“What you do in this world is a matter of no consequence. The question is what can you make people believe you have done.”- Sherlock Holmes

By Glen Reaux

“Too Big To Fail” is a theory that became popularized in a 1984 federal hearing discussing the Federal Deposit Insurance Corporation an organization that was created by the Franklin Delano Roosevelt (FDR)“NEW DEAL”^{1}.  The “NEW DEAL” was a series of economic policies and laws instituted by FDR that were responsible for ending the Great Depression, the most dire economic times in U.S. history prior to the Great Recession of 2008. The theory asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system and that they, therefore, must be supported by government when they face potential failure.  As such, in response to the circumstances of the 2008 recession, the federal government acted upon this theory to institute the greatest welfare program this nation has ever seen and it wasn’t to help poor people by providing financial recovery grants, food stamps or Medicaid.  This “corporate welfare program” essentially bailed out America’s largest corporations and financial institutions from the economic disaster that they created while dooming average American citizens to suffer the recession without any economic help from the government at all.  This artificially created recession was caused by the intentional destruction of FDR regulations and laws that were designed to prevent the events that caused the Great Depressions from ever happening again.  To put it in simple terms, the destruction of the FDR New Deal laws by the lobbying efforts bought-and-paid-for by the very corporations that received the “corporate welfare” is what caused the 2008 Great Recession.  Under the current economic conditions that exist in the nation today and due to the rescinding of the NEW DEAL laws, the American people in the not-too-distant-future will suffer the economic terrors of “Too Big To Fail the Sequel!”

The general public has been told that the Great Recession was caused by the collapse of the housing market. Nothing could be further from the truth.  The Great Recession was caused by greedy bankers that fought hard to deregulate the banks.  With the deregulation of the banks, the banks have created circumstances similar to the pre-recession economic environment were allowed to make hundreds of billions of dollars in bad mortgage loans.  These bad loans artificially inflated the value of homes in the marketplace.  Bad loans by the banks also created opportunities for people to purchase houses that they could not afford.  In doing so, this caused artificial and unnatural demand for new homes which led to uncontrolled and unsupportable growth in the housing market.  This stimulated the economy and created pie-in-the-sky wealth from the inflated value of homes that never should have been built in the first place.  So, the root cause of the Great Depression was not the collapse of an artificially created housing market but the lack of regulation of the banks caused by the destruction of regulations and laws by said banks.

Keeping in mind that these banks are all member banks of the Fed and stockholders in the Fed, one has to point the finger at the Fed.  In fact, the Fed itself did lobby for the destruction of New Deal laws like the Glass-Steagall Act of 1933 which was rescinded under President Bill Clinton in 1999.  The Graham-Leach-Bliley Act^{2} which was supported by then Fed Chairman Alan Greenspan replaced Glass-Steagall and effectively did away with all of its protections.   In other words, the Fed and their member banks are two heads of the monstrous hydra that plagues our great nation.  They are one-and-the-same, the monster of your economic nightmares that keeps you awake at night, forever wanting in the daytime, and living in fear of economic ruin.

The non-partisan, Center for Economic Policy and Research in 2010 published a very easy to read white paper titled “A Short History of Financial Deregulation in the United States.”  The paper authored by Matthew Sherman lays out a timeline of key events including legislation, Supreme Court Decisions and failure and mergers of major banks and recessions.  The paper explains the ownership and operations of the Fed, legislation, Supreme Court decisions, the abolishment of usury laws designed to protect consumers, the removal of interest rate ceilings, the implementation of “Hands-off Regulation” policies of the government and the creation of the economic bubble that collapsed resulting in the Great Recession.  Pages 3-5 provides a timeline of events from 1973-2010 and a chronological listing of the significant events that led to the Great Recession.   Provided below in pdf form, this document is an easy read, a must read and very short.

Like with all recessions, there are winners and losers.  And, the economic horrors of losing everything that one owns, is only suffered upon the poor and middle class.  As with all recessions and depressions, the wealthy and only the largest corporations are the benefactors.  When property values reach rock bottom these carpetbaggers swoop in and buy up everything at pennies on the dollar. This is what happened at the end of the Great Depression when the largest banks supported with government financing swooped in and bought up thousands of smaller banks that did not survive.  With these purchases, a small group of banks became super banks through the immediate and fast expansion of their geographic reach.  As evidenced by the 2008 Great Recession, history repeated itself when the government stepped in to either mitigate their losses or lend them the money needed to survive and prosper.  Once again the outcome of the Great Depression repeated itself when the government funded the merger of the nation’s largest failed mortgage banks with the largest member banks of the Fed.

Although recessions are viewed by the general public as being a normal event in the nation’s economy, point-of-fact, the opposite is true.  Very few recessions are normal to the economic business cycles.  Evidence that recessions are not a normal part of the economic cycle is provided  In a June 2017 report ^{3} to its clients by Goldman Sachs, one of the largest investment banks in the country and a member bank of the Federal Reserve (Fed).  Goldman stated that every recession (and depression) since World War II has been caused by the Fed.  On March 20, 2019, Xplicit News published part one of a 2 part article titled “Slavery With a Smile, America’s Economy Part I” ^{4} which analyzes recessions and the role that the Fed plays in the nation’s economy.  The article provides insight into how and why recessions are engineered.   However, in the public eye, the Fed is perceived as the guardian federal agency tasked with the shepherding of the nation’s economy.  Due to the public’s misunderstanding of economic policies and the functions of the Fed, this perception is false.  That said, the following axiom is apropos: “What you do in this world is a matter of no consequence. The question is what can you make people believe you have done?”– Sherlock Holmes.  And, the Fed has been masterful at making the people of this country believe that they are guardian angels and at no fault for their financial woes.  Quite the opposite, the Fed is the “wolf in sheep’s clothing.”

http://www.xplicitnews.org/2019/03/20/slavery-with-a-smile-americas-economy/

The consequences of the actions of the Fed as it relates to this Sherlock Holmes quote is that the American people in their belief that the Fed is here to protect them and grow the economy on their behalf are being led to the slaughter.  They are being enslaved by the Fed’s economic policies which include their regulated covert tax known as inflation. Inflation is defined as:

1. the action of inflating something or the condition of being inflated.
2. a general increase in prices and fall in the purchasing value of money. “policies aimed at controlling inflation”

The Fed sets economic policies aimed at inflation by controlling the money supply and through setting the rates that banks charge for lending money.  This makes them directly responsible for the state of the nation’s economy which includes how much money you have to spend and save based upon the usury practices that they permit their member banks to inflict upon unsuspecting citizens.  In other words, if you buy a home for $200,000 and after 30 years you have paid $450k-$600K in principle and interest back to the bank, you have not been given the opportunity to save any money.  You have been enslaved by the bank for 30 years of your life.

Interest rates hinder the growth of businesses.  Whether or not you get a loan is not based upon your ability to pay back the principle, rather it is based upon your ability to pay back the unethical interest rates that the bank is demanding.  Through the regulation of interest rates, the Fed also controls the prices of goods and services that you use in your everyday lives.  For instance, if you borrow $3,000 from a bank to purchase products to sell, the interest rates paid back to the bank have to be factored into the price of the goods sold.  In other words, nearly everything that you buy has an interest rate tax placed upon it by the bank.  No wonder you can’t dig yourself out of that deep economic hole you’ve been in your entire life.  These interest rates factor into how the Fed raises and lowers the rate of inflation through their control of how much money is placed into circulation for use in the economy.  This is called controlling the money supply.  Keep in mind that the Federal Reserve System is not a federal agency.  It is a privately owned banking cartel, with very little effective government supervision. It is owned by member banks, domestic and foreign private investors.  It is about as federal as FedEx.

Another economic piece of the puzzle lays with the high-interest rates that banks charge for use of loans made from your deposits and the low-interest rates that they pay their depositors for use of their money.   Banks charge as much as 30+% interests on credit card loans but on average pay less than 1% interest on savings accounts of their depositors.  Deposits made by the banks customers are used to fund the banks loans.  Due to the greed as evidenced by these circumstances, banks no longer serve the community.  Their greed only serves to engorge the over bloated bank accounts of their private investors who control their preferred stock, bondholders and the Fed.

While the role of deregulation and artificially created recessions are very important to the cause of this nation’s woes, the manner in which the banks create money out of thin air plays an even more important role.  The fractional reserve banking system allows for a Federal Reserve Member Bank with the pressing of a computer key, to lend as much as ten times the amount of money that it has on deposit.  The workbook provided below was published by the Federal Reserve Bank of Chicago.  It explains in great detail how the fractional reserve banking system operates.

While creating money out-of-thin-air is of grave concern, and obviously, you can’t do that yourself, there are other factors that are playing just as an important role in ‘Too Big to Fail the Sequel”   Those factors are being created by the Tax Cuts and Jobs Act of2017.^{5)  This so-called tax reform  law passed by Trump and the party that in the past has heralded the shield of fiscal responsibility (Republican Party), has scammed the American people on a number of levels and unless rescinded, will bring into existence “Too Big to Fail the Sequel.”  Much like the original movie in the franchise, “Too Big to Fail”, the ticket price for admission is a price that is not only forced upon the public, it is one that will result in their demise and possibly the economic fall from grace of this great nation.  While “Too Big To Fail” was not foreseen by the populace and the outcome nearly destroyed this country, sadly,  the villains in “Too Big To Fail the Sequel” have not been covert with their actions and the resulting catastrophe will not only destroy the lives of people today, it will destroy the lives of generations to come.

According to a 2018 report from the non-partisan Tax Policy Center titled, “How Did The Tax Cuts and Jobs Act Affect The Federal Budget Outlook”^{6}, the Republican tax law from 2018-2025 will increase the federal deficit by 1-2 trillion dollars.  In early 2019, the Treasury Department released a report showing that in 2018 the federal deficit was $779 billion up 17% or $113 billion for 2017. The Tax Cuts and Jobs Act is truly a Tasty Republican Duck.^{7}  It looks delicious and smells delicious but when you take a bite out of it, there just isn’t anything good about it at all.  It leaves a horrible taste in your mouth much like the enlarged tax bills of the citizens that are not a part of the 1%.

In today’s global economic climate with the rise of China as an economic power, the growing possibility that the U.S. Dollar may lose its status as the Global Reserve Currency^{8} and  the international plots against the petrodollar^{9} as the world standard for energy trading accompanied by the rising deficits created by the Tax Cuts and Jobs Act, the next economic crisis which is just over the horizon will strike a blow to this country that we may never recover from.

End of part I

Part II The Collapse of the American Economy

https://www.gofundme.com/xplicit-news

Linked Sources and Documentation

1. The New Deal: https://en.wikipedia.org/wiki/New_Deal
2. The Graham-Leach-Bliley Act: https://www.ftc.gov/tips-advice/business-center/privacy-and-security/gramm-leach-bliley-act
3. https://www.zerohedge.com/news/2017-06-24/goldman-finds-most-modern-recessions-were-caused-fed
4. Slavery With A Smile, America’s Economy Part I, link: http://www.xplicitnews.org/2019/03/20/slavery-with-a-smile-americas-economy/
5. The Tax Cuts and Jobs Act of 2017
6. Deficits created by the Tax Cuts and Jobs Act, link: https://www.taxpolicycenter.org/briefing-book/how-did-tcja-affect-federal-budget-outlook
7. The Tasty Republican Duck:: http://www.xplicitnews.org/2019/01/01/farm/
8. Global Reserve Currency: https://www.investopedia.com/articles/forex-currencies/092316/how-us-dollar-became-worlds-reserve-currency.asp
9. Petrodollar: https://www.investopedia.com/articles/forex/072915/how-petrodollars-affect-us-dollar.asp

Copyright © 2019, Glen Reaux, all rights reserved