If the American government paid less attention to alleged human rights abuses in Iran, and more attention to its current affairs TV programmes, it might not now be facing a financial meltdown.
Press TV is a 24 hour news service run by the Iranian Government; like all government mouthpieces, not everything it says can be trusted, but let’s not throw out the baby with the bathwater. Although it may give spurious credence to the 9/11 truthers – on the grounds of free speech – what is currently happening to the American economy does not involve a revealed truth, or coming to grips with some elaborate conspiracy theory; it doesn’t even require a grasp of Islamic economics – which appears to be foreign even to Iran – what it does require is to appreciate what the Federal Reserve is doing, and more importantly, what it is not doing.
Whether or not the Federal Reserve is controlled by the Bilderberg Group or the Order of the Illuminati, it is, or is supposed to be, America’s central bank. As such it has over the past few years created not billions but trillions of dollars of new money through the process of Quantitative Easing – printing money without actually printing it. In May 2009, when Congressman Alan Grayson grilled the Inspector General of the Federal Reserve asking her politely but firmly where all this new money had gone, she was unable to answer. According to one banking source, a total of 9 trillion dollars of off-balance sheet transactions was missing.
Speaking on Press TV, New York analyst Michael Burns said the American people had been lied to big time three times in recent years: firstly about the weapons of mass destruction – which dragged America into a war against Iraq; then again in 2008 when the taxpayer bailed out Wall Street; and now what he alluded to as Chicken Little and the sky is going to fall.
Another commentator was Jeff Steinberg, Senior Editor of Executive Intelligence Review. The fact that this magazine is published by Lyndon LaRouche should not distract the reader from the economic sense these people sometimes talk. In particular, he argued that the debt which the “Wall Street gamblers” had created should be given back to them rather than placed on the shoulders of the American people. Most importantly, he called for money to be invested in job creation instead of in the military industrial complex.
It was Michael Burns who hit the nail on the head when he said the Federal Reserve had (metaphorically) run the printing press; they had created money and pushed it into the banks who had taken this money at practically zero interest rates and invested it in government bonds at 4%. Yes, you heard right, the Federal Reserve created the money – out of thin air – then GAVE it to the banks, who loaned it to the government at 4%. So the American Government is paying the banks 4% interest for the privilege of borrowing its own money. Nice work if you can get it. It should be borne in mind though that the American Government does not actually have any money of its own, no government does, so it is the American people who are in fact paying the banking system for this “privilege”.
Mr Burns echoed Mr Steinberg when he said this money should be used for job creation, instead the banks were simply sitting on it, and creating even more debts. Jeff Steinberg went further and said some of the activities of those involved amounted to criminal activity, but government regulators and Federal prosecutors had simply let them get away with it.
This is what lies at the heart of the problem, not simply of the American financial system but of financial systems worldwide. Governments are in effect paying the banks for the privilege of doing something they should do themselves; it is the sovereign right, indeed it is the duty, of a government, any government, to create the credit needed to oil the wheels of its economy, and to do it both debt-free and interest free. Unless the current mess is sorted out by August 2, the American Government will default and will technically be bankrupt. That is when the real fireworks will begin.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com