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KNOW YOUR FED!

April 26, 2009

The Federal Reserve, what you need to know.

By Mike Sanch 3/22/09

“I believe that banking institutions are more dangerous to our liberties than standing armies.”

– 2nd U.S. President and Author-Thomas Jefferson

The Federal Reserve has no constitutional or moral authority to regulate interest rates.
It is a cartel of major privately controlled banks located in New York City.

Since the banks are privately owned, they are not held accountable for the causes of the business cycles, and “bubbles” in the market. The Housing Market, which recently burst, is a textbook example on the dangers of allowing centralized planning to dictate interest rates. In a true capitalist economic system, interest rates should be set by the market. The current financial crisis was created as a direct result of the Fed’s interest setting policies, which caused financial instability.

The “accepted” cycle of boom and bust in the housing market was perpetuated by artificially low interest rates.

These low interest rates that caused this latest crisis have been popular and put into effect since 9/11/01.Interest rates are the cost of “buying”/borrowing money. Think about the 1% interest rates in years past, which were outrageously, and unrealistically low.

Artificially low interest rates were the cause of the problem. It encouraged these now infamous investment banks to invest in complicated financial products that would not have been possible without cheap credit/money.

The problem is that, when the interest rate was set at such low levels, there was so much money in the markets that prices were going up, this is called inflation. Loans were being made on mortgages whose prices of the house had increased dramatically. The inflation or “bubble” in the housing market was a consequence of the flood of money into the market.

Houses that were worth 200,000 dollars where selling for 350,000 dollars. The banks, with their access to cheap money, gladly made the loans, because if they didn’t “move the money”, they would miss out on gaining the profits they proudly trumpeted to investors. It was one massive Ponzi Scheme.

The supposed “bailout” is just an attempt at treating the symptoms, while simultaneously obtaining more government control and regulation. Government control of the interest rates is the problem.

The Media is complicit in that it assumes, and implies that more regulation is good for the financial system.

To all those left leaning voices that follow a pseudo Keynesian philosophy, be careful for what you ask for.

Much like how the Patriot Act was rushed through with the public not realizing the extent of the government’s intention to dismantle the Constitution, the bailouts are a “shock and awe” strategy to ramming this into a rushed legislation. The speed at which these bailouts were being passed were aimed at limiting debate.

Where is Lady Liberty when we need her?
Where is America’s strongman to show up and start to regulate?

Former and disgraced N.Y. Governor Elliot Spitzer was on to these Wall Street gangsters and was in the process of ousting these hooked nosed Wall Street fat cats engaged in the usury their fathers taught them. Spitzer was about to expose their crooked and malevolent ways, yet the media/F.B.I. alliance managed to assassinate him politically by making his call girl visits public.

Maybe it’s already too late? The Banksters of Wall Street have taken over this country, and bankrupted the middleclass in the process.

Don’t forget to read about former Secretary of Treasurer’s Henry Paulson connections to Goldman Sachs, current Secretary of Treasurer’s Timothy Geithner’s role in bailout number one and Two. And most importantly read up on“Helicopter” Ben Bernanke.

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