The Emperor’s Bank Has No Clothes

A recent article in Bloomberg (first noted by my most excellent colleague Carlos Lara) pointed out the latest rigged game of the Federal Reserve and their commercial bank pals.   Let’s review. The Federal Reserve is not a government institution. It is run by private banks for their own benefit. It was granted extraordinary powers of counterfeiting and fraud by Congress that has led to the decline of the value of the dollar by over 95%. Without getting into all of the arcane intricacies of how the Federal Reserve runs its con game, this article focuses on just one of them that might drive you crazy. 

Something new happened after the 2008 crisis. You heard of the multi-trillion dollar bank bailout. but that wasn’t the end f the story. The Fed started paying its member banks interest on any of that money they left on deposit with the Fed. Yes, the Federal Reserve pays banks interest on money so that they don’t lend it to you. All the more obscene is that money was conjured out of thin air by the Federal Reserve and then given to the banks who were “too big to fail”. These banks now collect guaranteed safe interest of around 2% for doing absolutely nothing. No factories are built, no new jobs, no new products, no new research, no nothing.

Some smart people noticed this. A bank called TNF ( “The Narrow Bank”) was created specifically to use the Fed’s policy as its business model. To place its depositors’ funds with the Fed and claim this 2% interest.   Minus their operating fees, TNF’s customers earn consistent guaranteed interest. Sounds great, doesn’t it?

But the Fed said “no” and has not yet explained why. They won’t let anyone else in the club. It’s probably just a coincidence that the people who own the commercial banks also control the Fed. TNF is now suing the Fed for violating its primary charter of doing exactly what it does for every other bank. I eagerly await the Fed’s argument in court.  Popcorn in hand.

In the meantime,  Bloomberg decided to “white knight” for the Fed, defending them by saying that the real purpose of money in a free market is to circulate and do real things like everything I just said.  Which makes you wonder why the trillions of dollars on deposit with the Federal Reserve get to make interest for doing nothing when the rest of us actually have to work for a living. Bloomberg ends by saying:

 “As a trade, it’s as safe as can be; but as a business model, it’s a little scary.”

Yes, scary for us. This is why you want to be outside of this immoral and scary system.  A system where people write themselves checks and pat themselves on the back. Using your future tax rates and your children’s future as their collateral. The way out is Privatized Banking, putting your money into the hands of people and industries that actually do things.