Sunday, September 28, 2008
Book on Federal Reserve
In this past Tuesday's meeting, Robert started out talking about this bailout and brought up the book, "The Creature from Jekyll Island", a book about the Federal Reserve. This book is about a group of rich and powerful people who met on Jekyll Island off of Georgia in 1910. They came up with the plan for the Federal Reserve which was formed in 1913. It turns out that the Federal Reserve is not Federal but a private corporation. It's not a bank and they have no reserves. They simply print US Dollars at will and since '71, those dollars have no gold backing.
I've started reading the book but nowhere near finished (500+ pages). Robert believes that this financial system was set up by design and now we're seeing it start to break down with the failures of Lehman, Fannie, Freddie and the $85 billion loan to AIG. This $700 billion+ bailout is probably going to be much higher then what they are saying. More on this bailout and the book....
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2 comments:
I live in Canada, but have been very interested in the whole situation in the US.
I have a few questions... based on my perception of the following. If I am mistaken, please correct me.
1) Fanny and Freddy were created to give more people access to money to buy a home. In essence this artificially raised the value of property as more people now had access to credit and the auction process raised the price of property.
2) Decades later the markets tried to correct this and all the ridiculous lending when Fanny and Freddy failed. But the US Gov, gave them a practically unlimited line of credit to bail them out.
3) All these loans (some that are quite bad) were just sold around. Broker->Bank->Insurance->Financial Institutions and Foreign Banks
4) Now the US Gov. is bailing out the firms that purchased these bad loans. In so doing they devalue the US $, will probably have to increase taxes, etc.
Is Government intervention (in Realestate and now the Insurance industry) not just a prolonging and worsening of the inevitable? Is it worth going into another trillion $ worth of debt?
I have tried to look at it as an "investment" as the various representatives have said... but it's bad debt they are buying.
As an investor it takes a minimum 6 weeks for financing for a commercial property. Here the Gov. took 1 week to get a bill for 700 Billion to invest in bad debt?
Am I mistaken? What is RichDad's view?
Everything I need to know I learned from...duck tales? watch this youtube video as Uncle Scrooge tells his boys about printing money.
http://www.youtube.com/watch?v=t_LWQQrpSc4
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