Mouood Mouood English Edition
3. The Fed generates profits for its shareholders.
The interest on bonds acquired with its newly-issued Federal Reserve Notes (US dollars) pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their“reserves.”
The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in“reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans.
The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.
If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen, the present Fed which create the money out of nothing for themselves.
Too big to fail and too big to jail big banks role in money laundering and the Drug Trade
Mexico is in the grip of a murderous drug war that has killed over 150,000 people since 2006. It is one of the most violent countries on earth. This drug war is a product of the transnational drug trade which is worth up to $400 billion a year and accounts for about 8% of all international trade. The flood of illegal drugs into America continues unabated.
One thing the American government has not done is to prosecute the largest banks in the world like HSBC, Western Union, Bank of America, JP Morgan Chase&Co, Citigroup, Wachovia amongst many others for not complying with American anti-money laundering (AML) laws. The big banks support the drug cartels by washing billions of dollars of their blood stained money. As Narco sphere journalist Bill Conroy has observed banks are ”where the money is” in the global drug war.
“The Mexican drug cartels have caught the headlines again and again due to their murderous activities. The war between the different drug cartels and the war between the cartels and government security forces has spilled the blood of tens of thousands of innocent people. The drug cartels would find it much harder to profit from their murderous activity if they didn’t have too big to fail banks willing to wash their dirty money”.
This failure on the behalf of the US government to really crack down on the finances of the drug cartels extends to British banks as well. In July 2012 the US Senate Committee on Homeland Security and Governmental Affairs issued a 339 page report detailing an amazing catalogue of”criminal ” behaviour by London based HSBC. This includes washing over $881 for the Mexican Sinaloa Cartel and for the Norte del Valle Cartel in Colombia. Besides this, HSBC affiliated banks such as HBUS repeatedly broke American AML laws by their long standing and severe AML deficiencies which allowed Saudi banks such as Al Rajhi to finance terrorist groups that included Al-Qaeda. HBUS the American affiliate of HSBC supplied Al Rajhi bank with nearly $1 billion in US dollars.
On 4 March 2013, HSBC announced profits of $20.6 billion in 2012 while it paid out a $3 million bonus to its CEO. This outrageous state of affairs beggars belief after HSBC has been clearly caught out engaging in activity on behalf of murderous drug lords and terrorist financing banks.
The big banks that has quite clearly been caught out helping murderous drug criminals, terrorist groups, and all sorts of criminal characters are let off freely. No criminal prosecutions or even a mention of criminal behaviour due to the fears that to do so would put the world economy in jeopardy. So there you have it. Banksters who engage in such behaviour that is regarded as criminal by the vast majority of people on the planet are not only too big to fail they are also too big to jail.
150,000 people estimated by US Secretary of Defence have been killed in Mexico’s drug war and hundreds of thousands of Mexican citizens who have been forced to flee their homes and escape the violence by going to the United Sates or moving to other parts of Mexico.
America’s Economic Dark Side
Of all developed nations, the United States has the most unequal distribution of income, and USA is surging towards every greater inequality.
America’s 400 richest elites have more wealth than half the population. Jacob Kornbluth’s new documentary film “Inequality for All”examines disturbing truths.
US inequality is at historic highs. Since 1970, America’s economy doubled. The top 1% benefited hugely. They earn more than 20% of national income. It’s triple their 1970 percentage.
The gap between rich and all others keeps widening. Inequality hurts everyone and since economic recovery began in 2009, America’s top 1% got 95% of the gains.
USA has less upward mobility than any other developed country. If someone is poor in USA will remain poor for ever and if someone is lower middle class will remain in lower middle class for ever.
Now USA have turned into “100 percent plutocracy nation”Inequality is fueling public anger and is hurting the economic growth. The US economic system only benefits the privileged few and it harms most others and is undermining America and is expecting worse ahead.
So-called US economic recovery is fake. Main Street poverty, unemployment, underemployment, hunger and homelessness are at Depression era levels.
Half of all US households are impoverished or bordering it. Recovery benefited only America’s most well off. Most others endure deepening deprivation.
According to the famous economist Emmanuel Saez:
”For the first time in nearly 100 years, the percentage of income taken by the top 10 percent of Americans topped 50 percent.”
From 2009 to 2012, “top 1% incomes grew by 31.4% while bottom 99% incomes grew by only 0.4%.” Adjusted for inflation, they declined considerably.
From 2007 – 2009, average real family income in USA declined 17.4%. It’s more than any period since the Great Depression. Only wealthy Americans recovered and the conditions for most others went from bad to worse.
Russell Sage Foundation president Sheldon Danziger said:
“The continued high rate of poverty is no surprise, given ongoing high unemployment, stagnant wages and government spending cuts.”
”Poverty is higher today than it was in 2000, and household incomes are lower. The ‘lost decade’is likely to turn into ‘two lost decades.’ “
America’s wealth distribution is extreme. It keeps shifting disproportionately upward. Financial elites run America. Whatever they want they get. Popular needs go begging. Things go from bad to worse.
Census data show around half of US households impoverished or bordering it.
Over 20% of US households haven’t enough money for food and other essentials. Food costs are rising. Family incomes are falling. America’s most needy are harmed most. So will tens of millions of children. They are ending up without enough to eat.America’s great divide is greater than ever. In 2009, around half of US households had no assets. Today it’s more than half.
