Some Sickening Statistics about the Bailout

I see only one final solution, when the Fed Reserve asks for the tapayers to pay for this, we give them the bird and show them the door. We start issuing government currency, and only cover a limited amount of Fed Res notes and debt, with a limit of only a few hundred thousand per individual. We limit foriegn ownership of U.S. property, and let the world bankers sort out the mess they made with the Fed Res world currency.

The Federal Reserve itself, gets a commission of 4%-5% of all those
new bailout monies created out-of-thin-air as Treasury notes/bonds...


you need to add the estimated final money creation of the bailout/rescue = which is gonna be close to $10Trillion, +4% for the FederalReserve acting as Agent when its all said-&-done


With the TARP $ and the recent new loan facilities, & the bank guarantees by the Treasury equaling a sub total: $7.8Trillion - and counting!)


the infamous banner 1st used by GW concerning Iraq
-> 'Mission Accomplished'

reply to post by burdman30ott6


What I don't get is why go through all the hearings, etc for a measly $700 billion, and split it up into installments of which Paulson has to beg for? What was the point of all that?

If they are handing out over $8 Trillion (which equals $8,000 biliion), no questions asked, then why did they have to beg congress for the $700 billion?

Not only that, but who's handing it out, where's it going, and where is it all coming from?

I'm really confused

[edit on 26-11-2008 by mecheng]

reply to post by mecheng


Ok... Appologize for replying to my own post, but I thinnk I found what I was looking for...

The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.

Where it's all going

The thing I still don't get however is why all the fuss about $700 Billion?

[edit on 26-11-2008 by mecheng]

I am someone who believes Paulson and Bernanke aren't totally evil as many would like to think. Yes they are pumping the economy full of money and spending on deficit, but, they are doing this to stave off a severe deflationary spiral because banks are not lending any money and they would have stopped lending money all together because of their losses and their apprehension that they would lose money. What happens when there is no money in the market because banks refuse to lend and/or go out of business? Well the Great Depression can answer that question for you.

reply to post by grover


Here is the reason you see them getting away with their golden parachutes. In 1998 Andrew Cuomo the head of HUD under the Clinton administration sued a bank in Texas for $2.1 Billion for discrimination of who they were lending homes loans to. This forced banks to give bad loans to people who could not afford them. These banks began to default to the larger banks later on down the line. Basically a domino effect was created. Fannie Mae and Freddie Mac were also forced to take up these bad loans. Then in 1998 Bill Clinton under a Republican Congress signed into law or rather got rid of the Banking Act of 1933 that was set in place after the depression (to keep this sort of thing from happening). This Act kept loan banks and Investment banks separate. When Clinton unraveled the Act in 1998 these banks began investing all the money they were going to make off these loans. So to blame the Republicans alone is Ludicrous. All of them are to blame this is not the Bush administrations fault he has been trying to clean up the mess. His fault was for not telling the American people what was happening. There are also a few other incidents which have helped fuel the fire. I do not agree with this bail out at all. I think it stinks. I think everyone who is against the bailout should let their voice be heard come the next election for congress and that anyone whose Senator or Representative that didn't vote how they wanted them to should vote against them.

When do I get to start buying states at a liquidation sale?

I could go for some Hawaii right about now... I might put up with part of Florida too.

Living outside the US looking in, I swear it looks like your government is purposely trying to make your country worthless.
I dunno, maybe they really are planning on auctioning it off.

... or, maybe it's a set up to switch over to the Amero.

Originally posted by grover
reply to post by nyk537

 

I have personally heard illuminaries of the Republican party such as Phil Gramm, Grover Norquist, James Gilmore say essentially the same thing. I will find the quotes.

If that's the case then it totally doesn't make sense as to why it took a Democratic majority to pass the banker bailout with so many Republicans opposed. I agree with NYK537, this is clearly about nationalizing the hell out of everything in this country. Bigger government with control over everything, which has always been the agenda of liberals, not conservatives or Republicans.

I know the economy and the money system we have set up is about as simple to understand as Quantum Physics but the one thing I don't understand, and the one thing that I haven't heard mentioned on the MSM is this:

Where the hell are we getting this 8.5 TRILLION dollars???

Because this 8.5 trillion is 8.5 trillion NEW dollars right? All this bailout money is stacked on top of the money already in the economy, the money of which there is not enough already.

What is going to happen when we dump another 8.5 trillion into an already inflated and failing fiat economy?

How much money, in dollars, is in our entire economy anyway?

Correct me if I'm wrong but our nation is only worth X amount of money and every time we pump more fiat money into the system each $1 bill is worth that much less. You can see it in Twinkies, they used to cost 99 cents a pack and are now $1.19, not because Twinkies are worth more but because the Dollar is worth that much less. Pumping fiat money into the system only fractures the worth of every dollar without actually increasing the overall worth of our nation and our economy.

When this is over we won't even be able to buy a loaf of bread of a quart of milk!

reply to post by Shadowflux


Not when in the last 6 months, foreign investment in U.S. treasuries has exceeded 200 billion dollars. It should only take a decade or two at most to return that money to tax payers... and if a large scale military conflict were to break out, the treasury would benefit greatly...

[edit on 8-12-2008 by cognoscente]

reply to post by cognoscente


But don't we already have two large scale military conflicts going on at the same time and the economy is doing worse than it ever has? As far as I remember once the dollar devalues it never revalues. For instance, we'll never see cigarettes at 3 cents a pack again, no matter how good the economy is doing.

(forgive me if I sound like an idiot, i'm far from an economist)

reply to post by Shadowflux


Well, what we're seeing right now is that the world is willing to pour money into the US regardless of its pathetically operated businesses and despite the crippled integrity of its financial system. If there is ONE thing that this government is good at, it's tearing hard earned money from the hands of masses of reluctant citizens. The more we spend and bail out, the better it is for this government in terms of foreign countries holding onto the dollar. Apparently a dilapidated US economy is a safer investment than anything else at the moment.

[edit on 8-12-2008 by cognoscente]

reply to post by cognoscente


But that never translates to dollars in the pocket for the common citizens, the government is treating the country like a business, trying to please the investors while screwing the employees.

Plus a 200 billion dollar investment in our economy is hardly a drop in the bucket when face with a 8.5 TRILLION dollar expenditure on top of our normal yearly expenditures such as the War on Terror, welfare etc.

The fact remains that you can't just wave a magic money wand and create 8.5 trillion more dollars.

deleted: Used wrong data type..

[edit on 8/12/2008 by Freelancer]

That's absolutely true. All our spending right now will be a huge loss regardless. But I'm not convinced it will not be as devastating as most people think. We have massive leverage. As long as we can balance this leverage on the dollar with domestic monetary policy, then we should be good.

1) For example, too great a reduction of interest rates on the dollar would cause it to devalue, cause inflation, reduce the standard of living, and ultimately diminish the ability of our citizens to provide tax revenue, allowing the world to safely relinquish its dependence on the US dollar as the global currency reserve, as foreign investors sell off all their treasuries. The dollar collapses, meaning total economic failure and depression for this country.

2) Increasing the interest rate on the dollar would be reckless, destroy the integrity of the banks, virtually freeze all lending, and stop all domestic production. You would think that a high interest rate would attract foreign investment on the treasury... It would in the short run, but then it would all be dropped as investors learn US assets are worth absolutely nothing. It would be a bubble, almost exactly like the recent housing market bubble. But instead of mortgages being the toxic asset, the entire US economy would the toxic asset here.

History has shown us that an inflationary depression is much better than a deflationary one. You at least want the infrastructure to exist, even if your dollar is weak. If the infrastructure is proven to be valueless, people will start tearing everything up, manufacturing plants included, for scrap metal and materials to build their makeshift bunkers and bomb shelters.

You see this is all contingent on the fact that 68% of the world's currency reserves are in US dollars. If for some reason we were to abandon that, then your assumptions would be totally correct. No other country in the world is in the secure position we are in right now, that their central bank can experiment so liberally. Iceland just experienced both a deflationary valuation of its capital assets (houses, stock market, everything it produces basically), and hyperinflation in its currency. So nothing they produce is worth anything, and they are incapable of buying anything outside the country. This is what is essentially happening to the US right now, however, we're shielded by our dollar and the constant fear of foreign investors, who see no other alternative but the dollar. The Fed is now able to cut interest rates on the dollar (something no other economy would be capable of doing if they were in the same situation) so as to restore the domestic economy. However, you can expect interest rates to gradually increase over the next year (assuming domestic economy actually picks up that is).

It's a two front war at the moment. Our businesses and financial institutions are doing horrible. So the government needs to bail them out to stimulate the economy, and further cut interest rates so as to encourage domestic borrowing and private investment. Cutting interest rates should in normal circumstances devalue the dollar on the international market, however lack of foreign investors' confidence in the rest of the world is preventing that, as well as a reluctance to drop the dollar, as that would hurt their own economies as well.

But considering our situation, if hyperinflation were to ever occur, it would only devalue the amount of US debt held by foreign countries. And since our debt is so massive and so ubiquitous... it would be virtually erased. However, the price of imports, such as oil and food would then skyrocket. This would result in a lower standard of living, and economic collapse. If this should occur, it would technically be called a "depression". However, the long run result would mean economic resurgence and restored investor confidence, assuming the dollar survives. So it's a major risk. They have to prevent deflation at all costs.

The US dollar has an advantage over every currency except the Euro and the Pound at the moment. It jumped considerably this week. This is of course inflation, it's not real. But it means a secure standard of living in the short term, until we can fix domestic issues. So contrary to reason, we managed to decrease the interest rate on the dollar and at the same time increase the value of the dollar. See how that makes no sense at all?

If our businesses continue to fail, and our mortgage brokers continue being crooks, then we will become royally screwed. Bailing them out was totally morally wrong, but it was the responsible, ethical decision. The country needs the production right now, but what must be done in order to keep production integrious and viable for the future, is to remove all the leadership and all the executives, as well as implement oversight committees and more regulation to closely monitor these crooked operations.

It seems blatantly obvious to me that the government has little concern for its citizens. The government is going to induce inflation, inadvertently or not, and they will rely on tax payers to foot the bill. If tax payers are unable, or unwilling to do this, then we will have hit a wall. The Federal Reserve is playing a very risky game. They have to balance short term national interests (CitiGroup, Ford, GM) with long term economic foresight (dollar, treasury market).

However, as long as tax revenue remains constant, the dollar is good. If we go to war, the dollar is better. You can bet your ass you'll see US military involvement in Pakistan within the next year, whether they actually declare war on its government itself, or if they force an occupation to combat "terrorism". Global military conflict will increase if we don't address domestic issues.

So if we're in a bind and nothing we produce is worth anything, and our dollar is incapable of buying anything from outside the country, then what do we do?

How do we balance national monetary policy will international economic soundness? If nothing we produce is valuable, we can always make weapons. Since we have the infrastructure to do so that no other country in the world has (the equipment, the education, the knowledge, etc.) it will put a demand on the dollar like no other. In the worst case scenario, if the Fed can not accomplish its balancing act, the US will drag the world down with it to a point of despair that war becomes completely and totally inevitable.

[edit on 8-12-2008 by cognoscente]

reply to post by Shadowflux


As far as never seeing cigarettes being 3 cents a pack again... we never would've thought that we would see a one before the decimal place in gas prices again and yet strangely enough there it is