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The Fed's Dramatic About-Face


The Fed's Dramatic About-Face

Ellen Brown

“Quantitative easing” was supposed to be an emergency measure, but the Federal Reserve is now taking a surprising new approach toward the policy. The Fed “eased” shrinkage in the money supply due to the 2008-09 credit crisis by pumping out trillions of dollars in new bank reserves.



In response to the 2008 crash, QE, and other creative financing including tens of trillions of taxpayer funded bank bailouts were 180 degrees from what was needed to control the too big to fail (TBTF) banks that controlled 25% of US bank assets in 2008.

Just as Congress created a gubmit owned corporation (Conrail) into which several bankrupt northeastern US railroads were placed, nurtured back to financial solvency and sold to private investors at a profit, the US gubmit should have taken over the TBTF banks, broken them into smaller banks, restored New Deal financial industry regulations (that prevented crashes for nearly 80 years), and sold them to investors at a profit. Considering that railroading (especially the complex NE US matrix) is an inherently exponentially more complex industry than banking is (bankers make it complex and confusing to enhance their profits at our expense), a gubmit takeover would not have been technically difficult.

Eight years on when Obama left the White House the TBTF banks control of US bank assets had increased from 25% to 50% with no end in sight of their march to monopoly.

Two years of Trump and the GOP control have not only accelerated the growth of the existing TBTF banks but has now launched a wave of regional bank mergers that will create ADDITIONAL TBTF banks. The next time the TBTF banks crash the economy taxpayers will be footing a far larger bailout cost.



The harder “they” try to keep the economy going the faster we slide into full-blown climate catastrophe, because our “economy” is based upon “burn-baby-burn” metrics seeking to maximize activity. The planet is full of over consumers of which I am one. At least I am leaving no progeny over which to wring my hands.



I encourage folks to become familiar with the movement for PUBLIC BANKS that is picking up steam.The Public Banking Institute has a weekly newsletter with developments. More and more states are introducing legislation to form State Public non-profit banks. A ray of sunshine in these stormy times.

Also, the block chain technology and the potential changes it represents are worth becoming familiar with. MIT has the Chainletter newsletter that links to any and all the seminal sources and ongoing questions.



The “burn-baby-burn” metrics can increasingly be changed to green new deal metrics. If half of our population were not idiots and greedy monsters then we could make real progress.



I find it strange that the largest holder of US debt – the Federal Reserve – is responsible for setting interest rates.



It’s an interesting idea, Monke, enough that I would like to know something of how this could be arranged.

For present, I doubt that it is the case. These people were not born idiots or monsters; they are paid mightily to be so. And those who fail, who accept the grand bribe, lead.

I doubt the problem’s genetic; humans have lived quite differently. It’s a poor system.



It might be a good moment for alternative currencies, something (very roughly) like Berkshire bucks. A secondary and parallel currency might help arm a local economy against all of this best-guess and vested-self-interest sorts of manipulation.



For anyone interested in the Marxist analysis of banking rather than either the orthodox capitalist or MMT theories.



China has a 90+% cashless society right now. Im not clear about what that does for them overall. Almost everyone uses phonepay, and mostly with the chat site Wechat. If someone sends me money with wechat, i just go to a bank and cash it out. I still like my ATM card and use cash for absolutely everything. I just dont like carrying my phone everywhere.



I am not too good about money, I mean understanding the whole subject. But I keep thinking, what we have now is we put our money into these massive institutions called “banks”. Is there perhaps another way? Could we have a peer-to-peer type banking system? Or a kind of your-money-is-stored-in-the-Internet-ether type of money system? Now I know that someone is gonna say “Bitcoin”!! Blockchain!! But the following article recently came up on my news aggregator:

I don’t understand blockchains enough to even know if this is even what I am trying to imagine. And I guess anything involving the Internet is going to be hackable, unfortunately. But then is the only other option of storing your money in a bank, to keep lots of cash (or precious metals) in your mattress? Of course, yes, public banks would be the best if we do have to keep money in banks. I just want some way to keep my money out of the hands of these damn grubby money people. But then I use a credit card to shop online. And I use debit card to shop for groceries and gas (both from credit unions at least). So I guess I am guilty of being plugged into the system, sigh…

I just see the money issue as similar to the health care issue. How can we keep these middlemen out of the picture? I know, don’t tell me — blockchain, right?