Geithner’s ‘Dirty Little Secret’: The Entire Global Financial System is at Risk

The thing is if anyone has been paying attention to this situation at all other than dogmatically clinging to some party line; this has been, if not obvious, then out there and available to those who wanted to know. I have heard the implications discussed on PBS and NPR and even the nightly news.

It is the main reason why the let em fail mentality while certainly understandable; I feel that way a lot too, is little more than a knee jerk response because if we did...

... just let em fail...

it would; because these instituitions have become so large with their incredible reach, cause a planet wide economic meltdown that would take decades to crawl out of.

This is from the 1st page, second post.

The FDIC places the bank into receivership, its assets and liabilities are sorted out by independent audit. The irresponsible management is purged, stockholders lose and the purged bank is eventually split into smaller units and when healthy, sold to the public. The power of the five mega banks to blackmail the entire nation would thereby be cut down to size. Ooohh. Uh Huh?

This is standard operating procedure for failing banks. This is what should have been done. If you read the thread, you would know this, and you would also know why this wasn't done with these 5 mega banks.

The above is the proper way to handle this, however the people in power of the mega banks are also in power on the board of directors for the federal reserve.

One hand prints money for the other. This post is nearly verbatim of what I posted on the first page.

planet wide economic meltdown that would take decades to crawl out of.

And that is already happening DUE TO THE ACTIONS THEY ARE CURRENTLY TAKING

[edit on 31-3-2009 by djzombie]

they basically are turning the FDIC into a hedge fund in regard to how they are going to fund the gov't part of the "partnership".....especially when it comes to risk....when later the FDIC figures out the funds are not worth more than (when they were bid up during the bank bailout option) they will take a huge hit.....this seems a GAURANTEE..unless the dollar is devalued against gold (or loses reserve currency status) within the time period when the loan from the fdic runs out ( 3 year's i believe)....so we shall see....

it's almost like everyone knows these banks can't be returned to health because of the huge Credit derivatives exposure that continually requires writedowns that would other wise wipe out their capital........seems like the CEO's were interested most in getting golden parachutes while the currency still had quality purchashing power.....and it seems to me ...the elite class may be scheming for as much bailout money as fast as they can.....because the purchasing power of the currency is still pretty strong (and maybe for another 6-12 months) but then the bottom could fall out and they would like to have their bailout's (and invest them in products that repirce up in devaluation) when the SHTF.....

Originally posted by projectvxn
Bretton Woods system(Wikipedia)

To be a bit more fair here, this isn't about Tax Cheat Timmy, this is about a policy that spans a whole generation that is now coming to a close. Supported by everyone from Dwight D. Eisenhower, to Ronald Reagan, to Barack Obama. All legislation that arose from the Bretton Woods Agreement in July of 1944 has been a reaffirmation of that agreement ever since. And hence every piece of legislation inspired by it is a nail in the coffin of America's gigantic bubble economy... The Bretton Woods system officially collapsed in 1971, yet it's influence has been felt across the whole world. Especially in the US, with the rise of Keynesian Economics and the New American sytem of Corporate Welfare, which Keynes wholly advocates. The truth of the matter is this, This system we use today has subtle inherent flaws that are useful only to those who know the system and it's mechanics. And It isn't the Traders, and it isn't the Banks, or the Shortsellers, or even the whole of Congress. It is the people who have made the most money and garnered the most power and influence. Names we'll likely never hear.

Remember it took 20 years to discover Madoff, and it took an economic collapse to make it happen.

[edit on 31-3-2009 by projectvxn]

I quoted my post to give a bit more focus as to what I'm talking about:

As I said above, the Bretton Woods system collapsed but never really went away. The argument today is that the world needs a new monetary system and after the Panic of '08 French President Sarkozy said "we must rethink the financial system from scratch, as at Bretton Woods." Such rhetoric has been repeated by China, Russia, Japan, Saudi Arabia, certainly Iran, and the US through Tax Cheat Timmy.

They are going to regulate a new global financial order with old ideas. And it won't be long before that system collapses as well. The system the US is reeling from today is a result of monetary policies that more closely reflect Bretton Woods, and it is often called Bretton Woods II. The point is this:

Bretton Woods was a shaky and unstable way of valuing currency and exchanging it at a global rate. After it's collapse in 1971 the US saw inflation at ten percent well into the 80s. And the legislation used to "Fix" that problem is what caused the recession of 87-91, and it would have turned into another depression but the treasury somehow conned the Japanese to purchase $700 billion or so in Bonds, and other investments to keep from dragging the US economy down. It worked, but it wasn't destined to hold. So what did they do?

Here comes China, Saudi Arabia and even Russia as a new class of foreign debt holders. Our monetary policy from 1991 to 2001 was based solely on the idea that we could use the sovereign wealth of other countries to prop up our credit. In TEN YEARS this lead to more credit than actual assets in the system. And the mini-recession of '00-01 which to me proved we were not really making money, but creating credit based on money we borrowed was the correction of some of that inflation by the market. It doesn't make sense does it? Well, a few people got rich, and several countries are being bankrupted as a result because they loaned out real wealth and we returned it to them in credit we created from credit created from the real wealth they loaned us...Basically we sold them back worthless assets on paper and told them it was good because hey, our credit rating is AAA. The system is coming to a halt because of ten years of this rampant BS.

Forget MBS, forget the CDS market and think for a second, if we haven't produced anything here for nearly 30 years, then where did all of this prosperity come from? And how on Earth did we get away with it?

Flash to now, and you will find the Fed doing the VERY SAME THING with OUR sovereign debt. They are printing cash and monetizing our debt to the tune of $300 billion and they think it might work because when the Japanese did it a decade earlier it saved us...Well the problem with that rationale is that Japanese citizens are ardent savers, we are not. And monetizing our own debt will debase the dollar and likely force a US government default. Depression is now, and the only deflation we're seeing is the fact that this fake Credit from Credit scheme is being found out and the market is correcting. The Government is trying to NOT let this happen because so many have made so much from Bretton Woods. Except of course, our children, and our children's children. This will cause inflation TODAY, and it is. Only we haven't seen it because we haven't removed all the Credit Made Credit from the system yet. When that happens(If it doesn't all collapse before this correction is allowed to finally happen) the Feds actions will lead to MASSIVE INFLATION.

History is a Bitch!

Good Luck.

[edit on 31-3-2009 by projectvxn]

Well at least we know we don't need regulation!!!

NO tax increases either!!! they produce the jobs


Anyhow ya - soo I have been waring on here for a couple months and now that AJ say credit default swaps and derivative products you guys get it...

The government is not the only problem - even with a robust government we still allowed this to happen!

IDEOLOGY anyone?


LESS REGULATION !!!!

Originally posted by AlienChaser

100% of individual income tax collected goes directly to pay this interest.

Can someone please explain this to me? I've never been able to find any info on it. Thanks!

The problem is that the Rockefeller / Rothschild consortium has planned for this for sometime; the derivatives market was the very vehicle by which they could transfer massive amounts of wealth to the electronic dimensionality of the powers that be. The very fact that we now have such a massive amount of information on WHAT they have done and are doings is the arrogance of the predator having wounded his prey and allowing it to run for a bit bleeding before applying the death blow. Their arrogance will be their undoing.

Their basic assumption being that psychology of socially reeducated and seemingly system dependent Americans will fold like beaten Europeans when ordered to turn in their weapons as a security measure after soon coming national martial law is declared. The fatal flaw of their logic is that they initiated the final stage of their plans BEFORE our collective national memory of what it once meant to be an American was totally erased. Compounded by the error of sending our youth off to fight their wars, which returned men and women who know the meaning of ‘Duty and Honor’ to the Constitution. In effect, creating large reserves of trained masses of civilian ‘Minute Men’ who will not take much to awake from their media induced slumber.

Indeed, their final master stroke is being applied as I write this, the placing of the Federal Reserve and all other financial apparatus of the United States under the IMF at the G-20. This little tidbit was leaked this weekend; “Thinking themselves wise, they become fools.” Exactly how long do you think this will take to really awake the masses? As Dick Morris said, “It looks like all the anti-NWO conspiracy nuts in Montana, who were ready to shoot federal agents, were right.” Powerful words on prime time TV.

[edit on 3/31/2009 by SGTChas]

reply to post by MeanDirtyKiller

Originally posted by AlienChaser

100% of individual income tax collected goes directly to pay this interest.

Can someone please explain this to me? I've never been able to find any info on it. Thanks!

The Grace Commission report ordered by Ronald Reagan

ShowMeTheLaw (this is a must see)

“100% of what is collected is absorbed solely by interest on the Federal Debt … all individual income tax revenues are gone before one nickel is spent on the services taxpayers expect from government.”
-Grace Commission report submitted to President Ronald Reagan - January 15, 1984

It is important to note that all presidential assassinations can be directly connected with their threatening the Fed or the power of the banking cartel.

Another thing not commonly known is that at the beginning of our country there was no income tax at all. We didn’t have nor did we need an income tax until we got the bankers got into the government picture. The income tax was only needed to pay interest to the bankers for our money that they loan to our government. Yes, you read that right, the FED, mostly on paper and computer, creates money and pays the treasury a small printing fee for currency, and then loans this money to our government. Our taxes pay them interest on this loan that cost the FED virtually nothing to make,

Project World Awareness
A good, 5 minute breakdown.

Where does this private corporation get the money to loan to you, me, and our government? They get it from us.
THEY PRINT THE MONEY THAT BELONGS TO YOU AND ME AND... THEN LOAN IT BACK TO US AND CHARGE US INTEREST.

They buy back our assets and equity.
As it continues they own more and more and our children less and less.

JeremiahProject
I Highly recomend spending some time at Jeremiah Project.

Hope that will give you a good start.

More importantly Everyone continue to push your reps in congress to support Ron Pauls bill The Federal Reserve Transparency Act H.R. 1207
This is really building steam up to 49 co-sponsors (+3 from yesterday). This would force the FIRST EVER audit of the privatly owned Federal Reserve bank, and would almost certainly cause huge problems for them. It could even really lead to the ultimate goal of ending the fed all together.

THe people actually really have something going here.

Geithner has another angle he's playing out at the same time...

since there are far too many instances to list... just read any group of
Geithners Q & As or read his statements with your newly acquired
fine-tuned listening....

Geithner is trying to moderate and effectively change the definitions
of CREDIT and DEBT...
If one listens with an ear for those two concepts,
you will see he is trying to make a change in the pop-cultures view
of what constitutes a DEBT, like mortgages....

and that CREDIT, will always be recirculated, and should never be equated with 'Debt' or Debt instruments/Debt paper...or treated as finalized~


Could this be the magic trick which he's been talking-circles around
but never coming clean to the American people with?
All those $10 Trillions of CDS monetizations was not bailing out 'Debt'
but rather the unfortunate 'stopping point' for the CreditSwaps
which could-should have continued the almost infinite series of minute reductions of risk in the Credit instruments...

If only Geithner had in place already the 'Credit' risk clearing house he envisions, then the costs (losses) of those CDSs would have been spread
over another 10-or-so resales & transfers...which follows the mental exercise which says one cannot ever reach the door if one continually halves-the-distance with each step toward the door....
so it is with the securities achieving $0 (zero) value->

If most everything is 'credit' based, then there is always a possibility of repayment (and taxable events) no matter how many times its sliced/diced/repackaged/ressurrected...
the next 'balloon' to be created is Geithners derivatives/toxic-assets Market...
independent from the bond/'debt'/stock/commodities/futures/forex Markets


thanks

reply to post by imd12c4funn


Bank of America intentionally bought Countrywide and Merrill so they would be too big to fail.

It’s ironic that the 2 purchases are what will cause them to fail. How stupid!! A bad decision from the CEO on this one.

I assume Paulson is still in hiding with his riches.

Paul Volcker is the one pulling all the strings. He will give Timmy Geitner all the orders, as well as telling Obama what to do.

Here's the Real News Network's interview with William Engdahl:

reply to post by St Udio



hey guy, i found a whack-forward thinker that sees through the clutter like you, found in a list of replies @ huffington post. com

ClarcKing
The U.S.has not hit bottom. The situation is going to get worse.
The "plan" proposes to create a derivative from the toxic assets of the collapsed derivative market and resuscitate this market with a derivative made of U.S. financial resources, assets, and debt, managed by hedge funds in NY and London.
Insanity.
We are running out of time and patience.
Enough talk about saving the psychopathic speculators of Wall St. [...]

well, ClarcKing, isn't as specific as myself,
that Geithner ~et al~
have no intention of purging the system of the dubious paper and the continued creation of fraudulently devised paper/CreditSwaps & such.
All these masterminds see is they just need to have total knowledge
of what derivatives are out there, how many, owned & held by what issurer
and the elited-brained brokers at the Fed/Treas will be able to manipulate a continuing market for these always toxic products...
keeping all the ball-in-the-air in a massive juggling act approach.

thanks for peering behind the curtain,