Credit crunch is intentional

[Steve Pavlina]

The credit crunch is intentional, is it not? Since the Fed is controlled by private banks who control the money supply, isn't the credit crunch simply caused by their decision to tighten up the money supply? Then when the markets contract, those private bankers can trade their (fiat) money for assets like businesses (which are indebted to them anyway). Then then loosen up the money supply again, watch those assets soar in value, and gain ever more control of the global economy.

At least that's my current understanding based on the (albeit limited) research I've done. It seems that they're using the press to market this problem as well, thereby helping to make it worse (which benefits the Fed bankers).

If the bailout puts some (shaky) assets under the control of the Fed, then all the Fed needs to do is loosen up the money supply down the road so those assets increase in value once again. Then it controls a lot more assets than it used to, and it can use those assets to send even more people back into debt or corporate servitude.

This is basically the modus operandi of a group of darkworkers, isn't it? They intentionally yo-yo the money supply to increase their degree of control. Money is simply used as a medium for placing legitimate assets under their control, including human beings who become convinced they need jobs and such to survive.

Am I mistaken, or is this basically how the economy works?

[tobyhede]

The credit crunch is caused by a decline in asset prices - specifically houses in the US. Houses are inflated because of a bubble created to prevent a recession post-9/11 and dot-com.

Part of the problem is too much credit has been given out, backed by by inflated asset prices (largely from lending into the largest housing bubble in history). Due to loosened regulation, the debt was packaged, sold and traded in what has largely amounted to a Ponzi scheme.

The problem is that no one knows who is holding what.
And the minute these assets are traded, the institutions have to value them at the sell-price (this is "mark to market"). So if you offload some of the bad assets, you suddenly create a low-value for all of them.

The bailout is really some sleight of hand - the Fed will buy the assets at an inflated prices, everyone gets to book that price as the current value, then the fed slowly unwinds the asset value over time, essentially moving the hit into the future, and ideally (in the minds of the architects of this scheme) letting the system stay together long enough to have an orderly unwind.

I really don't think there is any conspiracy here except greed. Although the Fed has definitely colluded with Wall Street. The problem is not the free market. The problem is the lack of free market.

Every now and then I do wonder about this ... is this an immaculately timed event forged by the cabal that control the Whitehouse?

Or is this simply a confederacy of dunces?

[munish]

This is the the site about - How to Identify Misinformation.

How to Identify Misinformation - US Department of State

[wachusettgirl]

thanks for that site munish... this is a global economy, are all the leaders and banks and large corporations in on this, or just the US?

[Steve Pavlina]

Originally Posted by munish

This is the the site about - How to Identify Misinformation.

How to Identify Misinformation - US Department of State

LOL. "We are your friends. We mean you no harm. We will protect you. Do not think; we will think for you."

You could retitle that article, "On Being a Good Sheep: How to Believe What We Want You to Believe."

How to identify misinformation? How about if it comes from a source that reads just like the one you linked to?

I may have some gaps in my information, but I'm not THAT naive. Please...


"It is well enough that the people of this nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." – Henry Ford

"I have unwittingly ruined my country." – Woodrow Wilson, after passage of Federal Reserve Act

"We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the money vultures who control it. A superstate controlled by international bankers and international industrialists acting together to enslave the world for their own pleasure." – Louis McFadden, Democrat - PA

[ar81]

This video will give you something to think about... the religion of money...
Zeitgeist - Addendum | dotSUB

[Still Growing]

Originally Posted by Steve Pavlina

The credit crunch is intentional, is it not? Since the Fed is controlled by private banks who control the money supply, isn't the credit crunch simply caused by their decision to tighten up the money supply?

Am I mistaken, or is this basically how the economy works?

You are right Steve this is how it works for the most part. I should also point out that in 1907 JP Morgan did a lot of bank buyouts with the same fears and shortage of money in the banks. In 1914 JP Morgan joined as one of the owners of the NY Fed to prevent the thing like 1907 from happening again.

Here it is in 2008 and the same thing happens (at least eerily similiar) but why is JP Morgan on the buying side and the money coming through is taxpayers paid via "The Fed". I see no news stories in the media about 1907. Isn't the fact that it happened before with the same players relevant? I would think so.

Also its not a Republican or Democrat thing. Its a money thing. According to the NY Times Clinton was the one who pushed hard for the regulations to be loosed for Fannie Mae in the late 90s.

Its my belief that the money powers of the US have such influence that it has infiltrated both parties and that its merely a show and a pandering to the people. You have the Republicans pandering to rural Christians and the Democrats pandering to urban liberals but in the end EVERY decision seems to help the big guys in some way.

I like Obama better than McCain because I feel there is hope that he's an outsider however as soon as he won the Dem primary and as soon as the New Yorker put a negative pic of him on the front page he was on the first plane to Israel. Immediately pictures were shown of him wearing a yamaka and there was one week of dedicated news about the importance of the Jewish vote. Do you realize how small of a population this is? This was a sign to the money and banking communities that US foreign policy and protection of Israel will remain even in the "talk" of withdrawal.

I love Israel as they are our allies however its not the Israeli people its their elites, the UK's elites and the US's elites running the show. Its like a power triad and it dominates us. This isn't a conspiracy its just the way it is. You'd have to be blind not to see it.

[ar81]

Originally Posted by Still Growing

Also its not a Republican or Democrat thing. Its a money thing.

On the contrary.
Fed people warned before (not publicly of course).
Those in charge did not take proper measures.

Probably they thought market selfregulated.
It is a problem of belief.
Believing in the dance of rain won't cause money to rain.

On top of that, papers like The Economist published an article that suggested the idea that US does things and world pays off. It challenges foreign economies to take proper measures, and US may not like those measures.
Ego is a bad advisor.

[wachusettgirl]

Originally Posted by Steve Pavlina

LOL. "We are your friends. We mean you no harm. We will protect you. Do not think; we will think for you."

You could retitle that article, "On Being a Good Sheep: How to Believe What We Want You to Believe."

How to identify misinformation? How about if it comes from a source that reads just like the one you linked to?

I may have some gaps in my information, but I'm not THAT naive. Please...

I got exactly the opposite from it, I thought it was saying not to blindly believe everything you read and hear, and to do your own research.

[Steve Pavlina]

Originally Posted by wachusettgirl

I got exactly the opposite from it, I thought it was saying not to blindly believe everything you read and hear, and to do your own research.

Nah... it's nothing but a propaganda piece. I recognize the psychological tactics they're employing -- straight out of NLP and similar methods. If you end up agreeing with the piece, well... you've been suckered.

The point of that piece is basically to convince people to accept what the mainstream media and public opinion believes is true. I.e. if something sounds like it's too far from mainstream opinion, rest assured it's probably false. Then the points are backed up with stories most people would agree are false anyway.

The goal is to encourage the reader to adopt a herd mentality. Although it claims to be in favor of thinking for yourself, it clearly isn't. The subtext is that if you think for yourself and discover some truths that conflict with what the mainstream media tells you, you must be mistaken. This benefits those with a vested interest in maintaining the herd mentality. It's also an attack on alternative media (i.e. They're lying to you, but we're telling you the truth.)

For good measure they throw in a ton of fear-based marketing with the message "be afraid."

Take note of some of the marketing words used in that single piece: evil, manipulating, blame, disasters, virus, weapon, villain, conspiracy, suspicions, horrifying, disease, infect, hijacked, lie, terrible, fear, desperate, crash, kidnapping, wounded, frightening, discomforting, depleted, illness, cancer, birth defects, deceptive, killed, armed, firefight, dead, captured, etc.

I recognize online marketing when I see it.

Fear, fear, and more fear. Turn off your conscious mind and live unconsciously. This isn't truth. This is a fear-based propaganda piece. Adolf would be proud.

You can swallow B.S. like this and join the herd, or you can live consciously and make your own choices. If you want to live consciously, popular opinion can't serve as your guide because truth is too often unpopular.

[ar81]

The usage of good vs evil is the tactic that was used since the time of Hitler.
It is a drama triangle.

Victim: You
Rescuer: Politician who wants your support
Persecutor: Someone else

For germans, Hitler is not a crazy many who tried to destroy the world, for them he is a normal human who was capable of extreme cruelty, a warning to us, so we do not become cruel too.

But in mainstream media you see drama triangle and emergencies all the time. 9/11 emergency, terror emergency, bailout emergency.

Politicians play with you. They keep you uninformed.
I have moved to BBC because I have found evidence that US media is becoming the public relations dept of US government and weapon industries. In recent days a US media news in spanish was sponsored by Armor International.

[Steve Pavlina]

Originally Posted by ar81

I have moved to BBC because I have found evidence that US media is becoming the public relations dept of US government and weapon industries. In recent days a US media news in spanish was sponsored by Armor International.

I don't blame you. The level of media brainwashing here is ridiculous these days.

[teatree]

My understanding is that it is due to bank assets being worthless.

There was a new "mark-to-market" accounting rule introduced where the value of an asset was the market value, rather than the present value of it's income stream. Because no one wants to but those Credit Default Swaps, their market value is currently zero (though they might have value in the future).

Why is this a problem? Because the banks operate on fractional reserve banking - because they assume all their depositors won't withdraw their money out at once, they lend up to twelve times their capital - that is if they have $1000 in capital, they make loans of $12000 (I think 12 times is the max allowed by law, and many prudent banks operate at below this fraction for safety).

Now if some of your assets are deemed worthless, your capital drops. Say capital drops to $800 - that means that you can only have $9600 in loans. But what if you've already made higher loans than that based on the old capital? You can try to raise capital by rights issues, you can try to attract deposits with high interest rates. You can withdraw overdrafts to reduce lending, you can try to call in loans where you can. But above all you don't have the room to make new loans at all.

But that is why there is a credit crunch. It's nothing to do with money supply but all to do with lack if capital in the banks. Governments are now considering using tax money to make capital injections.

A better way for citizens to resolve this is to simply repay debt if they can. The banks of course will lose profit if mass debt repayment takes place (as banks earn from the interest) - but a) the individual makes a profit by repaying debt (because they are no longer paying interest) and b) if there is mass debt repayment, the amount on loan will shrink back into line with the bank's capital, which means they remain solvent and c) it is the strong who are shrinking the lending, rather than lending being shrunk by with-holding money from small businesses who will go bust without their credit lines, so this is a healthier solution for the economy.

This problem is affecting the entire developed world, which has about 750 million people (US+EU). If 300 million people repaid $2000 each, that's effectively $600bn in lending that disappears, which should ease things considerably.

Why is no one proposing this, apart from me? Because banks want the easy way out - they want to keep profits (so don't want lucrative loans repaid), and instead want taxpayers to give them capital to prop up the loans.

But anyone who can afford to repay debt, should do so asap. I wrote an article which essentially says what I've written above, and am trying to get a viral movement going to persuade people to repay their debt as a solution to this crisis, but we are only little people, not sure our voices will be heard!

[escapee]

Hmmm...I find some of the Thomas Jefferson's quotes relate extremely well with the current financial situation we're all in.

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” -
Thomas Jefferson

“The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals… it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.”–Thomas Jefferson


“If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air… We are warranted, then, in affirming that this parody on the principle of ‘a public debt being a public blessing,’ and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper.” –Thomas Jefferson to John W. Eppes, 1813.

“Paper is poverty,… it is only the ghost of money, and not money itself.” –Thomas Jefferson to Edward Carrington, 1788.

[wachusettgirl]

Originally Posted by Steve Pavlina

You can swallow B.S. like this and join the herd, or you can live consciously and make your own choices. If you want to live consciously, popular opinion can't serve as your guide because truth is too often unpopular.

So because I don't agree with you about this I'm a sheep? I don't live in constant fear or paranoia at all, thank-you, and I refuse to believe that the current global economic downturn/recession/crisis or whatever you want to call it was caused intentionally.

[Gabo]

Steve,

You are right that the credit crunch doesn't have to happen. But the only way to stop an inflated market from deflating is to keep inflating it at a more rapid rate. The Fed could push interest rates all the way down to zero, but such a policy will lead to hyperinflation.

When the Fed expands credit by artificially lowering interest rates, people make bad investments assuming that the interest rate is accurate. When those investments fail, the market is correcting itself because those investments shouldn't have been made in the first place.

The busts that come after the boom happen so that the market can return to equilibrium rates and investments will return to normal. The solution is for the Fed to stop artificially expanding credit in the first place, which is what creates the boom.

[Parthon]

I'm deeply scared for the world actually, not because of this downturn but for the future of everything and everyone.

Why? Growth.

The only thing a boom/recession represents is a change in the amount of growth per year. This measurement causes many reactive effects such as job loss, debt recall, unemployment and worse. All because one figure changed, a figure based on something which doesn't make logical sense to measure. It's the gross domestic product, or the output of a country. This does not need to grow. As more countries grow, they consume more resources, and we already know that the world is running out of resources. More resources are being used per day. More countries are demanding mroe goods. More natural landscape is being cleared for industry, agriculture and mining. The population keeps getting higher, inflation continues to go up. Property and asset prices rise, faster than wages right now. It costs more for a house now as a ratio to the people's average income than it did 50 years ago. In 50 years, the 95% of people will not be able to afford a house.

The banking industry of the US might have done some bad stuff, but if there wasn't a problem with the fundamental basis of modern economic theory, it wouldn't be such a big deal. There's a lot more at stake here, but noone's paying attention.

This recent turmoil represents the first cracks in the world economy, deep permanent cracks. Growth is not sustainable in the long run, in nature things that grow must die and decay to give back and renew again. The economy must become sustainable if it wants to survive, if it keeps growing it will die. It's time for a reinvention of the world economy before it's too late.

[Steve Pavlina]

Originally Posted by wachusettgirl

So because I don't agree with you about this I'm a sheep? I don't live in constant fear or paranoia at all, thank-you, and I refuse to believe that the current global economic downturn/recession/crisis or whatever you want to call it was caused intentionally.

That would be taking my statements out of context. I was referring to the text in the linked article only.

[Eric Revelin]

Originally Posted by wachusettgirl

So because I don't agree with you about this I'm a sheep? I don't live in constant fear or paranoia at all, thank-you, and I refuse to believe that the current global economic downturn/recession/crisis or whatever you want to call it was caused intentionally.

I find it hard to believe that it wasn't caused intentionally. I'm not a conspiracy theorist; I don't think secret societies are slowly working to enslave us. They don't have to; we demand it.

The way our banking system is designed it can boom or crash at will. There's too many flaws, too many loopholes, and too little logic. Note that when a recession or a depression occurs no actual wealth is lost; it's simply redistributed (I'm not talking about the money supply). There's a lot to be gained in this. Over and over, people get more independent, they become wealthier, then the system crashes. Many of them lose everything and they have to work twice as hard to maintain a standard of living that's half as good as what they used to have. Humanity isn't that stupid. At least some of this is happening by design.

It reminds me of a George Carlin routine from a few years ago: YouTube - AMERICA IS TYRANNY - George Carlin

[mercuryrising]

Originally Posted by Steve Pavlina

This is basically the modus operandi of a group of darkworkers, isn't it? They intentionally yo-yo the money supply to increase their degree of control. Money is simply used as a medium for placing legitimate assets under their control, including human beings who become convinced they need jobs and such to survive.

Am I mistaken, or is this basically how the economy works?

In a nutshell, yes.

I'm interested, as a lightworker, how you think we can fix this. I can re-hash the problem to myself and with others many times, but I'm left with the question, "What should I do?"