Fed hits 'Home Run'-- prevents 'Bank Run'

October 10, 2008

Fed hits 'Home Run'-- Prevents 'Bank Run'

"FDIC for stocks?", why not?

Source: CNN.com
October 10, 2008 Depression risk might force U.S. to buy assets

Source: CNN.com
October 10,2008 Dow fluctuates after falling below 8,000

Source: WorldNetDaily.com
October 10,2008 Pelosi: U.S. needs $150 billion stimulus

Source: Yahoo News.com
October 10,2008 US to buy stake in banks, first since Depression

--Warning: beware of a little parody in this piece.

Let's insure home values and stock values like we insure bank account values!

As our 401k accounts vanish, perhaps we should be asking ourselves if we need a new federal government entity to regulate brokerage houses, a 'Stock' Fed so to speak, that would protect against runs on our stock brokerage houses who hold our 401k accounts; as we now have a 'Bank' Fed to regulate and protect against runs on our banks where we deposit our paychecks?

OK, I know we have the SEC that regulates and polices stock purchases, but it does not guarantee our deposits in the brokerage houses, like the FDIC guarantees our deposits in banks. After all, what is the difference between a bank deposit and a stock deposit? One is riskier than the other, and one is more convenient to pay bills with than the other; however, you deposit money into both, you trust both places with your money, and you can make money with investing in both. So, why not have a guarantee that no one will steal our money or fraudulently misuse our money anywhere. "A CEO can steal your stock money easier than a bank robber can steal your bank deposit", you say, "so why not create a stock FDIC to pay us for any stock losses?"

Since giving your money to a stock broker, who then gives your money to some Enron somewhere, is riskier than giving it to a banker, who then gives it to some homeowner somewhere, we need extra government protection of our 'stock' accounts than we do our 'bank' accounts. A 'stock' FDIC would protect our retirement accounts from losing money and let us all sleep sound at night.

No one would propose such nonsense you say? Or would they? Just follow along with me here...

How did we get here? --1907--

It all started with the Banking Panic of 1907.

A few greedy Wall Street financial wizards playing games with the financial system. One Otto Heinze tried to trick and then steal innocent people's money with a scheme to corner the market on the stock of the United Copper Company. This resulted in destroying the Knikerbocker Trust Company and that started ordinary citizens into thinking they could not trust Wall Street Pharisees and Sadducees with their money. They pulled their money and stocks out and the panic of 1907 began.

All was not lost as one of the workers for the Sadducee Rothschild dynasty, a man named J.P. Morgan, came to the rescue, saving America. For his reward, he was allowed to spend the next several years going over to Europe to learn how the Rothschild's made real money with Central Banks.

Lucky for us that Sadducee Jacob Schiff was such a prophet about the need for a central bank just months before the Panic.

How did we get here? --1913--

The rough draft of the Federal Reserve was drawn up at Jekyll Island in Nov of 1910 (see: Creature from Jekyll Island). The final draft presented Jan 11, 1911, followed by two years of debate, thereafter the Federal Reserve Act was enacted on Dec 22, 1913.

For the first 125 years of America's existence, we had experienced periodic "bank panics". A bank panic would cause a run on that bank or a "bank run". The Panic of 1907 was the last straw.

"If you will trust us, we can fix that!" said the Federal government in 1913.

We will destroy the evil money trusts, who mismanage and steal from our financial accounts. And no, it is not true that these same money trusts have gathered on Jekyll Island to draft the creation of this banking cartel which we will call The Federal Reserve.

And so, in 1913, without any current crisis, and having obtained a world leading economy over the last 125 years, with capitalism and without a Fed, we started tinkering around with our success and created the Third Bank of the United States (a cartel of banks actually), commonly called The Federal Reserve. Its purpose was to bring money in and out of circulation and to raise and lower interest rates, all done in order to smooth out the business cycle and thus eliminate a nagging complaint of capitalism, "bank runs". The Federal Reserve was to make perfection even more perfect. Capitalism without the business cycle hangovers.

WW1 started the following year and lasted until 1917. Following the war, there was a one to two year readjustment to a peace-time economy. Sure the Fed allowed for the massive financing of the war effort on a scale never before seen, but this was all hidden from view to ordinary Americans. All during this war-time spending and readjustment, the Fed had not been able to show what it could do for the ordinary private business cycle. Now it had its chance.

How did we get here? --1920--

Starting in 1920, America was at peace and the Fed started its business in earnest. And sure as promised, the business cycle was eliminated. We were in the Roaring 20's, with none of that annoying downside of the business cycle. Problem solved! No "bank runs"!

Business profits were up, up, and away.

Since stocks are a reflection of business; investors believed that stocks also could never come back down.

Stock prices were up, up, and away!

So, the fad was to go to banks, get the biggest loan you could get, and buy as many stocks as you could on margin. It was a no-lose proposition.

The Fed did not promise to do a thing for "stock runs". No need, because without a downturn in a business cycle, there could never be a downturn in stocks.

How did we get here? --1929--

History proved otherwise. Just 10-years into the active life of the Fed, in 1929, we had a massive "stock run" like we had never seen before. As the current Fed Chairman, Ben Bernake, admits, the "stock run" was caused by the monetary policies of the Fed which caused a tremendous stock bubble to develop.

The problem is that immediately after this massive "stock run", bankers desperate to salvage what they could from the 'stock run', started calling in all those margin accounts from stock investors, further depressing the stock market. Banks started failing. Mostly private non-Fed banks went under. Once again, people felt like they would lose their life's savings. Now we had a massive bank panic and "bank run" like we had never seen before. This was a problem.

"If you will trust us, we can fix that", said the Federal government in 1929.

While they were not chartered to stop "stock runs", they tried to make sure there cannot possibly be another "bank run".

Since our Fed was created to be in the business of printing semi-fiat dollars, which we can adjust against the price of gold at will, (to help prevent "bank runs"), then we will guarantee your money sitting in the bank with a brand-new new government organization called the FDIC. (Federal Deposit Insurance Corporation) Your money was now 100% insured against loss. In return, we only ask to be able to tell the banks how to run their business, by monitoring and regulating the banks to make sure that you, the taxpayer, will not be forced to bail out bad bankers. If you see the FDIC logo on your bank, then you can rest assured that your bank has "voluntarily" submitted itself to our will, and we will become your ultimate banker should he fail.

You can probably see where this is headed!

After 1929 and before 1971, our federal government was on a semi-gold/semi-fiat money system thanks to FDR. The Fed would peg an arbitrary amount of dollars to a real ounce of gold and promise to pay an ounce of gold in exchange for those arbitrarily set number of dollars. I remember in my youth, the price was set at the time to $32 per ounce of gold. Foreign banks could bring $32 USD to the U.S. Treasury and the U.S. Treasury would give them one ounce of gold. Now, whenever they decided, they would readjust the amount of dollars they would redeem for an ounce of gold -- instantly always making the dollars worth less -- strangely, never deeming them to be worth more.

Then there was that messy fractional reserve banking which allowed the same dollars to be loaned out over and over again, still backed though by that lonely single ounce of gold. Fractional Reserve Banking meant that instead of one owner for one ounce of gold, many owners could independently claim the same ounce of gold. It's one of those magical banking tricks, which makes your gold disappear.

How did we get here? --1971--

Just prior to 1971, throughout the 1960's, America had been simultaneously funding a two front war; the Vietnam War and the War on Poverty. The government had simply been creating too many dollars for the same amount of gold. The two non-winnable wars caused a rush to redeem gold. The gold reserves at Ft. Knox were in danger of being used up. So, starting in 1971, Nixon decided that the federal government would stop promising to exchange any amount of dollars for an ounce of gold. The now totally fiat American dollar was free to find its own value against a basket of other country's fiat money.

Now, the Feds had no problems whatsoever guaranteeing their fiat money sitting in banks, thus eliminating any possibility of "bank runs".

How did we get here? --2000--

Coning now to the present day. Till this year, home prices had always risen, if for no other reason that government deficit spending assured a constant rate of inflation in society, and thus a constant rate of inflation in home prices. Add to the fact that there was only so much real estate and we were getting more families arriving from Latin America every day to live on that limited real estate. Housing was a no-lose proposition.

Home prices were up, up, and away.

So the fad was that we went to our banks and borrowed as much money as we possibly could, in order to buy as much house as we possibly could.

Banks who had only gave 50% margin loans on stocks in 1929, were now giving out 100% margins on homes in 2000 to poor credit risks. To make matters worst, they gave them loans with a low introductory rate called an APR -- Adjustable Rate Mortgage. Since rates were already at historic lows, the rate were guaranteed to rise. Match that to rising gasoline prices and viola, foreclosures from the poor credit risks who could no longer afford to pay their mortgage.

Once again, the Fed had caused a bubble. This time in housing, not stocks.

In the home lending business, a margin call is called a foreclosure. One foreclosure caused another foreclosure. Lenders lost money and had no money to lend for new homes. The supply of homes for sale were rising and the demand of people with money to buy a home was shrinking.

Home prices started to fall. We were in the beginnings of a 'home run' so to speak.

Good news though! Even with massive government monitoring and regulation of banks, the banks are once again failing, but viola, the system worked -- no "bank runs". Ok, there was that one in California, but no one lost any money in banks. Of course, no one has their money in banks because the Fed sets the prime rate lower than the inflation rate and you are guaranteed to lose money in a fully insured against loss bank account. All our money is in our homes and our 401ks.

Still, the Feds have not insuring our money sitting in brokerage houses. Now we are experiencing massive 'stock runs' to go with our 'home runs'.

How did we get here? --2008--

At the expense of being repetitive, there is a federal 'solution' seeking a 'problem'.

"If you will trust us, we can fix that", said the federal government in 2008.

First off, we will take $700 billion of your money in order to protect your money. We will stop this 'home run'.

Well, darn it, there is a 'stock run' to follow the 'home run' that we have to deal with.

I'll tell you what. We, your elected government officials whom you trust so deeply, wish to stop forever both 'home runs' and 'stock runs' as we have stopped 'bank runs'. If you trust us just one more time, we will create a Stock Market Federal Reserve. Our S-M Fed will buy and sell stocks to regulate the stock cycle. No longer will your stocks go down in value.

Stock prices will be up, up, and away.

We will do the same with a newly created 'Home' Fed piece of legislation.

Home prices will, once again, be up, up, and away.

Except that you cannot trust us to regulate perfectly, as we are only subhuman. We will also create a Stock Market FDIC to go along with our new Stock Market Federal Reserve. The only thing we ask, is that you allow us to tell your companies how to run their company. If you allow us to run your companies, then we will promise you that we will protect your investment in your stock accounts for up to $250,000 SM FDIC.

Same with your home. If you allow us to tell you how to run your home, we will protect your investment in your home up to $250,000 Home FDIC.

There has to be a better way?

........Or, we can just thank the feds for all their help, but we have decided that we were better off helping ourselves, as we did before 1913.

And to get out from under all this fake Fed debt in our mortgages and credit cards bills and equity loans, how about the gall of Pelosi wanting to give all of us 200 million taxpayers a measly $150 billion stimulus, after she just ramrodded a $700 billion stimulus package to a handful of bankers!

Come on Pelosi, how about a $50 trillion dollar stimulus package, so that each one of 100 million homes in America would have a stimulus check of $500,000 to pay off debts.

America needs a Jewish Jubilee to free us from bondage to the Jewish Sadducees. I call my plan The Christian Jubilee.

Article located at:
http://thechristiansolution.com/doc/20081010_54_StockFDIC.html

The Christian Solution	C S

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October 10, 2008 Fed hits 'Home Run'-- Prevents 'Bank Run' "FDIC for stocks?", why not? Source: CNN.com October 10, 2008 Depression risk might force U.S. to buy assets Source: CNN.com October 10,2008 Dow fluctuates after falling below 8,000 Source: WorldNetDaily.com October 10,2008 Pelosi: U.S. needs $150 billion stimulus Source: Yahoo News.com October 10,2008 US to buy stake in banks, first since Depression You know, instead of a bailout, how about locking these guys up with no bail? --Jay Leno --Warning: beware of a little parody in this piece. Let's insure home values and stock values like we insure bank account values! As our 401k accounts vanish, perhaps we should be asking ourselves if we need a new federal government entity to regulate brokerage houses, a 'Stock' Fed so to speak, that would protect against runs on our stock brokerage houses who hold our 401k accounts; as we now have a 'Bank' Fed to regulate and protect against runs on our banks where we deposit our paychecks? OK, I know we have the SEC that regulates and polices stock purchases, but it does not guarantee our deposits in the brokerage houses, like the FDIC guarantees our deposits in banks. After all, what is the difference between a bank deposit and a stock deposit? One is riskier than the other, and one is more convenient to pay bills with than the other; however, you deposit money into both, you trust both places with your money, and you can make money with investing in both. So, why not have a guarantee that no one will steal our money or fraudulently misuse our money anywhere. "A CEO can steal your stock money easier than a bank robber can steal your bank deposit", you say, "so why not create a stock FDIC to pay us for any stock losses?" Since giving your money to a stock broker, who then gives your money to some Enron somewhere, is riskier than giving it to a banker, who then gives it to some homeowner somewhere, we need extra government protection of our 'stock' accounts than we do our 'bank' accounts. A 'stock' FDIC would protect our retirement accounts from losing money and let us all sleep sound at night. No one would propose such nonsense you say? Or would they? Just follow along with me here... How did we get here? --1907-- It all started with the Banking Panic of 1907. A few greedy Wall Street financial wizards playing games with the financial system. One Otto Heinze tried to trick and then steal innocent people's money with a scheme to corner the market on the stock of the United Copper Company. This resulted in destroying the Knikerbocker Trust Company and that started ordinary citizens into thinking they could not trust Wall Street Pharisees and Sadducees with their money. They pulled their money and stocks out and the panic of 1907 began. All was not lost as one of the workers for the Sadducee Rothschild dynasty, a man named J.P. Morgan, came to the rescue, saving America. For his reward, he was allowed to spend the next several years going over to Europe to learn how the Rothschild's made real money with Central Banks. Lucky for us that Sadducee Jacob Schiff was such a prophet about the need for a central bank just months before the Panic. Early in 1907, Jacob Schiff of Kuhn, Loeb & Co. warned in a speech to the New York Chamber of Commerce that "unless we have a central bank with adequate control of credit resources, this country is going to undergo the most severe and far reaching money panic in its history" --Wikipedia, Panic of 1907 How did we get here? --1913-- The rough draft of the Federal Reserve was drawn up at Jekyll Island in Nov of 1910 (see: Creature from Jekyll Island). The final draft presented Jan 11, 1911, followed by two years of debate, thereafter the Federal Reserve Act was enacted on Dec 22, 1913. For the first 125 years of America's existence, we had experienced periodic "bank panics". A bank panic would cause a run on that bank or a "bank run". The Panic of 1907 was the last straw. "If you will trust us, we can fix that!" said the Federal government in 1913. We will destroy the evil money trusts, who mismanage and steal from our financial accounts. And no, it is not true that these same money trusts have gathered on Jekyll Island to draft the creation of this banking cartel which we will call The Federal Reserve. And so, in 1913, without any current crisis, and having obtained a world leading economy over the last 125 years, with capitalism and without a Fed, we started tinkering around with our success and created the Third Bank of the United States (a cartel of banks actually), commonly called The Federal Reserve. Its purpose was to bring money in and out of circulation and to raise and lower interest rates, all done in order to smooth out the business cycle and thus eliminate a nagging complaint of capitalism, "bank runs". The Federal Reserve was to make perfection even more perfect. Capitalism without the business cycle hangovers. WW1 started the following year and lasted until 1917. Following the war, there was a one to two year readjustment to a peace-time economy. Sure the Fed allowed for the massive financing of the war effort on a scale never before seen, but this was all hidden from view to ordinary Americans. All during this war-time spending and readjustment, the Fed had not been able to show what it could do for the ordinary private business cycle. Now it had its chance. How did we get here? --1920-- Starting in 1920, America was at peace and the Fed started its business in earnest. And sure as promised, the business cycle was eliminated. We were in the Roaring 20's, with none of that annoying downside of the business cycle. Problem solved! No "bank runs"! Business profits were up, up, and away. Since stocks are a reflection of business; investors believed that stocks also could never come back down. Stock prices were up, up, and away! So, the fad was to go to banks, get the biggest loan you could get, and buy as many stocks as you could on margin. It was a no-lose proposition. The Fed did not promise to do a thing for "stock runs". No need, because without a downturn in a business cycle, there could never be a downturn in stocks. How did we get here? --1929-- History proved otherwise. Just 10-years into the active life of the Fed, in 1929, we had a massive "stock run" like we had never seen before. As the current Fed Chairman, Ben Bernake, admits, the "stock run" was caused by the monetary policies of the Fed which caused a tremendous stock bubble to develop. The problem is that immediately after this massive "stock run", bankers desperate to salvage what they could from the 'stock run', started calling in all those margin accounts from stock investors, further depressing the stock market. Banks started failing. Mostly private non-Fed banks went under. Once again, people felt like they would lose their life's savings. Now we had a massive bank panic and "bank run" like we had never seen before. This was a problem. "If you will trust us, we can fix that", said the Federal government in 1929. While they were not chartered to stop "stock runs", they tried to make sure there cannot possibly be another "bank run". Since our Fed was created to be in the business of printing semi-fiat dollars, which we can adjust against the price of gold at will, (to help prevent "bank runs"), then we will guarantee your money sitting in the bank with a brand-new new government organization called the FDIC. (Federal Deposit Insurance Corporation) Your money was now 100% insured against loss. In return, we only ask to be able to tell the banks how to run their business, by monitoring and regulating the banks to make sure that you, the taxpayer, will not be forced to bail out bad bankers. If you see the FDIC logo on your bank, then you can rest assured that your bank has "voluntarily" submitted itself to our will, and we will become your ultimate banker should he fail. You can probably see where this is headed! After 1929 and before 1971, our federal government was on a semi-gold/semi-fiat money system thanks to FDR. The Fed would peg an arbitrary amount of dollars to a real ounce of gold and promise to pay an ounce of gold in exchange for those arbitrarily set number of dollars. I remember in my youth, the price was set at the time to $32 per ounce of gold. Foreign banks could bring $32 USD to the U.S. Treasury and the U.S. Treasury would give them one ounce of gold. Now, whenever they decided, they would readjust the amount of dollars they would redeem for an ounce of gold -- instantly always making the dollars worth less -- strangely, never deeming them to be worth more. Then there was that messy fractional reserve banking which allowed the same dollars to be loaned out over and over again, still backed though by that lonely single ounce of gold. Fractional Reserve Banking meant that instead of one owner for one ounce of gold, many owners could independently claim the same ounce of gold. It's one of those magical banking tricks, which makes your gold disappear. How did we get here? --1971-- Just prior to 1971, throughout the 1960's, America had been simultaneously funding a two front war; the Vietnam War and the War on Poverty. The government had simply been creating too many dollars for the same amount of gold. The two non-winnable wars caused a rush to redeem gold. The gold reserves at Ft. Knox were in danger of being used up. So, starting in 1971, Nixon decided that the federal government would stop promising to exchange any amount of dollars for an ounce of gold. The now totally fiat American dollar was free to find its own value against a basket of other country's fiat money. Now, the Feds had no problems whatsoever guaranteeing their fiat money sitting in banks, thus eliminating any possibility of "bank runs". How did we get here? --2000-- Coning now to the present day. Till this year, home prices had always risen, if for no other reason that government deficit spending assured a constant rate of inflation in society, and thus a constant rate of inflation in home prices. Add to the fact that there was only so much real estate and we were getting more families arriving from Latin America every day to live on that limited real estate. Housing was a no-lose proposition. Home prices were up, up, and away. So the fad was that we went to our banks and borrowed as much money as we possibly could, in order to buy as much house as we possibly could. Banks who had only gave 50% margin loans on stocks in 1929, were now giving out 100% margins on homes in 2000 to poor credit risks. To make matters worst, they gave them loans with a low introductory rate called an APR -- Adjustable Rate Mortgage. Since rates were already at historic lows, the rate were guaranteed to rise. Match that to rising gasoline prices and viola, foreclosures from the poor credit risks who could no longer afford to pay their mortgage. Once again, the Fed had caused a bubble. This time in housing, not stocks. In the home lending business, a margin call is called a foreclosure. One foreclosure caused another foreclosure. Lenders lost money and had no money to lend for new homes. The supply of homes for sale were rising and the demand of people with money to buy a home was shrinking. Home prices started to fall. We were in the beginnings of a 'home run' so to speak. Good news though! Even with massive government monitoring and regulation of banks, the banks are once again failing, but viola, the system worked -- no "bank runs". Ok, there was that one in California, but no one lost any money in banks. Of course, no one has their money in banks because the Fed sets the prime rate lower than the inflation rate and you are guaranteed to lose money in a fully insured against loss bank account. All our money is in our homes and our 401ks. Still, the Feds have not insuring our money sitting in brokerage houses. Now we are experiencing massive 'stock runs' to go with our 'home runs'. How did we get here? --2008-- At the expense of being repetitive, there is a federal 'solution' seeking a 'problem'. "If you will trust us, we can fix that", said the federal government in 2008. First off, we will take $700 billion of your money in order to protect your money. We will stop this 'home run'. Well, darn it, there is a 'stock run' to follow the 'home run' that we have to deal with. I'll tell you what. We, your elected government officials whom you trust so deeply, wish to stop forever both 'home runs' and 'stock runs' as we have stopped 'bank runs'. If you trust us just one more time, we will create a Stock Market Federal Reserve. Our S-M Fed will buy and sell stocks to regulate the stock cycle. No longer will your stocks go down in value. Stock prices will be up, up, and away. We will do the same with a newly created 'Home' Fed piece of legislation. Home prices will, once again, be up, up, and away. Except that you cannot trust us to regulate perfectly, as we are only subhuman. We will also create a Stock Market FDIC to go along with our new Stock Market Federal Reserve. The only thing we ask, is that you allow us to tell your companies how to run their company. If you allow us to run your companies, then we will promise you that we will protect your investment in your stock accounts for up to $250,000 SM FDIC. Same with your home. If you allow us to tell you how to run your home, we will protect your investment in your home up to $250,000 Home FDIC. There has to be a better way? ........Or, we can just thank the feds for all their help, but we have decided that we were better off helping ourselves, as we did before 1913. And to get out from under all this fake Fed debt in our mortgages and credit cards bills and equity loans, how about the gall of Pelosi wanting to give all of us 200 million taxpayers a measly $150 billion stimulus, after she just ramrodded a $700 billion stimulus package to a handful of bankers! Come on Pelosi, how about a $50 trillion dollar stimulus package, so that each one of 100 million homes in America would have a stimulus check of $500,000 to pay off debts. America needs a Jewish Jubilee to free us from bondage to the Jewish Sadducees. I call my plan The Christian Jubilee. Article located at: http://thechristiansolution.com/doc/20081010_54_StockFDIC.html	Last Hope for America Christian Libertarian: Harmonious Union of Church and State Recent News The Christian Solution ^©was released March 15, 2008
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