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Member since: Thu Oct 5, 2006, 02:23 PM
Number of posts: 2,486

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This is ALL that you need to know to understand modern economics.

Charts and graphs don't explain the economy. Most of the charts and graphs are either meaningless or designed to confuse you.

The stock market is another technique based exclusively on trickle-down economics used by the wealthy to separate the middle class from its savings.

So-called "free trade" doesn't exist. It is basically a marketing term to distract the unknowing from reality. Trade is controlled by the largest corporations for their own power and profit. So-called "free trade" agreements are the major corporations' method of carving up a captive market so as to increase their profits and prevent competition.

Consider "trade agreements" such as NAFTA and the proposed TPP as the manufacturing equivalent of OPEC.

The Federal Reserve is controlled by the largest banks for their own benefit exclusively. Interest rates are low only on depositors savings. Interest rates are high on credit card balances, student loans, and other money owed to the banks by the middle class.

Corporate avoidance of taxes, such as through unnecessary corporate subsidies, and offshore tax havens, is designed to withdraw money, the circulation medium that drives economic activity, from the middle class so as to collapse the bargaining power and influence of the middle class.

In order to understand reality, one first has to purge the false myths about economics from one's consciousness.

Another battle to fight in "Wall Street's War Against America".

The banks are already siphoning off the assets of middle class depositors by paying a measly 0.1 percent interest rate to their depositors while charging 14 percent or more on credit card balances.

A further loss to depositors occurs because 0.1 percent earned interest doesn't even come close to the annual inflation rate.

The Federal Reserve claiming that its low interest rates spur the economy are patently absurd. If the Fed really wanted to spur the economy, they would pay higher interest to depositors, thereby putting funds into the pockets of people who would spend it, while charging much less interest on credit card balances, which would leave much more money in the hands of those people who would spend it.

K and R!

The Fed's low interest rate on bank deposits is a key factor in stealing middle class assets.

A large part of loans to consumers involve credit card balances which interest rate can be 14 percent or more.

So, we see a situation where middle class depositors receive 0.1 percent on their savings while paying the bank 14 percent or more on their credit card balances.

The banks pay 0.1 percent (0.001) on deposits of their customers while charging credit card customers 14 percent or more on credit card balances of their customers which amounts to a spread of 0.14 / 0.001 which equals 140 times. That is, the bank receives from its credit card customers 140 times what it pays to its depositors for the use of their money.

Even when a loan is 6 percent, the spread is 0.06 / 0.001 = 60 times. .

Consider, a person has $100,000 in a retirement account. At 0.1 percent interest, in one year, that person earns $100,000 x 0.001 = $100. A few years ago, many banks paid around 2.0 percent interest, so a few years ago, that $100,000 was earning $100,000 x 0.02 = $2000 in a year.

Earnings on bank deposits aren't even keeping up with inflation.

The banks, with the collusion of the Federal Reserve, are transferring the savings of depositors to the banks and Wall Street.

Good description of how the system works to transfer middle class assets to the 1 percent.

Jobs are created when there is demand for goods and services.

The money given to the wealthy will NOT create jobs when there is no demand.

Does General Motors hire workers and expand production when few people are buying cars?

Would prudent consumers buy stuff when the value of their assets is deteriorating when keeping them in bank accounts paying 0.1 percent interest while the real inflation rate is eating the value of their wages (assuming they have a job).

This is one of the mechanisms that is transferring the assets of the middle class to the corporate 1 percent: The Federal Reserve is duplicitous in this scheme and has been from the beginning (think Greenspan, Bernanke, and ,now, Yellen for this current round of thievery.)

The banks pay around 0.1 percent interest to depositors for the use of their money. They collect 14 percent (or more) on unpaid balances on credit cards. The banks collect, in this case, 140 times the cost of the use of depositors' money ( 0.14 / 0.001 = 140). The Fed makes sure all banks comply with paying low interest rates to prevent competition by the banks to attract depositors by offering higher interest on deposits.

Since demand for goods is too low for corporations to make money merely from producing goods, the banks "lend" money to Wall Street (made legal again due to repeal of the Glass-Steagall Act) to buy out and merge once competing companies, fire "duplicate" employees to boost next quarters' profits, and get away with raising prices since there is now less competition.

The stock market is at record high levels because of all the money being thrown at it. Wall Street "speculators" and corporate insiders "borrow" money at low interest rates, buy up a targeted company's stock, wait for the "suckers" to invest driving up the price still further, and then sell their shares at huge profits.

How quickly the Enron scam has been forgotten.

The Federal Reserve is a central bank run by the banks and Wall Street for their benefit. Forget mission statements and reputed policy goals. Look at what they do and what are the results.

The stock market is a Ponzi scheme enabled by repeal of the Glass-Steagall Act...

...and aided and abetted by the Federal Reserve.

The Federal Reserve keeps bank interest rates low on deposit accounts, thus stealing the value of depositors' assets, and providing Wall Street with cheap (essentially, free) money to artificially pump up the stock market, just by throwing money at it.

The corporate insiders give themselves bonuses and stock options to make huge profits off of the "improvement" in the stock prices, and corporations merge to eliminate competition, while improving profit margins by eliminating now "redundant" employees from the newly merged company.

The way the inflation numbers are calculated is a joke. Anyone who has been buying fruits and vegetables for the past 15 years is aware of the significant price hike in essentials such as food.

As long as corporations control world trade through agreements like NAFTA, the WTO, and their ilk, the main requirement to enable the middle and working classes to have control over their lives, the ability to obtain an income through gainful employment, will not happen.

There is NO "global" economy. The general price level in the United States is too high relative to countries such as China, India, and Bangladesh such that Americans cannot survive on the low wage rates in those countries.

The manufacturing of everyday types of goods such as clothes, shoes, appliances, hardware, furniture, tools, and more has to be brought back to the U.S. in order to keep the flow of money circulating within the U.S. economy.

Nothing else will save the U.S. economy from collapse.

Between the loss of jobs (i.e., the loss of income to Americans) and the corporate tax evasion enabled by foreign tax havens, real capital is being drained from the U.S.

Real capital is being replaced by the Federal Reserve with "funny money" that is increasing U.S. debt at an accelerating rate. This is an unsustainable situation.

This will inevitably lead to global economic collapse. In fact, this is the end game for Wall Street and the 1 percent. Then the Corporations will offer to "save" the planet by privatizing everything.

Welcome to the new feudalism.

You are the only one, so far, who understands the Republican strategy re women voters.

Republican strategy rests on the fact that many Americans have been "educated" to have authoritarian personalities.

This makes them question their own judgement on every debatable issue.

The Republican strategy, in this case, is to flood the public consciousness with propaganda that suggests that the women's interpretation of their experience is "incorrect".

This instilling of authoritarian traits into the American psyche is what allows the Republicans to get people to "vote against their own self-interest."

This phenomenon goes beyond its effect on religious views. It explains why propaganda works, even when the propaganda is blatantly counter to reality and the facts.

What progressives have to do is reinforce the questioning of the right wing propaganda, and propose a progressive course of action that would benefit the population that is affected by the issues.

The response of the government was merely to bail out the crooked bankers.

The crooked bankers are still in control of the banks and still stealing the assets of the middle class.

What the government should have done is kicked out the crooked bankers, and forced the banks to renegotiate the bad mortgages and other bad debt promoted by the banks and sold to investors.

The only response the government needed to do was to guarantee depositors' assets so that there wouldn't be a run on the banks by depositors to withdraw all of their money.

There was no need to give hundreds of billions of dollars to the crooked bankers to cover the losses caused by their fraud.

The Fed influences interest rates by its ability to increase and decrease the money supply. Basically, when the Fed makes money cheaply available to the banks, the banks don't have to pay higher interest to depositors to attract deposits.

This process is explained in more depth on the Internet. A good place to start is at:


The bank fraud was intentional.

One significant act that shows that the fraud was intentional was repeal of the Glass-Steagall Act.

The Glass-Steagall Act prevented the large banks from merging into "too big to fail" banks, which was an integral part of the scam.

People with bank savings accounts are losing money every day with connivance of the Fed.

Banks pay depositors 0.1 percent interest on the money they deposit in a bank account.

At the same time, banks charge customers 14 percent or more on credit card balances. That is a "spread" of 14 percent divided by 0.1 percent ( 0 .14 / .001 ) which equals 140 times.

The trivial amount of interest banks pay their depositors doesn't even keep up with inflation.

People who keep their savings in banks are losing their principal merely by having their money there.

The excuse used by the Fed for keeping interest rates low in order to "stimulate" the economy is pure nonsense. If the Fed wanted to use monetary policy to promote spending, they would lower credit card interest rates to, say, 5 percent, and raise interest rates on deposits to, say, 3 percent, to put more money into the hands of people who would spend it.

Current bank interest rates extract money from the economy which is one reason for the sluggish economy.

The Fed's interest rate policy is merely another aspect of trickle-down economics in which wealth is extracted from the middle class into the pockets of the wealthy.

In order for the "invisible hand" to work, there has to be competition.

From the original article:

A wave of consolidation that started in 2008 has left four U.S. airlines — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines — controlling more than 80 percent of the domestic air-travel market. Discount airlines such as Allegiant Air and Spirit Airlines have grown at breakneck speed but still carry a tiny fraction of overall passengers.

That control of the market has enabled the bigger airlines to charge more for tickets and not worry about being undercut by the competition. In addition, the airlines are taking in about $3.3 billion a year in fees. The result: record profits.

In the days of the robber barons, the corporations formed cartels to set prices and control output.

So, the government passed antitrust laws.

These days, companies buy each other, or merge, or are purchased by so-called investment companies, and accomplish the same goals: limit supply and set prices by eliminating competition.

To protect the public, government has to set policies that promote competition and regulate in the public interest.

The last 20 years or so has seen the gutting of government regulatory authority. An important example is the repeal of the Glass-Steagall Act which, for the most part, separated commercial banks from investment banks (Wall Street securities firms).

Repeal of Glass-Steagall, critics argue, "permitted Wall Street investment banking firms to gamble with their depositors' money that was held in affiliated commercial banks."


Repeal of the Glass-Steagall Act was effectively accomplished by the Gramm–Leach–Bliley Act of 1999.

It repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. Furthermore, it failed to give to the SEC or any other financial regulatory agency the authority to regulate large investment bank holding companies. ”The legislation was signed into law by President Bill Clinton.

A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998. Less than a year later, GLB was passed to legalize these types of mergers on a permanent basis. The law also repealed Glass–Steagall's conflict of interest prohibitions "against simultaneous service by any officer, director, or employee of a securities firm as an officer, director, or employee of any member bank".
Notice in this paragraph that the Federal Reserve does NOT work in the public interest.


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