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Thursday, February 9, 2012

US war with Iran around the corner?

Electric pulses in the brain can boost memory, say scientists...



The secret to a good memory is simple - zap an electric current into the right part of your brain.

Scientists found passing an electric current through a part of the brain known as the 'gateway' to memory caused people's memory to improve instantly.

The researchers worked with seven epileptic patients who had already had electrodes implanted into their brains.

They stimulated nerve fibres one part of their brain while they played a videogame where they had to remember and plan routes as a taxi driver.

The volunteers played the role of cab drivers who picked up passengers and traveled across town to deliver them to one of six requested shops.

'When we stimulated the nerve fibers in the patients' brains during learning, they later recognized landmarks and navigated the routes more quickly,'said Fried.

'They even learned to take shortcuts.'

The finding could lead to a new method for boosting memory in patients with early Alzheimer's disease.

The UCLA team focused on a brain site called the entorhinal cortex.

Considered the doorway to the hippocampus, which helps form and store memories, the entorhinal cortex plays a crucial role in transforming daily experience into lasting memories.

'The entorhinal cortex is the golden gate to the brain's memory mainframe,' explained senior author Dr. Itzhak Fried, professor of neurosurgery at the David Geffen School of Medicine at UCLA.

Every visual and sensory experience that we eventually commit to memory funnels through that doorway to the hippocampus. Our brain cells must send signals through this hub in order to form memories that we can later consciously recall.'

Fried and his colleagues followed seven epilepsy patients who already had electrodes implanted in their brains to pinpoint the origin of their seizures.

The researchers monitored the electrodes to record neuron activity as memories were being formed.

'Critically, it was the stimulation at the gateway into the hippocampus – and not the hippocampus itself – that proved effective,' he added.

The use of stimulation only during the learning phase suggests that patients need not undergo continuous stimulation to boost their memory, but only when they are trying to learn important information, Fried noted. T

his may lead the way to neuro-prosthetic devices that can switch on during specific stages of information processing or daily tasks.

'Our preliminary results provide evidence supporting a possible mechanism for enhancing memory, particularly as people age or suffer from early dementia,' says Fried 'At the same time, we studied a small sample of patients, so our results should be interpreted with caution.'

Read more: http://www.dailymail.co.uk/sciencetech/article-2098383/Electric-pulses-head-boost-memory-say-scientists--All-remember-brain-zapper.html#ixzz1ltSpw6xS

Sen. Rand Paul on Freedom Watch with Judge Napolitano

Israel: Iran's nuclear arms program is complete, its missiles can reach US





Iran has completed the development of a nuclear weapon and awaits nothing more than a sign from Supreme Leader Ayatollah Ali Khamenei to start assembling its first nuclear bomb, said Israeli Military Intelligence Chief Major General Aviv Kochavi on Thursday, February 2. Assembling a bomb would take up to a year, Kochavi estimated. With 100 kilograms of uranium enriched to 20 percent grade and another 4 tons of uranium enriched to 3.5 percent already in stock, Iran would need another two years to make four nuclear bombs.
Therefore, by the end of 2012 or early 2013 Iran may have a single nuclear bomb, but by 2015 the figure would jump to four or five.

The officer was essentially amplifying the words of his predecessor, Maj. Gen. (res.) Amos Yadlin, who said on Jan. 26 that as long ago as 2007 or 2008, Iran had already passed the point of no return in developing nuclear weapons. Kochavi agreed with him that none of the sanctions imposed thus far had persuaded Iran to slow down, least of all shut down, its drive for a nuclear weapon.

His comments coincided with the findings published Thursday by the Enterprise Institute, an American think tank, that Iran would be able to manufacture a 15-kiloton nuclear bomb as soon as August of this year, just seven months from now.

Also Thursday, Deputy Prime Minister Moshe Yaalon disclosed that the big blast at the Iranian missile base near Tehran last November blew up a new missile system with a range of 10,000 kilometers, capable of targeting the United States.
Commenting on Iran's underground bunkers for nuclear facilities, the minister stressed that any facility built by man can be destroyed by man. "Speaking as a former chief of staff, I say none of Iran's installations are immune to attack," he said.

Major General Kochavi went on to say that if Iran had attained a nuclear capability, this meant that the US and Israel had failed to pre-empt this outcome.

Turning to another threat, the military intelligence chief painted a grim picture of 200,000 rockets and missiles of assorted types pointing at Israel.

Wednesday, February 1, Chief of Staff Lt. Gen. Benny Gantz stressed that there is no longer any point on the Israeli map that is outside the range of enemy missiles.
According to Gen. Kochavi, Iran, Syria, Hizballah and Hamas are dispersing their missiles and rockets to sites deep inland and integrated in urban environments to minimize their vulnerability to IDF attack. He warned "the enemy" had prepared increasing numbers of its missiles for "depth strikes against Israeli population centers, their warheads more lethal than ever."

"Every tenth residential house in Lebanon," he said, "harbors a missile arsenal or launching position. Their sheer volume has reached a strategic dimension with which Israel will have to deal."

Tuesday, Jan. 31, the IDF practiced mobilizing an armored division under war conditions,DEBKAfile's military sources report. The drill simulated moving the troops to conscription bases, arming them with equipment and weapons and getting them to battle lines – all under the heavy missile bombardment of military facilities, national highways and railway lines.
The various assessments of Iran's nuclear capabilities have faced serious credibility problems over the years, DEBKAfile's intelligence sources note.

Today, thanks to Kochavi and Yadlin, we know that the US National Intelligence Estimate of 2007 accepted by the Bush administration was wrong. Its main finding was that Iran had discontinued its military nuclear program in 2003. For five years, Western intelligence officials have given out misleading estimates to save their governments having to pursue direct action for preempting a nuclear Iran.
One school of thought claimed that Iran would not build a bomb until it had the resources to create an arsenal; another, that Tehran lacked the technology for weaponizing enriched uranium. Does the latest evaluation that the manufacture of a bomb awaits the decision of one man, the Iranian Supreme Ruler, fall into the same category as the others? Or is it another gambit to fend off a military strike against Iran for five more years?

How do the US and Israel know for sure that Khamenei has not given the order and that Iranian teams are not already busy assembling a bomb in some bunker?

US Defense Secretary Leon Panetta has maintained more than once that America has the resources for finding out about a decision by the Supreme Leader, but no American or Israeli intelligence officer can endorse this certainty.

DEBKAfile

Here comes Libya.....First foreign troops in Syria back Homs rebels. Damascus and Moscow at odds





British and Qatari special operations units are operating with rebel forces under cover in the Syrian city of Homs just 162 kilometers from Damascus, according to DEBKAfile’s exclusive military and intelligence sources. The foreign troops are not engaged in direct combat with the Syrian forces bombarding different parts of Syria's third largest city of 1.2 million. They are tactical advisers, manage rebel communications lines and relay their requests for arms, ammo, fighters and logistical aid to outside suppliers, mostly in Turkey.

This site is the first to report the presence of foreign military forces in any of the Syrian uprising's embattled areas.
Our sources report the two foreign contingents have set up four centers of operation - in the northern Homs district of Khaldiya, Bab Amro in the east, and Bab Derib and Rastan in the north. Each district is home to about a quarter of a million people.

Our military sources also report that Wednesday afternoon, Feb. 8, Assad sent the 40th Mechanized Brigade of heavy T-72 tanks to Homs for an all-out effort to beat the rebellion, counter the foreign contingents and reinforce the 90th Infantry Brigade commanded by his kinsman, Gen. Zuhair al-Assad, the backbone of the military force battering the city for the past five days at the cost of hundreds of dead.

The presence of the British and Qatari troops was seized on by Turkish Prime Minister Tayyip Erdogan for the new plan he unveiled to parliament in Ankara Tuesday, Feb. 7. Treating the British-Qatari contingents as the first foreign foot wedged through the Syrian door, his plan hinges on consigning a new Turkish-Arab force to Homs through that door and under the protection of those contingents. Later, they would go to additional flashpoint cities.

In the close to eleven months of the Syrian revolt, Erdogan has hatched more than one scheme for countering the Assad regime's savage crackdown on dissent. His most persistent was a plan for the creation of military buffer zones to shelter rebels and civilians persecuted by the Syrian authorities. But nothing came of those plans because, every time they came up, Assad reinforced his contingents on the Turkish border and deployed air defense and surface-to-surface missile batteries. He made it clear that the first Turk crossing the border would spark a full-scale war.

It is hard to say at this point whether the latest Turkish leader's current plan is any more practical than his earlier schemes. For now, he has put the ball in the American court. Wednesday, Feb. 8, he sent Foreign Minister Ahmet Davutoglu to Washington to ask for the Obama administration's cooperation. The Turkish prime minister is also in urgent consultation with Saudi and several other Gulf rulers in the hope of bringing them aboard.

The British-Qatari troop presence in Homs was at the center of Assad's talks in Damascus Tuesday with Russian Foreign Minister Sergei Lavrov and Russian SVR intelligence chief Mikhail Fradkov. Senior Syrian intelligence officers laid their updates from the field before the Russian visitors and received SVR data and evaluations in return.

Western intelligence officials familiar with the talks describe the atmosphere between Assad and the Russian officials as uneasy and tense. Later, Lavrov reported optimistically that he had received assurances from the Syrian ruler of an end to the violence, talks with all Syrian parties and an early referendum on a new constitution for political reforms. His account was no more than prevarication to conceal the opposite outcome of their talks. In fact, their conversation focused on more violence, namely, Assad's plans for his next assault on rebels and protesters and his military response to the rising covert presence of foreign Western, Arab and Muslim troops in Syria.




DEBKAfile

Bank of England injects another £50bn into UK economy






The Bank of England has agreed to extend its quantitative easing (QE) programme by £50bn to give a further boost to the UK economy.

When completed, it will bring the total amount of QE stimulus to £325bn.

The Bank started its QE programme, through which it buys mainly government-issued bonds from banks freeing up cash for lending, in 2009.

The Bank's Monetary Policy Committee (MPC) also said it would keep interest rates at their record low of 0.5%.

UK interest rates have been held at that level since March 2009.

The BBC's economics editor, Stephanie Flanders, said the £275bn of QE undertaken so far was an amount equivalent to nearly 20% of the country's gross domestic product.

Inititally, experts were predicting an extra of £75bn of QE, but this figure was reduced to £50bn when economic surveys released last week indicated that the manufacturing and service sectors had performed better than expected in January.

However, concerns remain over weak consumer spending and the eurozone crisis.Inflation undershoot?

The Bank said in a statement: "The underlying pace of recovery slowed during 2011, with activity falling slightly during the final quarter.

"Some recent business surveys have painted a more positive picture and asset prices have risen. But the pace of expansion in the United Kingdom's main export markets has also slowed and concerns remain about the indebtedness and competitiveness of some euro-area countries."

It added that without another stimulus from QE, inflation was likely to fall from its current 4.2% to below its 2% target, as rising unemployment and falling import and energy prices fell away, and as the VAT increase from 17.5% to 20% last January also dropped from the annual comparison.

Official economic data also released on Thursday showed import prices fell by 1.3% between November and December.

Other figures showed that industrial production, which accounts for about 15% of the economy, grew by 0.5% on the month, against forecasts for a 0.2% rise.

"Despite overall signs that activity picked up in January after GDP contracted 0.2% in the fourth quarter of 2011, the economy is far from out of the economic woods and it continues to face major obstacles to developing sustainable, decent growth," said Howard Archer, chief UK economist at IHS Global Insight.Damaged pensions

The new QE was greeted with dismay by the pensions industry.

Joanne Segars, the chief executive of the National Association of Pension Funds, said while she could understand the need to boost the economy, QE was damaging the value of pensions: "Retirees who get locked into a weak annuity will find that the Bank's money printing leaves them out of pocket for the rest of their lives.

"For the companies that run final salary pensions, QE is a headache which pushes their pension funds further into the red. This means businesses have to put more money into their pension schemes, instead of spending it on jobs and investment. Our fear is that firms struggling with a weak economy will simply choose to close their pension schemes."

She called for help for pension funds from the Pensions Regulator.

BBC


The ECB's €2.7 trillion balance sheet is about to expand dramatically, pushing the European central bank even further into bad bank status



While a lot of the just completed Draghi press conference was mostly fluff, the one notable exception was the announcement that the European central bank would "approve eligibility criteria for additional credit claims" (see below). While purposefully vague on the topic, Draghi noted that the step is one of onboarding even more risk: "Sure, it's going to be more risky. Does that mean that we take more risk? Yes, it means we take more risk. Does it mean this risk is being unmanaged? No, it is being managed. And it's being - it's going to be managed very well because really there will be a strong overcollateralization for the additional credit claims. The conditions will be very stringent." While it remains to be seen just how stringent the conditions will be, but a bigger question is what is the total pool of eligible claims that can be used to flood the ECB in exchange for freshly printed cash. For that we go to Goldmanm whose Jernej Omahen a month ago calculated the impact of the expanded collateral pool which was formally confirmed today. To wit:"Scarcity of collateral was becoming an evident problem for a large number of banks, especially smaller and medium sized. In our view, the ECB’s collateral pool expansion was therefore a critical decision. Select corporate loans – which form over >€7 tn, or >30% of total balance sheets – will now be admissible for refinancing operations, through national central banks. Criteria on eligibility have yet to be determined – we are therefore not able to quantify the actual expansion of collateral pool at this stage. That said, the €7 tn starting points suggests it will be significant." In other words, and this is excluding anything to do with the LTRO, the ECB just greenlighted a potential expansion to its balance sheet all the way up to €7 trillion. Will banks use this capacity to convert "trash to cash" - why of course they will, and this goes to the very heart of the biggest problem with Europe: the fact that there are virtually no money good assets left as collateral, which requires the implicit rehypothecation of bank "assets" back to the ECB, to procure cash, to pay out cash on very real liabilities. How much will they do - we don't know yet. We will find out very soon. What we do know is that the ECB's €2.7 trillion balancesheet is about to expand dramatically, pushing the European central bank even further into bad bank status. And this is excluding the upcoming new usage of the Discount Window known as the LTRO in three weeks. Trade accordingly.
From the ECB:
9 February 2012 - ECB’s Governing Council approves eligibility criteria for additional credit claims

The Governing Council of the European Central Bank (ECB) has approved, for the seven national central banks (NCBs) that have put forward relevant proposals, specific national eligibility criteria and risk control measures for the temporary acceptance of additional credit claims as collateral in Eurosystem credit operations. Details of these specific national measures will be made available on the websites of the respective NCBs: Central Bank of Ireland, Banco de EspaƱa, Banque de France, Banca d’Italia, Central Bank of Cyprus, Oesterreichische Nationalbank and Banco de Portugal.

These developments follow up on the decision of the Governing Council of 8 December 2011 to increase collateral availability by allowing Eurosystem NCBs, as a temporary solution, to accept additional performing credit claims as collateral.

Eurosystem NCBs continue to work on developing specific national eligibility criteria for additional credit claims. Any further Governing Council decisions in this respect will be communicated through the monthly publication “Decisions taken by the Governing Council of the ECB (in addition to decisions setting interest rates)” and announcements made by the respective NCBs. Eurosystem counterparties are invited to contact their respective NCBs to obtain further details on the specific national eligibility criteria for additional credit claims. The general Eurosystem eligibility criteria for credit claims, as stipulated in the publication “The implementation of monetary policy in the euro area: General documentation on Eurosystem monetary policy instruments and procedures” remain unchanged.
And this is what Goldman, apropos the firm from which Mario Draghi graduated, said on the question of credit claim expansion vis-a-vis the ECB:
Expanded collateral pool: A necessary measure

Scarcity of collateral was becoming an evident problem for a large number of banks, especially smaller and medium sized. In our view, the ECB’s collateral pool expansion was therefore a critical decision. Select corporate loans – which form over >€7 tn, or >30% of total balance sheets – will now be admissible for refinancing operations, through national central banks. Criteria on eligibility have yet to be determined – we are therefore not able to quantify the actual expansion of collateral pool at this stage. That said, the €7 tn starting points suggests it will be significant. The collateral pool expansion has two elements.

(1) Bank loans will be temporarily accepted as collateral. This will be done via the respective national central banks, after the relevant legal acts are published. We note:
  • 65 of the largest European banks have exposure at default (EAD, a balance sheet proxy) of €22.5 tn. Of this amount, €6.4 tn are corporate loans and a further €691 bn are SME loans. Together, they account for €7.1 tn or 31% of the EAD total. For banks in Italy, this proportion is highest (43%).
  • It is unclear how much of this €7.1 tn will ultimately qualify as collateral. That depends primarily on the size threshold (for individual loans) and the minimum IRB rating. The responsibility for setting these will be with individual central banks. But preliminary expectations are for some 20%-50% of corporate loans qualifying as collateral, before the haircuts are applied.
We also note that a new source of collateral is likely to encourage banks to fully pledge their existing collateral amounts, in our view. Currently, banks hold meaningful portions of ECB collateral on the sidelines, as a precautionary measure.


Zero Hedge

10 Things That Every American Should Know About The Federal Reserve


What would happen if the Federal Reserve was shut down permanently?  That is a question that CNBC asked recently, but unfortunately most Americans don't really think about the Fed much. Most Americans are content with believing that the Federal Reserve is just another stuffy government agency that sets our interest rates and that is watching out for the best interests of the American people.  But that is not the case at all.  The truth is that the Federal Reserve is a private banking cartel that has been designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government to perpetually expanding debt.  During this election year, the economy is the number one issue that voters are concerned about.  But instead of endlessly blaming both political parties, the truth is that most of the blame should be placed at the feet of the Federal Reserve.  The Federal Reserve has more power over the performance of the U.S. economy than anyone else does.  The Federal Reserve controls the money supply, the Federal Reserve sets the interest rates and the Federal Reserve hands out bailouts to the big banks that absolutely dwarf anything that Congress ever did.  If the American people are ever going to learn what is really going on with our economy, then it is absolutely imperative that they get educated about the Federal Reserve.
The following are 10 things that every American should know about the Federal Reserve....
#1 The Federal Reserve System Is A Privately Owned Banking Cartel
The Federal Reserve is not a government agency.
The truth is that it is a privately owned central bank.  It is owned by the banks that are members of the Federal Reserve system.  We do not know how much of the system each bank owns, because that has never been disclosed to the American people.
The Federal Reserve openly admits that it is privately owned.  When it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court that it was"not an agency" of the federal government and therefore not subject to the Freedom of Information Act.
In fact, if you want to find out that the Federal Reserve system is owned by the member banks, all you have to do is go to the Federal Reserve website....
The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
Foreign governments and foreign banks do own significant ownership interests in the member banks that own the Federal Reserve system.  So it would be accurate to say that the Federal Reserve is partially foreign-owned.
But until the exact ownership shares of the Federal Reserve are revealed, we will never know to what extent the Fed is foreign-owned.
#2 The Federal Reserve System Is A Perpetual Debt Machine
As long as the Federal Reserve System exists, U.S. government debt will continue to go up and up and up.
This runs contrary to the conventional wisdom that Democrats and Republicans would have us believe, but unfortunately it is true.
The way our system works, whenever more money is created more debt is created as well.
For example, whenever the U.S. government wants to spend more money than it takes in (which happens constantly), it has to go ask the Federal Reserve for it.  The federal government gives U.S. Treasury bonds to the Federal Reserve, and the Federal Reserve gives the U.S. government "Federal Reserve Notes" in return.  Usually this is just done electronically.
So where does the Federal Reserve get the Federal Reserve Notes?
It just creates them out of thin air.
Wouldn't you like to be able to create money out of thin air?
Instead of issuing money directly, the U.S. government lets the Federal Reserve create it out of thin air and then the U.S. government borrows it.
Talk about stupid.
When this new debt is created, the amount of interest that the U.S. government will eventually pay on that debt is not also created.
So where will that money come from?
Well, eventually the U.S. government will have to go back to the Federal Reserve to get even more money to finance the ever expanding debt that it has gotten itself trapped into.
It is a debt spiral that is designed to go on perpetually.
You see, the reality is that the money supply is designed to constantly expand under the Federal Reserve system.  That is why we have all become accustomed to thinking of inflation as "normal".
So what does the Federal Reserve do with the U.S. Treasury bonds that it gets from the U.S. government?
Well, it sells them off to others.  There are lots of people out there that have made a ton of money by holding U.S. government debt.
In fiscal 2011, the U.S. government paid out 454 billion dollars just in interest on the national debt.
That is 454 billion dollars that was taken out of our pockets and put into the pockets of wealthy individuals and foreign governments around the globe.
The truth is that our current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the Federal Reserve as a tool to create money out of thin air and lend it to the U.S. government at interest.
And that plan is working quite well.
Most Americans today don't understand how any of this works, but many prominent Americans in the past did understand it.
For example, Thomas Edison was once quoted in the New York Times as saying the following....
That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.
Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good.
We should have listened to men like Edison and Ford.
But we didn't.
And so we pay the price.
On July 1, 1914 (a few months after the Fed was created) the U.S. national debt was 2.9 billion dollars.
Today, it is more than more than 5000 times larger.
Yes, the perpetual debt machine is working quite well, and most Americans do not even realize what is happening.
#3 The Federal Reserve Has Destroyed More Than 96% Of The Value Of The U.S. Dollar
Did you know that the U.S. dollar has lost 96.2 percent of its value since 1900?  Of course almost all of that decline has happened since the Federal Reserve was created in 1913.
Because the money supply is designed to expand constantly, it is guaranteed that all of our dollars will constantly lose value.
Inflation is a "hidden tax" that continually robs us all of our wealth.  The Federal Reserve always says that it is "committed" to controlling inflation, but that never seems to work out so well.
And current Federal Reserve Chairman Ben Bernanke says that it is actually a good thing to have a little bit of inflation.  He plans to try to keep the inflation rate at about 2 percent in the coming years.
So what is so bad about 2 percent?  That doesn't sound so bad, does it?
Well, just consider the following excerpt from a recent Forbes article....
The Federal Reserve Open Market Committee (FOMC) has made it official:  After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.  The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
#4 The Federal Reserve Can Bail Out Whoever It Wants To With No Accountability
The American people got so upset about the bailouts that Congress gave to the Wall Street banks and to the big automakers, but did you know that the biggest bailouts of all were given out by the Federal Reserve?
Thanks to a very limited audit of the Federal Reserve that Congress approved a while back, we learned that the Fed made trillions of dollars in secret bailout loans to the big Wall Street banks during the last financial crisis.  They even secretly loaned out hundreds of billions of dollars to foreign banks.
According to the results of the limited Fed audit mentioned above, a total of$16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.
The following is a list of loan recipients that was taken directly from page 131of the audit report....
Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
"All Other Borrowers" - $2.639 trillion
So why haven't we heard more about this?
This is scandalous.
In addition, it turns out that the Fed paid enormous sums of money to the big Wall Street banks to help "administer" these nearly interest-free loans....
Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the "too big to fail" banks, the Fed also paid them over 600 million dollars to help run the emergency lending program.  According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in "fees" to the very financial institutions which caused the financial crisis in the first place.
Does reading that make you angry?
It should.
#5 The Federal Reserve Is Paying Banks Not To Lend Money
Did you know that the Federal Reserve is actually paying banks not to make loans?
It is true.
Section 128 of the Emergency Economic Stabilization Act of 2008 allows the Federal Reserve to pay interest on "excess reserves" that U.S. banks park at the Fed.
So the banks can just send their cash to the Fed and watch the money come rolling in risk-free.
So are many banks taking advantage of this?
You tell me.  Just check out the chart below.  The amount of "excess reserves" parked at the Fed has gone from nearly nothing to about 1.5 trillion dollarssince 2008....
But shouldn't the banks be lending the money to us so that we can start businesses and buy homes?
You would think that is how it is supposed to work.
Unfortunately, the Federal Reserve is not working for us.
The Federal Reserve is working for the big banks.
Sadly, most Americans have no idea what is going on.
Another example of this is the government debt carry trade.
Here is how it works.  The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall Street banks, and in turn those banks use the money to buy up huge amounts of government debt.  Since the return on government debt is higher, the banks are able to make large profits very easily and with very little risk.
This scam was also explained in a recent article in the Guardian....
Consider this: we pretend that banks are private businesses that should be allowed to run their own affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by central banks at near-zero interest. They lend that money to us or back to the government at higher rates and rake in the difference by the billion. They don't even have to make clever investments to make huge profits.
That is a pretty good little scam they have got going, wouldn't you say?
#6 The Federal Reserve Creates Artificial Economic Bubbles That Are Extremely Damaging
By allowing a centralized authority such as the Federal Reserve to dictate interest rates, it creates an environment where financial bubbles can be created very easily.
Over the past several decades, we have seen bubble after bubble.  Most of these have been the result of the Federal Reserve keeping interest rates artificially low.  If the free market had been setting interest rates all this time, things would have never gotten so far out of hand.
For example, the housing crash would have never been so horrific if the Federal Reserve had not created such ideal conditions for a housing bubble in the first place.  But we allow the Fed to continue to make the same mistakes.
Right now, the Federal Reserve continues to set interest rates much, much lower than they should be.  This is causing a tremendous misallocation of economic resources, and there will be massive consequences for that down the line.
#7 The Federal Reserve System Is Dominated By The Big Wall Street Banks
Even since it was created, the Federal Reserve system has been dominated by the big Wall Street banks.
The following is from a previous article that I did about the Fed....
The New York representative is the only permanent member of the Federal Open Market Committee, while other regional banks rotate in 2 and 3 year intervals.  The former head of the New York Fed, Timothy Geithner, is now U.S. Treasury Secretary.  The truth is that the Federal Reserve Bank of New York has always been the most important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been dominated by Wall Street and the major New York banks.
#8 It Is Not An Accident That We Saw The Personal Income Tax And The Federal Reserve System Both Come Into Existence In 1913
On February 3rd, 1913 the 16th Amendment to the U.S. Constitution was ratified.  Later that year, the United States Revenue Act of 1913 imposed a personal income tax on the American people and we have had one ever since.
Without a personal income tax, it is hard to have a central bank.  It takes a lot of money to finance all of the government debt that a central banking system creates.
It is no accident that the 16th Amendment was ratified in 1913 and the Federal Reserve system was also created in 1913.
They have a symbiotic relationship and they are designed to work together.
We could fill Congress with people that are committed to ending this oppressive system, but so far we have chosen not to do that.
So our children and our grandchildren will face a lifetime of debt slavery because of us.
I am sure they will be thankful for that.
#9 The Current Federal Reserve Chairman, Ben Bernanke, Has A Nightmarish Track Record Of Incompetence
The mainstream media portrays Federal Reserve Chairman Ben Bernanke as a brilliant economist, but is that really the case?
Let's go to the videotape.
The following is an extended excerpt from an article that I published previously....
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In 2005, Bernanke said that we shouldn't worry because housing prices had never declined on a nationwide basis before and he said that he believed that the U.S. would continue to experience close to "full employment"....
"We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though."
In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no danger to financial markets....
"With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly."
In 2006, Bernanke said that housing prices would probably keep rising....
"Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise."
In 2007, Bernanke insisted that there was not a problem with subprime mortgages....
"At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency."
In 2008, Bernanke said that a recession was not coming....
"The Federal Reserve is not currently forecasting a recession."
A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they were totally secure....
"The GSEs are adequately capitalized. They are in no danger of failing."
For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben Bernanke, please see the following articles....
*"Say What? 30 Ben Bernanke Quotes That Are So Stupid That You Won’t Know Whether To Laugh Or Cry"
*"Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?"
But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as Chairman of the Fed.
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#10 The Federal Reserve Has Become Way Too Powerful
The Federal Reserve is the most undemocratic institution in America.
The Federal Reserve has become so powerful that it is now known as "the fourth branch of government", but there are less checks and balances on the Fed than there are on the other three branches.
The Federal Reserve runs the U.S. economy but it is not accountable to the American people.  We can't vote those that run the Fed out of office if we do not like what they do.
Yes, the president appoints those that run the Fed, but he also knows that if he does not tread lightly he won't get the money from the big Wall Street banks that he needs for his next election.
Thankfully, there are a few members of Congress that are complaining about how much power the Fed has.  For example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now actually more powerful than Congress.....
"The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress."
As members of Congress such as Ron Paul have started to shed some light on the activities of the Federal Reserve, that has caused many in the mainstream media to come to the defense of the Fed.
For example, a recent CNBC article entitled "If The Federal Reserve Is Abolished, What Then?" makes it sound like there is absolutely no other rational alternative to having the Federal Reserve run our economy.
But this is not what our founders intended.
The founders did not intend for a private banking cartel to issue our money and set our interest rates for us.
According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress has been given the responsibility to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".
So why is the Federal Reserve doing it?
But the CNBC article mentioned above makes it sound like the sky would fall if control of the currency was handed back over to the American people.
At one point, the article asks the following question....
"How would the U.S. economy then function? Something has to take its place, right?"
No, the truth is that we don't need anyone to "manage" our economy.
The U.S. Treasury could be in charge of issuing our currency and the free market could set our interest rates.
We don't need to have a centrally-planned economy.
We aren't China.
And it goes against everything that our founders believed to be running up so much government debt.
For example, Thomas Jefferson once declared that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing....
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
Oh, how things would have been different if we had only listened to Thomas Jefferson.




Economic Collapse