Fractional Reserve Banking in Pictures

"The few who understand the system, will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class. The great body of people, mentally incapable of comprehending the tremendous advantages, will bear its burden without complaint." - Lord Rothschild, European central banker

The below slides are meant to explain fractional reserve banking as simply as possible using pictures. The presentation itself can be found here, and a written description and documentation in "The Money Matrix - How the FED Works (PART 6/15)".The below demonstration assumes a reserve requirement of 10%, which is the figure typically given by the banking industry and financial experts. However, in Part 2 I will demonstrate there there is effectively NO set reserve requirement though the banking system obviously carry some level of cash reserves. I alluded to this previously in "Off a Cliff with No Airbags: The FED Banking System Quivers in Fright".

click to enlargeDisclosure: Like everyone else in the USA, I am still long the dollar.

http://seekingalpha.com/article/154637-fractional-reserve-banking-in-pictures

WAS AMERICA SOLD?

By Nancy Levant
July 3, 2009
NewsWithViews.com

In 1992, George H.W. Bush signed Executive Order 12803, which gave D.C. the authority to sell America’s infrastructure. They called this authority “Infrastructure Privatization.” E.O. 12803 tells us this power cleared the way for the “disposition or transfer of an infrastructure “asset” such as by sale or by long-term lease from a State or local government to a private party.”

E.O. 12803 also lists examples of America’s saleable and/or lease-able infrastructure:

• Roads
• Tunnels
• Bridges
• Electricity supply facilities
• Mass transit
• Rail transportation
• Airports
• Ports
• Waterways
• Recycling/wastewater treatment facilities
• Solid waste disposal facilities
• Hospitals
• Prisons
• Schools
• Housing

E.O. 12803 tells us that this list represents infrastructure “examples.” Let us, therefore, assume that this is not the complete list of America’s saleable infrastructure.
However, this list is a stunning confession.

Notice that all items listed in 12803 are the very same infrastructure items listed in all Martial Law Executive Orders (see here). Martial Law kicks in to power during declared states of emergency and with the single signature of the president. Strangely (and ignorantly), we currently have multiple declared states of emergency:

• Act of March 9, 1933, a declared state of emergency at the request of the Federal Reserve Bank of New York. This state of emergency was never lifted.

• Global pandemic - Level 6
• Mortgage/housing crisis
• Banking/lending crisis
• Automobile industry crisis
• Insurance industry crisis
• Healthcare crisis
• Southwestern border crisis
• Black market drug crisis
• National education crisis
• Nature/global warming crisis
• Jobs/unemployment crisis
• On-going weather and forest fire crises
• Extreme and unread congressional legislation crisis due to on-going crises

What are the odds of complete and total social and “natural” crisis in every single facet of our lives and all at the same time? I will tell you how it was accomplished with simple math:

Federal Reserve System + Politicians + Tell-A-Vision = Assembly Line Crises. It is called the Hegelian Dialectic Show.

Everything in the country, including the current planet-sized medical emergency, is in crisis. So enters Martial Law.

Think of our president’s promises to “change” the country and to fix the economy (which the Federal Reserve and Congress destroyed) by rebuilding America’s infrastructure, including “21st Century schools” and by greening-up our living standards and conditions (International Code Council, Carbon Credits, Waxman-Markey Climate Bill, etc.) - minus, of course, privately owned land and homes (Agenda 21). In the last six months, consider the massive growth of the Federal Government, the national debt, and the powers of the Federal Reserve Central Banking System - all with stated intentions of fixing the economy that they single-handedly destroyed - and fixing it with “infrastructure” projects.

As Martial Law militarily guards all of E.O. 12803’s infrastructure as listed in the Order, and with homeland paramilitary armies holding practice drills with foreign armies, local law enforcement, and emergency responders all across the nation (and with a big drill planned July 27th through July 31st in FEMA Region 6),

And with all public schools, private schools, and universities forced to have “lock-down policies” and to be forced-used as quarantine holding tanks, and with all Americans having been repeatedly told to prepare for an emergency (meaning an emergency that will bring Martial Law into the full light of day, which the “drills“ have clearly done),

AND the very same infrastructures listed in Executive Order 12803 are also listed in all Martial Law Executive Orders, and all these infrastructures having been for sale, lease-able, or having been sold during the last 17 years- including our children’s schools, our hospitals, and our homes - I suggest to you that you are witnessing Central Banking Debt Magic at its finest moment. Wouldn’t you love to know how much money has been made by selling our nation to the highest bidders?

Let us review:

1. The country’s infrastructure has been for sale for 17 years. Roads, tunnels, bridges, electricity supply facilities, mass transit, rail transportation, airports, ports, waterways, water supply facilities, recycling/wastewater facilities, solid waste facilities, prisons, hospitals, schools, and housing -- this being of “examples” of saleable infrastructure and not the entire list of saleable items according to E.O. 12803--so the question begs: What exactly has been sold to “private parties in our nation? We would like to see the complete list. We know that many highway systems have been sold to foreign countries, but what of the other listed items? Have they been sold as well?

If so, who owns them, and more to the question, which D.C. department sold them and for how much? Did the Federal Reserve and Congress sell our nation? Where is the paperwork? Did they repay any of America’s debt that they purposefully created with their pyramid fiat money lending schemes? And why are they still raising our taxes if America is no longer America but belongs to foreign nations or “private parties?” Since the Federal Reserve is a “private” corporation, did the Fed buy any of America’s infrastructure “assets?”

As American “housing” is on 12803’s list, and since D.C. recently took over the mortgage industry, has the housing market been sold and/or leased to a “private party” like a foreign nation or the Federal Reserve Corporation? Are the American people tenants to unknown parties? Are American children occupying foreign-owned schools, and are our loved ones lying in foreign hospitals that are clearly chock-full of foreign doctors? Equally, who, exactly, is financing the building of 21st Century schools and classrooms complete with foreign curricula? The questions beg: who are the foreigners....the foreigners or the American people?

More to the point, who is dissolving, partitioning, and/or divvying up our nation? Is it Obama? Geithner? Bernacke? Bushes? Clintons? FDR? Wilson? American morons?

It would seem that we are preparing for the Big Transfer - the transfer of our nation to and beneath a new authority or several new authorities. It now makes a great deal of sense why foreign troops have been cross-training with our new paramilitary systems, and yes, there are foreign troops on American soil, which I fear may not be American soil at all. Equally, multiculturalism suddenly makes a great deal of sense. I believe we can call it “behavior modification” so that we the stupid people will behave and be obedient under the new rules of new and foreign leaders.

I ask you, has our nation been sold out from under us, and without our knowledge? Could there be any other possible explanation for selling the most critical components of our country, while at the same time creating new, multicultural and cross-trained armies; permanently bankrupting the nation and selling its debt to foreign countries, and having Martial Law orders written specifically to protect the sold “assets” of our nation--including our schools and homes? Are America’s new owners to be protected by new Martial Law armies, cross-trained with foreign armies, while our “traditional” military is spread all over the planet - except here with its nation’s people? Are we being transferred to new ownership as we speak?

Consider:

Washington D.C. debts were sold to foreign nations.

• Washington D.C. = politicians
• Debts = Federal Reserve Central (Fiat) Banking
• Sold = Wall Street

Is it not realistic to think that big league politicians, bankers, and CEOs are loyal to no nation when they were massively enriched by internationalized banking, internationalized trade, absurd and illegal taxation, and by interest rates forced upon the people of this nation, while at the same time selling our nation to other central banks around the world and “private parties” - and for personal profit? Truth is, they sold the infrastructure first, and then they sold we the people as tax generators and life-long human resources to their global banking and business partners in crime.

What is the crime, you ask? The Federal Reserve, which is a piece of a global banking cartel, and their politicians and CEO partners who made counterfeiting and Ponzi/pyramid schemes legalized theft on continental scales. Your country is 1) not your country and, 2) not what you thought it was for at least 100 years. You are going to have to seek God’s grace to be relieved from the bitterness of that truth. Today, we don’t know under whose authority we live, but Washington, D.C. and the Federal Reserve do know.

Big, big changes are on the horizon. All I can tell you is to remember that freedom, granted to all by God, is first and foremost a state of mind. Pray for guidance. Prepare yourselves because Obama spoke the truth. It is all about “infrastructure.” The promised change has arrived. The question is this: who owns America? Who have the American people been committed to serving and beneath what form of government?

We can pretty much assume that Asia owns a very large chunk of America, as does Great Britain, India, Middle Eastern countries, and perhaps Mexico and Canada, as well. We can also assume that Martial Law armies will be guarding all the sold “assets” during what could be an extraordinary and massively tyrannical transfer of power. The love of money is the root of all evil. No truer words were ever spoken.

Please join Darren Weeks and myself on the Republic Broadcasting Network’s Govern America radio program every Saturday morning, 8:00 A.M. to 11:00 A.M., Eastern Standard Time. Happy Inter-dependence Day. Please join us. Click here to listen live.

© 2009 Nancy Levant - All Rights Reserve

Nancy Levant is a renowned writer for Constitutional governance and American culture. She is the author of The Cultural Devastation of American Women: The Strange and Frightening Decline of the American Female (and her dreadful timing).

She is an opponent of deceptive governance and politicians, global governance by deception, political feminism, the public school system, political economics based upon manufactured wars and their corporate benefactors, and the Federal Reserve System. She is also a nationwide and lively radio personality. To book an engagement with Nancy Levant, send an email request to:

Not available

http://www.newswithviews.com/Levant/nancy134.htm

The Truth Behind AIG

Making Bernie Madoff Look Like The Artful Dodger Since at Least 2005

I knew something was fishy when I worked out the details on AIG's "Securities Lending" program. It sucked the whole institution into a long bet on rising housing prices, in an irresponsibly unprotected position. My one-year-old nephew's got better risk management than that. It just didn't add up.

Well, dear friend...it turns out I had no idea.

"AIG was a Ponzi scheme plain and simple," says a new report from Institutional Risk Analytics, "yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community."

That's right friend...our intuition was right on with this one. So grab yourself a cup of coffee, mute the television, and get ready to take a peek under the Emperor's Kimono.

What we're going to see truly might shock you...or...if you're like me, it'll just make your blood boil and wonder how you can "opt-out" of funding any more bailouts.

AIG...A Black Hole for Your Tax Money

So we'll start with some of AIG's less egregious sins. Namely selling Credit Default Swap contracts on GM bonds...and in doing so, indirectly driving GM into bankruptcy.

Here's how that works...

If I understand it correctly, Obama gave GM sixty days to negotiate with its bondholders. Either they take a "haircut" on the value of their bonds, or a "debt-for-equity" swap. But neither seems likely at this point. Why?

Well...as it happens, GM's bondholders bought CDS protection from AIG. And as the government's made perfectly clear over the last few months, AIG counterparties can expect their CDS contracts to be paid out at 100 cents on the dollar. What's more, bankruptcy recovery on bonds is rarely - if ever - zero. Lehman bonds were worth about ten cents on the dollar...even after the biggest bankruptcy in history.

So GM's bondholders are staring down the barrel at two grossly different opportunities. On the one hand, they could do the right thing - at least in terms of taxpayer bailout money - and take a haircut on their assets. That would mean taking a serious hit on the value of their bonds...something that would be necessary just to make GM solvent.

But on the other hand, they're looking at recovering 100%+ on the exact same bonds. Granted, through means of indirect taxpayer extortion, but nonetheless; a profit. And as we said yesterday, these guys are in the business because they love money, not because they feel a duty to their government or their people. (ed.: We could likely say the same thing about Washington at this point.)

And remember, President Obama vowed that the American auto industry would indeed survive...even if they're forced into Chapter 11 bankruptcy. That means any money paid out by GM in the aforementioned recovery process would need to be replenished by taxpayer dollars in order to get the company back up to speed.

So effectively - thanks to AIG - the taxpayers could end up bailing out GM twice...on the hook for paying to make GM's bondholders whole, but also indirectly paying for any recovery they make on those bonds post-bankruptcy.

Now...if your already steaming mad...and if you're worried about your blood pressure...well, you might just want to skip this next session...

AIG: The Ponzi Scheme Laid Bare

Because this is the big one folks.

The proof that AIG was just one big Ponzi scheme...cooking the books for the whole global financial system. If AIG really was bailed out because of "systemic risk," then it was bailed out because the system risked being exposed for how insolvent it truly was.

If the "systemic risk" was failure and a collapse in the global credit markets, then it holds that AIG was merely preventing an illusion...an incontrovertible fraud that disguised this ugly truth.

The major hat-tip here goes to the whistleblowers at Institutional Risk Analytics, and you can find their full report here.

Basically, they wanted to know why AIG would ditch the highly profitable business of writing Property and Casualty (P&C) insurance policies in favor of the highly risky CDS business. It just didn't add up.

So they spent a few months, "interview[ing] a number of forensic experts, insurance regulators and members of the law enforcement community focused on financial fraud. The picture we have assembled is frightening and suggests that, far from just AIG, much of the insurance industry has been drawn into the world of financial engineering and has thus become part of the problem."

It all started with reinsurance...and a form of communiqué known as "side letters"...

"In the regulatory world, a 'side letter' is perhaps the most insidious and destructive weapon in the white-collar criminal's arsenal. With the flick of a pen, underhanded executives can cook the books in enormous amounts and render a regulator helpless."

Reinsurance is a common practice in the insurance industry...where one insurer will offset another insurer's risk on his own books for a fee. But once side letters are involved, all bets are off.

At that point, reinsurance essentially becomes a show...a "window dressing" that helps keep accountants and regulators at bay while you get down to the business of making money - never mind those pesky safeguards.

Oh yeah, and it nullifies your CDS contracts...

"There are two basic problems with side letters," says the IRA report, "First, they are a criminal act, a fraud that usually carries the full weight of an '"A'" felony in many jurisdictions. Second, once the side letter is discovered by a persistent auditor or regulator examining the buyer of protection, the transaction becomes worthless. You paid $6 million to AIG to shift risk via the reinsurance, but the side letter makes clear that the transaction is a fraud and you lose any benefit that the apparent risk shifting might have provided."

Did this practice hit AIG's CDS business? It's highly, highly likely according to the report from the IRA...

"Indeed, our sources as well as press reports suggest that the CDS contracts written by AIG may have included side letters, often in the form of emails rather than formal letters, that essentially violated the ISDA agreements and show that the true, economic reality of these contracts was fraud plain and simple."

But the evidence might be harder to come by...largely thanks to our government's ham-fisted approach to the situation..., "Unfortunately, by not moving to seize AIG immediately last year when the scandal broke, the Fed and Treasury may have given the AIG managers time to destroy much of the evidence of criminal wrongdoing."

As for a resolution...or perhaps a recovery following fraudulent conveyance...

"Only when we understand how AIG came to be involved in CDS and the fact that this seemingly illegal activity was simply an extension of the reinsurance/side letter shell game scam that AIG, Gen Re and others conducted for many years before will we understand what needs to be done with AIG, namely liquidation. Seen in this context, the payments made to AIG by the Fed and Treasury, which were then passed-through to dealers such as Goldman Sachs (NYSE:GS), can only be viewed as an illegal taking that must be reversed once the US Trustee for the Federal Bankruptcy Court for the Southern District of New York is in control of AIG's operations."

However Did We Get Here?

With US$200 Billion of our dollars already crammed down AIG's craw, and more fraudulent "bailout" on the way before we even inspect the legality of AIG's CDS contracts, I just want to know how the hell we got here in the first place.

This isn't the kind of America they told me about when I was in school. And they're not even covering it in the media. What happened? When did we become the United States of AIG?

But then I took a look at AIG's campaign contributions over the last few years and it all became perfectly clear. I wish I had US$9 million kicking around to subsidize measures that would have prevented utter financial collapse, rather than provoking one.

Sadly, it's often the culprits of financial collapse - the AIG's the Goldman's and the Madoff's - that have the money necessary to buy "democratic support" for their continued shenanigans. This stuff won't be stopping any time soon, but I'm taking steps to make sure it doesn't cost me a dime...are you?

http://www.sovereignsociety.com/2009Archives1stHalf/040209TheTruthBehindAIG/tabid/5522/Default.aspx

Was Eliot Spitzer Taken Out Because He Was Going to Bust AIG? YES!

Posted by Melina Ripcoco, Brilliant at Breakfast at 3:39 PM on March 19, 2009

America is known for its great second acts, and we may be witnessing the curtain rising on Spitzer's.

Eliot Spitzer is back and he's talking. The thought of this, no doubt, brings a small shiver to the boardrooms of some of the perps walking around trying to figure out how to hide the money this week. Today Edward Liddy testified that there have been death threats made to or about executives who received bonuses, so no names will be put on the record, but these anonymous players must know that the jig is up in the land of easy-money. Isn't what to do a no-brainer for these great Americans?

Spitzer may be as "disgraced" as any anonymous sex loving Republican loser, but America is known for its great second acts, and we may be witnessing the curtain rising on Spitzer's.

Today in Slate Eliot Spitzer has a short op-ed that speaks volumes about what is going on, and indirectly, if you follow the money, what happened to him. Plainly stated, Spitzer brings the AIG Ponzi Scheme one step closer to the revered establishment when he explains how the bailout money was funneled straight into the top players, with Goldman Sachs being the name that comes up again and again. These top players already got bailout money, and Goldman is looking at zero losses at this point, while regular Americans are being asked to make concessions or just plain losing everything. here are the biggest financial entities in the world, making billions on what appears to have been nothing but air traded back and forth, and having gutted the American people they are walking away with 100% return to their stockholders. In return AIG seems to think that its appropriate to pay themselves bonuses with the leftover funds. This leaves AIG still a wobbly shell with no plan of how to go forward, and the threat of the collapse of all of the world's financial markets still up in the air. So, what was all that bailout money for? Apparently to make sure that no one at Goldman or the other few top firms in the hand-out-line lost anything!

The relationship between AIG and Goldman goes back long enough that one would think that Goldman would know, having bought so much of this "insurance" or whatever it was, whether the "products" were ...er...real or feasible at all. Indeed, Goldman and AIG almost merged a few years ago, but Spitzer notes that the unknown black hole of AIG's business practices were probably what prevented it. Still, that didn't stop the incestuous dealings; it almost makes one think that this whole thing was a setup.

This is country that Spitzer is familiar with; he has been a terrible liability to entities that, under the Bush administration, were allowed to literally gut the country and its citizens. All of this seems to have been part of the Bush Administration's own Ponzi Scheme, which figured that the illusion of an ownership society, terrified of the "terraism" and steeped in the me, me, me, culture would look the other way while they finished clearing out the vault. Beyond that, it's clear that the media hyped housing bubble encouraged the house flip mentality and the idea that anyone could be rich. The idea of the lottery dropping on our own heads made us more protective of the rich, because we might one day be one....or look, we could be one with no money down, if we could just balance that on this, and flip that house!!

Every week came a new offer from our bank or credit card to just put the enclosed check into the bank for a $50,000 loan, unsecured and with a low APR!! Who would know that those same banks would go out of their way to cause a day or week default by changing the cycle or stopping refusing cards that went over-limit, in order to charge fees and raise the rates. Who could know that the fine print on all those little fliers talking about privacy rights and how they are selling all of our information, also said that by-the-way the interest rate is now 25% and the minimum payment has tripled! Default on that and likely AIG has sold insurance to your lending institution that should repay them for making the bad loan in the first place....no money down mortgages? No problem....its the same story. This is the ownership society and we all need to own alot of stuff. It is... what did he say?...uniquely American!

Spitzer was questioning this back in February 2008 when he wrote his Valentine to predatory lenders in the Washington Post. He detailed that Attorneys General across the country had entered into litigation in an attempt to protect the people of their states from predatory lending. The response from the federal government was astounding!

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Now, they will say that they fought the consumer protection laws to actually protect the consumers and assure that they could get credit in the future. But actually, Americans could get credit; just credit that they were able to handle and could, by reasonable standards, pay back. This was just more of the same in hindsight. Looking back that all that the Bush administration has done, the beginnings of this disaster looks almost quaint, and not like an institutionalized foray into the dirty underside of criminal activity. There were quotas passed by the government as to who got the loans and the focus was on certain populations who would be helped into homeownership even if they couldn't maintain the credit. It was treated as some sort of fulfillment of the American Dream for people to own something, but really had more to do with the insurance on the loans than the people involved. The American dream is dead, as we well know, but what it was, way back then, was that people could afford to own a house and put their kids in college!

AIG sold insurance to the biggest entities in the financial world to cover the proliferation of bad loans. This insurance became so common that it was impossible that the lions of finance didn't somehow have an inkling that something was wrong. Didn't Goldman and the rest of these huge firms know something about the stability of an impossible business plan? Hadn't Goldman gone over everything in their bid to merge? And what of the government and their mandating of certain loans that were bound to go bad. There were people involved in these things, and its not like regular people understand the ins and outs of the financial industry. They rely on brokers to explain it to them. But these brokers were being forced to see a certain product to an unqualified population. How could they? Why would they? Those are questions for another time.

Spitzer has been fighting these guys and asking questions all along.

Coincidentally, right after the WSJ editorial appeared on Valentine's Day 2008, Spitzer was caught up in what was an extremely unusual sting. So unusual is an investigation like this that it seems almost like it was a set-up; and considering where it all came from and how it all came down, it might well have been.

It seems that Spitzer's bank was investigating expenses under the auspices of the newer Homeland Security laws of the Bush administration.

Greg Palast wrote about this compellingly, and in light of how the whole thing is shaking out now, and what Spitzer said back then about this financial mess and what he tried to DO about it, Palast had a pretty good early grasp on what had gone down. So now, with Spitzer poking his head up from the underground of "healing his family," at this most compelling of moments, its probably worthwhile for Americans to screw their heads on straight and forget the details of the hooker, and look at what Spitzer was working on when he was taken down. We might all find ourselves wanting to thank the egotistical crime fighter who cant keep it in his pants.

I am no apologist for breaking the law, and usually its the highest and mightiest that fall the hardest. But when the mainstream is showing us the shiny object, we must resist the temptation to succumb to our base natures and try to see the bigger picture. There was never a real case against Eliot Spitzer, and no charges were filed. The release of embarrassing personal information was at the discretion of the Bush Administration's Justice Department.

Why was this information released? It wasn't that he was a crusader against such crimes, because many who have been caught were exactly the same and their information has been kept quiet. It wasn't that the press is all so great in their investigative journalism, either...because we know they're loathe to get off their asses if they can just read a talking point; as is evidenced by the reportage on this case.

Palast

Not all crimes lead to federal bust or even public exposure. It’s up to something called “prosecutorial discretion.”

Funny thing, this ‘discretion.’ For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him in diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.

Naming and shaming and ruining Spitzer – rarely done in these cases - was made at the ‘discretion’ of Bush’s Justice Department.

Or maybe we should say, 'indiscretion.'

Bush's Justice Department.

Its clear to me that all things being equal, this was at the very least, not a transsexual streetwalker a la Hugh Grant, and it was all very ho-hum and quiet. So, whatever the problem that leads to this sort of behavior, I don't want to know about it...its personal, so just walk on by...nothing to see here.

Welcome back Eliot Spitzer. I hope we hear more from you very soon...your voice is needed in this matter.

c/p RIP Coco

http://www.alternet.org/blogs/peek/132547/

Spitzer on AIG: I told you so

A.I.G. Sues U.S. for Return of $306 Million in Tax Payment