Bailout BS Exposed
I found this one at Federal Debt Relief System. Like many of you, all of the point-counterpoint on the current economic collapse has me searching for the answers.
Here’s the straight talk on what’s wrong with the newly passed so-called “bailout” plan. The Treasury plan was originally predicated on buying $700 billion of collateralized residential mortgage-backed securities that banks could not unload.
The idea was that the banks would get the money, which they could then turn around and lend to keep the credit markets open and credit flowing throughout the economy. In the meantime, the Treasury Department would sit on the securities until it is able to sell them, hopefully at a profit.
The idea, from a theoretical standpoint, isn’t stupid. It is, however, impossible to implement to any degree that will result in the desired economic recovery.
Here’s why:
- There are more than $1 trillion worth of subprime collateralized mortgage-backed securities out there – and that’s just one type of problematic derivative security. The bottom line: $700 billion isn’t enough. Period.
- Treasury is going to hire banking-industry managers to manage the process. Those managers are going to serve themselves – just as they served themselves to get us into the crisis
- The purchase plan is not limited to just residential mortgage-backed securities. Surprise! What else will Treasury buy? Experts predict that toxic credit card debt will require another multi-billion dollar “bailout” in the coming weeks as well.
- This government deception is even more under-funded than people realize, for it doesn’t authorize the full $700 billion: Indeed, it starts with only $350 billion, leaving an even greater shortfall. Did we mention that $700 billion wasn’t enough?
- Since Treasury can’t buy all the problem securities, if it prices what it’s going to buy too low, all remaining holders will have to mark down their holdings and take more writedowns and losses. How will that create confidence and facilitate “liquidity”?
- However, if the Treasury Department prices the securities too high, several problems quickly emerge: Hedge funds will rush to sell their current holdings, and may very well speculate by buying up more securities to sell them at a higher price (profit) to Treasury, meaning that the Treasury Department plan won’t necessarily be helping banks directly. What’s more, if those securities are priced too high, and the market for them continues to fall, taxpayers will eat the losses – a reality that likely will lead to an end to further program funding.
- There is no defined mechanism to determine what price the Treasury Department will pay for what it buys. For argument’s sake, even if Treasury were to only buy the problem securities its leadership speaks of in public – residential mortgage-backed securities – there are problems if it prices them too low: If that happens, some holders won’t sell them, taking the chance that if they hold them long enough they will be worth more than Treasury is willing to pay. How will those financial institutions regain liquidity if they won’t sell the securities needed to make this happen?
- Who’s going to fight off the lobbying groups out to influence the managers that the Treasury Department hires to direct money to their masters? Did we mention that $700 billion wasn’t enough?
The Federal Debt Relief System is dedicated to sounding the alarm while there is still time to do something about it.
Learn more at Federal Debt Relief System now.
Federal Debt Relief System totally gets it. These guys were able to explain to me the ridiculous truth about the US Banking system and how they create money out of “thin air.” Only to hold us accountable when it comes to paying back outrageous amounts of interest on top of the money we borrowed.
It really makes me mad when I think about how many times I’ve borrowed money thinking the money I was borrowing was from the bank itself only to find out the only asset being exchanged was my signature and promise to pay back this imaginary money.
It’s no wonder our country is in the state that it’s in with big businesses and government making all the wrong decisions for people like me and you. Do yourself the favor and check out Federal Debt Relief System, if anything … TO GET INFORMED!!!!
You can find them at http://www.fdrs.org/
Federal Debt Relief System helped my fiancé and really opened my eyes to the serious credit card and banking scams going on when it comes to credit card debt. I’ve been paying on credit cards I got my freshman year of college for years and couldn’t seem to manage making any more than the minimums and quite honestly it got to the point that I almost got my car repossessed. It took me over 10 years to clear up my credit on my own and it still pains me to even think of the total debt I paid back to creditors over that time.
It’s a helpless feeling believe me, I know but I also know that many Americans experience the same thing at some point in their lifetime and I’m here to tell you that there is a way out if you’re willing to do the research and get the facts when it comes to your debt. Many of the creditors that you owe didn’t sell you anything but a line of credit. Credit on money they didn’t even have and when the economy takes a hit like it has recently or when you get out of college with that new diploma and can’t find a job because the job market is upside they come knocking on your door trying to snatch up any remaining assets you may own.
Federal Debt Relief System was able to help my fiancé and I get the information we needed to make the decision to fight back against fraudulent creditors in a way that we never knew we could. It’s easy to feel helpless when the phone calls just won’t stop and when even making it week to week gets difficult.
Now that we’re informed we are finally starting to feel the heavy dark cloud of debt being lifted. If there are any of you out there in the same situation know that there is help out there you just have to get informed and be aware of the programs that are run by scammers. What I like about Federal Debt Relief System is that they truly want to help you understand how it is that you arrived at your current financial crossroads and how it is that you can get back on track in a way that seems manageable and more importantly feasible for the average American.
Check out the website at http://www.fdrs.org/ and see for yourself there are tons of informative articles and even a form to fill out if you want more information.
I totally checked out Federal Debt Relief System on their website and you’re right. There are tons of articles about credit card and banking scams not to mention how the Federal Reserve is a private bank. Who knew? Seriously, with a name like Federal in it how could it not be an official government agency?
It really starts to make sense once you get the facts. As a country we basically borrow made up money from private banks that make up the Federal Reserve and as a country we get to pay back private banks WITH INTEREST when quite honestly we could create the money ourselves through the Treasury Department and pay OURSELVES back the interest. Why do you think the deficit clock has run out of digits?
I’m really thankful I was able to get the truth about what’s going on and think I’m finally ready to fight back! Thanks for blogging about Federal Debt Relief System!
Take care and keep blogging the good fight!
Kathy S.