Alliance of Banks and Government

Hey everyone

The recent government actions have shown why the banks have a stranglehold on government. I feel that the recent infusion of capital, the allowance of foreign governments to purchase large interests into our banks, and the rebate bill currently proposed will benefit nobody more than the credit card companies and banks. The idea that this money will get to consumers and will get into the economy is wrong because the banks will not release the money either because they are using the money to cover their own losses or they have tightened their credit limits.

When the fed dropped over forty billion into the system and initially dropped rates, they said it was for making the consumer be better able to handle the growing housing and credit issues. In reality, what they did was make it easier for the banks to cover their own losses in the housing and credit issues! Do you really think the CEO's of Citi and Merrill Lynch would get their golden shoots if it were not for the US government? There is a trader in France who is up against charges for losing 7 billion. I know for sure the heads of Citi and Merrill knowingly supervised losses that dwarf 7 billion dollars and still received their retirement! In the meantime, the banks are tightening their lending standards so that they don't make the same mistakes. By doing that, the money train stops at bank station. So the percentage of the billions of dollars that the Federal Reserve released into the banking system actually getting to the consumer is very small.

Speaking of not servicing the American consumer, I would like to bring Congress into the discussion. I am not a little surprised with the fact that the Congress did almost nothing to confront the fact that the banks have sold large portions of themselves to other countries government run financial organizations. The same government that wanted to handle the ports and had to back out has now purchased a large portion of Citibank. There is an article in the Washington Times that quotes Senator Chuck Schumer as saying "this deal will keep New York as a financial center." Now I know they were not given voting rights. But really, do you think they need voting rights to get what they want? They have the oil we need. I don't think they were too concerned with voting rights. With this deal, it is my opinion that the financial center has moved a little closer to asia, not stayed in New York, like Senator Schumer has suggested. Senator Schumer might want to find out how the Morgan family and other bankers were able to wrestle the financial capital away from London and bring it to New York. He and the rest of the Congress might want to find out how those hefty dividends will be used.

The rebate deal passed by the House that is going to give taxpayers like myself a few hundred dollars is almost certainly going to be going to put into credit card bills or house payments. That is all well and good, but the only benefiters of this in the short run are the banks and the credit card companies. I am all for paying those credit cards off. I will be doing the same with my check. I mean people would be stupid to go to Best Buy or Macy's with that money if they have existing debt to pay off.

The fact that the Fed had to drop rates drastically and infuse cash has been a one two punch on the dollar. The value of our currency is in such bad shape, the Canadian dollar is worth more! American manufacturers have seen a bounce because of the low dollar. That is good. But overall, I think there is a long term prospect of having too much money into the system.

So let see. The fed saves the banks by issuing more cash. Foreign government run financial organizations are allowed to buy into our banks, and the rebates will be put towards banks and credit cards. I've heard the tale of the oil companies running this government, but the banks need to be included into the conversation.


Now, with that all said, I do believe that the recent half point rate cut will finally start to put money into the consumers hands. But the simple fact is that it took over 40 billion in cash, two percentage points on fed rates, and a rebate completely designed for the banks to get over the mistakes of the banking industry. I also feel that the banks would probably make a good investment as we now know there business is insured by the US Government.