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Global Financial Crisis – What caused it, and what causes “BOON and BUST Cycles”.

Global Financial Crisis – What caused it, and what causes “BOON and BUST Cycles”.

IN 18 WORDS:

ISSUANCE OF MONEY AS LOANS WITH AN INTEREST COMMITMENT , BY ANY ENTITY OTHER THAN A HONEST CENTRAL BANK !

Best example: Housing, residential and or commercial.

For a period of ten years, if there is a continuous increase in
production and sales, one can be assured, based upon
the present system that a bust will occur.

The boom portion:
The builders
… invest $3 trillion production cost.
… invest $3 trillion labor and sales cost
Resulting in a $12 trillion dollar GDP increase.
….an investment return of $6 trillion .

Business, labor,material vendors, lenders are all pleased.
SO where does it go wrong?
In order for all to receive these gains within the time period
the $12 trillion must be sold, turned in money.

Let’s say $2 trillion is sold by cash.
………….. $10 trillion is sold with an average of 10% down
with an average mortgage of 6% for 24 years.
We have a perfect circle…$12 trillion = $12 trillion

But, there is a problem, a major problem
the money issued must be returned and the interest must be paid.
The buyers need to earn at least $1 trillion a year for the next 10 years
to pay for this 10 year old “boom”.
The boom cycle can not continue to grow simply because the final securitization
of the GDP will always exceed its value.
“ISSUANCE OF MONEY AS LOANS WITH AN INTEREST COMMITMENT ,
BY ANY ENTITY OTHER THAN A HONEST CENTRAL BANK !”
can not be extinguished by any other means than a “bust”.
Please note: IF, a honest Central bank issued this money, it could make the
circle perfect by “calling” the loans and restructure; as they did with “Savings and Loans Crises”.
Something that they could not do with the GFC because they could not “call” the loans and restructure them.Because there was more than one cause, its like asking ‘if a person in the hospital dies from a heart attack while undergoing surgery for a bullet wound, what would be the cause of death?
Repeal of the “Glass-Steagall” Act did allow banks to ‘invest in mortgages’ as well as allowed their massive credit allocation to the housing sector to form a “Boom and Bust” cycle.
Based upon the present economic system this is a “normal heart attack”. But ,how do we account for ‘violation of their fiduciary duty’ ? The “Fatal Bullet’ fatal bullet that would have caused
the ” systemic failure” or “monetary collapse” ? The Glass-Steagall Act could have prevented the meltdown, or really it could have controlled the extent of the damages via the Fed
as in the “Saving and Loan Crisis”. The only thing the “GSA” would do would have been perhaps a means by which the banks could be civilly and criminally held accountable for their violation.
“The banks contractually giving up their rights, no duty, to protect their assets.”
That is another story…. “Justaluckyfool” ,http://bit.ly/MlQWNs .

Theories of Knowledge

Source: Theories of Knowledge

INCOME TAX REFORM: FANTASY TO REALITY

https://www.washingtonpost.com/posteverything/wp/2016/01/28/we-desperately-need-major-tax-reform-or-maybe-not/?postshare=9951454150648936&tid=ss_fb-bottom

We desperately need major tax reform! Or maybe not…
Fundamental tax reform is a fantasy. Now, let’s get to work on improving our tax code.
By Jared Bernstein January 28
“So, let’s stop being distracted by the “fundamental reform fairy” and start pursuing incremental reforms:
— Close the carried interest loophole that privileges the earnings of investment fund managers. In a town where every tax break has a defender, that one stands alone. (Sen. Chuck Schumer used to support it on behalf of his constituents, but he’s backed off; even Trump’s against it!) Can we please put it out of its misery?

— Block corporate tax inversions, where U.S. companies merge with overseas companies just to move their tax mailbox to a low tax country.

— End the “step-up basis” provision by which the wealthy can pass capital gains on to their heirs tax free.

— Stop incentivizing multinationals to keep, or at least book, their profits overseas by letting companies repatriate their foreign earnings after paying a minimum tax (the Obama administration suggests a 19 percent minimum rate).

— Increase the EITC (“… a refundable tax credit for low- to moderate-income working individuals and couples for childless adults…” Wiki.), who now get very little from it, an idea supported by both Obama and House Speaker Paul Ryan (R).

Above, I called these “tweaks” as opposed to major reforms. Though the contrast is apt, it’s the wrong word, as any such changes are hugely heavy lifts. But heavy lifts are at least in the realm of the possible. And that’s the right realm to be in if we actually want to improve our tax code.” Jared Bernstein.

THREE ADDITIONAL “TWEAKS” to make a great tax plan a “more perfect tax plan”.(by Justaluckyfool)

—Federal Personal Income Tax for any individual income up to $75,000 shall be ZERO. Joint income up to $150,000 shall be ZERO.

—FICA payment will no longer be withheld or payable for individual income up to $75,000. Joint income up to $150,000. The 15% must be paid as income in take home pay ( actually producing an increase in wage without any increase in cost).

Please ask “The Tax Foundation”,” What will this cost ?”
JUSTALUCKYFOOL will prove that it can be paid for “by reaising money from somewhere else.”

So Where Is The Multi Trillion Dollar Class Action Lawsuit?

SO WHERE IS THE MULTI TRILLION DOLLAR CLASH ACTION LAWSUIT? People are still suffering losses.

“True or False ?”

IT ALL WENT WRONG-when the banks violated their fiduciary duty and abandoned their rights, no their obligation to “protect the asset”

Fraudulent mortgage loans do not, can not and will not cause “systemic failure” or “total collapse of the monetary system” .
The mortgage system is not flawed because it is based on lending against an asset.
As long as the lender can reclaim the asset, even if at 50% of its original value, the lender will be able to recover over time. (If at 6%; 12 years.)
The “suckers” were the Buyers of the MBS’s. The scheme collapsed when they discovered the banks and their insurers no longer could pay back the money they paid for the so-called ultra safe investment. The future interest income from the mortgages was what securitized the MBS’s—NOT THE LOANS, hell the banks could not sell them the loans; they didn’t even own the money they printed to make them.
In order to make trillions of dollars in todays money, they sold and got cash for tomorrows money-the interest income.
Mortgages were not supposed to be to make trillions of dollars for banks who in turn would make trillions for financial corps, they were supposed to be for helping people buy homes.
IT ALL WENT WRONG-when the banks violated their fiduciary duty and abandoned their rights, no their obligation to “protect the asset”

To keep the ‘suckers’ buying they gave up the right to foreclose (their protection of the asset) to “the upper tiers” buyers of the investment-the MBS !

This violation caused the loss of trillions of dollars of “the people money”.

This violation was the cause of the Feds giving the money to the banks to prevent the “systemic failure” or “total collapse of the monetary system”. The loans would have cured themselves but they (banks) could not return the trillions they they spent as profit from the sale of the MBSs. And more important, the Fed could not purchase and restructure the mortgages thereby destroying the future income receipts. The “systemic failure”, “total collapse of the monetary system” could have occured if the ‘people’ were told that the banks and insurance companies were insolvent.

WITNESS : SHEILA BAIR,”How could things have deteriorated so quickly…? In a word, securitization.

…Working with a Wall Street investment bank, the issuer packages the mortgages together into ‘pools’ and divides the right to the cash flows of these mortgages into securities that are sold to investors…”“…but they can’t get the mortgage notes written down to affordable levels for contractual reasons….” Quote Sheila Bair ,

(Former FDIC Chairman appointed in 2006(“BULL BY THE HORNS”) THE KEY WORDS BEING, “… the right to the cash flows of these mortgages into securities that are sold to investors…” These contracts allowed the investors to take away the rights of the lenders to modify the mortgages: they sold “the cash flows” for cash . How could they get back the trillions of dollars they already spent so they could repurchase the MBSs ?

The Fed would have been able to “fix” the modification problem with simple strokes on a computer: Allow all to stay at market value, with loans at 3% for 40 years,period. 85% would stay, the other 15% would become welcomed ‘short sales’. END OF CRISES, stabilizing the housing industry, saving millions of jobs and even creating more jobs. But if they were to reveal the banks made trillions of profit by selling-future interest income and would have had to return that money; the banks would have crashed. The banks would be provn that they were insolvent. Also, the Insurance industry would have “failed” because they were also insolvent, that is also they could not “pay out the trillions needed to cover the banks insured losses.
The banks made a fatal error in that they turned over to the investors all control over the performance of the basic asset..with total disregard of their fiduciary duty- thereby making it impossible for the TBTF” banks to make good on their “representations”. The only way available for the Fed was to “make the banks and the insurers whole”. Return the trillions they took since it was discovered that not only were they not of “good faith and credit” but also the insurers they paid were also not of “good faith and credit”. Has anyone asked ,why the Fed purchased almost $1 trillion of MBSs instead of the mortgages ?
Because the mortgages were not the problem and such a purchase would have been even more disasterous because the buyers of the MBS would see their purchases go to zero as there would be ZERO future interest income for them. And the Fed would have exposed-we are in a system that is flawed and could result in catastrophic failure.

Please feel free to correct any errors and any profound wisdom is welcomed.
” … “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha

WITNESS : BEN BERNANKE

Former Federal Reserve Chair Ben Bernanke joined practically everyone in America by saying in his new memoir, The Courage to Act, that more Wall Street executives should have gone to jail for criminal misconduct that led to the financial crisis.

“It would have been my preference to have more investigation of individual action, since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm,” he wrote.”The mortgage securitization process that fed the housing bubble and generated the financial crisis also led to widespread foreclosure fraud, and in April 2011, the Fed, along with the Office of the Comptroller of the Currency, issued enforcement orders against ten major banks over “misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing.”

Please feel free to correct any errors and any profound wisdom is welcomed.
” … “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha

WHO REALLY SAW THIS COMING?????

Did Frederick Soddy see that coming in 1932? Quote from ‘The Role Of Money”-“…

(This book) is concerned

less with the details of particular schemes

of monetary reform that have been advocated

than with the general principles to which, in the

author’s opinion, every monetary system must at

long last conform, if it is to fulfil its proper role

as the distributive mechanism of society. To allow

it to become a source of revenue to private issuers

is to create, first, a secret and illicit arm of the

government and, last, a rival power strong enough

ultimately to overthrow all other forms of

government.”
“There never was an idea stated
that woke men out of their stupid indifference
but its originator was spoken of as a crank.”
— Oliver Wendell Holmes, Sr.
(1809-1894) American Poet

.*** BUT, why not read and challenge a Noble Laureate for Physics and challenge ? ******Excerpt from http://en.wikipedia.org/wiki/Frederick_Soddy

“In four books written from 1921 to 1934, Soddy carried on a “quixotic campaign for a radical restructuring of global monetary relationships”[this quote needs a citation], offering a perspective on economics rooted in physics—the laws of thermodynamics, in particular—and was “roundly dismissed as a crank”[this quote needs a citation]. While most of his proposals – “to abandon the gold standard, let international exchange rates float, use federal surpluses and deficits as macroeconomic policy tools that could counter cyclical trends, and establish bureaus of economic statistics (including a consumer price index) in order to facilitate this effort” – are now conventional practice, his critique of fractional-reserve banking still “remains outside the bounds of conventional wisdom”[this quote needs a citation]. Soddy wrote that financial debts grew exponentially at compound interest…”

http://archive.org/stream/roleofmoney032861mbp/roleofmoney032861mbp_djvu.txt “The Role Of Money”

(Entire book as a free download)

DEBT SOLUTION: SODDYISM

DEBT SOLUTION.
The interest on the Fed bonds that we are PAYING to the top 10%ers is close to $700 billion (2015 entitlement) and is expected to be over $700 billion for 2016. It is in the budget as “debt service” on debt.That does not satisfy the GREED of the banks so now the Fed has instituted a new entitlement..”that will likely total $24 billion in 2016″..”for holding our money in deposit.” Please anyone ask L Randal Wray, “Is this correct” Please also ask ANYONE that wishes to cut ENTITLEMENTS !Solution is a proven method: Call the bonds and replace them with 0% interest bonds.(Add as L Randall Wray stated, “When I’ve engaged advocates of debt-free money, my protestations always generate confusion and the topic gets switched to government payment of interest. The “debt-free money” cranks hate payment of interest by government. I’m not sure, but I think what they really want to do is to prohibit government payment of interest.
That is fine with me. ZIRP forever. Stop paying interest on bank reserves, and stop issuing Treasury bills and bonds. I’m with them. Advocate ZIRP…”
Then proceed to pay off the entire Federal Debt?
*****It is correct as stated on ” 60 minutes” (12/11/11)”
President Obama said,”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.” ? DUH, why not lower, yes, lower Federal Personal Income Taxes to ZERO for each individual earning up to $100,000 while at the same time TAXING SOMETHING ELSE!!

So how will you create enough government revenue to create millions of new jobs,
reduce Federal Personal Income Taxes,
increase Social Security,
have Medicare for all
and decrease the National Debt?
THERE IS A WAY:
SODDYISM:
*****It is correct as stated on ” 60 minutes” (12/11/11)”
President Obama said,”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.” ? DUH, why not lower, yes, lower Federal Personal Income Taxes to ZERO for each individual earning up to $100,000 while at the same time TAXING SOMETHING ELSE!!

While adhering to the basic principle-“The way and means for a ‘capitalistic sovereignty’ is to RAISE TAXES should they wish to increase spending.”
Yet no one explains that there are “other ways” of taxation. There is a method available to us that is no only fair but also of such a magnitude that it could fund this great union to become“…a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…
Simply a better, fairer taxation.
No inflation or deflation for there is zero change in the capital value of the sovereignty.
There is zero change on the balance sheet of the Central Bank; a true zero net change.”*************************
THE K.I.S.S. SOLUTION TO DECREASE INEQUALITY GAPS, POVERTY, and NATIONAL DEBT.
When a honest Central Bank uses “QE” for the betterment of the community in a capitalistic economy, it will be the greatest system ever devised by mankind.
IN EIGHT WORDS: A CAPITALISTIC ECONOMY WITH A HONEST CENTRAL BANK.
Reverse “ an economic recovery program that has privileged the recovery of financial markets and corporate profits has fueled the increase in wealth inequality, in the United States and across the world.”, reverse that program, make it fund “…a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…”
“Capitalism is the “best” system to date devised by mankind. As it is administrated, perhaps, is where the “flaw” is manifested. If capitalism used its Central Bank properly,that is for the betterment of the common good, with equality and justice for all, capitalism would be the best ways and means to help “form a more perfect union….”, Pontifical C.
SOLUTION.
“LEGISLATE FOR “We the People” WHAT WE HAD LEGISLATED THE CENTRAL BANK TO DO FOR THE Private For Profit Banks (PFPB) ! ISSUE OUR OWN MONEY AS LOANS AND CHARGE A TAX CALLED INTEREST ! ! ! ”
Create an honest Central Bank that shall fund-
““We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…””
When a honest Central Bank uses “QE” for the betterment of the community in a capitalistic economy, it will be the greatest system ever devised by mankind.
FREE DOWNLOAD: “The Role Of Money”
”http://archive.org/…/role…/roleofmoney032861mbp_djvu.txt

THE K.I.S.S. SOLUTION :DECREASE INEQUALITY GAPS, POVERTY, NATIONAL DEBT.

*****IN EIGHT WORDS***
(and one book).

THE K.I.S.S. SOLUTION TO DECREASE INEQUALITY GAPS, POVERTY, and NATIONAL DEBT.
IN EIGHT WORDS – -A CAPITALISTIC ECONOMY WITH A HONEST CENTRAL BANK.
WHY WOULD YOU NOT WANT PROSPERITY FOR YOURSELF AND YOUR CHILDREN ?

“Capitalism is an economic system based on private ownership of the means of production and
the creation of goods and services for profit.[1] Central characteristics of capitalism include
private property, capital accumulation, wage labour and competitive markets.[2][3] In a capitalist
market economy, investments are determined by private decision and the parties to a transaction
typically determine the prices at which they exchange assets, goods, and services.[4]”(Wikipedia).
WHAT WE DO WITH THE PROFITS DETERMINES WHETHER WE ARE OR ARE NOT FOR
THE BETTERMENT OF ALL MANKIND; THE WAY WE ADMINISTER THE SYSTEM IS THE ISSUE!
“Capitalism is the “best” system to date devised by mankind. As it is administrated, perhaps, is where
the “flaw” is manifested. If capitalism used its Central Bank properly,that is for the betterment
of the common good, with equality and justice for all, capitalism would be the best ways and means
to help “form a more perfect union….”,
SOLUTION.
“LEGISLATE FOR “We the People” WHAT WE HAD LEGISLATED THE CENTRAL BANK TO DO FOR
THE Private For Profit Banks (PFPB) !
ISSUE OUR OWN MONEY AS LOANS AND CHARGE A TAX CALLED INTEREST ! ! ! ”

Use a HONEST CENTRAL BANK to turn over that income stream to Congress for appropriations
for the betterment of ALL THE PEOPLE.
Have a honest Central Bank that shall fund-
““We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…” ” WHY WOULD YOU NOT WANT PROSPERITY FOR YOURSELF AND YOUR CHILDREN ?
There is a solution.
REVERSE: What the Central Banks are doing; rather than making the rich richer have them…fuel the increase in wealth Equality and …” promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…””

A HONEST CENTRAL BANK; THE ONE STEP ADMINISTRATION SOLUTION..
When a honest Central Bank uses “QE” for the betterment of the community in a capitalistic economy, it will be the greatest system ever devised by mankind.
FREE DOWNLOAD: “The Role Of Money”
”http://archive.org/…/role…/roleofmoney032861mbp_djvu.txt

***** “Believe nothing merely because you have been told it…But whatsoever,
after due examination and analysis,you find to be kind, conducive to the good,
the benefit,the welfare of all beings – that doctrine believe and cling to,and
take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC),
Comments by Justaluckyfool ( http://bit.ly/MlQWNs )(justaluckyfool@aol.com, please due examination and analysis.)

DEBT SERVICE SOLUTION

Submitted to…Please share,

DEBT SOLUTION.
The interest on the Fed bonds that we are PAYING to the top 10%ers is close to $700 billion (2015 entitlement) and is expected to be over $700 billion for 2016. It is in the budget as “debt service” on debt.That does not satisfy the GREED of the banks so now the Fed has instituted a new entitlement..”that will likely total $24 billion in 2016″..”for holding our money in deposit.” Please anyone ask L Randal Wray, “Is this correct” Please also ask ANYONE that wishes to cut ENTITLEMENTS !Solution is a proven method: Call the bonds and replace them with 0% interest bonds.(Add as L Randall Wray stated, “When I’ve engaged advocates of debt-free money, my protestations always generate confusion and the topic gets switched to government payment of interest. The “debt-free money” cranks hate payment of interest by government. I’m not sure, but I think what they really want to do is to prohibit government payment of interest.
That is fine with me. ZIRP forever. Stop paying interest on bank reserves, and stop issuing Treasury bills and bonds. I’m with them. Advocate ZIRP…”
Then proceed to pay off the entire Federal Debt?
***The ease with which the government’s debt could be paid in this way was demonstrated in January 2004****
As the chairman of the Coinage Subcommittee observed in the 1980s, the entire federal debt could actually be paid in this way. The Federal Reserve has already established that it can issue $4.5 trillion in accounting-entry QE without triggering hyperinflation. In fact, it has not succeeded in triggering the modest inflation the exercise was designed for. As with QE, paying the federal debt in this way would just be an asset swap, replacing an interest-bearing obligation with a non-interest-bearing one. The market for goods and services would not be flooded with “new” money that would inflate the prices of consumer goods, because the bond holders would not consider themselves any richer than before. They presumably had their money in bonds in the first place because they wanted to save it rather than spend it. They would no doubt continue to save it, either as cash or by investing it in some other interest-generating securities.
The ease with which the government’s debt could be paid in this way was demonstrated in January 2004, when the US Treasury called a 30-year bond issue before its due date. The bonds were redeemed “at par” to avoid a 9-1/8% interest rate, which was then well above market rates. The Treasury’s January 15, 2004 announcement said that payment would be made “in book entry form,” meaning numbers were simply entered into the Treasury’s online money market fund (Treasury Direct). In effect, the money just moved from an online savings account to an online depository account, converting interest-bearing bonds into non-interest-bearing cash.
Where did the Treasury get the money to refinance this $3 billion bond issue at a lower interest rate? Whether it came from the private banking system or from the Federal Reserve, it was no doubt created out of thin air. As Federal Reserve Board Chairman Marriner Eccles testified before the House Banking and Currency Committee in 1935:
When the banks buy a billion dollars of Government bonds as they are offered . . . they actually create, by a bookkeeping entry, a billion dollars.
The US government can just as easily create this money by a bookkeeping entry itself. It can and it should, to avoid the interest charges that compound the national debt and make it unrepayable.
Quoting Thomas Edison again:
If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way.http://ellenbrown.com/…/how-obama-could-beat-the-debt-ceil…/
Comments by Justaluckyfool ( http://bit.ly/MlQWNs )
( “You are always welcome to share, copy, plagiarize, improve, etc..any comments.)
Read and challenge:
Frederick Soddy writings, namely “The Role Of Money”
(Entire book as a free download…)http://archive.org/details/roleofmoney032861mbp ******************** “Believe nothing merely because you have been told it…But whatsoever,
after due examination and analysis,you find to be kind, conducive to the good,
the benefit,the welfare of all beings – that doctrine believe and cling to,and
take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC),

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