Another Comment on Banking

Several times I have bemoaned the huge bonuses paid to Big Bankers, and Wall Street.

However, I should make something quite clear: I am NOT opposed to profits in general, nor large bonus checks. What I AM opposed to is paying them out of taxpayer bailout money.

If a business cannot succeed on its own merit, products and methods, it needs to fold. Period. If a person can become the CEO and turn a company into a money-making venture on its own, then the CEO should be compensated as the company sees fit.

It is not the business of government to curb legitimate private enterprise from making money, nor it is the business of government to bail out money-losing private companies, and it is certainly not the business of government to do so with taxpayer money.

What government needs 42,000 paid lobbyists unless government can be bought?

Federal Reserve Ponzi Scheme?

Recently CNBC reported that the Federal Reserve bought aprox. 80% of the US Treasury securities issued in 2009.

What does that mean? Well, when the US government needs more money, they go to the Federal Reserve Bank (a PRIVATELY-owned bank, not government-owned bank). The Federal Reserve prints some greenbacks (Federal Reserve Notes... look in your wallet), and the US government issues US Treasury notes (called T-Bills) for the same amount in return.

Normally the Federal Reserve sells these Treasury notes, but last year no one wanted to buy many, so the Federal Reserve sold itself about 80% of them. Now, please note that the US Treasury notes are normally sold at a discount, but pay interest.

So the Ponzi scheme is this: the Federal Reserve creates 'money' out of nothing but a printing press and special paper. Then they loan those greenbacks to the US Government for interest, and 'buy' back the US Treasury notes which also pay interest. If they sell them, great. If they don't sell them, they are out some paper and ink, and the government still owes the full value plus interest.

Nice gig, eh?