Federal Disaster Area

In the May 20 edition of Metro Pulse, Joe Sullivan argues that Wall Street's mega-banks have been unfairly demonized for the 2008 financial meltdown ["Demonizing Wall Street," Insights].

Mr. Sullivan states that "the prime cause of the crisis was the subprime mortgage lending binge that begat the housing bubble that burst with calamitous effects." This essentially mirrors the GOP spin—blame Chris Dodd and Barney Frank for the whole thing.

Mr. Sullivan concedes that "Wall Street aided and abetted them (the subprime lenders) by bundling their toxic loans into what became known as collateralized debt obligations and selling them to institutional investors around the globe."

It was the bundling of the toxic loans that created the crisis—a financial black hole of debt that the Federal Reserve and other central banks continue to pump fiat currency into, by creating money out of thin air. Unfortunately, the financial black hole of debt cannot be filled by creating more worthless fiat paper currency backed by nothing but the empty promises of a bankrupt federal government. And we now know that the bailout money was not even used to buy up the toxic assets or to pump liquidity into the system. Instead, it sat in accounts, earning interest income for the mega-banks.

Prime Minister Merkel of Germany is advocating the banning of derivatives trading because her nation has determined that derivatives are the real cause of the meltdown. An excellent article detailing how giant Wall Street investment banks, such as Goldman Sachs, manipulated markets and made money as they pumped up the bubble and made money as it collapsed can be read in the March 4, 2010, Rolling Stone article entitled "Wall Street's Bailout Hustle." The really bad news is that the big banks are busy recreating the conditions for another crash.

As long as the banking cartel known as the Federal Reserve retains its power to coin money and regulate the value thereof (the constitutional power that Congress abdicated by passage of the Federal Reserve Act in 1913), the American people will continue to be held hostage by these criminal banksters, who manipulate our financial system for personal gain. I urge readers to buy the book The Creature From Jekyll Island by G. Edward Griffin, in order to understand the Federal Reserve and its criminal formation and nature. End the Fed!

Douglas Freeman

Knoxville