With all the talk about the 1% vs. the 99% and the pros and cons of Mr. Obama's talking points about it, I came across a curiosity that seems to defy common sense. Which, when it comes to politics and government, means it may be very true!
This is it, one paragraph from the blog of James Howard Kunstler. The Smog of Fraud | KUNSTLER :
"JP Morgan is one of the specially privileged primary dealer banks said to be systemically indispensible to world finance. Supposedly, if one of them is allowed to flop, the whole global matrix of global debt obligations and, hence, global money would dissolve in a misty cloud of broken promises. They are primary dealers to their shadow partner, the Federal Reserve, and their main job in that relationship is buying treasury bonds, bills, and notes from the US government and then selling them to the Fed (earning commissions on the sales, of course). The Fed, in turn, lends billions of dollars at zero interest back to the primary dealers who then park the borrowed money in accounts at the Fed at a higher interest rate. This is, of course, money for nothing, and even small interest rate differentials add up to tidy profits when the volumes on deposit are so massive."
(Bold italics are mine.)
If this is really true, as we are talking hundreds of billions of dollars here, isn't all the apparent concern by the Obama administration about income inequality somewhat of a facade? It would seem the Secretary of the Treasury is a part of a strange scheme that actually would end up redistributing income in the wrong direction, from the public to the top tier 0.1%. Just think, to lend money at zero interest and then borrow it back from the same banks at a positive interest rate. What can they be thinking? (If this is for real.)
If the government wants to stimulate things, why not help out the little guys, the Larry Lunchpails of America, to meet their mortgage obligations with the gift of zero interest rates as opposed to the likes of JP Morgan and its cohorts?
Otherwise, it creates the impression that we are in a new form of feudalism, in which the top bankers have become some sort of royalty in America in which we pay for their mistakes, and keep them in the lap of luxury but they balk at doing their part to help the nation and us peons.
This is it, one paragraph from the blog of James Howard Kunstler. The Smog of Fraud | KUNSTLER :
"JP Morgan is one of the specially privileged primary dealer banks said to be systemically indispensible to world finance. Supposedly, if one of them is allowed to flop, the whole global matrix of global debt obligations and, hence, global money would dissolve in a misty cloud of broken promises. They are primary dealers to their shadow partner, the Federal Reserve, and their main job in that relationship is buying treasury bonds, bills, and notes from the US government and then selling them to the Fed (earning commissions on the sales, of course). The Fed, in turn, lends billions of dollars at zero interest back to the primary dealers who then park the borrowed money in accounts at the Fed at a higher interest rate. This is, of course, money for nothing, and even small interest rate differentials add up to tidy profits when the volumes on deposit are so massive."
(Bold italics are mine.)
If this is really true, as we are talking hundreds of billions of dollars here, isn't all the apparent concern by the Obama administration about income inequality somewhat of a facade? It would seem the Secretary of the Treasury is a part of a strange scheme that actually would end up redistributing income in the wrong direction, from the public to the top tier 0.1%. Just think, to lend money at zero interest and then borrow it back from the same banks at a positive interest rate. What can they be thinking? (If this is for real.)
If the government wants to stimulate things, why not help out the little guys, the Larry Lunchpails of America, to meet their mortgage obligations with the gift of zero interest rates as opposed to the likes of JP Morgan and its cohorts?
Otherwise, it creates the impression that we are in a new form of feudalism, in which the top bankers have become some sort of royalty in America in which we pay for their mistakes, and keep them in the lap of luxury but they balk at doing their part to help the nation and us peons.
