The mainsteam media talks about the “fiscal cliff” a lot. The fiscal cliff is not a real crisis. It’s a fake crisis created by the State.
In the USA, the fiscal cliff refers to two laws. First, the “Bush tax cuts” are set to expire at the end of the year. Second, during the last “debt ceiling” debate, the law had an unusual compromise. If Congress cannot agree on a budget, automatic budget cuts take effect. (the “sequestration”) That would lead to a tax hike and huge budge cuts, if there is no compromise.
There’s an obvious fallacy. If Congress wanted to, they could change the law. It’s a fake crisis and not a real crisis.
In Europe, there also is a fiscal cliff. There are several insolvent governments, with huge debts. Periodically, they get bailed out. Each bailout gives the governments enough money to pay the creditors/banks for a few more months. However, the budget deficit is not fixed and there’s another crisis every few months.
In the USA, the Federal government’s debt is in dollars and the Federal government is the issuer for dollars. The budget deficit is just a number on a piece of paper. In a paper monetary system, you can have arbitrarily large deficits. The budget deficit isn’t free. The cost isn’t deferred to the future. The cost of the deficit is higher inflation. The only limit to deficits is the risk of hyperinflation.
In the EU, no government controls its own money. Because the EU governments ceded monetary sovereignty, they can’t inflate their way out of debt like the USA. If Greece has a huge deficit, the cost is paid by inflation throughout the EU.
Who benefits from the European government bailout? The main beneficiaries are the banks who own the bonds. Banks borrow cheaply from the central bank (Federal Reserve or ECB), and buy high-yielding government debt. When there is a bailout, those bonds get paid off at face amount, leading to huge profits for the banks. If there were no bailout, those banks would lose a lot of money due to high leverage. The government bailouts are an indirect bailout of the creditors, the big banks.
Once in a while, there is not bailout and there’s a default. In that case, insiders and the big banks know it’s coming, and make a fortune short-selling.
Who benefits from the periodic crisis? The politicians benefit. It seems like an urgent problem that the politicians are fixing. They get to make deals every time there’s a new compromise.
Most people don’t realize that the “fiscal cliff” problem is 100% caused by government. They passed laws that set up a future crisis, if the law is not changed. It’s a fake crisis, because they could always change the law.
Have you ever wondered how Ben Bernanke could conceal $4 BILLION profit from Congress and the people EVERY DAY??? It is from the auctions of Treasury securities. Essentially, it is theft from the American people. Profit of the Fed belongs to the government. Under any other circumstances, it would be called embezzlement.
That profit is undoubtedly used to fund the New World Order agenda promoted by the CFR and Wall Street.
The auction accounts and disbursements are handled EXCLUSIVELY by the FRBNY and have never been reported or audited. Details below and the footnoted article show a comprehensive mathematical analysis of how the Fed’s Ponzi scheme can be carried out.
Ben is a lackey for Wall Street and his job is to keep the banks (owners of the BOG ?) from bankruptcy. Everything he has done confirms this. He will devastate the economy with inflation; the public be damned.
Maybe your senators or membership would be interested in the information, but congress-critters receive lavish campaign contributions from “financiers” and also insider information that boosts their net worth. Their inclination to investigate may be dampened.
Read it and weep.
Reb
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Open letter to my Senators
RE: THE FEDERAL RESERVE HEIST
or
HOW BEN HIDES $4 BILLION FROM CONGRESS DAILY
Dear Senator
Mr. Ben Bernanke told the Senate Banking committee that the government must take action (deficit spending) to prevent an economic collapse. Did he tell Congress that every dollar of such spending would be profit for the Fed that would be hidden by the FRBNY in apparent violation of the law ??
A popular concept is that the government will “borrow” from the Federal Reserve. This involves giving a Treasury security (bill, bond, or note) to the Fed as collateral and the Fed will credit an account of the government in the amount of the security. The government then spends the (book-entry) funds while the Fed (theoretically) holds the collateral; i.e. deficit spending. Voila !! Additional (fiat) money has been injected into the economy of the Nation which, as expressed by Mr. Bernacke, MAY stabilize the economy.
Observe that the Fed holds the collateral. When the collateral matures, government must pay the Fed to redeem the security. The fiat money spent by government must be re-acquired and paid to the Fed. But the government has already spent the money and the bank account is zero.
So the Fed can sell the collateral at the Treasury auctions (if it has not already been auctioned). If the funds went to the government, the Fed would essentially give up the security. Bankers are not known to generously give up money.
Also, if the funds went to the government, they would be used to pay off the debt of the security that had been issued and that would negate the existence of the debt and further it eliminates any inflation from the currency in circulation being increased. Since this does not happen, the funds from deficit spending cannot go to the government.
The Federal Reserve Bank of New York has the responsibility of handling all accounting and funds for Treasury auctions. The funds from deficit spending go into the FRBNY but they are not recorded as coming out. These items are not included in the ANNUAL REPORT TO CONGRESS nor are they disbursed in any available record
Receipts from the 2010 Treasury auctions totaled $8.4 trillion. $7 trillion was used to roll-over preexisting securities (without increasing the national debt) and $1.4 trillion was received from deficit spending as detailed above. That $1.4 trillion ($4 billion every day–7/52) disappeared in the catacombs of the FRBNY.
Profit of the Fed legally belongs to the government. Concealment of funds belonging to the government is identified as embezzlement and subject to one year incarceration per count. Ref. 18 USC section 641. Nonpayment of monies belonging to the government is a separate crime and subject to five years incarceration. Ref. 18 USC section 1001. Anyone knowing of such an offense who “relieves, comforts or assists the offender…to prevent his apprehension, trial or punishment, is an accessory after the fact.” Ref. 18 USC section 3.
Should members of Congress reflect on their involvement ?
In addition, commercial banks have a practice of “fractional reserve” that allows them to create check book money as a multiple of “reserves.” It appears the QE’s has the FR banks writing checks in the same manner WITH NO REQUIREMENT FOR RESERVES. This appears to be a new practice of unlimited money creation without authorization of Congress—an entry of hyperinflation. Perhaps Congress should investigate.
Respectfully,
Olde Reb
oneconstituent@home.us
Conclusion: The Fed is wanting more money to bail out the owners of the BOG and NY banks from their fraudulent derivative gambles and construct a fraudulent claim on the entire wealth of the nation while your constituents get ripped off and enslaved.
[NOTE: This letter is excerpted from, and documented in, RIP OFF BY THE FEDERAL RESERVE, http://www.scribd.com/doc/48194264/rip-off-by-the-Federal-Reserve-revised ]
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