For months now, many of us have suspected that Goldman Sachs has exhibited way too much influence on Wall Street. Now, the evidence shows that Goldman has been a key player in politics. In fact, they are the Government. We pointed out a few weeks ago that Goldman Sachs alumni are sprinkled liberally in all branches of government. They are the big dogs of the banking system and therefore are entitled to operate as shadow leaders.
The New York Times discovered that during the days of the fall of Lehman Brothers and AIG that Treasury Secretary Hank Paulson was in constant touch with the CEO of Goldman Sachs, Lloyd Blankfein. Presumably, this violates all sorts of ethics but since the bankers rule our country they must, by definition, be above the law.
Here is what the Times uncovered. "On the morning of Sept. 16, 2008, the day the A.I.G. rescue was announced, Mr. Paulson's calendars show that he took a call from Mr. Blankfein at 9:40 a.m. Mr. Paulson received the ethics waiver regarding contacts with Goldman between 2:30 and 3 the next afternoon. According to his calendar, he called Mr. Blankfein five times that day. The first call was placed at 9:10 a.m.; the second at 12:15 p.m.; and there were two more calls later that day. That evening, after taking a call from President Bush, Mr. Paulson called Mr. Blankfein again.
When the Treasury secretary reached his office the next day, on Sept. 18, his first call, at 6:55 a.m., went to Mr. Blankfein. That was followed by a call from Mr. Blankfein. All told, from Sept. 16 to Sept. 21, 2008, Mr. Paulson and Mr. Blankfein spoke 24 times.
At the height of the financial crisis, Mr. Paulson spoke far more often with Mr. Blankfein than any other executive, according to entries in his calendars. "
So perhaps you caught the sentence above about the bankers ruling the country. May we provide a short and woefully inadequate explanation? We will leave the big discussion for another day.
Our nation appears to be under the tight fist of Ben Bernanke, the Chairman of the Federal Reserve Board. The economy, President Obama, Wall Street and all the nations of the world are waiting with breathless anticipation at his every move. He is the most powerful man in the world.
First of all, the Federal Reserve Board is not a government agency! Less than 1 in 100,000 know that the Fed is, in fact, a private corporation. Unlike all corporations however, they are not subject to the same accounting and auditing rules. Mr. Bernanke recently rebuffed any attempts to subject the Fed to an audit saying it would compromise their objectivity. The stock in the Fed is owned by such banks as Citigroup, Bank of America, Goldman Sachs and others.
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Who prints the money? The government? Hardly. The government mints coins which account for about one tenth of one percent. All other money is printed, controlled and manipulated by the Fed! Those printing presses that you think are running in Washington DC are actually running in Wall Street, Main Street and the Federal Reserve. Money is created by loans. Without loans there is no money. Loans are debt so without debt there is no money! Where does money come from? It is created by the banks using debt; it is not printed by the government.
No doubt all this is very foreign to you but suffice it to say it is no surprise that Treasury Secretary Paulson was in close communication with the Goldman Sachs chief. After all they are buddies but more importantly, they work together to control the destiny of our country's finances.
That leads us to suspecting that the "Cash for Clunkers" bill is another attempt to benefit Wall Street more than Main Street. As most people know by now, banks are not lending as they usually do. With more defaults around the corner, they are hoarding cash. By stimulating car buying which is really nothing more than incurring more loans and debt, the banks can start lending by using government incentives. More lending will then beget more money in the money supply which is designed to increase prosperity.
Increasing debt is not a good thing. For two hundred years we have piled on debt. Not since Andrew Jackson has our country been debt free. Oh sure, we talk about a surplus like we had in the Clinton years but that is merely a paying of the current budget shortfall. The deficit is a year-by-year mismanagement of public funds. The federal debt is an accumulation since the days of President Jackson. Ultimately all debt must be paid. Currently our debt is around $13 trillion with another $45 trillion in future obligations. These future obligations are like a balloon payment on a mortgage that is due in 10 to 20 years.
Since government has sold out by letting private enterprise (banks) print money and collect interest, they are hamstrung with no way out. They cannot run a profit-making organization (Amtrak and the Post Office) nor generate substantial revenue. That leaves them with only one option. They must raise taxes. The only other way is to allow substantial inflation which is the most insidious tax of all. We can look forward to both.
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