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The Banker's Trick: America Takes the Bait
By Indy Media /

By Patrick Henningsen. From

Here we stand in the wake of the virtual financial tsunami, followed by the giant bail out. In the words of the next generation, I guess you could say, "we should have known better."

We just witnessed a full week of Wall Street experts on television threatening the American people, and President Bush threatening Congress, claiming that “to do nothing” will result in a economic crisis- possibly a depression. So constituents called their Congressional representatives telling them to “do something”. No one is entirely sure what that something should be, so most Congressmen and women guessed that ‘something’ must be a $700 Billion ‘get-out-of-jail card’ for the bankers.

Well, we really fell for it. Here we have a crisis engineered by the bankers followed by an unprecedented bailout for those same bankers…

Unbelievably, with a crisis this big, no one has presented an alternative plan other than the one served on a silver platter by the Fed’s own ‘Member Banks’- the very bankers who cause this mess in the first place. No other plan in sight. So it was all or nothing, a fait accompli.

In the Bailout Bill, Congress is proclaiming an era of reform and that there will be "Sweeping new powers for the US Treasury", powers not reviewed, and run by committees which they, the bankers, have set up. Total power. No oversight. What you have on paper are the bankers now openly running government. They have the power to create money and regulate themselves.

And regulate themselves they sure have. Americans might do well to know that there is now 14 times as much money in circulation as there was in 1980. This fact means that we are living on a borrowed bubble and that we are yet to realize the type of hyperinflation which routed Argentina in 2000.

Most Congressman (or Presidential candidates for that matter) could not tell you exactly how this great bail out will work. The big figure mentioned appears to be a vague, back-of-the-napkin figure. If there is a $700 billion bond issued by the Federal Reserve then US will have $35 billion per year it will owe the privately owned Federal Reserve Bank… in interest payments alone. If you are able to see how this skewed system works, the Fed never create the interest owed– so we must again borrow this figure into circulation… at interest! This creates a constant demand for money that’s greater than the supply. Surely this is not what we signed up for?

Aside from being a private institution who controls our nation's money supply, that very mechanism of compound interest is what gives the Federal Reserve unrivalled much power. Too much power in fact. Now you can see that this great system we have come to worship is nothing more than a simple parlour trick.

Knowing how we got here

Remember how we got here. Remember that the Fed crashed the housing market in the 80's with the Saving & Loan crisis. Remember that at no point in this current slide did the Federal Reserve Bank stop Lehman Brothers, Goldman Sachs, Citigroup, Bear Stearns, UBS, Deutsche Bank or HSBC from issuing these rather toxic(and dead) financial instruments. Had they done so, there would not have been these gigantic claims against money, that in reality, was money never had. But they made their money already, approximately trillions stuffed away in off-shore banks.

To call it 'greed' is a huge understatement. It's total fraud, no less. Americans should be calling for thousands of criminal prosecutions.

Banks have been allowed to bypass all the regulations put in place to protect the economy from fraud by allowing Hedge Funds to create fake fortunes and through openly shady practices like illegal co-signing of AAA rating junk debt. This is the junk, faux debt-based money that has crashed our system today. Similarly, banks have also been allowed to leave obvious under-performing loans on their books for long periods of time and claim them as valuable “assets”. If all of these banks’ bad loans where written off their books- as they should be... as a loss(like any normal business), then some banks would indeed have to declare themselves as insolvent.

Now these bankers are turning to the US taxpayer to buy this financial trash. You don’t have to be a financial guru to see the problem here.

Overseas investors are now so sick of today's over-rated dollar that they will soon be dumping them as fast as the Fed can print them.

The record shows that the Fed attacks our savings year after year with an over supply of money, referred to by some as the "inflation tax". It’s a math equation and it will likely yield a certain result.

Fed History 101

So who are the Fed? The fact remains that the overwhelming majority of American actually believe that the Federal Reserve Bank is owned by the government of the United States of America. The truth is that it is neither "Federal" nor does it have any "Reserves". Yes, you heard that right. It's a cartel of banks, complete with private shareholders. Sure, you might say, all businesses have cartels, right? Well, this happens to be the godfather of all cartels on the planet.

Let's get this straight: in 1913 the Federal Reserve Act took the responsibility of printing the US dollar away from the US government and into the hands of the Federal Reserve Bank- and lending these Fed dollars back to the US government at interest. And what of Federal Income Tax? The IRS was then created and explicitly required by the new Federal Reserve Bankers to secure the new US national debt by collecting a new Federal Income Tax. See how that works?

From the beginning, they created more notes than they had gold and silver to back it up. The Federal Reserve Bank in NYC is the lead bank in a cartel and this bank has allowed for creation of $3 in debt for every $1 in circulation. They(the bankers) designed this system, not the American people. This "Magic Money" model has worked since 1913 and has been responsible for every bubble and crash since then. And it has also been the financial engine for excessive military build-up and sustaining long wars, like the current debacles in Iraq and Afghanistan.

We saw the seeds sowed in the 1990’s with the unprecedented mixture of formerly separate retail and investment banking industries, allowing a dilution of the dollar to occur without anyone really noticing. It was a literal 'banker's free-for-all'. Bill Clinton happened to be the President who signed the legislation which allowed this to happen and setting the stage for the disastrous scams, where we have seen a banking system that went from fractional reserve lending to UNLIMITED leveraging.

What's next?

So what’s next? Certainly we will see an inflated dollar and the wipe out of America’s great middle class. Stagflation- a sharp drop in property values and a sharp rise in inflation. $7-10 per gallon? We are also fast seeing the elimination of savings in America(without savings we have no real economy). Successive waves of inflation which will mean that every one of those Baby Boomers' 401K retirement funds will only be worth 60% of what they were. And the list goes on.

Ultimately, our failed monetary policies will break the back of the US dollar- and it might take weeks, months, or years. Who knows how long until the wave of hyperinflation? But with the current monetary policy, it will happen. Further speculation could see extreme devices like a single North American currency like the "Amero". Or worse, serfdom in the form of an economy controlled by a private World Bank.

Predictably, too many pundits are blaming 'the scourge of capitalism' here, yet they are caving in by wanting to award the bankers with their biggest-ever payout- go figure that out. It only amounts to yet another giant scam by our perennial charlatan banking community- and all at the expense of the trusting, naive, and endangered American saver.

It seems that too many of us Americans would prefer to read little and not to know anything bad is going on in Wall Street and Washington DC. America will do so at its own expense.

The reality of this $700 Billion bail out is that most of the money will be stuffed away in the labrynth of the financial system and will not "trickle down" at all. If this passes, then expect many more, larger bail outs(imagine that) after this one. So call it what it is- a crime against the American people.

Congress needs to do something alright. It need to wake up and understand how the Fed plays them. And Americans must now make it their business to know how this system works, and pressure their leaders to end the Fiat money game started in 1913. We've had enough.

Just ignoring it and wishing it won't happen will not stop the economic collapse of the dollar. Getting informed just might.

Authors Bio: Patrick Henningsen is a graduate of California Polytechnic State University SLO, currently a writer and documentary filmmaker based between the US and UK. He is also a former corporate communications and PR executive from the hi-tech and entertainment industries. He has a passion for libertarian ideals and "hard talk" on the toughest issues.

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The Banker's Trick: America Takes the Bait