Bank Robbery or What the Fed Is Helping the Banks Do to Us

Ever since big Republican bankers began writhing and howling because of all the house mortgages going belly up across the land, the great minds of the world of finance have been trying to figure how to save their asses from being fried for all the bad loans they enticed the ignorant into signing in order to finance four walls and a roof.

Their answer–or least a main one of them–is loot the U.S. Treasury, itself a vault that if it didn’t have the power to print money and government bonds would be bankrupt, thanks to the drunken spending of the Bush Administration on the wars in Iraq and Afghanistan.

How do bankers loot? First they have to convince fellow bankers sitting on the board of the Federal Reserve that if the Fed doesn’t make money cheaper for the banks to borrow from the Treasury, then the whole economy will collapse. It’s not as if such convincing takes place in public meetings. Nay, it occurs over lunches, cocktails and dinners, where the rich among us whisper of those terrible dangers that might happen if a new Depressions starts: Reform! Revolution! And worse, or maybe the same thing, Democrats owning the White House and Congress.

Given such fears voiced by old school chums and business buddies, the Fed governors then lower the interest rates that banks can borrow at, now down about 3 percent. In the next day or two that may go lower.

Can an ordinary citizen or even a business or General Motors borrow at the Fed prime rate? No.

So the big banks borrow the money low and lend it high, usually 100 percent or more higher, for mortgages, business loans, automobiles.

But better yet these days, there are credit cards. Yes, Bank of America may borrow at 3 percent and lend it to you in a risky fashion, via credit card, for upwards of 30 percent.

Granting the spread in interest rates between what a big bank can borrow at and what it can loan at, one might think the riches pouring in the door might make major banks what they are supposed to be, conservative. Yes, their officers are conservative, but only in politics. The easy greed fostered by the Bush Administration has washed away until lately all their concerns about bad loans.

It’s been come in suckers, sign here on this dandy mortgage that will double your monthly payments in three years. And then we’ll bundle this risky paper under some fancy name and sells of it to your betters.

Read the upcoming news stories. Read about how the Fed will tell the bankers to back semis up to the Treasury doors to load up with $1,000 bills. Read a few days later how the bankers will cry, it’s not enough! Lower interest rates again! Sell more federal bonds to the stupid Chinese and give us the dough! We’ll love you for it! And so will the children yet unborn who will be paying off those bonds 50 years hence. What do you care? You’ll be dead!