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The Real Reason the Fed Didn’t Taper

96 | By Shah Gilani

Ben Bernanke is the don of the greatest criminal enterprise in the world.

And yesterday his made monsters, the Five Families, lined up to kiss his ring, again.

By not “tapering” or reducing the $85 billion a month ($45 billion in Treasuries and $40 billion in agency mortgage-backed securities) the Fed is buying from banks, the Fed is saying to its hit men, “We are family, and as long as Johnny Law is coming after you, we’ve got your back.”

The “legal and litigation costs” (that means lawyers and fines) racked up by America’s Five Families since the credit crisis gently (not) ushered in the Great Recession is over $103 billion, by some estimates. That doesn’t include actual losses from related activities.

The Five Families, according to the Federal Reserve, are big, very big bosses in their territories, which means America and a good part of the world.

Let’s name names… and then I’ll tell you the REAL reason the Fed didn’t taper yesterday.

Here are the Five and how big (by total assets) they are as of 06/30/2013:

    1. JPMorgan Chase & Co. $2,439,494,000,000
    2. Bank of America Corp. $2,125,686,000,000
    3. Citigroup Inc. $1,883,988,000,000
    4. Wells Fargo & Co.. $1,440,563,000,000
    5. Goldman Sachs Group Inc. $938,611,000,000

That’s a lot of muscle.

Let’s look at just JPMorgan’s rap sheet, because it’s fantastic (as in I can’t believe it) and sickening to me.

While JPM has spent some $16 billion in legal expenses and some $7 billion in fines (oh wait, add another $920 million in fines as of this morning for the Whale tale they told regulators…) related to the financial crisis, since the end of 2007 through the first half of 2013, it has also paid out $23.9 billion in dividends to common shareholders.

Now, don’t get me wrong. The bank isn’t technically guilty of any of these misdeeds (crimes?). So just because they may be accused of things or may have paid fines related to some of this stuff, or will pay fines, or will keep on keeping-on paying legal and litigation costs on account of the myriad “other” cases being brought by government gumshoes (SEC, CFTC, OCC, FBI, Justice Department, State Attorneys General, Federal prosecutors) and class-action lawyers, and ma and pa investors everywhere, they’ve neither admitted nor denied anything.

This stuff is all “alleged,” got it?

This list is off the top of my head, so please feel free to chime in on anything I missed.

Without admitting or denying doing the following, JPM did the following:

  • Conspired with other big banks to rig LIBOR
  • Conspired with other big banks to rig derivative prices
  • Hid massive losses on mortgage securities by creating off-balance sheet “conduits”
  • Pawned off bad mortgages on Fannie Mae and Freddie Mac
  • Built mortgage-backed derivative products to fail to sell to clients and bet against them
  • Aided and abetted mortgage originators falsifying loan documents to make mortgages
  • Manipulated energy rates, ripping off states and consumers
  • Ripped off consumers on overdraft and other banking fees and charges
  • Strong-armed credit card customers with abusive collection schemes
  • Hid massive losses at its London trading office from regulators
  • Accused of money laundering

That’s off the top of my head. What else do you all have on them that I’ve forgotten?

Now, I’m not calling JPM a criminal enterprise. It’s a bank. But if it was a criminal enterprise it would be one helluva bank.

You want to know why the Fed didn’t taper yesterday? Because the banks need more money, and the Fed’s stimulus QE program is all about pumping up the banks’ balance sheets.

Is that so they have money that trickles down to consumers who might want or need loans?

NO.

Because the banks in the criminal enterprise system are spending billions on litigation and fines; and on top of that, they have to have plenty of money, cash, to pay common holders fat dividends.

Why? So their stock prices go up, so their bonus pools get bigger, so they can hire more smarter people to generate new schemes to rip-off more consumers and businesses and governments.

That’s what yesterday was, it was a ring-kissing ceremony. And you thought it was a press conference… silly you.

Shah

96 Responses to The Real Reason the Fed Didn’t Taper

  1. Adrian.shiner@virgin.net says:

    Many of the activities on the list are fraud, plain and simple…….
    I have no regard for banks or the government of the USA.

    • fallingman says:

      Indeed. Well said.

      Great column Shah. You aren’t shy. Just sorry you’re gonna miss all those swell JPM cocktail parties.

      The biggie JPM transgression you missed…The manipulation of the gold and silver markets, likely at the behest of the Fed and the BIS. The CFTC “investigation” into manipulation in the silver market is 5 years old now. Soooooo complicated, don’t-cha-know.

      NOT. A fourth grader given the rules and shown the evidence… that the CFTC itself generates in it own %@#$%*! reports…could bring the gavel down and issue a guilty ruling in 10 minutes.

      Not that I’m saying they’re actually GUILTY of anything.

      Oh, and don’t forget how they reamed Jefferson County Alabama, paying bribes to councilmen to take on that outrageous swaps deal that cost them BILLIONS and bankrupted the county.

      Then there’s … how much time do you have?

      Wrongfully foreclosing on homeowners. $546 Million.
      Robo signing / faulty forclosure processing
      Rigging state municipal bond markets
      Failing to properly segregate customer funds
      Making off with the loot in the MFGlobal theft case
      Violating Section 4a(b)(2) of the Commodity Exchange Act in cotton trading
      Executing Fictitious trades for customers to get around Wash Sale Rules on 10 separate occasions in the WTI and gasoline markets

      But here’s my favorite. It’s relative small potatoes, but it says it all about how sleazy these guys are:

      “The bank paid a $110 million fine for what is commonly known as ‘check sequencing’. Rather than process their customers’ debits and credits based on their chronological order, the bank went days back into the past to re-sequence the transactions in whichever order would make the account holder run out of money fastest so the remaining debits would bounce and the bank could charge multiple insufficient funds and overdraft fees.”

      You gotta love that. Even in the plain vanilla banking area, they’re ripping off their customers.

      Christ, and they still talk about the rule of law in this country as if it still exists.

      Calling Eric Holder. Calling Eric PLACE Holder.

      Excuse me know. I have to go barf. All this talk of JPM has made me ill.

      By the way, the phrase is Palmed off not pawned off. Those pesky homonyms. Comes from the term for sleight of hand with playing cards.

      • Ben says:

        Don’t you just love them though? Those hefty fines they pay without having to fess up – will be paid with taxpayer (for generations to come) provided QE cashflow!

    • bill says:

      Ed P . wants to know what the common person can do about the price manipulation. start with silver, if every working person would buy one ounce of physical, hold in your hand U.S. silver dollar or even a .999 pure silver round or .999 pure bullion, just one ounce every payday it would bring down the paper market in the precious metals very quickly as JP Morgan hold massive contracts in silver that they have to deliver on if the client wants it.to do the above would cause a massive silver shortage and would shut down the tech industry which depends on silver because it is a great conductor

    • A sanders says:

      Thanks shah.
      It’s the whole finacial sector which is corrupt.
      The BBC did an exposé on pension funds and investment funds, they found ( I think 17 ) extra charges not listed on the prospectus or contract.
      Scams (my word) included buying foreign shares and exchanging currencies to buy the shares, at best price but charging worse price, buying duff shares to loan out to other companies who wishes to sell short, usually pocketing the fee, trading each share holding on average more than once every year ( with no benefit ) earning a fee for each transaction.
      The series covered other penalties which the thrifty had to pay i.e. hedge funds front buying, the whole series was very sickening, we the country and we the individual are being ripped off I realise this is the uk and the USA maybe different, and of course Mr Bernanke may have a cunning plan and is a genius, what do I know?

      • Claudia says:

        Visit gata.org and zerohedge.com for more information – many other information sources are available with a Google search. Also, add gold to the list of metals whose price has been manipulated, and for many years.

  2. Ed P says:

    How can we do anything about it? Can we organize a group to collaborate and find ways that we can bring about change? I for one, would enjoy being a part of a group that strives to bring about change. I just have not found one worthwhile joining.

    • Peter Jennings says:

      OK. I think the majority of Americans are sick of our government. My best suggestion is to insist on a ‘No confidence’ party on the next ballot. If that wins then look at MEganize (the book) for a new system where these crafty buggers would have someone to answer to. This gives all the answers how to sort this country out, schools and government. We need a new self regulating structure!
      Not sure who would champion this – perhaps Rush Limbaugh or another non-politician.

      • miken25m says:

        “We need a new self regulating structure.” Yes! It’s called laissez faire capitalism. It’s a free market without a central bank. The government stays out of the market where its only role is that of a policeman protecting the rights of traders.

        • Richard says:

          Actually, the federal reserve is a separate entity from the government. It does not work for the government but for the bankers. This was its original mandate and still is. All of you want change, but that has to come from your government (I am Canadian) in the form of policy (e.g. force banks to loan money -this by the way is not the fed’s role; and how about something called regulation -it works in Canada because we did not de-regulate to our heart’s content). Yet, you still have that impossible government structure that cannot get anything done or changed. I believe ordinary Americans are getting the royal shaft from these corrupt financial elitists (and their political counterparts who aid them). Yes, the US is corrupt. Interesting, that since the recession, 95% of the income went to the wealthiest 1%. Talk about a “trickle-down” economy. I guess it wouldn`t be so bad if more than 50% of that wealth trickled down to the rest of you.

      • Jimmy Z says:

        While most agree that we’re sick of it we’ll have better luck with a Guillotine Party because sooner than later we’ll have to eat the rich to survive if nothing changes. And they’re only 1% so eventually we’ll turn on each other. Capitalism only has one major glaring flaw; greed.

        • CJ says:

          Oh and the politicians are not greedy? How about overpaid over perked union members? Especially the government union members? At least no one is forced to do business with “greedy” businessmen. If you don’t like a business just boycott it; that’s what I do. I wish I could avoid having to deal with greedy corrupt politicians, bureaucrats and tax collectors as easily.

  3. Robert Rennkaer says:

    Holy Cow, All the $85 billion/month is going to Banks,and banks are paying their bills with the money. Isn’t there any control over how they use the money. If you leave it to bankers to decide how to use the money, They will use it to fill their wallets or to save their jobs.

    • miken25m says:

      Right! That’s why it’s so important to get rid of the central bank. Don’t put all the blame on the banks. They are doing whatever government regulations make it profitable for them to do. Get rid of the Fed.

  4. Kimberly says:

    Agree with you but you did not mention the 100 and 300 ton gold paper dumping in April but I think that was one of the other five

    • T-time says:

      The cure is the sickness itself – once the unsustainable actions of the big banks continue to a growing rate and risk of inflation and subsequent loss of fiat money value – the cure will come shortly afterward….

  5. Peter - a.k.a. Facilitator PeterW says:

    I think they were caught between a rock and a hard place internationally.

    Their intention is to survive and will do and are doing, that which is necessary, figuring that, because they are wearing runners, and carrying a weapon, they can survive the bear attack, not by outrunning the bear, but out running the others who are wearing boots, backpack and a small weapon.

  6. Joe says:

    And, just think, over 50% of the people really believe that redistribution is about helping the poor and middle class!!!! When the next financial crunch comes these same 5 ‘Crooks’ will be saved again!!!!

  7. Harrison says:

    All this to finance the fines and other penalties while not depleting the balance sheet. My guess is, everyone is happy that all the new layers of consumer protection agencies installed recently will save the consumer from footing the bill?

  8. David B Jones says:

    It is time for the American people through its trusted leaders(Politicians,judges,business leaders)to begin to take these greedy bankers and government criminals down.The sooner the better before they can do any more damage,and freeze all their assets.

    • Andruskovicz says:

      TRUSTED LEADERS?? Sorry, but 98% are IN on the game, on BOTH sides. Only Dr. Ron Paul and Cynthia Mckinie and a few others have not been compromised and look what happened to them.

      It’s up to US, the man and woman on the street to do the job.

      The “lawmakers” are preparing for civil unrest on a massive scale. DHS has purchased over a BILLION rounds of hollow point, LETHAL ammunition, the past year. When asked why, they replied that it was for “target practice”.

      WE, my friend, are the targets. Don’t believe ME, look it up, it’s all being done in plain sight, “for our security” you see.

      Look up, Freedomforceinternational, headed by G. Edward Griffin, the author of The Creature From Jekyll Island about the how, who and why regarding the creation of the Fed. He has pubished a number of other books and is active on the lecture tour.

      Compare the honesty, integrity and courage of this man, (among other men and women) with the psychopaths that are REALLY running the show. It does make you want to puke.

      But as Mr. Griffin says, it takes only 2% to become actively, ACTIVELY aware, to affect real change.

      Join his organization, I did and I will devote all the time I possibly can to spread the word.

      TGFTI

    • David says:

      You missed (are missing) the point: It IS the “Politicians, judges, business leaders” who are perpetuating the problem. “trusted leaders” is an oxymoron!

  9. Steve Murdoch says:

    So all this bank propping is only creating a bigger bubble. What will happen when it all comes crashing down?? … probably within the next 6-8 months.

  10. Steve Murdoch says:

    on another note … is it possible Bernanke is aware of what’s going on but wants to leave the perceived blame on his successor for the eventual “tapering” the unravels the world?

  11. Rob T says:

    Overcharged and improperly foreclosed on active military duty personnel

    Mislead investors due to conflict of interests with investment banking department and resarch department

    Aided and abetted in helping Enron and World Com hide off balance sheet liabilities casuing retail investors to lose billions after collapses of both companies.

    Conspired to rig interest rate auctions to cheat municipalities out millions in interest rate payments (See Article on bond rigging scandal Rolling Stone magazine)

    These are just some of the things they caught on, just imagine,if you dare, all the dirt in the underbelly of this beast they have never been caught on and has never come to light!

  12. Steve Baze says:

    I agree on some of your analysis ? But there is more to the answer for sure ? The simple fact is that the fed cannot ease up on stimulus ? Simply because that is all that is holding up or propping up this phony economy ? And that is beyond obvious and as I say , simply the fact of the matter ? The 85 billion a month is of course a bit over a trillion a year and that is the magic number it is taking to hold it all together and keep this phony economy propped up ? As well we have created the 17 trillion debt and have accomplished absolutely nothing except dig a far deeper hole ? But who seems to be counting any of it these days ? Certainly not the idiots in congress , except for a very few . Nothing has been fixed or resolved except that the banks have benefited greatly as you have pointed out on numerous occasions . SO who are these so called smart guys making all these insane decisions ? They are the criminals ! the real criminals and no question Amerika has morphed into a giant criminal enterprise . I speak of these things in great detail at Down to Earth Prepper ?

  13. Steve Baze says:

    I agree on some of your analysis ? But there is more to the answer for sure ? The simple fact is that the fed cannot ease up on stimulus ? Simply because that is all that is holding up or propping up this phony economy ? And that is beyond obvious and as I say , simply the fact of the matter ? The 85 billion a month is of course a bit over a trillion a year and that is the magic number it is taking to hold it all together and keep this phony economy propped up ? As well we have created the 17 trillion debt and have accomplished absolutely nothing except dig a far deeper hole ? But who seems to be counting any of it these days ? Certainly not the idiots in congress , except for a very few . Nothing has been fixed or resolved except that the banks have benefited greatly as you have pointed out on numerous occasions . SO who are these so called smart guys making all these insane decisions ? They are the criminals ! the real criminals and no question Amerika has morphed into a giant criminal enterprise .

    • matagorda says:

      Steve Baze you count is a little short. Where do you think the plotisickos get the election funds. It really got bad when the supreme court gave banks to go ahead. Your just another mullet along with another 240 million mullet minus 535.

    • R3P3T3 says:

      Steve, isn’t it amazing that with a trillion of deficit spending and another trillion of bond buybacks, which = about a 12% stimulus of GDP and all they get is a lousy 2% growth.

  14. john says:

    So where does all this leave you/us regarding VXX.
    Even averaging down seems a bad idea.
    what say you ?………………john

  15. Terry T. says:

    The bigger the Monster, the more required to feed it. Our government intends to keep spending and they want to generate inflation as an automatic tax increase.

  16. Jim says:

    It seems to me that the robber barons are back but this time the government is in bed with them, congress and the administration know what is going on but they are unwilling to interfere because either the US is now in a death spiral and they are just postponing the crash, or they are all bought and paid for, probably both.

  17. Christopher Fry says:

    How about the NACP – the North American Consumer Party. Use elections in US, Canada and Mexico as a billboard for a new active consumerism. Inspire people to begin to put pressure on companies which move manufacturing and head offices offshore. Stop buying their products. Soon just the mention of a “consumer attack” will cause stock prices to free fall. Maybe then corporations, banks and governments will start to listen to the majority, not the moneyed.

    • matagorda says:

      Christopher how about cancelling all your bank sponsored credit cards. But wait John Q owes the banks too much, That may be a plus,

      • Andruskovicz says:

        There’s an idea. Start a movement to get as many people as possible to max out multiple credit cards. Take on million dollar morgtgages. Fill the home with furniture on no payments for a year plans. Buy TWO cars on similar plans. Buy all the latest tech gadgets. Buy spares. Shoot, buy GOLD and SILVER with your credit cards, take delivery, bury it somewhere and then,

        DECLARE BANKRUPTCY.

        This has to be done on a massive scale, done all at the same time in a structured, co-ordinated fashion.

        They’d have to print a TRILLION a month to bail out the bstrds.

        But unfortunately, they have militarized the police and they DO have lots of those hollow points and FEMA camps.

        Dang, they’ve thought of everything, it seems.

  18. CALARISTOS says:

    Agree that the financial sector (parasitic shifting of assets to get fees, leverage, etc.) is as described. The productive sectors that actually do something or make something that contributes to our economy is there, working, and doing its best to gain traction. Incredible innovation in nano, bio, geno, materials, robotic, process, etc. technology. Hard to abandon investments in those sectors even though we know this federal money pumping is a bad long run proposition. What to do?

  19. gk says:

    Just heard about the man who invented the Beenie Baby. He received a fine of $53 million because he had $3 million in foreign income he “forgot” to report.

    Now if the Five Families were fined at that same ratio instead of the very small slap on the wrists they would really be in trouble! But I’m sure the Five Families funnel some of our money into the pockets of the President, Congress, and the alphabet soup of Consumer protectors!

    And of course, the law is different for the Five!

  20. Wes Herman says:

    Thomas Jefferson, Andrew Jackson and Charles Lindberg Sr. are among the many wise luminaries who warned us down through history about what would happen if we put the money supply creation in the hands of the bankers. What we are experiencing now is Meyer Rothschild’s dream come true. Ron Paul has been mocked for years for his, “End the Fed,” proposal. The money laundering that the large banks have done for terrorists and drug cartels should be enough to put the heads of the Family, the Shaw speaks of, in jail for life. JFK signed a document that would have ended the FED 22 days before he was murdered in Texas. I think of the bankers as nothing more than a Debt Cartel. We have lived in an illusion of freedom which is starting to wear very thin. In the History Channel’s 1991 documentary series titled, “The Men Who Killed Kennedy,” one can get a picture of how our freedom was finally taken away from us. Anyone can google the documentary and watch all nine episodes online. It was only allowed to be played on the History channel one time and then suppressed with lawsuits and threats. I have serious doubts about any possibility of reversing the process which corrupted our way of life. It appears so well woven into every aspect of our life, media, commerce, military, law enforcement, politics, medicine, and even education, that it is possible that. the only way it will pass is by choking to death on it’s own greed. The men who wrote our founding documents and forged our country and then fought and died for it are far different than the men I have grown old with in my 7 decades on this planet. I hold out a bit of hope that I may be wrong. Far more is at risk than our bank accounts.

    • Wes Herman says:

      No, Our poor country is undergoing moderation because we all co-operate in moderating to avoid facing the ugly truth. We shake with fear in our cubicles and thereby sustain the cancer that is consuming us.
      Sorry,
      wish you had a set of testicles that matched the size of your bank account.

    • fallingman says:

      The Men Who Killed Kennedy was a terrific piece of work. Highly recommended. Really jawdropping stuff. And you’d have thought it would have been aired on the History Channel since that would be a natural fit for it, but it was actually on A&E. Go figure. Why the broadcast it, I’ll never know. Seemed odd at the time. Still does.

      By the way, if you don’t get a chance to watch the series, I don’t want to give away the the whodunnit, but here’s a clue. His initials are LBJ.

      • Harris Klein says:

        LBJ is the one I said was behind the assination from the get- go and I am no genius. Oswald, or any one else, could not have fired all the shots they claimed even without a scope from the rifle found in rhe given time. With a scope it is even harder to fire with any accuracy in the given time frame.. Also, isn’t it handy have a man,dying from cancer, kill Oswald in front of several l law officers. Our
        greart grandchildren may see this proven as we feel.

  21. Frankie Baby says:

    Are we seeding the rain so we can reap the whirlwind? This stage-management of the economy is leading to the disruption of the exchange values of currencies of other countries. When the inflation pushes bread to $16/loaf, and gasoline to $8.00-$10.00/gallon, and when the US Dollar is no longer the preferred currency of the world, and violence and demonstrations erupt all over the country, are going to experience martial law? Looks like martial is being planned already, just as martial law in the Philippines in 1969 was planned as soon as the President was elected in 1964.

  22. Bernard B says:

    A very intelligent bunch or replies to the very intelligent Shah. The problem is, outside of this group lies the average American, who is dumber than a box of rocks. They do not know, they will not take the time to know and they do not care. I am afraid we are pass the tipping point of correcting this. I think the government is arming itself with ammunition and swat equipment for when they cannot continue to pay the number of people in the handout line. the government is a starving beast that will protect itself number one.

  23. FrasIssunset says:

    They should have the brains not to encourage the greedy lyeing banks who are THE cause of massive debt. Production of goods generates money in the economy . These lazy bully banks are not produceing anything. More burden on an economy which is in unprecedented perilous trouble frank

  24. Mr D. says:

    Greed and greedy people will always find a new way to screw you. Drive a stake through it’s evil heart. The revolution is now! Elect someone who will stop the insanity.

  25. Ron says:

    Shah,
    What we are seeing is the natural outcome of central banking. Central banking is a criminal enterprise on a global scale. The last person to take them on and win was Andrew Jackson and he was called “crazy.” Likewise for Ron Paul. The only solution is education and a refusal to do business on their terms as well as electing more like Ron and Rand who are willing to take them on. Other solutions are private (or infinite) banking and credit unions.
    Thanks for a great column.

  26. Melville Yuen says:

    A gold analyst wrote that JP Morgan has a large position in gold futures long contracts. Bernanke couldn’t begin tapering until JP Morgan takes profits and go short. I also think that the spring take down in gold prices was about influencing Iran’s presidential elections as Iran uses physical gold for foreign trade.

  27. Jim Morris Sr. says:

    The human experience is a cesspool, and the USA is one of the biggest turds therein. Scientists, and those who applaud the scientific processes are by far the few sane humans to be found amongst the masses who pollute this fair planet with their very existence. The blindly religious, the war mongers and the greedy power-hungry types who invariably thrive in cesspool environments are the scourge of what was long ago a tiny speck of an Eden-like beautiful blue planet spinning through the vastness of time and space. It still appears as such, but a closer look with ye old magnifying glass reveals the reality of a planet gone bad….at least the human element thereon. Eden-like pristine-ness will only return to fair Planet Earth when the like of a cosmic hit removes the stench of the human existence completely. Too bad most other species will be lost, as well, but maybe evolution will get it right the next time. One can only wonder. The blessing of a humans existence is the brevity of it. Who in their right mind will not be so jaded by the time they have lived up to the one-hundred year span which we have attained as a basic limit of our life, at present, to want to continue living, longer yet, with the medical advances currently in the works? When, and if, scientists are able to make possible mass brain scrubs or complete replacements thereof, for our entire civilization will life become tolerable beyond our current life expectancy. Isn’t that word civilization a farcical creation to beat all?

    • Brad M says:

      Wow ! How kind ! Are you actually a Bilderberg member ? If so, please tell us how you are planning to bring it all down and kill us. Believe me, history shows well that some of the greatest frauds and cess pools on this planet were created by the supposedly well meaning “intellectual elite”.

  28. Steve B says:

    Interesting take on the Fed’s decision, but I would suggest there are other compelling factors that explain the decision, including the downward revision of employment numbers for recent months, the decisions facing a dysfunctional Congress in the immediate future, and perhaps most importantly, the effect of the recent spike in interest rates had on housing, the most important segment of the economy from the standpoint of recovery.

    • R3P3T3 says:

      Right Steve, and with rising rates in the U.S., the BRICS have been hurting. But with our government and the FEDS quest for a one world economy, they had to take care of them and it worked . All their currencies spiked against the dollar after Bernankes announcement.

  29. MartinMayer says:

    The reason the Feds didn’t taper
    Is hidden behind B.S. vapor!
    We taxpayers thank
    Every innocent bank
    While we wait for their very next caper!

  30. eric taylor says:

    No one wants to rock the boat, especially with our debt falling towards balance as long as the economy stays on track, and the disposable income in America is among the lowest in the developed world, and so just including Home Health Care workers, and later Waitresses under the minimum wage umbrella would stimulate the economy, but raising the minimum wage too fast would derail economic growth, and it would be nice if we could bring back half of our domestic content manufacturing, but a gradualist policy is still in order—Don’t Rock The Boat ( I can’t swim very well)!

  31. Ethan Hamilton says:

    Absolutely breathtaking! Marvelous work, Shah! You are my hero. I am glad somebody has the decency to shed the light on those criminal bankster blood suckers.

  32. Jack B says:

    Actually Shah your theory is interesting but I disagree. The real reason I believe that the Fed didn’t taper is that they put out the trial balloon in May about the possible tapering of their bond buying and interest rates increase 50% in 3 months. Tapering would only accelerate that interest rate increase and make it more difficult to cover our ability to pay its huge interest payments due on outstanding debt. The rollover of debt is approximately $100 Billion per month. An increase in rates could put our debt interest payments alone over a trillion per year. The Fed is boxed in. It can’t allow interest rates to creep up more, so the taper was only a caper. I guess they should have sold more long term debt that didn’t roll over as often.
    I hate the Banks as much as you so keep killing them anyway. Good work.

    • R3P3T3 says:

      And don’t forget, the Feds bond assets are over $3tril. now and if rates go up, their bond values go down, so they will bankrupt themselves. OK, maybe not possible, they can just print more money, but the world will notice, the bond sell off will happen and the dollar will crash. They really have boxed themselves into a corner is right.

  33. Robert in Canada says:

    No question that American bankers operate like organized crime.

    But it was Bill Clinton and his gang who enabled bankers to commit their crimes.

    Clinton changed the mortgage rules and lending regulations so anyone could get a mortgage, and told banks they had to go along with the changes – OR ELSE. In return, the bankers would be held harmless from any consequences of their actions.

    The bankers were like Clinton’s foot soldiers carrying out orders.

    So now the whole world is struggling to overcome the problems Clinton’s gang created.

  34. Dave B says:

    “This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President Woodrow Wilson signs this bill, the invisible government of the monetary power will be legalized….the worst legislative crime of the ages is perpetrated by this banking and currency bill.” Charles Lindbergh Sr. – Member of the U.S. House of Representatives.

  35. Eric says:

    Thank You Shah for telling it like it is. I believe you will also agree to one more motive for the Fed for avoiding instituting even a token tapering. They are faced with the specter of the eventually fatal rise in bond interest rates. Tapering would be like gasoline being thrown onto an already hopelessly out of control fire, accelerating it. When those interest rates inevitably reach the fatal tipping point down the road we will no longer be able to pay the interest on our debts and the USA will default. That means bankruptcy and all its hellish consequences, especially for the clamoring masses looking to government for solutions.

  36. Eric says:

    It is true what one commentator said above. The sickness is eventually its own cure via the fait acomplie of ultimate default. We are running out of road after kicking the can down the road just a little farther over and over again. Addison Wiggin and Bill Bonner rightfully dubbed us the ‘Empire of Debt’ which was also their best selling books title first published back in the early 2000’s along with the follow on book titled ‘Financial Reckoning Day’. The reckoning is far from over and the ‘cure’ is one helluva nightmare.

  37. dan says:

    The Fed started in 1913 and has slowly taken over the leadership of the country. Nothing happens unless the banksters what it to. There are more bankster puppets than good politicians in government to allow a country to flourish. Our trade, our wars and our bombs are part of their plan. I hope we can find a few good people to reverse what the Fed has done. The fines that are paid should go to the investors who lost money as a result of JPM and the others.

  38. Thank you FED's says:

    The mere fact of not doing anything at all “not to taper” has given me more time to buy more Gold & Silver!
    The only thing the Fed’s have done is……buy more time before the whole banking system goes over the cliff.

    Thank you Ben and thank you to the bankers…

    JPMorgan Chase & Co.

    Bank of America Corp.

    Citigroup Inc.

    Wells Fargo & Co.

    Goldman Sachs Group Inc.

    THANK YOU!!!!

    Kind regards,

    HNW = High Net Worth Individual!

  39. Mike S says:

    Bankrupcy! It’s time to use it for its intended purpose…Banks are Ruptured and should have automatically led to Bankrupcy back in 2008!!!!
    Here we are still talking about the same corruption issues some 5 years later when the situation was capable of resolution by the Government allowing the “Free Enterprise” system to automatically do its own checks and balances…let them go bankrupt then Shareholders and Depositors will be a lot more careful as to where they invest in the future and the “Owner / Directors” of such firms would feel the direct consequences of their fraudulant actions in their own hip pocket, or with jail time!
    Yes, a big short term financial and economic hit would have occurred world wide, but it would have worked its way through the system by now instead of Governments continually “kicking the can down the road” for someone else to eventually take all the pain!
    What a mess…yet it is us “the non vocal majority” that have the numbers to change the system and make all Politicians / Government Bureaucrats etc, abide by all the laws of the land and not have their own self serving “Parliamenary Privileged” laws seperate to ours!
    One law for all and all laws for one!

  40. R3P3T3 says:

    And if you all really want to get your blood pressure up, errrrr, I mean higher, Just google “Rolling Stone/Matt Taibbi/The real housewives of wall street”

  41. Brad M says:

    We are in a bad position. If the Fed quits the stimulus, it ends very ugly. If the Fed continues the stimulus much longer, well, it ends very ugly. If the Fed does quit the bond purchasing program, interest rates will certainly rise. With current levels of debt, even a modest increase in int rates could cause serious trouble. Plus, even at just the thought of it, look at various market reactions. It is unfortunately the glue holding it all together for now. If the Fed continues QE, as is now stated, eventually inflation is an absolute certainty, Maybe not hyperinflation, but how damaging would 12-15% a year inflation over 5 to 6 years be to our country right now? Very damaging ! Looking at many current economic factors right now, there is no painless way out of this one kids. It maybe more than ten years before things are “normal” once again, provided disaster or war does not accompany all this.

    • Jim Cossitt says:

      Brad, Most of what you say is dead on, but it is unsistainable. The QE3 thing pumps about $1T / year into the economy and the deficit of the US government pumps in the same. So our lifestyle and standard of lving is propped up by $2T / year of unsustainable (over the long haul) spending.

      I agree with you: it is going to end, it is going to end ugly. We diverge in that the longer we keep it going, the uglier it will end. Politically, no one (Pres, Congress, Fed chair) wants to preside over a 20-40% drop in US living standards, but it will happen and the longer the QE3 dance goes on, the uglier the ending will be.

  42. Jerry says:

    I only wish I had bought more option Puts, and sooner. They (JPM) probably consider the fines, etc., they have to pay as trifling amounts, but I hope the stockholders sock them Hard! Couldn’t be a more deserving target. The most CS aspect really was treatment given standard bank customers. What shysters!!

  43. Craig says:

    Empire to republic to empire… And back again… It takes a while… Roman republic to Roman Empire … Debase the currency… War with everyone… Get fed up… Go somewhere else and start a republic… It becomes an empire… US, AUstralian, New Zealand, etc.. Wealth accumulates in strong hands… Population dwindles… What can you do… Get a bigger picture… Make as many friends as you can and listen to the voice of older, wiser men and women..
    But there is a simultaneous dissolution of the economy while some are working on the new economy… Hold your breath it’s going to be a great ride…
    Check out the Paris-Orleans company and it’s wealth transfer managers who sell the assets of giant multinationals and federal and state governments (or rather public) assets when they really don’t have to…. As per page 29 of their 2011-12 prospectus…
    Thanks for drawing our attention to the problems Shah…

  44. Bob says:

    Excellent article but this is to be expected because the investment banks control the Fed Reserve. Surprisingly and what even most US citizens don’t know is that the Fed Reserve is the only privately owned central bank in the entire world. That in itself is ludicrous and begs for both a rewriting of the Fed Reserve Act and a real time audit of Fed Reserve activities. Then there is the Fed Reserve’s massive short position in gold to bail out their investment bank patrons who have to make good on the gold entrusted to them that they had leased out.

  45. Harris Klein says:

    I don’t understand why my supposedly posted earlier comments were omiitted and all shown were name and email.I’ll try to remeber all I said.
    “I have said that LBJ was behind the JFK assination from the getgo and I am no genius.It is impossible to fire the number of shots with any accuarcy they say Oswald fired from the rifle reported-bolt action with a scope. Even without a scope it could not have been done. Also, it was great to have a man dying from cancer available to kill Oswald in front a several law officers.Maybe our greatchildren will see a full and honest official report.”
    Harris

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