Stop the Coming Civil War: My Savage Truth (10 page)

It’s Washington that is under the financial world’s thumb.

How good is quantitative easing for fat-cat bankers and hedge fund crooks? “It’s the greatest Wall Street backdoor bailout of all time,” says one former Federal Reserve official.

Andrew Huszar was in charge of the Fed’s bond-buying spree after the 2008 financial collapse. In late 2013, Huszar finally came to his senses and realized that quantitative easing
was implemented only to increase the price of the derivatives in order to keep the big banks solvent. Derivatives are nothing more than worthless securities manufactured out of thin air and given whatever value those trading them choose to assign. After he left the agency in disgust, he wrote an opinion piece for the
Wall Street Journal
in which he explained how he had had his eyes opened. He started with an apology: “I can only say: I’m sorry America.” He went on to describe his role in creating the financial disaster we’re currently in the middle of, saying that he “was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing.” He went on, “Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a
real
crisis: that of a structurally unsound U.S. economy.”
¹¹

Quantitative easing is nothing short of robbery, but it’s only the latest felony in big banking’s sordid history, which dates back to the repeal of the Glass-Steagall Act during the Clinton administration; since the 1930s, this act had prevented banks from being brokerage houses and making risky investments with their clients’ money. With a stroke of his pen, Clinton signed legislation that effectively made it no longer necessary for banks to manage their assets responsibly and honestly.

The result has been that banks are hiding tens of trillions of dollars in debt off their books because of failed investments. When they’re no longer able to hide that debt, we face a devastating economic crash.
¹²

The financial crash of 2008 was engineered by an elite group of financial professionals in order to help ensure the election of Barack Obama and guarantee the continued complicity of
the U.S. government and its cadre of economic advisors, advisors who formerly worked with financial behemoth Goldman Sachs.

The government’s response to the crash was the passage in 2010 of the Dodd-Frank financial reform act, a 2,300-page behemoth containing more than four hundred new regulations. When he signed the bill into law, the president promised that the American taxpayer “will never again be asked to foot the bill for Wall Street’s mistakes.” The president even added his favorite word for emphasis, as he does frequently when he’s deceiving the American people: “There will be no more tax-funded bailouts—period.”
¹³

Nothing could have been further from the truth. Period.

We’ve done nothing
but
foot the bill for Wall Street’s financial mismanagement.

The banks have continued to engage in extremely high-risk trading while at the same time manipulating everything from interest rates to the price of commodities such as gold and silver.

Let me give you a few examples:

LIBOR, the London Interbank Offered Rate, is the interest rate banks charge when they’re borrowing money from each other. Big bankers decided to get together, write down what they think their borrowing costs should be, average those costs, and agree that that average interest rate would be what they charge when they trade interest-rate derivatives among themselves.

The thing is, the banks aren’t borrowing
their
money from each other, they’re borrowing
your
money from each other, and then fixing the interest rate however they see fit. It’s a win-win, unless of course you’re an average American taxpayer.

In the third quarter of 2013, the big banks in the United States collectively pocketed $2.8 billion on their interest rate derivatives alone.
¹⁴

The riskiest markets for banks intent on keeping interest rates low are precious metals. Gold has been trading at artificially low levels between $1,200 and $1,350 an ounce for an extended time. Silver remains stuck in the $20-dollar-an-ounce range. There’s a reason for this: If those prices ever do rise to the levels they should be trading at, it’s likely that our economy will collapse.

Gold, for instance—if it were being traded freely and without manipulation—would be priced at around $7,000 an ounce, according to one knowledgeable investor.
¹⁵

Why do banks want to keep the price of gold and silver artificially low?

As the Fed continues to print fiat money at the rate of nearly a trillion dollars a year, the market is flooded with new U.S. currency. That drives the value of the currency down relative to commodities such as silver and gold. If the banks, including the Fed, ever let the value of the gold rise to its normal level, the value of our currency—and of many currencies around the world—would plummet.

And interest rates would likely skyrocket.

The cost of servicing our federal debt would escalate beyond our ability to pay.

In order to prevent that from happening, U.S. banks, especially JPMorgan Chase, sell paper contracts for gold they do not own. It’s called naked short selling, and it has the effect of damping the price of gold, keeping it down so that the U.S. dollar will manage to artificially maintain its value against gold and silver.
¹⁶

It’s market manipulation at its most subversive.

The Fed’s activities are also at the root of what amounts to the indirect manipulation of the stock market.

Because the Fed is essentially giving money to the banks in exchange for taking fraudulent mortgage-backed securities and other derivatives off their hands, the banks are constantly on the lookout for places to “invest” their excess cash. With low interest rates, the ongoing housing market uncertainty, and the risks associated with lending to small and midsized businesses, banks have virtually stopped lending to the American people.

With interest rates close to zero, banks can’t make much money lending to small businesses and for other purposes, including mortgages. And so the money gets shuttled into the stock market, which has been on a dramatic climb.

In other words, instead of lending money to the American people—who could use it to build small businesses, or buy houses, or pay for their kids to go to college—the banks are playing the stock market.

But they’re not investing in the way you and I would invest.

They’re letting robots do their trading for them.

It’s called high-frequency trading.

High-frequency trading involves the use of powerful computers to analyze market data at unimaginably high speeds. Based on their analyses, the computers execute trades—often involving hundreds of thousands of shares—that generate enormous profits in microseconds, even though the value of the stocks they’re trading may change by only hundredths of a cent as the trade is completed. A single one of these powerful robot traders can execute as many as twenty thousand transactions in a single second.

Robot trading has changed the way the stock market works. It’s driven normal people interested in developing a stock portfolio out of the market. More than 70 percent of U.S. stock trades are now executed by robot traders, and that number is rising.
¹⁷

While all this market manipulation and centralization of wealth has been going on, the Dodd-Frank bill has proven to be worthless in preventing corruption. The big banks’ blatant, reckless manipulation of the value of fraudulent derivatives continues to rise to unheard-of levels.

Let me just point out a few of the many failures of this legislation.

First, as I’ve just explained to you, banks are still gambling with your money—money that the Federal Deposit Insurance Corporation guarantees will be safe in your bank account—by using it to make risky trades.

Even though banks, despite Dodd-Frank, have actually increased the number of illegal practices they engage in, not a single banker has been arrested and tried, let alone sent to jail. Let me put that in perspective. In the 2008 crash alone—and not taking into account the continuing Wall Street larceny since then—the average American household lost $108,000. Whether or not you had that much in the bank at the time, that’s the figure the crash would eventually cost you.
¹⁸
Every single American family was robbed of over a hundred thousand dollars, first because the Fed has kept the interest rates at zero so that money in the bank earns nothing, and second because federal policies have led to no income growth, not to mention a dramatic decrease in the number of jobs available.

Not one person has been put on trial, let alone served time, for perpetrating what I see as an enormous crime.

As many opinions as there are about the turning point of the Civil War, there are that many and more over what caused it. State versus federal rights, economic differences, Abraham Lincoln’s election, and other reasons are often mentioned as the impetus behind the war. In fact, it was money that caused the Civil War.

If you listen to today’s liberals, however, you would think that slavery is the reason for the high unemployment rate among African-Americans today.

In the past fifty years, as Lyndon Johnson’s War on Poverty grew exponentially, the U.S. has spent some $20 trillion in taxpayer money to fund such programs as Medicaid, Head Start and the Food Stamp Act.

The result?

The poverty level in the United States recently reached a five-year high.
¹⁹

One of the key demographics that Democrats depend on to maintain their hold on American politics has been African-Americans. Over the years, the left has effectively consigned American blacks to life in inner-city ghettoes and bought their votes with government-subsidized programs that discourage 14 percent of the American population from seeking meaningful jobs and careers. By the beginning of the president’s fifth year in office, African-Americans had the lowest participation rate in the labor force ever recorded.
²⁰

While the White House boasted that the unemployment rate among blacks had fallen by 5 percent, they failed to mention that the statistical drop occurred only because blacks had
dropped out of the job market at an unprecedented rate: Only 60 percent of African-Americans were even bothering to look for jobs.

The picture for minority youths looking for jobs is not any better. Some 25 percent of African-American youths do not work.
²¹
And 18 percent of Hispanic people between the ages of sixteen and twenty-four—the future of the Democratic Party—are unemployed.
²²

I just don’t understand how Mexican- and South American–Americans can vote for this president in such numbers. He might promise you the world, but he delivers on nothing. The unemployment rate among American minority youth is almost guaranteed to continue to worsen under this administration.

The consequences of the current U.S. economic policies have also been devastating for the middle class. While the administration continues to focus on what it characterizes as the decline in the unemployment rate, in fact what we’re seeing is nothing more than a decline in the number of people who are searching for jobs.

More than 90 million Americans have given up looking for jobs.

That’s the lowest the labor participation rate in thirty-five years.
²³

What is this administration’s solution?

Increase the minimum wage.

One of the themes that Democrats are pushing is “income inequality.”

How do they plan to address the fact that successful Americans make more money than those less successful?

Bump up the wages we pay to those working the lowest-paying jobs.

As if that will somehow make so much as a dent in the lives of the increasing number of Americans living at or near the poverty level.

Let me explain why this strategy won’t work.

First, less than 3 percent of working Americans are employed in minimum-wage jobs. More than half of those are people who come from families whose average income is more than $50,000 a year. They may be students working as they attend school, or people starting out in the labor market. They are only temporarily working these jobs.
²⁴
Or, as Joe Biden pointed out on
The View
, they may be single mothers “trapped in that job because if you leave, you lose your health insurance.”
²⁵

The Congressional Budget Office, normally supportive of this administration’s unworkable economic policies, didn’t cooperate when Obama announced he wanted to raise the minimum wage. In fact, the CBO couldn’t have been any clearer in its opposition to Obama. It said that raising the minimum wage would cause the loss of half a million jobs.
²⁶

That report came at about the same time the CBO told the American people that Obamacare is a disincentive for people to work, and that the Affordable Care Act would cause the loss of another 2.5 million jobs over the next several years.
²⁷
That’s because if you’re an unemployed person getting a subsidy to help you pay your medical insurance premiums, you lose that subsidy if your income goes up. Not only do the Obama regime’s policies cause the loss of jobs, they provide an incentive for people not to look for a job.

What most people on the left will not tell you is
that’s exactly what the president wants to accomplish
.

As I see it, the president is after nothing more than to make
America into a permanent welfare state, where people who once worked for a living no longer have any incentive to do so. He’s out to expand even further the permanent underclass that liberal policies have created over the past half century. He will not stop until the 99 percent have no means of support beyond what the federal government gives them.