You pay, they play

Another version of what is going on here...

The Fed has even decided to buy treasuries, which is the absolute definition of "printing money" since it amounts to one part of the government funding the other part of the government.

Um, except the Fed is not part of the government. The Fed is privately owned. So our Treasury, the part of this equation that IS part of the government, the part that WE own, is selling US to the privately owned Fed. That is closer to the definition of PROSTITUTION, actually.

All of this money is going to land somewhere. What we are going to see is another bout of riptide inflation, where some parts of the economy (such as wages and housing prices) are in deflation, while other parts are inflating. My guess where the money is going to land? Oil prices again. It's already begun. Put all that money into the hands of speculators and they have to park it somewhere.

Inflation, commodities bubble. That seems to be the consensus around these parts.
The key difference here is between "paid off" and "wiped out". "Paid off" means the full value gets paid back (minus whatever inflation the US has, which may be a lot). " Wiped out", on the other hand, is what would occur if private banks, firms and investors were forced to take their own losses. In that case, when the full value of the investor or firm was gone, any remaining value would simply disappear. If a bank goes bankrupt owing $200 billion, and the bankruptcy windups leave only $100 billion of proceeds, then the remaining $100 billion goes away. Yes, that $100 billion may wipe out some other people, but it's done. It's over with. It's finished. You can't get blood out of a stone, and when a firm or person is wiped out, they're wiped out.

Paid off being contrary to public policy, which is of course exactly why our leaders have chosen this route. Because it enriches the Fed, which is privately owned.

As Christopher Story covers in his latest report, the primary motive here is to prevent -- evidently at ALL COSTS -- these corrupt institutions from going into bankruptcy, which is what would happen if they were forced to wipe out their losses. No wipe outs. Because once in bankruptcy, the Bankruptcy Trustee would have unlimited powers to investigate what's been going on. This would expose hundreds, perhaps thousands of unseemly arrangements like this:

Dodd's wife a former director of Bermuda-based IPC Holdings, an AIG controlled company

From 2001-2004, Jackie Clegg Dodd served as an "outside" director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR. In 2001, in addition to a public offering of 15 million shares of stock that raised $380 million, IPC raised more than $109 million through a simultaneous private placement sale of 5.6 million shares of stock to AIG - giving AIG a 20% stake in IPC. (AIG sold its 13.397 million shares in IPC in August, 2006.)

Clegg was compensated for her duties to the company, which was managed by a subsidiary of AIG. In 2003, according to a proxy statement, Clegg received $12,000 per year and an additional $1,000 for each Directors' and committee meeting she attended. Clegg served on the Audit and Investment committees during her final year on the board.

IPC paid millions each year to other AIG-related companies for administrative and other services. Clegg was a diligent director. In 2003, the proxy statement report, she attended more than 75% of board and committee meetings. This while she served as the managing partner of Clegg International Consultants, LLC, which she created in 2001, the year she joined the board of IPC. (See Dodd's public financial disclosure reports with the Senate from 2001-2004 here.)

How cozy. Surely our good congress people, their spouses and friends, the Clintons, the Bushes, etc. etc. do not want see each other harmed by having all their corruption exposed to the sunlight. So they're busy scratching each others' backs with our money. Anything to keep the lid on another day.


Sis said...

Funny thing just happened. I've been following the treasuries to get an idea if we are still hanging by the fingernails. Today, the Feds auctioned $7.5 bil, the first of an announced #300 bil.

So here's what happened. I read a report on Marketwatch about the initial offering. The news was negative; bidders weren't enthusiastic and there was a marked absence of foreign buyers. Stock market begins to erase it's morning gains. Then, I go back to that same article just ten minutes later and the article is rewritten to a neutral position on the auction. Not a whiff of negativity.

If these treasury auctions fail, the gig is up.

A. Peasant said...

How can they not fail? The corruption is exposed. I want the gig to be up.

malcontent said...

If even this story doesn't get people marching in the streets I'm afraid nothing short of destroying all their teevees will.

We may have to pull the plug on fluoridated water to wake these sheeple up.

A. Peasant said...

you know what they say...wish in one hand, shit in the other, see what you come up with.

Greg Bacon said...

"Party like it's 1929!"

AMY GOODMAN: You compare this whole thing to a casino. Lay out the analogy for us.

MATT TAIBBI: Well, you know, the biggest situation is, you know, a lot of these contracts, these CDS contracts, are like gambling, in the sense that—normally when you buy an insurance policy, you’re buying a policy on a house that you actually own. With these CDS contracts, you could actually bet on somebody else’s mortgage. AIG, for instance, could have gone to Goldman Sachs and said, you know, “We’d like to bet that the mortgages that were issued by JPMorgan Chase are going to default in the next ten years.” So these two parties that don’t have anything to do with the actual underlying loan could actually gamble on the outcome of that loan. So, this is—it’s really no different at all from gambling. And that’s why they had to seek a specific exemption from gaming laws in the year 2000, when they actually went forward with the deregulation of these instruments.

AMY GOODMAN: What do you mean?

MATT TAIBBI: In the Commodity Futures Modernization Act in the year 2000, they specifically exempted credit default swaps from being treated as gaming under any state laws. And they had to do that, because they were afraid that they were going to be regulated by, you know, state gaming agencies.


Roll "snake eyes" and still get paid.

Greg Bacon said...

And the Fed can not be audited by Congress.

Plus, the Fed doesn't pay income tax. Isn't income tax evasion how they got Al Capone?

Rick said...




legal mumbo jumbo

Disclaimer: The posting of stories, commentaries, reports, documents and links (embedded or otherwise) on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such posted material or parts therein.

Fair Use: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.