Source:  http://theeconomiccollapseblog.com/archives/10-things-that-every-american-should-know-about-the-federal-reserve

 What would happen if the Federal Reserve was shut down permanently?  That is a question that CNBC asked recently, but unfortunately most Americans don’t really think about the Fed much. Most Americans are content with believing that the Federal Reserve is just another stuffy government agency that sets our interest rates and that is watching out for the best interests of the American people.  But that is not the case at all.  The truth is that the Federal Reserve is a private banking cartel that has been designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government to perpetually expanding debt.  During this election year, the economy is the number one issue that voters are concerned about.  But instead of endlessly blaming both political parties, the truth is that most of the blame should be placed at the feet of the Federal Reserve.  The Federal Reserve has more power over the performance of theU.S. economy than anyone else does.  The Federal Reserve controls the money supply, the Federal Reserve sets the interest rates and the Federal Reserve hands out bailouts to the big banks that absolutely dwarf anything that Congress ever did.  If the American people are ever going to learn what is really going on with our economy, then it is absolutely imperative that they get educated about the Federal Reserve.

The following are 10 things that every American should know about the Federal Reserve….

#1 The Federal Reserve System Is A Privately Owned Banking Cartel

The Federal Reserve is not a government agency.

The truth is that it is a privately owned central bank.  It is owned by the banks that are members of the Federal Reserve system.  We do not know how much of the system each bank owns, because that has never been disclosed to the American people.

The Federal Reserve openly admits that it is privately owned.  When it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court that it was “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.

In fact, if you want to find out that the Federal Reserve system is owned by the member banks, all you have to do is go to the Federal Reserve website….

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

Foreign governments and foreign banks do own significant ownership interests in the member banks that own the Federal Reserve system.  So it would be accurate to say that the Federal Reserve is partially foreign-owned.

But until the exact ownership shares of the Federal Reserve are revealed, we will never know to what extent the Fed is foreign-owned.

#2 The Federal Reserve System Is A Perpetual Debt Machine

As long as the Federal Reserve System exists,U.S.government debt will continue to go up and up and up.

This runs contrary to the conventional wisdom that Democrats and Republicans would have us believe, but unfortunately it is true.

The way our system works, whenever more money is created more debt is created as well.

For example, whenever theU.S.government wants to spend more money than it takes in (which happens constantly), it has to go ask the Federal Reserve for it.  The federal government gives U.S. Treasury bonds to the Federal Reserve, and the Federal Reserve gives theU.S.government “Federal Reserve Notes” in return.  Usually this is just done electronically.

So where does the Federal Reserve get the Federal Reserve Notes?

It just creates them out of thin air.

Wouldn’t you like to be able to create money out of thin air?

Instead of issuing money directly, theU.S.government lets the Federal Reserve create it out of thin air and then theU.S.government borrows it.

Talk about stupid.

When this new debt is created, the amount of interest that theU.S.government will eventually pay on that debt is not also created.

So where will that money come from?

Well, eventually theU.S.government will have to go back to the Federal Reserve to get even more money to finance the ever expanding debt that it has gotten itself trapped into.

It is a debt spiral that is designed to go on perpetually.

You see, the reality is that the money supply is designed to constantly expand under the Federal Reserve system.  That is why we have all become accustomed to thinking of inflation as “normal”.

So what does the Federal Reserve do with the U.S. Treasury bonds that it gets from theU.S.government?

Well, it sells them off to others.  There are lots of people out there that have made a ton of money by holdingU.S.government debt.

In fiscal 2011, the U.S.government paid out 454 billion dollars just in interest on the national debt.

That is 454 billion dollars that was taken out of our pockets and put into the pockets of wealthy individuals and foreign governments around the globe.

The truth is that our current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the Federal Reserve as a tool to create money out of thin air and lend it to theU.S.government at interest.

And that plan is working quite well.

Most Americans today don’t understand how any of this works, but many prominent Americans in the past did understand it.

For example, Thomas Edison was once quoted in the New York Times as saying the following….

That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.

Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.

But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good.

We should have listened to men like Edison and Ford.

But we didn’t.

And so we pay the price.

On July 1, 1914 (a few months after the Fed was created) theU.S.national debt was 2.9 billion dollars.

Today, it is more than more than 5000 times larger.

Yes, the perpetual debt machine is working quite well, and most Americans do not even realize what is happening.

#3 The Federal Reserve Has Destroyed More Than 96% Of The Value Of The U.S. Dollar

Did you know that the U.S. dollar has lost 96.2 percent of its value since 1900?  Of course almost all of that decline has happened since the Federal Reserve was created in 1913.

Because the money supply is designed to expand constantly, it is guaranteed that all of our dollars will constantly lose value.

Inflation is a “hidden tax” that continually robs us all of our wealth.  The Federal Reserve always says that it is “committed” to controlling inflation, but that never seems to work out so well.

And current Federal Reserve Chairman Ben Bernanke says that it is actually a good thing to have a little bit of inflation.  He plans to try to keep the inflation rate at about 2 percent in the coming years.

So what is so bad about 2 percent?  That doesn’t sound so bad, does it?

Well, just consider the following excerpt from a recent Forbes article….

The Federal Reserve Open Market Committee (FOMC) has made it official:  After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.  The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

#4 The Federal Reserve Can Bail Out Whoever It Wants To With No Accountability

The American people got so upset about the bailouts that Congress gave to the Wall Street banks and to the big automakers, but did you know that the biggest bailouts of all were given out by the Federal Reserve?

Thanks to a very limited audit of the Federal Reserve that Congress approved a while back, we learned that the Fed made trillions of dollars in secret bailout loans to the big Wall Street banks during the last financial crisis.  They even secretly loaned out hundreds of billions of dollars to foreign banks.

According to the results of the limited Fed audit mentioned above, a total of $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.

The following is a list of loan recipients that was taken directly from page 131 of the audit report….

Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion

So why haven’t we heard more about this?

This is scandalous.

In addition, it turns out that the Fed paid enormous sums of money to the big Wall Street banks to help “administer” these nearly interest-free loans….

Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the “too big to fail” banks, the Fed also paid them over 600 million dollars to help run the emergency lending program.  According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in “fees” to the very financial institutions which caused the financial crisis in the first place.

Does reading that make you angry?

It should.

#5 The Federal Reserve Is Paying Banks Not To Lend Money

Did you know that the Federal Reserve is actually paying banks not to make loans?

It is true.

Section 128 of the Emergency Economic Stabilization Act of 2008 allows the Federal Reserve to pay interest on “excess reserves” thatU.S.banks park at the Fed.

So the banks can just send their cash to the Fed and watch the money come rolling in risk-free.

So are many banks taking advantage of this?

You tell me.  Just check out the chart below.  The amount of “excess reserves” parked at the Fed has gone from nearly nothing to about 1.5 trillion dollars since 2008….

But shouldn’t the banks be lending the money to us so that we can start businesses and buy homes?

You would think that is how it is supposed to work.

Unfortunately, the Federal Reserve is not working for us.

The Federal Reserve is working for the big banks.

Sadly, most Americans have no idea what is going on.

Another example of this is the government debt carry trade.

Here is how it works.  The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall Street banks, and in turn those banks use the money to buy up huge amounts of government debt.  Since the return on government debt is higher, the banks are able to make large profits very easily and with very little risk.

This scam was also explained in a recent article in the Guardian….

Consider this: we pretend that banks are private businesses that should be allowed to run their own affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by central banks at near-zero interest. They lend that money to us or back to the government at higher rates and rake in the difference by the billion. They don’t even have to make clever investments to make huge profits.

That is a pretty good little scam they have got going, wouldn’t you say?

#6 The Federal Reserve Creates Artificial Economic Bubbles That Are Extremely Damaging

By allowing a centralized authority such as the Federal Reserve to dictate interest rates, it creates an environment where financial bubbles can be created very easily.

Over the past several decades, we have seen bubble after bubble.  Most of these have been the result of the Federal Reserve keeping interest rates artificially low.  If the free market had been setting interest rates all this time, things would have never gotten so far out of hand.

For example, the housing crash would have never been so horrific if the Federal Reserve had not created such ideal conditions for a housing bubble in the first place.  But we allow the Fed to continue to make the same mistakes.

Right now, the Federal Reserve continues to set interest rates much, much lower than they should be.  This is causing a tremendous misallocation of economic resources, and there will be massive consequences for that down the line.

#7 The Federal Reserve System Is Dominated By The Big Wall Street Banks

Even since it was created, the Federal Reserve system has been dominated by the big Wall Street banks.

The following is from a previous article that I did about the Fed….

The New York representative is the only permanent member of the Federal Open Market Committee, while other regional banks rotate in 2 and 3 year intervals.  The former head of the New York Fed, Timothy Geithner, is now U.S. Treasury Secretary.  The truth is that the Federal Reserve Bank of New York has always been the most important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been dominated by Wall Street and the major New York banks.

#8 It Is Not An Accident That We Saw The Personal Income Tax And The Federal Reserve System Both Come Into Existence In 1913

On February 3rd, 1913 the 16th Amendment to the U.S. Constitution was ratified.  Later that year, the United States Revenue Act of 1913 imposed a personal income tax on the American people and we have had one ever since.

Without a personal income tax, it is hard to have a central bank.  It takes a lot of money to finance all of the government debt that a central banking system creates.

It is no accident that the 16th Amendment was ratified in 1913 and the Federal Reserve system was also created in 1913.

They have a symbiotic relationship and they are designed to work together.

We could fill Congress with people that are committed to ending this oppressive system, but so far we have chosen not to do that.

So our children and our grandchildren will face a lifetime of debt slavery because of us.

I am sure they will be thankful for that.

#9 The Current Federal Reserve Chairman, Ben Bernanke, Has A Nightmarish Track Record Of Incompetence

The mainstream media portrays Federal Reserve Chairman Ben Bernanke as a brilliant economist, but is that really the case?

Let’s go to the videotape.

The following is an extended excerpt from an article that I published previously….

———-

In 2005, Bernanke said that we shouldn’t worry because housing prices had never declined on a nationwide basis before and he said that he believed that theU.S. would continue to experience close to “full employment”….

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no danger to financial markets….

“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

In 2006, Bernanke said that housing prices would probably keep rising….

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

In 2007, Bernanke insisted that there was not a problem with subprime mortgages….

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

In 2008, Bernanke said that a recession was not coming….

“The Federal Reserve is not currently forecasting a recession.”

A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they were totally secure….

“The GSEs are adequately capitalized. They are in no danger of failing.”

For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben Bernanke, please see the following articles….

*”Say What? 30 Ben Bernanke Quotes That Are So Stupid That You Won’t Know Whether To Laugh Or Cry”

*”Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?”

But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as Chairman of the Fed.

———-

#10 The Federal Reserve Has Become Way Too Powerful

The Federal Reserve is the most undemocratic institution inAmerica.

The Federal Reserve has become so powerful that it is now known as “the fourth branch of government”, but there are less checks and balances on the Fed than there are on the other three branches.

The Federal Reserve runs theU.S.economy but it is not accountable to the American people.  We can’t vote those that run the Fed out of office if we do not like what they do.

Yes, the president appoints those that run the Fed, but he also knows that if he does not tread lightly he won’t get the money from the big Wall Street banks that he needs for his next election.

Thankfully, there are a few members of Congress that are complaining about how much power the Fed has.  For example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now actually more powerful than Congress…..

“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”

As members of Congress such as Ron Paul have started to shed some light on the activities of the Federal Reserve, that has caused many in the mainstream media to come to the defense of the Fed.

For example, a recent CNBC article entitled “If The Federal Reserve Is Abolished, What Then?” makes it sound like there is absolutely no other rational alternative to having the Federal Reserve run our economy.

But this is not what our founders intended.

The founders did not intend for a private banking cartel to issue our money and set our interest rates for us.

According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress has been given the responsibility to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.

So why is the Federal Reserve doing it?

But the CNBC article mentioned above makes it sound like the sky would fall if control of the currency was handed back over to the American people.

At one point, the article asks the following question….

“How would the U.S. economy then function? Something has to take its place, right?”

No, the truth is that we don’t need anyone to “manage” our economy.

The U.S. Treasury could be in charge of issuing our currency and the free market could set our interest rates.

We don’t need to have a centrally-planned economy.

We aren’tChina.

And it goes against everything that our founders believed to be running up so much government debt.

For example, Thomas Jefferson once declared that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

Oh, how things would have been different if we had only listened to Thomas Jefferson.

Please share this article with as many people as you can.  These are things that every American should know about the Federal Reserve, and we need to educate the American people about the Fed while there is still time.

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply from the FHA:  

“Upon review of your letter adjoining your client’s loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin.”  

Annoyed, the lawyer responded as follows (You Really have to Love this Lawyer): 

 “Your letter regarding title in Case No.189156 has been received. I note that you wish to have title extended further than the 206 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France in 1803, the year of origin identified in our application.  For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain.

 The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus’s expedition…Now the Pope, as I’m sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it, and the FHA.

 I hope you find God’s original claim to be satisfactory. Now, may we have our loan?”   The loan was immediately approved.

<<<A letter to the editor>>>

….The Curry County Reporter — January 25, 2012….

Editor:

As a Citizens’ Advisory Committee member, below are my views on thehigh point, the most disappointing point, the lamest point, and some in-between points. The high point was during the December 15, 2011 meeting and listening to a presentation by two co-chairs of a small committee (5-7 people) from Coos County addressing a problem similar to that of Curry County. Their group had interviewed approximately 60 county personnel. These interviews included looking at interdepartmental communication, work flows, sharing of data, duplication of data input, etc. When asked if their group had suggested any tax/revenue possibilities, they offered that subject had not been seriously looked at. The opinion was that the organizational structure first required major work and improvement which could result in significant dollar savings.  For more go to: http://www.co.coos.or.us/structure/Documents/conclusion11-30-2011.pdf.

The most insulting point was the general conversation tone from members of Oregon Consensus, the ‘advisory’ group assigned to coordinate and oversee the Citizens’ Committee. Their initial introduction November 30, 2011 left me feeling these educated folks were compelled to ‘dumb’ us common folk down to a pliable controllable consistency prior to telling us what to do. Just prior to the December 15 meeting the advisors provided all members a one page document containing ‘Ground Rules’ and ‘General Principles’ along with a page containing ‘TASKS and a TIMELINE’. My reaction to the first document was oh my, this is what is coming out of our state colleges today. The TIMELINE showed a completion date of February 1, 2012 which in my opinion was a fraction of the time required to thoroughly address the issues. The most honest point (finally) was January 12, 2012 when an advisor when asked what was so magic about the February 1 deadline replied, “I think one of the reasons for that time frame was that if there is something to be put on a ballot, that has to be done in March. That’s something the commissioners have said.” The most infuriating point was December 14, 2011 when the commissioners ignored ‘Ground Rule’ number 6. “We commit to building trust by doing what we say we will do.” For more go to http://www.currycountyreporter.com/news/results.cfm?story_no=8116.

The most mind numbing point was learning on January 10, 2012 that the timeline had been moved up two weeks. One committee member commented to the advisors they had taken the original inadequate schedule that did not allow sufficient time and reduced that time by two weeks.

The lamest point was an advisor’s rebuttal to the member objecting to the timeline change above. “Remember during the first meeting we did discuss that the timeline would shift because ah, we were discussing that we weren’t ready to go to the next process and so forth so, I do remember that we did discuss that. I’m not sure that’s only in my head. Ah, so [laughing] please correct me if I’m wrong ah, and there was a new timeline that was sent out which I gave you a copy of last meeting. Ah, so there is a shift in the timeline yes. And we’re doing it because we heard it from you. I mean we’re not doing it because we thought it was the best process but we heard that you needed a shift in the timeline and that’s fine and if there’s further shifts that need to happen please let us know. We’re ready to adjust your needs.”

The most disappointing point was spending an enormous amount of time reviewing data provided to the committee, following the rules, and providing questions to the advisors that were never answered. December 23, 2011 six emails were sent to the advisor. Each had one to five questions. Each covered a particular subject and was cc: to the county employee most likely to answer the question(s). An explanation and reason for each question was also provided. For example, the county finance director was asked, “What are the current total cumulative negative balances (liabilities) of county departments by individual department?” The county attorney was asked, “What types of decisions now made by the commissioners may not be delegated to and made by others?” The county attorney was asked five questions regarding mandated services including, “What categories currently mandated and provided may not be subcontracted or outsourced to a third party?” The Sheriff was asked for a breakdown of a 40 percent benefit figure used in his presentation November 30, 2011. (Sheriff acknowledged forwarding the question to accounting department). Side note: One file requested November 30, 2011 was provided January 13, 2012 by the county finance director. The file was created back in July 2011. Why did it take six weeks to provide a file that already existed? The most shocking point was determining from the county master payroll that the 40 percent benefit figure was actually 65 percent (average). A work sheet was provided and reviewed with the Sheriff January 13, 2012.

My final opinion: sadly the Citizens’ Committee was an enormous waste of resources. Oregon Consensus, which was created by the Oregon Legislature in 2005, is nothing but more, bigger, government. Their advisors were not skilled or experienced in the organization and running of a public or private entity. They were skilled to some degree in mediating disputes. No credible recommendations or discussions were initiated before the full committee regarding any county benefit reductions, which in their current form are simply not sustainable. The manner in which this project was handled goes to the root problem. There was no comprehension of what was entailed nor the time required to properly look at the structural foundation of the county or anything else for that matter. As for staff not responding to questions or requests, that also goes to the root problem and the lack of accountability, the lack of consequences for such behavior, the lack of integrity, and ultimately the lack of credibility.

Thomas Huxley

Harbor

Are We Riding a Dead Horse?

The tribal wisdom of the Dakota Indians, passed on from generation to generation, says that: When you discover that you are riding a dead horse, your best strategy is to dismount.  However, in our government more advanced strategies are often employed, such as:

1. Buying a stronger (and more expensive) whip.

2. Changing riders.

3. Appointing a committee to study the horse.

4. Arranging trips to other countries to see how other cultures ride dead horses.

5. Lowering the standards so that dead horses can be included.

6. Reclassifying the dead horse as living-impaired.

7. Hiring outside contractors to ride the dead horse.

8. Harnessing several dead horses together to increase efficiency.

9. Providing additional funding and/or training to increase dead horse’s performance.

10. Doing a productivity study to see if lighter riders would improve the dead horse’s performance.

11. Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead and therefore contributes substantially more to the bottom line of the economy than do some live horses.

12. Rewriting the expected performance requirements for all horses.

And of course….

13. Promoting the dead horse to a supervisory position.

If you don’t understand the stupidity in this reasoning, you probably are happy with the way our tax money is being spent….

Abbott & Costello on Unemployment Numbers!

COSTELLO: I want to talk about the unemployment rate inAmerica. 

ABBOTT: Good Subject. Terrible Times. It’s almost 9%.  

COSTELLO: That many people are out of work?  

ABBOTT: No, that’s 16%.  

COSTELLO: You just said 9%. 

ABBOTT: 9% Unemployed. 

 COSTELLO: Right 9% out of work. 

ABBOTT: No, that’s 16%.  

COSTELLO: Okay, so it’s 16% unemployed.  

ABBOTT: No, that’s 9%… 

COSTELLO: WAIT A MINUTE. Is it 9% or 16%?  

ABBOTT: 9% are unemployed. 16% are out of work.  

COSTELLO: IF you are out of work you are unemployed.  

ABBOTT: No, you can’t count the “Out of Work” as the unemployed. You have to look for work to be unemployed.  

COSTELLO: BUT THEY ARE OUT OF WORK!!!  

ABBOTT: No, you miss my point.  

COSTELLO: What point?  

ABBOTT: Someone who doesn’t look for work, can’t be counted with those who look for work. It wouldn’t be fair. 

COSTELLO: To who?  

ABBOTT: The unemployed. 

COSTELLO: But they are ALL out of work.  

ABBOTT: No, the unemployed are actively looking for work… Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed. 

 COSTELLO: So if you’re off the unemployment roles, that would count as less unemployment?  

ABBOTT: Unemployment would go down. Absolutely!  

COSTELLO: The unemployment just goes down because you don’t look for work?  

ABBOTT: Absolutely it goes down. That’s how you get to 9%. Otherwise, it would be 16%. You don’t want to read about 16% unemployment do ya?  

COSTELLO: That would be frightening.  

ABBOTT: Absolutely.  

COSTELLO: Wait, I got a question for you. That means they’re two ways to bring down the unemployment number?  

ABBOTT: Two ways is correct.  

COSTELLO: Unemployment can go down if someone gets a job?  

ABBOTT: Correct.  

COSTELLO: And unemployment can also go down if you stop looking for a job?  

ABBOTT: Bingo.  

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work. 

ABBOTT: Now you’re thinking like an economist.  

COSTELLO: I don’t even know what the hell I just said!  

And now you know why Obama’s unemployment figures are improving 

Over Qualified???

Sally Mullihan of Coral Springs, Florida decided to take one of the jobs that most Americans are not willing to do.  The woman applying for a job in aFlorida lemon grove seemed to be far too qualified for the job. She had a liberal arts degree from the University of  Michiganand had worked as a social worker and school teacher. 

The foreman frowned and said, “I have to ask you, have you had any actual experience in picking lemons?”  ”Well, as a matter of fact, I have!   I’ve been divorced three times, owned 2 Chrysler’s and voted for Obama.”

…Oregonlive.com  –  January 12, 2012…

Should a simple bus shelter — basically a few benches covered by a roof — cost as much to build as a three-bedroom house?   That’s a question that is provoking outrage and official embarrassment in the southern Oregon city of Grants Pass, which this week signed off on a project to build five bus shelters at an estimated cost of $106,000 apiece.  To some, the price tag is particularly galling given the increasingly fierce competition for dwindling federal highway dollars, which are paying for the project.

“The price is obviously high,” said Grants Pass Mayor Mike Murphy, clearly chagrined at the negative publicity his city is getting. “It makes everyone want to hold their nose and gag a little bit here.”   But he said the city has little control over the construction cost, which is dictated by a combination of federal and state spending rules. So what was supposed to be a symbol of civic progress instead has turned into an object lesson in the way government makes itself look bad.

“The feeling in the community is this is an outrageous use of federal money and so we should turn it down,” Murphy said. All that would do, he said, is send the dollars elsewhere and deprive the city — population 33,225 — and its small, four-route bus system of some attractive shelters.  His inclination is to soldier on. Some council members, however, have said they want to bring the project back for more discussion and, potentially, another vote.

A brief history lesson is in order to grasp how Grants Pass got itself into this position.

Back in 2008, the city council decided to build more bus shelters for its growing transit system in hopes of attracting even more riders. The city occasionally has bouts of poor air quality, which allowed it to qualify for special highway funds under the federal Congestion Mitigation and Air Quality program.  By 2009, the city had an estimate of a little more than $300,000 for the whole project, which included design, engineering and original art installations at each shelter. The city contracted with Eugene-based Oregon Bridge Engineering Co. to start designing the shelters and do the engineering leg work that would allow construction bids to go out.  The price tag kept going up, however, including an increase in the budget for art, which swelled from $2,500 to $15,000 per shelter. And by last week, the city council approved a project with an estimated cost of $530,000, which works out to $106,000 apiece.

By way of comparison, bus shelters for the city of Roseburg, a slightly smaller city to the north, cost between $7,000 and $11,000 each, said the city’s bus system manager Toby Notenboom. “Ours are pretty plain-Jane ones,” he said.

Engineering and design work on the Grants Pass shelters, which already has cost more than $100,000, would have been much cheaper if the city had been allowed to do it in-house, said Scott Lindberg, who oversees city grant money. But that’s not allowed under state and federal spending rules, which require a level of certification that Grants Pass doesn’t have, Lindberg said.  The rules dictate everything from the size of the drawings to the type of computer programs used, he said, adding that budget estimates were worked out between city staff and Oregon Department of Transportation officials.  ”They were vetted and seemed adequate at the time,” Lindberg said. “I don’t know who bears the blame for the project cost.”

A state Department of Transportation spokesman said the city called the shots. ODOT administers the project and ensures the money is spent correctly, said Patrick Cooney. “The scope, what’s in the project, how much art is in the project — that’s all the city’s decision,” he said.  Federal highway officials did not respond to requests for comment.

The cost, first reported in the Grants Pass Daily Courier, incensed local businesswoman Toni Webb, who happened to be in the market for a house at the time and was comparing prices of new construction. Local builder Adair Homes told her she could put up a nice 3-bedroom, two-bath house — excluding the price of land — for the same amount of money as a single bus shelter, an estimate confirmed Wednesday by Adair employee Johanna Siebert.  ”We could have put a whole house there,” she said.  Webb said she raised a fuss because she’s tired of seeing federal tax money spent frivolously.  ”Everyone, including people in small towns, need to look at the budget deficit and do their part to control it,” she said. “We can’t leave it to Washington, D.C., to solve these problems.”

State Rep. Wally Hicks, a Republican who lives in Grants Pass, said he expects the bus shelter issue to come up during budget discussions at the Legislature next month.  ”It’s just not a good approach to spend that kind of money on a bus stop at this point,” Hicks said. “We need to recognize that tax dollars all start off at the same place.”
TEA Update:  Last Thursday, the City Council voted to end the program, only to find that its vote is moot: the shelters project will continue.

 “Pardon me, sir, I’m Rebecca Smith from CNN. What’s your name?”  “Morris Feinberg,” he replied.  “Sir, how long have you been coming to the Western Wall and praying?”  “For about 60 years.”  “60 years! That’s amazing! What do you pray for?”

 “I pray for peace between the Christians, Jews and the Muslims.”  “I pray for all the wars and all the hatred to stop.”  “I pray for all our children to grow up safely as responsible adults and to love their fellow man.”  “I pray that politicians tell us the truth and put the interests of the people ahead of their own interests.”

 “How do you feel after doing this for 60 years?”  “Like I’m talking to a damned wall.”

Because of the evolution in teaching math since the 1960s: 

1. Teaching Math In the 1960s:

A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price. What is his profit ? 

2. Teaching Math In the 1970s:

A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price, or $80. What is his profit? 

3. Teaching Math In the 1980s: 

A logger sells a truckload of lumber for $100. His cost of production is $80. Did he make a profit ?   Yes or No

4. Teaching Math In the 1990s:

A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20.

Your assignment: Underline the number 20. 

5. Teaching Math In the 2000s:

A logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of $20.  What do you think of this way of making a living? Topic for class participation after answering the question:  How did the birds and squirrels feel as the logger cut down their homes? (There are no wrong answers, and if you feel like crying, it’s ok). 

6. Teaching Math In the 2010:

Un hachero vende una carretada de maderapara $100. El costo de la producciones es $80. Cuanto dinero ha hecho?   ANSWER: His profit was $375,000 because his logging business is just a front for his pot farm.

….The Oregonian — January 18, 2012, By Richard Read ….

Taxpayers will have to bail out a state fund that made bad loans to increasingly speculative renewable energy projects.

The fund loaned $18 million to a Clatskanie ethanol plant that quickly went bankrupt, $12.1 million to a Linn County solar company crippled by plunging global prices, and $1.4 million to a glitzy central Oregon resort plagued by the real estate crash.

In all, state officials estimate the Oregon Energy Department’s Small Scale Energy Loan Program will cost the Oregon general fund, and taxpayers, as much as $20 million over five years.

Bob Repine, acting director of the Energy Department, confirmed that growing bad loans within the SELP program will make it impossible for the fund to continue to pay for itself, as it has historically.

The state loan program’s issues come at a time when the collapse of federally backed Solyndra has raised questions about the government’s ability to pick and fund winning business investments.

Repine and Anthony Buckley, brought in to lead the SELP fund a year ago, defended the approach. “There are cases where there’s a role for government,” Buckley said. “There are companies that probably would not be able to access the dollars to move forward and succeed.”

But during the green-energy boom of the last decade, the character of the SELP program changed. What had been predominantly a small conservation loan operation morphed into an economic development tool making bigger, more speculative loans.

The Energy Department’s loan underwriting prowess did not keep up. In some cases, borrowers were allowed to use cash they got from the department’s controversial Business Energy Tax Credit, or BETC, program to qualify for SELP loans.

That practice is no longer allowed. “We absolutely do not underwrite the expectation of a tax credit in a loan anymore,” Buckley said.

SELP, approved by voters in 1980, is funded by the sale of state bonds. To date, it’s been self-supporting.

SELP has made 848 loans over the years totaling $574 million. Currently, 227 loans are outstanding for $206 million.

At year’s end, five loans totaling more than $13.4 million had gone delinquent. Two borrowers of another five loans totaling $8.2 million persuaded the state to lower their payments because they are “experiencing financial challenges.” Together, the 10 loans amount to 10.4 percent of SELP’s portfolio.

Some high-profile failures have plagued the portfolio.

The state got pounded when Cascade Grains, developer of an ethanol plant in Clatskanie, went bankrupt in 2009. SELP failed to ensure that it was at the head of the line of creditors and lost all but $2 million of the $18 million it loaned to the company.

More recent delinquent loans include $11.2 million owed by Peak Sun Materials Corp. in Millersburg, $1.1 million owed by central Oregon resort developers Pronghorn Investors, and $999,249 owed by Blue Heron Paper, which went bankrupt and ceased operations.

Peak Sun was pioneering a method of producing silicon for solar cells. The Energy Department has declared the loan in default and has initiated foreclosure proceedings.

Peak Sun did not return calls Tuesday.

Repine blamed the loan problems on the economic collapse of 2008, not mismanagement in his department. There have been no personnel changes at the department as a result, he said.

Buckley added that his department has adopted a tougher approach to originating loans and pursuing full payment. It no longer makes construction loans of any kind, a bitter lesson from the Cascade Grains loan.

“I think if you talk to customers today, they’d say we’re more stringent, more aggressive on the underwriting and the collection end,” he said.

The state has always sold general obligation bonds to fund the SELP loans. Payments from the SELP borrowers historically have provided sufficient cash to repay the bonds.

Until now. The problem loans will put a crimp in SELP’s cash flow to the point that it will need a taxpayer bailout. In a Jan. 10 report, the State Debt Policy Advisory Commission said SELP will require $2 million to $5 million a year from the general fund over four years, or up to $20 million.

Sen. Richard Devlin, D-Tualatin, said the Legislature never authorized higher-risk loans at the level that SELP moved to. “It is very problematic when risks have been taken that the Legislature is not aware of,” he said. “It impacts dollars that should be going to schools, public welfare or public safety.” Devlin serves on the state debt commission.

A spokesman for Gov. John Kitzhaber said new controls have been implemented at SELP and that it should be preserved.

The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke(pictured to the right), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.” - Bernie Sanders (I-VT)

When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.

Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.

The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places

View the 266-page GAO audit of the Federal Reserve(July 21st, 2011): http://www.scribd.com/doc/60553686/GAO-Fed-Investigation

Source: http://www.gao.gov/products/GAO-11-696
FULL PDF on GAO server: http://www.gao.gov/new.items/d11696.pdf
Senator Sander’s Article: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

www.unelected.org