Homework Due:
Web of Debt Chapters 33 & 34
- Extra viewing: Let Your Life Be a Friction to Stop the Machine 22 min.
- Occupy the SEC on Democracy Now 11 min.
- Extra reading: Argentine Advice for Greece: “Default Now!” by Adrian Salbuchi
Questions on Web of Debt
Chapter 33: Maintaining the Illusion: Rigging Financial Markets
- What is the Plunge Protection Team? How do they “maintain investor confidence?” Whose money do they use? What specific device do they use to support the stock market?
- Who are the PPT’s “primary dealers?” What is a repo? How do they work? Thought question: Does this seem similar to how Rothschild first gained control of the monetary system?
- How is gold affected? What would a soaring price of gold do to the housing market and taxpayers? Why don’t stock traders complain? What’s the eventual outcome likely to be?
- What is moral hazard? How are the PPT’s primary dealers and the government comparable to Mafia-controlled gambling? How can they eliminate competition that refuses to be bought? Thought question: Do banks monetize Federal funds or do US citizens monetize the presto-chango accounting dollars of the banks?
- What is the Exchange Stabilization Fund? Who are three Goldman Sachs execs who have been the Treasury Secretary? What has the US Treasury been called?
- What does CRMPG stand for and why was it set up? What is program trading and how does it relate to the CRMPG? How did program trading change between 2002 and 2006? What does “financial stability” really mean in banker jargon? How does this affect small investors?
- If the stock market were allowed to crash what would happen to the real economy? What did Addison Wiggen predict in The Demise of the Dollar?
- How are Rockefeller and the US intertwined? What does Hans Schicht say that the US is now? What is an alternative prognosis put forward by Richard Freeman? How does he describe the Cayman Islands and those who run them? How does this $30 trillion figure into our estimates of M3? What is the impact of this remote band of modern-day pirates?
- How does Adrian Douglas describe the Bear Stearns debacle over derivatives? Why is it like a Katrina hitting every city on the same day? Why is the stock market now like an EKG on a patient who’s dies? What strategy would the Fed need to employ to keep interest from rising? What is ungluing the whole sham?
Chapter 34: Meltdown: The Secret Bankruptcy of the Banks
- When did the banks actually go bankrupt, according to John Hoefle? What was the first bailout that started the snowball? What bank was secretly taken over by the Fed in 1989? What does he describe as “shotgun mergers and backdoor bailouts?” What created the zombie banks?
- By 2002 how much had the number of banks contracted by? What about the top banks? Why was Bank One’s acquisition of MP Morgan Chase ludicrous? What would happen if US markets were not manipulated? What have banks become?
- When Ellen Brown writes, “The Federal Reserve was instituted… to prevent [bank] runs” does she seem to be forgetting her earlier chapters? What does Robert Guttman say will replace the deposit and lending function of banks? Does this seem likely to you? Are private, small-time investors protected by law?
- How did the 1999 repeal of Glass-Steagall help banks regain their losses in commercial lending from less-regulated global investment banks? Why did the share values of commercial-investment banks fall anyway?
- Discussion question: If banking is a public service and not a profit center, should it be a function of (local) government? Rather than the activities we think of as banking what are the four primary activities that banks engage in?
- What does Patrick Byrne state that 75% of investment bank profits come from? Where did the “too big to fail” concept come from? Who owned a large chunk of Salomon Brothers when they were caught submitting false bids for US Treasury securities? Does this make you doubt his motives in wanting to pay more taxes?
- What is JP Morgan’s derivatives exposure and what assets is it funded by? Would taxing the rich solve the problem? What cost Bush Sr. a second term? Given what you know from the audit of the Fed, should anyone want to buy US bonds? Has the banking system been nationalized?
- Why does Murray Rothbard say that all banks are bankrupt? Are the global mega-banks indispensible to the economy? What is Ellen Brown’s alternative to the bail outs?
- What do some recommend that we do to protect ourselves? While these are worthwhile what’s the drawback of these individual solutions? What’s the illusion that’s tricked us into submission?