so marcus shrock sent along this little gem and i just had to respond. this is my facebook comment gone wild...
that was a poorly structured string of paranoid delusional claims that was about as rhetorically effective as a stoner in a dorm room ranting about how the CIA invented AIDS. there is nothing in reality that matches a literal interpretation of that article, so rather than sort through that pile of garbage, i'll just restate in english what this guy apparently thinks he is ranting about...
cash is an unproductive asset, so it behooves a business to hold as little as possible. sometimes a business has too little to meet operating expenses (like payroll or raw materials), so they need to borrow short term funds. for healthy businesses that are a going concern (like caterpillar, mcdonald’s, toyota, and verizon,) this should be no problem and they just sell IOUs called commercial paper.
when the financial crisis hit, the commercial paper markets froze up. all the usual lenders (buyers of commercial paper) thought it was a very real possibility that otherwise perfectly healthy institutions (like ge, caterpillar, mcdonald’s, toyota, and verizon) could fail. because financial panic is a self-fulfilling prophecy, they were right. could you imagine the panic upon panic that would spread if a bunch of fortune 500 companies like ge, mcdonald’s, and verizon had to shut their doors because they couldn't pay their workers or buy raw materials? the world was on the edge of a financial apocalypse.
rather than let that happen, the fed stepped in as lender of last resort and started buying up billions worth of commercial paper. companies like ge, caterpillar, mcdonald’s, toyota, and verizon all borrowed from the fed and joe the plumber went about his merry way buying supplies at home depot, eating at mcdonald's, and stopping by his bank without a clue as to how close the world had just come to another great depression.
despite the alleged conspiracy, none of this was a secret. it is all very clearly explained on the board of governors and new york fed's website, so i'm assuming the news what inspired this guy's rant is the fed's release naming exactly who borrowed (to comply with dodd-frank.) now let's get specific and tear this thing up... i will just quote the thing and give short responses.
"What if the greatest scam ever perpetrated was blatantly exposed, and the US media didn’t cover it?"
it wasn't a scam, and the media did cover it. it was headline news.
"Does that mean the scam could keep going? That’s what we are about to find out."
no. the commercial paper funding facility closed february 1, 2010.
"We were finally granted the honor and privilege of finding out the specifics, a limited one-time Federal Reserve view, of a secret taxpayer funded “backdoor bailout” by a small group of unelected bankers. This data release reveals “emergency lending programs” that doled out $12.3 TRILLION in taxpayer money – $3.3 trillion in liquidity, $9 trillion in “other financial arrangements.”"
actually it was never a secret and congress was aware, though the borrowers names were not disclosed until now to avoid causing further panic.
also, the fed does not dole out taxpayer money. that's a drastic oversimplification. the fed creates money (a liability) that is backed by u.s. treasuries (an asset), thus the money created is indirectly backed by the wealth of the u.s. to include the taxpayer, which is quite a bit different. any profits earned by the fed on it's holdings are returned to the u.s. treasury, and thus returned to the taxpayer.
"Wait, what? Did you say $12.3 TRILLION tax dollars were thrown around in secrecy by unelected bankers… and Congress didn’t know any of the details?"
"The Founding Fathers are rolling over in their graves. The original copy of the Constitution spontaneously burst into flames. The ghost of Tom Paine went running, stark raving mad screaming through the halls of Congress. Talk about the ransacking and burning of Rome! Sayonara American middle class... If you still had any question as to whether or not the United States is now the world’s preeminent banana republic, the final verdict was just delivered and the decision was unanimous. The ayes have it. Any fairytale notions that we are living in a nation built on the rule of law and of the global economy being based on free market principles has now been exposed as just that, a fairytale. This moment is equivalent to everyone in Vatican City being told, by the Pope, that God is dead."
really? all this because the fed acted as an emergency lender of last resort?
"Based on many conversations I’ve had with people, it seems that the average person doesn’t comprehend how much a trillion dollars is, let alone 12.3 trillion. You might as well just say 12.3 gazillion, because people don’t grasp a number that large, nor do they understand what would be possible if that money was used in other ways. Can you imagine what we could do to restructure society with $12.3 trillion? Think about that..."
the money was not spent outright, it was lent for profit. the fed returns all profits after operating expenses to the treasury, so that money actually now goes back to the taxpayer along with a little extra, who is free to spend that on whatever brilliant societal restructuring plan this rant is all about.
hopefully by now you've gathered the ridiculousness of this guy's rant. here is more for your entertainment...
"People also can’t grasp the colossal crime committed because they keep hearing the word “loans.” People think of the loans they get. You borrow money, you pay it back with interest, no big deal. That’s not what happened here. This was a hostile world takeover orchestrated through economic attacks by a very small group of unelected global bankers. They paralyzed the system, then were given the power to recreate it according to their own desires. No free market, no democracy of any kind. All done in secrecy. In the process, they gave themselves all-time record-breaking bonuses and impoverished tens of millions of people – they have put into motion a system that will inevitably collapse again and utterly destroy the very existence of what is left of an economic middle class. That is not hyperbole. That is what happened. We are talking about trillions of dollars secretly pumped into global banks, handpicked by a small select group of bankers themselves. All for the benefit of those bankers, and at the expense of everyone else. People can’t even comprehend what that means and the severe consequences that it entails, which we have only just begun to experience. Let me sum it up for you: The American Dream is O-V-E-R. Welcome to the neo-feudal-fascist state."
wow... as for the guy who wrote this, i'm pretty sure there's a tea party rally out there missing one of its retards.