Since the days of the "trick the down" economics, there has been an "easy credit" policy on the part of the Federal Reserve, which to the masses, simply means that credit is freely available to those good people lucky enough to qualify.
Indeed, this credit is so easy; it actually flows from the US Treasury. Fannie Mae has a $2.9 Billion dollar line of credit with the US Treasury that is used to finance new mortgages, to be given to those clients who qualify for their AAA rated list.
In fact, the US Treasury is used to generate new, fresh money, for the republican elites, who simply have to "apply" to the right banker, or know the right person in their secret chain of command. Fresh public funds are minted and signed over to them for a real estate venture or the construction of a mansion or vacation home. There seems to be no limit to the amount of these "loans", so long as they go to the "right" person.
To the republican elites, this is a well-known insider secret. They even have the audacity to denigrate those who are not so well connected as "monkeys" that actually have to work for the money they earn.
The scheme works like this: Fannie Mae gets funds from itís $2.9 billion line of credit with the US Treasury to buy a new mortgage from a private bank, usually extended to a well-heeled republican insider. Fannie Mae then pays the issuing bank the freshly minted funds, which the issuing bank then uses for itís own private business. The new mortgage has in effect been "monetized" by Fannie Mae.
Fannie Mae then turns around and places the mortgage in the secondary mortgage market, via its insider liaison with Freddie Mac. These GSI or government secured instruments or bonds are then sold in the open bond market. The funds collected from the sale of these securities are then used to restore the credit line. These outstanding GSIs now total several trillions of dollars. It gets worse.
In the developing world, the IMF guarantees itís standby loans with these instruments. What the IMF grants to desperate governments overseas are simply GSIs that it has purchased for them. The IMF calls these GSI backed funds "monetary reserves" for the foreign currencies.
Unbelievably, most of the third world debt with the IMF is held in US GSIís, which in turn have been issued to finance the largesse of the republican insiders since the Reagan administration. The poor of the world have indirectly financed the expensive mansions and real estate ventures of these well-heeled republican insiders.
In the past, many of these mortgage loans have simply been "forgiven" when the issuing bank has unexpectedly gone "bankrupt". This is the ultimate in easy money, a loan that is funded by the US Treasury that does not have to be repaid. Money does grow on trees after all, if you are well connected.
It is no wonder then that the Republican Party would elicit such a loyalty among the elites. A following so loyal that their own media looks the other way when our constitution is trampled on, or when our foreign policy turns into a sanguine imperialist juggernaut.
There is now an ongoing attempt by these republican insiders to pass a lax bankruptcy law through the US Congress, at a time it is distracted with the Iraq war and itís aftermath. Their plan is clear, they will simply declare personal bankruptcy and retain their ill begotten mansions, a la "savings and loan fiasco" of the 80ís, and the GSIís will be paid for by the US taxpayers, once again.
The republican elites are nothing less than suckling pigs feeding off the US Treasury, and are guilty of a massive financial deception that would make the Russian monetary debacle pale by comparison.
April 28, 2003print this article send this article to a friend link to this article