CHAPTER 4

Chapter Four of the Creature From Jekyll Island

So what we know so far in this book, is one, money can be printed out of thin air from the Federal Reserve Banking Cartel. And two, printing money out of thin air diminishes our purchasing power through the hidden tax called inflation. Now in this chapter the book goes from central banking to world of savings’ and loan industry. This explores large amount of money disappearing into a black hole of government spending and lining pockets and the hardworking unknowing taxpayer pays the bill. Same scam, different institutions same results in the end.

Socialism Takes Root in America

American is already a socialist society that capitalizes off of its citizens labor. The concept took root in the 1930 during the Great depression that was started by the Federal Reserve Banking Cartel in the first place. American politicians were fascinated with how the Marxists were able to attract the masses support by blaming the Capitalist system for the countries problems and promising a socialist heaven. They admired and feared them at the same time. They admired how they were able to gather crowds, but feared that they would become so popular as to be voted in public office. So what did these politicians do? They changed their style of speech, and voters put them in happily put them in office. They violent and extremes parts of communism were rejected, but the socialist part where government takes care of it citizens was gaining ground with the educated elite in this country. And why not? I mean they were naturally to become the leaders in this country, and who better to tell the masses or sheep what to do for their own good because the sheep were too stupid to think.

So when more than 1900 S&L companies took a nose dive during the Great Depression, Herbert Hoover and most of the congress agreed to create the Federal Home Loan Bank Board. A S&L is a saving and loan that specializes in accepting savings’ deposits and making mortgage and other loans. And just like that, the Government was in the real estate business. The people felt “SAFE” knowing Big Brother was going to make sure the public would be protected next time. After Hoover came FDR who was the leader of the socialist movement it seems or just played his role in it. At first FDR spoke out against socialism then became the pioneer of the socialist movement. FDR was just another puppet for this Banking Cartel.

It was FDR that took it to the next level in housing and banking industry by creating the FDIC ( Federal Deposit Insurance Corporation) for banks, and FSLIC ( Federal Savings and Loan Insurance Corporation) for the housing. That made everything better because Big Brother was looking out for we the people once again. That was so nice of them, and if anything did go wrong Big Brother would make sure that we the people would bail them out through our hard work that pay taxes come in to use, because its for our own good. And we will take it and love because that’s been the playbook for a long time now……we the people are you tired yet? Oh, don’t worry it gets better this is just the fourth chapter of the book The Creature From Jekyll Island.

Full Faith and Credit

At the same time loans on private homes became subsidized through the FHA ( Federal Housing Authority) allowing S&L to make loans at a lower rate so everyone came realize the dream of owning your own home. The Marxists was offering a chicken in every pot the socialist was offering a house on every lot. It made purchasing a home easier but it drove the prices of the house higher, another win for the Banking Cartel known as the Federal Reserve at the expense of we the people. Don’t you just love our Big Brother?

1979 was the first year was the first time since the 1930s that total net worth of the federally insured S&L’s became negative. So in 1982 our protectors that protect we the people from all evil came up with the Full Faith and Credit of the United States government motto. It was reassuring but people had that feeling that this means that we the people were going to be paying for it and the people were right. In the early days of the Reagan administration the rules changes to where S&L’s could now finance 100% of a deal meaning no money down financing. Office buildings and shopping centers popped up everywhere. Developers, builders, managers, and appraisers made millions. The field soon became flooded with buildings and covered in fraud. Billions of dollars disappeared and there was evidence that the Mafia and CIA was involved too. As I found out while reading this book, fraud is not necessarily against the law. In fact most of the fraud in the S&L scam was not only legal but encouraged by our government! The government was basically saying, we can’t make good on our protection scam, so they said go get the money yourself by putting investors at risk, and not only will we back you up if you fail, we will show you how to do it!

The Fallout Begins

In spite of all the accounting scams that were created to make the dead S&Ls; look healthy, the fallout began in 1984. The FSLIC closed one institution that year and arranged for the merger of 26 others that were insolvent. To persuade healthy firms to take over insolvent companies, the government offered cash settlement to compensate for the liabilities costing the FDIC over a billion dollars per year. This was just the beginning. Between 1980-1986 a total of664 insured S&Ls; failed. We know the government promised to always protect the public from losses, but the losses were already to far beyond what they could handle. They couldn’t close all of them because they didn’t have enough money to cover them all. Keeping this scam going was costing the FSLIC $6 million per day in 1986, by 1988 it was costing $9.8 million a day. The fall of Lincoln Savings brought the crisis to the forefront, that there was no money at all.

The FEDS took it upon themselves by force the rule of congress by bailing out Lincoln savings’ in the amount of $70 million dollars. Historically the Fed served to create money only for government and banks. If it was the will of the people to bail out a savings’ institution, then it is up to congress to approve the funding. If congress do not have the money or can’t borrow it from the public then the Feds start printing money out of thin air to give to government. But in this case the Feds strong armed congress and made the decision on its on, now that’s gangster. Later that year congress passed the Financial Institutions Reform and Recovery Act ( FIRREA) and approved a minimum of $66 billion for the following ten years, $300 billion over 30 years. $225 billion was to come from taxes and inflation and $75 billion to come from healthy S&Ls;. This was the biggest bailout ever. Bigger than the combined total cost of Lockheed, Chrysler, Penn Central, and New York City.

During all of this the FSLIC was eliminate because it became hopelessly insolvent and replaced by the Savings Association Insurance Fund and the Banking Insurance Fund for the protection of commercial banks and both are now administered by the FDIC. Congress was paralyzed by all of this and for good reason. Why wasn’t there an investigation into all of this. The answer is simply, all of these institutions were heavy donors to a lot of members of congress and opening an investigation into this would reveal their relationship and the whole ship would sink.

In conclusion, the savings and loan industry is a cartel within a cartel. Savings and loan can’t function without Congress pushing unlimited amounts of money into it. And congress couldn’t do this without the Feds printing money out of thin air. If we are to survive as a nation we really need to start waking up to the Federal Banking Cartel scam. As good as it sounds for everyone to be able to afford a home ( American Dream) they have made the dream a nightmare. How many people can afford a home now, many young people are moving back home after college because the housing market is priced extremely high due to inflation. So ask yourself, after 60 years of the government subsidizing and regulating the housing industry are we in better shape than before?

Chapter 3 PROTECTORS OF THE PUBLIC

Chapter 5  The Bretton Woods Agreement