Economic Liberty over the Tyranny of Obamnomics

Bankers are Trying to Free Themselves of the Shakles of Fascism

The Fed has taken an active role in the banking crisis and has four main tasks:  Keep the banks liquid, maintain public confidence in banks, maintain market faith in the value of its treasury securities including its own reserves, and maintain the integrity of the dollar in relation to other countries currencies. In the system wide crisis these factors will conflict.  Fed Chair Bernanke has raised bank reserve requirements, inflated the currency available to banks and in an attempt to keep the banks solvent has infused them recently with a trillion dollars.

Now the Fed is in the position of either defending the dollar or the treasury debt rather than peoples bank deposits.  In 1929 the Fed raised its holdings of Treasury securities from 10.8 percent to 91.5 percent and today as of April 9, 2009 98.9 percent. It is acting just like the market acquiring quality in government securities.

Bank Failures verses Bank Paybacks
This year’s tally of 23 bank failures is nearing the total for all of 2008, when regulators seized 25 U.S. banks. A growing number of banks are becoming insolvent as home prices continue to fall and unemployment rises, causing more individuals and businesses to default on their debt. At the end of 2008, the FDIC had 252 banks and thrifts on its list of troubled institutions, up from 171 in the third quarter of last year.

There is no end in the immediate near future to the default of banks from bad loans as unemployment and the ratcheting up of variable rate interest loans will continue throughout 2009, deepening the cycle and need for more Fed cash in the banking system.

Due to concern over nationalized control of the banking and financial sector by government there is a move by banks that have received federal bail outs to return the cash.  Since the Obama administration has refused payback in at least one instance, the economy and its recovery lies in the private sector.  Independent banks, free of government meddling can compete with government run institutions, and better navigate through the morass and insanity of new regulations that inhibit the health and recovery of the socialist sector of our economy.

The government has invested almost $200 billion in hundreds of banks as part of the $700 billion financial rescue program that Congress passed on Oct. 3.

Six banks have returned emergency assistance they received from the federal government.  The amount of support payments returned by banks so far totals $442.3 million.

When people realize that their funds are better secured by local banking institutions that have had few if any foreclosures, they will move their funds from the too big to fails to the community banks.  Smaller community banks have proven their ability to navigate the government pressure to make poor loans because of government policy to do so, which unleashed the major banks to make bad loans to poor credit worthy clients.  This economic downturn was not started by financial institutions, but allowed to grow as perpetrated by congress and an administration that wanted home ownership for all Americans and Mexicans even though they were not able to qualify based upon income to debt levels.

Those conservative guidelines are now back in place, to new unreasonable levels where people with 800 credit scores and adequate income levels are not able to qualify for loans because of new income guidelines  placed by Fannie and Freddie.  Even if Fannie and Freddie approve of loans and the people are unable to make their loan payments not for the guidelines but due to job losses, Fannie and Freddie are coming back to mortgage brokers and requiring them to take the loan back.  Contracts mean nothing to government controlled institutions, the financial system under government control is proving it is fascist.

Executives are becoming aware that to invite government in for financial assistance is promoting fascism and putting control of business and therefore society not in the hands of individuals but making individuals subservient to government.  This is what Americans are coming to understand, Obamanomics, is fascist control of financial and manufacturing institutions and the rewriting of contract law where government can seize any private business in the name of national security.

The liberals hated the Bush Administrations wire taps on phone conversations. Where is the outrage over government-sponsored extortion to acquire business assets that it intends to use to promote its new “green” business and social re-engineering agenda on America?

Obamanomics has new principals being defined on a daily basis contrary to the constitution, where the fight will be brought to the Supreme Court and the teleprompter tyrant will be brought back to reality.  Let us all pray this happens sooner rather than later!