Treasury Department Releases First Report on Current U.S. Financial System…

On February 3rd 2017 President Trump signed Executive Order #13772 calling for a system of reviews, first due in 120 days, of the U.S. financial, investment and banking system for possible reform. Today Treasury Secretary Steven Mnuchin released the first in a series of reports (full pdf below) outlining the U.S. Financial System.

Given the breadth of the financial system and the unique regulatory regime governing each segment, Treasury will divide its review of the financial system into a series of reports:

• The depository system, covering banks, savings associations, and credit unions of all sizes, types and regulatory charters;
• Capital markets: debt, equity, commodities and derivatives markets, central clearing and other operational functions;
• The asset management and insurance industries, and retail and institutional investment products and vehicles; and
• Non-bank financial institutions, financial technology, and financial innovation.

Today’s report covers the depository system.

The full report is below and it is rather extensive.  Here’s my initial review of the content with the report embedded at the bottom.

Back in July 2010 when Dodd-Frank banking regulation was passed into law, there were approximately 12 to 17 banks who fell under the definition of “too big to fail”.

Meaning 12 to 17 financial institutions could individually negatively impact the economy, and were going to force another TARP-type bailout if they failed in the future. Dodd-Frank regulations were supposed to ensure financial security, and the elimination of risk via taxpayer bailouts, by placing mandatory minimums on how much secure capital was required to be held in order to operate “a bank”.

One large downside to Dodd-Frank was that in order to hold the required capital, all banks decreased lending to shore-up their liquid holdings and meet the regulatory minimums. Without the ability to borrow funds, small businesses have a hard time raising money to create business. Growth in the larger economy is hampered by the absence of capital.

Another downstream effect of banks needing to increase their liquid holdings was exponentially worse. Less liquid large banks needed to purchase and absorb the financial assets of more liquid large banks in order to meet the regulatory requirements.

In 2010 there were approximately twelve “too big to fail banks”, and that was seen as a risk within the economy, and more broad-based banking competition was needed to be more secure.

Unfortunately, because of Dodd-Frank by 2016 those twelve banks had merged into only four even bigger banks that were now even bigger risks; albeit supposedly more financially secure in their liquid holdings. This ‘less banks’ reality was opposite of the desired effect.

The four to six big banks (JP Morgan-Chase, Bank of America, Citigroup, Wells Fargo, US BanCorp and Mellon) now control $9+ trillion (that’s “TRILLION). Their size is so enormous that small group now controls most of the U.S. financial market.

Because they control so much of the financial market, instituting a Glass-Steagall firewall between commercial and investment divisions (in addition to the Dodd-Frank liquid holding requirements), would mean the capability of small and mid-size businesses to get the loans needed to expand or even keep their operations running would stop.

2010’s “Too few, too big to fail” became 2016’s “EVEN FEWER, EVEN BIGGER to fail”.

That’s the underlying problem for a Glass-Steagall type of regulation now. The Democrats created Dodd-Frank which: #1 generated constraints on the economy (less lending), #2 made fewer banking options available (banks merged), #3 made top banks even bigger.

This problem is why President Trump and Secretary Mnuchin are working to create a parallel banking system of community and credit union banks that are external to Dodd Frank regulations (less than $10 billion asset based) and can act as the primary commercial banks for small to mid-sized community businesses.

The goal of “Glass Steagall”, ie. Commercial division -vs- Investment division, is created by generating an entirely new system of banks under different regulation. The currently remaining ten U.S. “big banks” operate as “investment division banks” per se’, and the lesser regulated community banks/credit unions operate as would be the “Commercial Side”.

Instead of firewalling an individual bank internally within its organization, the Trump/Mnuchin plan looks to be setting up a system for firewalling the banking ‘system’ within the U.S. internally. [See page 132 appendix “B” Table of Recommendations]

Hope that helps to make sense as you review the first of the reports:

.

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120 Responses to Treasury Department Releases First Report on Current U.S. Financial System…

  1. IndiaMaria says:

    Very much appreciate your expertise on this Sundance.

    Liked by 21 people

    • Ned says:

      I also thank you for wading through this and isolating the meat and the effect. After awhile these issues can appear very convolted. MAGA THANK YOU!

      Liked by 7 people

    • The small, community banks weren’t big investor’s anyway, they just just caught up in the regulations that they shouldn’t have been. They dealt with local contractor’s and such. Never in the investment side of lending.

      Liked by 5 people

    • It’s good to see that the adults are in charge again.

      Liked by 3 people

    • Good article, but the real problem is fractional reserve banking, which causes depositor money to be lent out without his/her consent as if depositor money was not the property of the depositor. That’s where the bank runs happen because banks promise they have the money when they don’t (its lent out and representing otherwise is fraud). Interest rates become artificially reduced because of this unsustainable lending practice, leading to a boom/bust cycle. When the bust comes the entire banking system gets in trouble because these loans suddenly cannot be repaid.

      We are on a fiat money central banking model in part because we are either too ignorant or too cowardly to demand an end to the unethical practice of fractional reserve banking. Instead the government uses the former systems to bail out the banks every time they get overextended due to this practice, which we end up paying for anyway through currency depreciation and higher taxes.

      We gotta stop hacking at the branches of evil and attack the roots.

      Liked by 5 people

      • evergreen says:

        Bingo.

        Like

      • jstanley01 says:

        There is nothing unethical about fractional reserve banking. The deposited money that they lend out is backed by the assets against which they have a lien.

        Liked by 1 person

        • And what happens when the lending bubble ends and the economy crashes? That’s right the assets held as collateral decline in market value below the value of the (fractionally reserved) loans. Think it through.

          Like

        • Moreover, it is inherently unethical to lend out depositor money without formal consent. Why do banks fail to offer secured accounts where you do not automatically become an unsecured subordinate lender to the bank? People would be willing to pay for that security from their money “disappearing” in a bank failure, and yet nothing like it exists.
          You do not address that fundamental issue of property rights.

          Liked by 1 person

        • Cruella de Ville says:

          JStan: Wake up ! ! Our banking system is very unethical. Large banks only have about 2-3% capital (deposits) for the 98% they loan out – and the spread between interest paid to the depositor and what is collected from the loans is shameful!. What if everybody that deposited their money came to the window and wanted to withdraw it?
          But the worst thing about our banking system is that we have to “borrow” every dollar (with interest) from the Federal Reserve, which is a private bank cartel…..when in fact our Treasury has the ability to issue it’s own money debt-free. This scam was passed by our congress in the dead of night over a hundred years ago….through bribery and extreme manipulation. No wonder our economy is in such trouble and the Banksters control the world !

          Liked by 2 people

        • Aguila2011 says:

          Banking since it’s inception has been based on “fractional reserve” funds management. I agree with you jstan, banks were there to take in funds, pay interest on said loans which was income made from interest charged on loans from funds deposited. The “fractional reserve” was the amount banks calculated they needed to keep on hand to handle the flow of cash, the velocity, in the system in the local economy and the bank could be responsive to it’s depositors/customers.
          What has totally screwed the depositor is the large banks being able to raid and now, since the demise if Glass-Steagall, gamble with your money without any oversight, and have their asses covered by the taxpayer. You want to talk about a ponzi scheme, well, there you have it.
          So now banks have shrunk from 12 TBTF to 4, and just how did that happen? Was there no oversight or anti-trust review within the Dodd-Frank crap-stew to protect the public? Nah! Who give a fuck! No they really have TBTF squared!!
          Well, I say that unlike some anti-trust efforts like breaking up Google, Amazon and some others, these four TBTF Banks need to be broken down into state banks and a Glass-Steagall protection put into effect to keep Wall Street gamblers grubby fingers off of small depositors money. This is out of control and is too much. Since 2008 and Bernie Maddoff, people need to hang. Just my opinion. That is the best regulatory prescription you can offer, not any of this “oversight” stupidity that politicians and lobbyists live for.

          Come on Sundance, how about chiming in here and clarifying for these rubes who here “fractional reserve banking” and think they know what ails the system.

          Liked by 2 people

          • jstanley01 says:

            I knew I would stir up a hornet’s nest, but that’s okay. It ain’t the first time. Of course there is a lot wrong with the system, but fractional reserve banking is not the basic problem. Yes, the money you deposit is loaned out, but it is backed by the assets that guarantee the bank’s loans.

            For a simplified illustration, if you deposit money in a bank, and the bank turns around and loans your deposit out on a mortgage, what backs your deposit? The liquidation value of the house does. Not “nothing,” like people against fractional reserve banking always like to rant about.

            In fact, I would go so far as to say that fractional reserve banking is the financial innovation that best allows the money supply to match an economy’s potential growth. Of course crashes have occurred under fractional reserve schemes, when asset prices have crashed. But asset prices have crashed under all kinds of money and finance regimes, so to blame it for crashes does not stand up to the evidence.

            Read Colonial history. The problem back then was too little money, not to much. Imposed by the British to keep their American colonies from developing too much. That’s why we’re on the dollar, not the pound. Because the Yankee traders earned hard money in trade with the Carribean.

            Like

            • Cruella de Ville says:

              JStan:
              These are valid considerations in ANY banking system. But here is the central issue:
              Who controls the banking system and its policies – and therefore, to whose benefit do those policies (and profits) redound? Currently a private banking cartel (The Federal Reserve) controls the sovereign (so it really isn’t !) banking system in the U.S. They make immense profits and increasingly control – from behind the scenes – our country.
              Who controls the quantity of currency and interest rates in this system should belong to the country’s treasury – NOT AN OUTSIDE PRIVATE BANK ! With this kind of system that we now have, these Bankers have almost unlimited money to create mischief! – sound familiar?
              Bill Still is the expert on this subject and has several very popular documentaries on YouTube.

              Liked by 1 person

      • G. Combs says:

        Actually you are completely missing the problem with Fractional Reserve Banking. To put it bluntly Fractional Reserve Banking is nothing but legalized THEFT!

        These are very important concepts that many don’t understand so please read carefully:

        Bankers make an entry in a ledger and Voila! YOU now OWE them your labor and/or your property!

        Nelson W. Aldrich, United States Senator, at a New York City dinner speech on October 15, 1913 (IV Proceedings of the Academy of Political Science), repeated Daniel Webster’s words when he condemned the Second Bank of the United States.

        Of all the contrivances for cheating the laboring classes of mankind, none is so effectual as that which deludes them with paper money. It is the most perfect expedient ever invented for fertilizing the rich man’s fields by the sweat of the poor man’s brow. Ordinary tyranny, oppression, excessive taxation, these bear lightly on the happiness of the community compared with fraudulent currencies and the robberies committed by depreciated paper. Our own history has recorded enough, and more than enough, of the demoralizing tendency, the injustice and intolerable oppression on the virtuous and well disposed, of a degraded paper currency, authorized by law, or in any way countenanced by Government.

        The Federal Reserve Act of 1913 was originated by Nelson W. Aldrich as the Aldrich Bill so I am sure there was much gleefulness upon repeating these words since the Banksters were about to get this nasty Albatross hung around the necks of Americans along with the Amendment allowing direct taxation by the federal government.
        …………

        FRACTIONAL RESERVE BANKING TODAY.</b.

        #1. The depositors money IS NOT LENT OUT! Originally that was true however since the 1960's the banks CREATE BANK SCRIPT out of nothing.

        *****US Banks Operating Without Reserve Requirements*****
        “Banks typically have 3% of their assets in cash in order to meet customer needs. Since 1960, banks have been allowed to use this “vault cash” to satisfy their reserve requirements. Today, bank reserve requirements have fallen to the point where they are now exceeded by vault cash, which means lowering reserve requirements to zero would have virtually no impact on the banking system. US banks are already operating free of any reserve constraints. The graph below shows reserve requirements falling to zero over the last fifty years.[…]”

        Example from DOLLAR DECEPTION: HOW BANKS SECRETLY CREATE MONEY
        “[…]First National Bank of Montgomery vs. Daly (1969) was a courtroom drama worthy of a movie script. Defendant Jerome Daly opposed the bank’s foreclosure on his $14,000 home mortgage loan on the ground that there was no consideration for the loan. “Consideration” (“the thing exchanged”) is an essential element of a contract. Daly, an attorney representing himself, argued that the bank had put up no real money for his loan. [that would be the money from a depositor in payment for his labor] […] Drexler hadn’t given much credence to the theory of the defense, until Mr. Morgan, the bank’s president, took the stand. To everyone’s surprise, Morgan admitted that the bank routinely created money “out of thin air” for its loans, and that this was standard banking practice. “It sounds like fraud to me,” intoned Presiding Justice Martin Mahoney amid nods from the jurors. In his court memorandum, Justice Mahoney stated:

        Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis, . . . did create the entire $14,000.00 in money and credit upon its own books by bookkeeping entry. That this was the consideration used to support the Note dated May 8, 1964 and the Mortgage of the same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law or Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note.

        Justice Martin Mahoney
        “The court rejected the bank’s claim for foreclosure, and the defendant kept his house. To Daly, the implications were enormous. If bankers were indeed extending credit without consideration – without backing their loans with money they actually had in their vaults and were entitled to lend – a decision declaring their loans void could topple the power base of the world.[…]

        Justice Mahoney, who was not dependent on campaign financing or hamstrung by precedent, went so far as to threaten to prosecute and expose the bank. He died less than six months after the trial, in a mysterious accident that appeared to involve poisoning[…]”
        ………..

        So where does the value of the new Bank Script come from?

        Mises and Gary North explain:

        New money does not appear magically in equal percentages in all people’s bank accounts or under their mattresses. Money spreads unevenly, and this process has varying effects on individuals, depending on whether they receive early or late access to the new money

        It is these losses of the groups that are the last to be reached by the variation in the value of money [the worker whose wages are devalued while the prices of goods increases] which ultimately constitute the source of the profits made by the mine owners [in the case of gold or Bankers in the case of bank script] and the groups most closely connected with them [the large corporations or Corporate Raiders like Romney.]

        This indicates a fundamental aspect of Mises’s monetary theory that is rarely mentioned: the expansion or contraction of money is a zero-sum game. Mises did not use this terminology, but he used the zero-sum concept. Because the free market always maximizes the utility of the existing money supply, changes in the money supply inescapably have the characteristic features of a zero-sum game. Some individuals are made better off by an increase in the money supply; others are made worse off. The existing money is an example of a “fixed pie of social value.” Adding to the money supply does not add to its value.
        https://www.lewrockwell.com/2002/01/gary-north/mises-on-money/

        Sorry that is long but I hope it clears up any misunderstandings and shows just how EVIL the Banksters and our Congress really is. Less than a dozen Congress Critters have EVER gone after Fractional Reserve banking.

        A PRIMER ON MONEY
        COMMITTEE ON BANKING AND CURRENCY
        HOUSE OF REPRESENTATIVES

        WRIGHT PATMAN (D) Chairman 1964
        is a very good read by one of those few honest Congress Critters.

        Liked by 3 people

        • Well it is a lesser known fact that depositors can “spend” their electronic deposits even though the bank has actually lent out their money. It is a complex scheme that allows, to out it simply, the private banks to effectively inflate the money supply even though they cannot formally counterfeit money. But yes this inflationary activity through the technicalities of fractional reserve banking is the true cause of the boom/bust cycle that I referred to in passing (absent outright money printing by the central bank).

          Liked by 2 people

        • Aguila2011 says:

          No, the FED is corrupt and doing illegal machinations with the economy by implementing their so-called brilliance. NOT.

          Liked by 1 person

        • Orygun says:

          It also shouldn’t be lost on us the investors, that every crooked politicians first move is to leave politics and start up a bank. That should tell you all you need to know about banks. It is a great scheme for fraud and laundering money from other “activities”.

          Every banking regulation insures the bank has no liability. An easy one is look what happens when someone writes you a bad check. You are charged a fee. That is ridiculous.

          Like all the legislation in Congress, anything to do with the banking industry is done by the lobbyists for the banks.

          Like

        • jstanley01 says:

          Fiat money versus gold-backed and silver-backed money has nothing to do with fractional reserve banking. Anyone who conflates the two issues is either ignorant or deliberately deceptive. Fractional reserve banking was in operation long before the U.S. went to fiat. I am in favor of going back to a gold-backed dollar.

          Like

          • Cruella de Ville says:

            Hard metal backed currency is not the answer – it is a diversion from the real problem…which is WHO controls the system. Fiat simply means under the color of government – like the color of law. Under our current system the dollar’s value is based on the full faith and credit of the American people. Theoretically if you could take total assets and productive capacity of every entity in the United States and divide it by every dollar – that would be the value of the dollar. There is nothing wrong with valuing your currency this way but the current system is being abused by the Banksters who administer it. These greedy actors have run our banking system into the ground for their benefit. The U.S Treasury needs to control its own money system !
            The problem with gold/silver backing is that can be manipulated, as it is now, by the same Banksters. Again the issue: WHO controls. U.S. MUST control its own system.

            Like

            • jstanley01 says:

              That will work too, and can also be screwed up royally. But the topic is fractional reserve banking, which nobody in their right mind is going to eliminate. So, I’m not really worried about that. What worries me is how little otherwise sound-thinking people know about how commerical banking is supposed to operate. And as a result, they get bamboozled by cranks.

              Like

      • The problem is that our entire banking and economic system is built on the principle of fractional reserve banking, and there is no easy way (that I know of) that we could ever extricate ourselves from this… there is literally not enough cash in the entire world to payback all the money that is currently “borrowed”, which we have do do before we could switch to any new kind of system…

        Liked by 1 person

        • jstanley01 says:

          Not true. You have to look at the balance sheet of the entire system. If $1000 of my on-deposit money goes into a mortgage, the deposit asset that the seller gets when he collects and puts his from the sale money in his bank is equal to the debit liability incurred by the homebuyer.

          Like

  2. Left_at_Dunkirk says:

    Just experienced the effects of the big banks restraining capital at the local level (North Florida/property investing). We were flat out told by several reps at the “too-big” banks that for a small business/investor, going to a local bank was the best (only) option right now.

    Liked by 7 people

    • Which is and will be subject to the amount of money the local bank can actually “afford” to loan a small start up in need of capital- or will. A small company that is established and looking to grow will end up first in line every time.

      And again, the monopoly problem still remains. dodd-frank and four to six “big banks” controlling what is now $9 trillion but will only grow… with apparently at this point no way to get rid of either thanks to uniparty.

      Because globalism. The globalist bankster cartel can afford to wait out this Trump presidency be it four or eight years and then the four to six “big banks” will start buying up the parallel banking system.

      We should all know by now that once evil creeps in and installs itself it never goes away. The not at all “federal” “reserve” comes immediately to mind.

      Liked by 6 people

      • Left_at_Dunkirk says:

        Agreed. In our case, our normal banker (big bank) tried to get us $$$ but was over ruled by corporate, as they just weren’t doing any small stuff at all. And yes, the parallel system will be swallowed as soon as the uni-party can be put into play by the big boys at a future date.

        Just remembering the days when my hometown had quite a few local banks, with one named after the city itself. Now, most have been swallowed whole.

        Liked by 6 people

        • Sylvia Avery says:

          Yes, me too. I can remember even further back in time when we were paid with a thing called a check, a paper document, that you actually drove to the bank, parked your car, walked into the bank to cash or deposit it, and the teller would smile and wave and say “Hello, Sylvia! How’s your Mother? I missed her at choir practice.” Gone with the wind.

          Liked by 10 people

          • Your Tour Guide says:

            In Ohio and many other states you could tell which big metro area you
            were in by the bank signs you saw. You saw different banks in Cincinnati,
            Dayton, Columbus, Toledo, even smaller metro areas like Springfield ( 55,000
            back then.).

            Liked by 3 people

          • boogywstew says:

            Well … I can remember even further back in time when there was this stuff called cash, sort of like rectangular pieces of lettuce that we stuck in the bank and the teller would smile and ask, “Hey Stew, how’s your mom? When’s her next parole hearing?” More than her Thompson, Mom loved the license plates she made.

            Liked by 6 people

            • Sylvia Avery says:

              Dude, I am trying to eat my Caesar salad. Now I have salad dressing and croutons on the floor. Thanks for the laugh, though!!!

              Liked by 3 people

            • Fe says:

              Hahahaha 😂😂😂 Treepers are the funniest folks around!

              Liked by 4 people

              • ladypenquin says:

                We’re also some of the smartest folks around. I mean not just intellectually but with the ability to constantly learn new things. While finance and banking are complex issues, I just sat here and read every comment and increased my knowledge base a little, or at least have more awareness. That’s what makes people smart… folks willing to always learn and consider new information.

                No one has addressed the fact that any money we do have in the bank earns almost no interest. In fact, these big banks now try to charge fees for “keeping” that money. How does this happen???

                Liked by 1 person

      • wolfmoon1776 says:

        Vigilance. We’re gonna need some. For a LONG, LONG time.

        Liked by 9 people

      • Ned says:

        Perhaps it is time to break up the monopolies. AT& T was broken up fro similar reasons. I am patient and realize Trump has an over flowing plate and doing his best to implement campaign promises. So don’t take my response as a criticism. I still shudder when I think about HiLIARy as President. Hopefully they will, “lock her up”.

        Liked by 1 person

        • boogywstew says:

          Aren’t Amazon and Google monopolies … speaking of AT&T and monopolies being broken up? Is the secret to keeping a monopoly the donating only to left wing causes?

          Liked by 3 people

          • Sam says:

            Boogywstew,

            Amazon and Google pay the protection money to the Uniparty candidates so they will be left alone. Errr, meant they donate to political candidates. Yeah, that was it. (Sarcasm)

            Liked by 2 people

    • FrankDodd just made Wall Street banks larger… we have investment properties as well, but we own them out right because we don’t like debt, but love the passive income.

      Like

    • f104 says:

      Dear Left At Dunkirk, do yourself and the country a favor and leave the big banks at Dunkirk! Why give them any of your business? I do real estate and I use a credit union. Find a small local bank and support Your community.

      Like

  3. FofBW says:

    Way above my pay grade. Glad you are on top of it in you actuary way Sundance.

    Liked by 7 people

    • Sylvia Avery says:

      Gosh, me too FofBW. Makes my head ache. Still, I plodded through the Executive Summary and am grateful that Sundance made that understandable. Awfully glad to have the information. Awfully glad I don’t have to understand every jot and tittle or we’d be in even bigger trouble that we are now.

      Liked by 4 people

  4. Flight93Gal says:

    A very interesting read, indeed!

    If Treepers ONLY read the Executive Summary and its key objectives, this is the MAGA Roadmap to building a financial system for Main Street and NOT Wall Street:
    I copied the Executive Summary key bullet points below and in parenthesis, stated “how” those objectives are enabled! Thank you, Sundance!

    POTUS MAGA ROADMAP
     A. Empower Americans to make independent financial decisions and informed choices in
    the marketplace, save for retirement, and build individual wealth; (REMOVE THE FED FROM BAILING OUT WALL STREET THROUGH DEBT BUY BACK AND LET THE MARKET WORK!)
    B. Prevent taxpayer-funded bailouts; (STOP BAILING OUT BIG BANKS)
    C. Foster economic growth and vibrant financial markets through more rigorous regulatory
    impact analysis that addresses systemic risk and market failures, such as moral hazard and
    information asymmetry; (REDUCE REGULATIONS)
    D. Enable American companies to be competitive with foreign firms in domestic and foreign
    markets; (IMPLEMENT AMERICA FIRST ECONOMICS)
    E. Advance American interests in international financial regulatory negotiations and
    meetings; (IMPLEMENT AMERICA FIRST ECONOMICS)
    F. Make regulation efficient, effective, and appropriately tailored; and (REDUCE REGULATIONS
    G. Restore public accountability within Federal financial regulatory agencies and rationalize
    the Federal financial regulatory framework. ((REMOVE THE FED FROM BAILING OUT WALL STREET THROUGH DEBT BUY BACK AND LET THE MARKET WORK!)

    Liked by 24 people

    • Left_at_Dunkirk says:

      This one is the kicker – B. Prevent taxpayer-funded bailouts; (STOP BAILING OUT BIG BANKS). I have a very good friend who spoke at a mortgage re insurers conference a few years ago, and he basically told them that until they get of the type of moral hazard outlined in “B” that they were doomed to repeat the same disasters over and over again. Not only was he not invited back to speak, but was not invited back even as an attendee the following year.

      Liked by 5 people

    • MaineCoon says:

      I wish they would also remove the”bail-in” scenario.

      Liked by 1 person

    • mw says:

      Thank you!!

      Like

    • M33 says:

      Thank you for the summary!

      Like

    • Ned says:

      Excellent!
      Thank you too, Flight93 Gal!
      MAGA!

      Like

    • G. Combs says:

      “G. Restore public accountability within Federal financial regulatory agencies and rationalize the Federal financial regulatory framework.”

      A bit of back ground on that is found in the A PRIMER ON MONEY by WRIGHT PATMAN that I linked to above. It is actually well written and understandable by the layman.

      This Primer is from 1964 before Nixon closed off the gold exchange.

      This is very important. Although US citizens can not exchange Federal Reserve notes for treasury gold, official and semi official foreign banks could. This allowed the International Banksters to literally steal the formally privately held gold of American citizens.

      “Behind the Federal Reserve notes is the credit of the U.S. Government. If you happen to have a $5, $10, or $20 Federal Reserve note, you will notice across the top of the bill a printed statement of the fact that the US government promises to pay not the Federal Reserve promises to pay. [hence the Sixteenth Amendment allowing the federal government to tax US citizens ]Nevertheless most Americans to do not understand what the US Government promises to pay: American citizens holding these notes cannot demand anything for them […] Certain official or semiofficial foreign banks may exchange any “dollar credits” they may hold-that is, deposits with the commercial banks-for an equal amount of the Treasury’s gold. Americans themselves may not exchange them for gold . [pg 19]”

      Of the 19 Federal Reserve officials 12 are elected by bankers so HOW the money supply is increase and WHO gets the interest on the US treasury bonds can get very interesting.
      “The Federal Reserve officials can always decide to create a large portion of any increase in the money supply themselves, though, of course, a larger portion of the supply will always be provided by the private banks under present law. Still the larger portion of Reserve-created money, the more the U.S. Treasury benefits-because all income of the Federal Reserve after expenses reverts to the Treasury. Thus the Treasury receives a good share of the income earned from the Government securities purchased in Reserve money-creating operations.
      On the other hand, if the Federal Reserve officials decide that the increase in the money supply they want is all, or substantially all, to be made by the private banks, the private banks acquire and hold more Government securities than in the first case, and the interest payments on these securities go into bank profits. So, whether the Federal Reserve officials decide to favor the U.S. Treasury or the private banks does make a difference-millions of dollars of difference-in the amount of taxes you, I, and all other taxpayers must pay. After all, one of the biggest items of expense of the Federal Government is the interest it must pay on its debt.”
      [pg 36]

      In 1950 the Federal Reserve revolted and told the US government they would be henceforth be “independent.” In other words the US Government has ZERO control over the Federal Reserve!!! This is why when Ron Paul tried to get the Fed to tell where the taxpayer bailout went (to the EU) the Fed refused. They have also refused to give an accounting of the gold in Fort Knox.

      “In mid-August of 1950, however, the Federal Reserve raised the discount rate and short-term Treasury bills jumped toward 11/2 percent, although there were requests from the Secretary of the Treasury and the President for the System to continue a low-rate policy. It was later revealed by testimony of some of the Federal Reserve officials to committees of Congress that the Open Market Committee had held a meeting on August 18 and decided not only t o raise the discount rate, but to “go their own way” on the Government longer term bond rate as well, despite what the President, the Secretary of the Treasury, and the head of the Office of Defense Mobilization might do[….]
      Since the signing of the so-called accord, in March of 1951, this event has been widely interpreted as an understanding, reached between the Treasury and the Federal Reserve, that the Federal Reserve would henceforth be “independent.” It would no longer ” peg Government bond prices. It would raise or lower interest rates as it might see fit, as a means of trying to prevent inflation or deflation. These are understandings which have been grafted onto the accord over the years. Certainly, no such understandings were universal at the time the accord was signed.[….] At the end of 1951, then, the Federal Reserve had both self-proclaimed independence, as a result of the accord, and an operational policy which aimed at maximum credit effects through minimum changes in interest rates….. the Federal Reserve people were quite sure that they could do a better job of running the country than the President, and with only slight increases in interest rates.[…] It then added another string to its bow- the “bills only” policy. … Henceforth when the Treasury issued bonds or medium-term securities, it was to dump these issues on the market and watch the natural consequences-first a drop in bond prices, then a gradual recovery as the market absorbed the bonds. Any private rigging or manipulations of the market were to go without interference from the Federal Reserve, as were any speculative booms or panics short of a “disorderly” market. The “bil1s-only” policy had only one reservation: The Federal Reserve would buy long-term bonds in the event that the Open Market Committee made a findings that the market was disorderly.”
      [ full details starting on pg 103]

      Liked by 1 person

  5. Stringy theory says:

    zThanks, Sundance. I wad hoping we could see this TBTF banks forced to move from Wall Street to more Main Street, buy maybe this parallel approach has merit

    Liked by 2 people

    • The Boss says:

      It’s kind of like using Twitter and other social media sites to run a parallel operation against the MSM. The people hear the truth, and the MSM losers become whiners.

      Insofar as TBTF goes, I seem to recall that a quasi-monopoly known as AT&T was carved into little pieces known as Baby Bells. Carving up 4 banks into smaller pieces may not be as tough as it sounds.

      Liked by 1 person

  6. Comrade Mope says:

    You know, I like to read stuff like that. I’m the only person I know that actually reads the ToS before clicking “I agree”. But this Swamp Lingo is maddening. For example: Why would a bank need a “Living Will”? Also,if they insist on using acronyms could they at least spell it out once per page some I can find what they are talking about?

    Liked by 9 people

  7. bluesky says:

    I’m struck by Trump & Administration’s “business” approach…. their common sense actions reveal how badly Americans have been deceived for the last 25 years.

    Liked by 9 people

    • wolfmoon1776 says:

      This is actually happening everywhere, in other fields. There has been a steady removal of people who understand the business side, and pod-person replacement of them with lawyers and accountants. Kinda spooky.

      And then there’s Hollywood, but let’s not go there.

      Liked by 8 people

      • Ned says:

        I couldn’t agree more.

        I like Tom Cotton and he is a patriot but positively clueless about business. His solution to illegal immigration was to raise the minimum wage to $15.00 per hour to pay legal locals better and illegals would be out of jobs. Eye roll. That will only encourage businesses to hire MORE illegals to work under the table and grow illegals working here. He was trying to be helpful but didn’t understand the business side of it. Raising minimum wage pushes up the cost of the product/service and only makes illegals more attractive! He has a outstanding military background but no business savvy and again, he meant well.

        I think we need people that are more well rounded with actual business experience instead of career politicians that are increasingly disconnecting and push forward legislation and policies that only benefits them directly and will fund them for their re-election. It has become VERY corrupt. Forget term limits! We need educated voters and an educated populace. Term limits if that could ever happen would just have career politicians taking turns as Putin did with Russian elections.

        Liked by 1 person

        • wolfmoon1776 says:

          Interesting point! Yes – Cotton is the kind of guy about whom the men of my childhood would say “Nice kid, but a bit wet behind the ears.”

          Trump is running a meritocracy. He is keeping people who can do the job, and getting rid of people who can’t. People who KNOW THE BUSINESS – whatever that is. NOT political hacks, or “true believers” with thin resumes.

          VERY, VERY Trumpian. The people he is keeping, and his new appointments, all have something in common, I’ve noticed – they are REALLY good at what they do. They also get the job done without questions, they imaginatively do that without excuses, and they put the job before politics or background. That means they are people who have serious ability. And THAT is exactly what this government needs.

          AMERICA FIRST MEANS BUSINESS FIRST. Get the job done.

          Liked by 6 people

      • f104 says:

        I am in the insurance business and it has the same problem. Bean counters who know the price of everything and the value of nothing.

        Liked by 3 people

        • G. Combs says:

          AMEN!
          I used to run Quality/analytical chem Labs.

          I tore my hair out trying to get the bean counters to authorize incoming inspection in more than one factory. In one case it would have cost $64.00 in added reagents a year. Still no dice…. until the incoming raw material was crap and cost the plant millions. I had that happen at three different plants so it was quite frustrating. Although having the WRONG raw material blow out the wall in the warehouse at the last company was at least memorable.

          Liked by 2 people

  8. When will people realize that the trillions of dollars of debt was planned and executed by professional politicians NOT LOYAL to the United States. MANY OF OUR ELECTED AND APPOINTED REPRESENTATIVE ARE CRIMINALS

    Liked by 8 people

  9. sDee says:

    “”Growth in the larger economy is hampered by the absence of capital.””

    This “crisis” seves the globalsts at another level.

    I fight globalization at the local levels where urbanization is a tool of federal/UN agendas. Towns and cities find capital and bonds scarce unless projects and policies align with global and federal agendas like HUD, EPA, DoT and FEMA. Wealth is transferred via mass transit, high density housing, public infrastructure “investments”, erosion of property rights, no-bid single-source contracting and other types of public-private partnerships. All made possible by federal grants and constrained capital.

    This aspect of globalization then furthers itself. It concentrates wealth and populations dependent on government-aligned capital flow into areas that will vote for more of the same. Freemarket capitalism starves. Monopolies strengthen.

    The collusion between larger municipalities and Federal agencies is dangerous – bypassing state sovereignty.

    This must be reversed. I pray Trump and Mnuchin’s strategy engages with haste – the monopolies and the public-private partnerships must be busted up. IT CANNOT HAPPEN SOON ENOUGH.

    Liked by 8 people

    • WSB says:

      SDee, I have been preaching for months that we should de-centralize Social Security. The money you pay into that program should be held at your local bank when your paycheck arrives, and 20%+- could be invested. Capital for the bank…investment account for you. Get the slush fund out of D.C.

      Liked by 2 people

    • Ned says:

      Couldn’t agree more!!!!!

      Like

    • G. Combs says:

      Rosa Koire, a democrat, has a really good video on that (ICLEI):

      Paul Homewood has info on Vancouver Declaration 1976

      […] In 1976, the United Nations Conference on Human Settlements was held in Vancouver. The above paragraph was part of the Vancouver Declaration, which has subsequently formed the basis for much of the UN-Habitat Agenda, itself heavily tied in with Agenda 21.

      When they’ve stolen your land, what will they take next?

      Liked by 1 person

  10. BobW462 says:

    I applaud the Administration’s noble effort to build some practical protection into the system.

    But, since the entire global economy, including the US financial system, is actually not much more than a high-stakes shell game, the potential for disastrous collapse will always remain just one “wrong move” away.

    At least the Trump Team is trying, and not just sitting on their hands, though.

    Liked by 5 people

  11. Michael says:

    I’m just a dumb blue collar construction worker doing the things American just won’t due. Be that as it may seems to me if a bank is too big to fail it is too big to exist and should be ordered to divest daughters (and sons let us not be sexist) until none are too big to fail.

    My uptown wife works inside a really really big 3 letter wealth management firm and she is buried under DF spawned regs that do nothing useful other than possibly help chop down trees to print more and even more silly ass regs. Meanwhile the too big to fail are insulated from their foolishness knowing WHEN it again hits the fan they will be rescued – after all they are too big to fail!

    Liked by 7 people

    • Ned says:

      It’s even worse than that. The “too big too fall” are huge on lobbying. Remember seeing STACKS of papers for Bills? The companies actually WRITE the legislation and leave loopholes for more financial benefits. This further kills small and medium sized businesses trying to grow. The big guys just get bigger at the expense of the small and mid sized companies. Typically the small guys go under and medium ones limp along and eventually get bought our by a bigger guy. I’d like to see SMALL and MEDIUM sized business representation of Trump’s business advisory board. The globalist Disney guy left. He favored junk science and the Paris agreement. Why not replace him with a small or medium business representative?

      Like

      • Orygun says:

        What you are describing is a move towards Fascism with crony companies and institutions allowed to exist because of their ties to the government. The government works to remove any competition to their cronies.

        Like

    • Maquis says:

      Too Big to Exist!
      That’s awesome!

      You should send that to the White House. Seriously.

      This resonates with me, my brain is exploding over all this Evil, Mammon as a Global Entity of soul-crushing Evil Greed, hard to get my brain around this, but TOO BIG TO EXIST, I can get that, and Deplorables Nation-wide would get it. It can be our mantra as we sharpen our pitch-forks!

      While we’re at simple profunditys, how about:
      TOO DUMB TO LIVE? Dodd-Frank, both evil, Obama, Killary, Swamp Critters and Global “Masters of the Universe types, were we a truly civilized society we would have public hangings on a regular basis. Allowing such Evil to Reign is not Righteousness.

      Like

  12. fleporeblog says:

    http://www.nydailynews.com/news/national/republicans-slash-dodd-frank-act-comey-testimony-excitement-article-1.3232515

    From the article linked above:

    Republicans slash Dodd-Frank Act amid Comey testimony excitement

    While former FBI director James Comey’s testimony gripped most of the nation, Republicans voted to repeal a significant piece of Obama-era banking legislation.

    “Our community banks are in trouble,” said House Speaker Paul Ryan (R-Wis.) “They are being crushed by the costly rules imposed on them by the Dodd-Frank Act. This law may have had good intentions but its consequences have been dire for Main Street.”

    The issue is that the bill will need 60 votes in the Senate. The likelihood of getting 8 Democrats isn’t good.

    https://www.housingwire.com/articles/40390-is-the-financial-choice-act-doa-in-the-senate

    From the article linked above:

    So while the bill in its entirety might not pass Senate, it doesn’t mean the act is completely dead.

    Oliver Ireland, partner at Morrison & Foerster, explained in an interview that at least some portions of the CHOICE Act are unlikely to pass the Senate in this Congress and possibly thereafter.

    However, he added, “It is likely that other portions, and possibly other regulatory relief proposals, may pass both the House and the Senate. It is too early to identify what will be viable in the near term, what may be viable in the longer run and what has no real prospect for enactment.”

    Ireland stated, “The most likely path is for the Senate to come up with its own bill, which will require support from some Democrats, and to go to conference with the House and see what comes out of the conference.”

    Liked by 2 people

    • MaineCoon says:

      I happen to catch this last week, but very little mention was made by the single-minded MSM honing in on Comey. It’s a big deal. Thanks for posting it.

      Liked by 1 person

    • Ned says:

      I totally missed that. Thank you.
      Could the nuclear option push this through?

      Liked by 1 person

      • fleporeblog says:

        Regrettably yes!

        Like

      • Maquis says:

        It should be NUCLEAR all the way. It is not in the Constitution that every bill require 60 vote “cloture” (nasty name) to get to a real vote.

        McConnell should be refining and revising Senate Rules and procedures. Most are Evil counter productive idiocies designed to block the will of the people while Decepticons like the Turtle throw up their hands in feigned frustration, knowing his paymasters will reward his treachery.

        The Filibuster should be gutted, by restoring it to it’s original NOT IN THE CONSTITUTION purposes and practice. We averaged one, ONE, single filibuster a year for two hundred years, then in the Seventies Commies revised the rules, no longer requiring the filibusterers to remain on the floor, all day and all night, continually speaking in favor or disfavor of the bill in question, without extraneous filler and no simple repetitions of the same comments. It was to allow the minority to ensure it’s concerns were heard, then on to a vote. Now it’s an evil monstrosity giving full power of the agenda and nature of the final passing bill to the minority party, without them losing a single night of sleep.

        They just declare bill after bill to be filibustered and put them on the huge pile of frustrated “will of the people” bills that will never be allowed to pass until the majority party demonstrates sufficient subservience and payoffs and perversions of the nature of the bill before the usurpers grant the magnamity of passing a bill that essentially has been twisted to serve their own goals. Infuriating and what McConnell should be fighting for day after day.

        The following is must reading for folks wishing to understand how Turtles and traitors exercise unauthorized powers whilst pretending to be hog-tied.
        This is MAGA.

        http://www.imprimis.hillsdale.edu/senate-must-reform-filibuster/

        Yes, I’ve sent it to the White House. But I need to send it to McConnell and the entire Senate, the entire House, and to Candidates gearing up to Primary our RINOs. We all need to. This should be a nationwide aspect of MAGA, isuccess here would ring the Bell of Liberty through generations to come.

        I also have concerns about the Constitutionality of the Senate Parliamentarian and the wisdom of allowing an unelected individual hidden from public view and understanding to exercise great powers over the viability of legislation. I gotta check it out further, maybe a Treeper already has this thing figured out…?

        Maquis

        Liked by 1 person

  13. coltlending says:

    I thought TARP was to recapitalize the Banks.

    What happened to all that money?

    Did they send billions outside the country, pump up the Stock Market & Real Estate Market and pay themselves big bonuses?

    Liked by 1 person

  14. The Devilbat says:

    The banks are too big NOT to fail as per the globalists plans.

    Like

  15. Daybreaker8pt says:

    Thanks , Sundance, for this analysis. It seems like a good first step to get Main Street more capital. I have only a layman’s knowledge of finance, so my reasoning may be faulty, but I have the impression that a large portion of the “assets” that the mega-banks hold is imaginary wealth like carbon trading and over inflated investment-bubble stocks and sketchy derivatives…play money. The big guys get to play with it like it’s real now. Then when there is a meltdown, they are bailed out with tax-payers’ REAL money (or IOUs, given the current US deficit), so the banks win either way. I’m glad there are wizards like Sec. Mnuchin working on this. It is going to take some major drilling down to see what the banks really have, and what can be done to fix it.

    Liked by 3 people

  16. KBR says:

    So six banks control the finance.
    And six megacorporations control the press/media.
    One more set of six, and we have 666.

    I am thinking the beast is not a man, but a system.

    Liked by 5 people

  17. QuestGirl says:

    Haven’t I heard or read that Pelosi and the like made millions off Dodd-Frank?

    Like

  18. calbear84 says:

    Thanks Sundance for your succinct review of this complex situation. What a brilliant idea by POTUS & Sec Mnuchin to defer the mega-bank problem (for now) and focus on what can be done at a local “we the people” level now. Allowing small and medium size banks to extend capital to their own communities with foster trust in the financial system. Can’t wait to read more on this topic.

    Liked by 2 people

  19. alliwantissometruth says:

    Of course, the whole thing was a set-up in order to keep the money / power consolidated in the hands of the elite

    For decades & decades, every f***ing thing that’s been put into motion in the financial world has been fabricated for the benefit of the elite, who use our bought & paid for “representatives” to bring it to fruition

    The people have lost the power of the purse, our purse, which in turn means we’ve lost the ability to choose our destinies & live in true freedom

    This is the crux of Presidents Trump’s agenda. He’s old enough to have been part of the business-banking world when it still worked for the average citizen, with both citizens & companies working together to produce a viable society

    Liked by 2 people

    • free2313 says:

      “………who use our bought & paid for “representatives” to bring it to fruition”………..
      Here are some bought and paid for representatives from 1980s:

      John McCain of the Keating Five. You remember the Keating Five, don’t you?
      Five corrupt U.S. senators, including McCain, John Glenn, Alan Cranston, Donald Riegle and Dennis DeConcini — amazingly, all Democrats except for McCain — got themselves in a bit of a pickle.
      Somehow McCain came out smelling like a rose…
      https://pjmedia.com/michaelwalsh/2013/3/8/john-mccain-american-hero/

      And believe it or not John McCain is still standing………

      Liked by 1 person

  20. coltlending says:

    Too many dollars chasing too few legitimate engines of revenue has been spawning building deconversions.

    With the cost of new constructions and lack of lending developers are looking to find existing buildings that they can deconvert from Condominiums to Rentals.

    Many condos were forced to accept more rentals, as sales stalled after the crash.
    Many underwater on their mortages leased there units, because they’d take a big hit.

    In buildings where there is a mix of 60/40 renters to resident and investor owners the people who developed the pre-crash economic model have now turned their energies to trying to make renters of everyone.

    With our money derived from TARP, ZIRP and the propped up stock market Hedge Funds, Private Equity Groups and banks look for C+ to B tier condo buildings at roughly, $260/sq.ft. in Chicago to take the piece of cheeze from the small landlord and the resident owner.

    The biggest component of the return on their investment deconverting is the monitization of the resident owner square footage in a 60/40 % Small landlord / occupant owner building (percentage can vary but you get the

    It is not improving the property and the higer rents that typically derive from that, IMHO.

    Monitized formerly resident owner sq. ft. + Small landlord piece of cheese.

    It drives people in to renting.

    As this scam picks-up, the vast population of America will be renters, many former owners.

    You won’t be able to find a landlord that’s not a Bank, Hedge Fund or large Equity Group.

    People can thank the UniParty for it.

    Like

    • Your Tour Guide says:

      What’s the going thing around Atlanta is new buildings that are “live/work/play”
      developments, where vast amounts of older single family or smaller square feet
      retail is tore down and replaced with bigger square foot retail, adjacent to apartments.
      Nestled in between is 1/2 to 3/4 acre of “greenspace”.
      When they write about these developments in smaller local papers, they always
      mention ‘the percentages.” Thirty percent of the housing is for seniors, 40% is for
      “work force housing”, x percent is for “low to moderate income persons”. When I
      start hearing percentages thrown out, then I know that tax credits are being scammed
      to help pay for the construction/ attract investment. Haven’t done further research,
      but expect that little slab of “greenspace” is there for the tax advantages, also.

      Like

  21. NJF says:

    Thank you once again SD, you make it so easy to understand!!!

    Liked by 1 person

  22. Bendix says:

    An awful lot of pundit types out there have been yammering bigly about President Trump not knowing what he’s doing with regard to financial issues and a pending (potential) crash.
    Yet here we see him doing his best, and probably more than any one man has done, to get a handle on exactly what is going on.
    I notice the genius experts all have different opinions, and the genius experts somehow forgot to tell anybody what was coming before it came.

    Liked by 1 person

  23. Bubba says:

    Fewer entities are easier to control whether it’s in banking, in media, in healthcare, etc. Control the money, the culture, and the health & person of a people. Institute a surveillance state in a parallel, incremental fashion in the name of security, of course. Then, convert to a cashless society (which is being test run in India). And, presto, you have everything in place for total control of the useless eaters. If they revolt? Empty their bank account or leak their medical records or plant evidence of a crime on their computer or destroy their reputation via the media. Nah, that’ll never happen. Conspiracy theory, tin foil hat stuff…

    Liked by 1 person

  24. I’d still like to see an audit of the Federal Reserve. I bet it’s as empty as Al Capone’s vault.

    Liked by 1 person

    • G. Combs says:

      Add in Fort Knox. You know, where the gold FDR confiscated from our parents and grandparents was put for ‘safe keeping’

      The Great American Disaster: How Much Gold Remains In Fort Knox?

      August 17, 2010
      Yesterday marked the 39th anniversary of the day when the US Government declared bankruptcy. Oh, they didn’t call it that at the time. But what happened on August 15, 1971 was that the US defaulted on its promise to pay gold for dollars.

      Before that day, gold was the legal linchpin of the world monetary system. Although every currency was defined in terms of the US dollar, the dollar itself was legally defined as 1/35th of a troy ounce of gold.

      Since then, there really has been no center to the international monetary system. The “reserve currency” continues to be the US dollar. But there is no official definition of what a dollar is. Like every other currency, its value changes every ten seconds as it is traded on the global currency markets. It is a promise to pay nothing. Its value has been devalued for years.

      […] until 1972, at least 75% of official US gold left the nation in exchange for paper dollars which can be printed at will. However, I think the total amount of real gold which remains is even less. The exact amount that remains is now officially listed at 147.3 million ounces. From the peak, that is a decline of 79%.

      In 1988, 22 years ago, I wrote a book about Fort Knox, the gold there, and the documented history of official lies, evasions and incompetence of those who were entrusted with the gold.

      I say “documented history” because when writing the book, I was very careful to only include official documents and private correspondence from the US government, stretching from 1934 to 1987. Using their own responses to the questions of just how much gold is left, and what that gold’s quality is, for the first time this book put all these governmental attempts to answer the questions about their own gold policies in one place. What their responses revealed was shocking to me.[…]

      Nothing since 1988 has happened to change my views.[…]

      The central part of what I learned is that, by official admission, only a small percent of the gold that is left in Fort Knox is “good delivery” gold. In fact, though this is just my opinion, I wonder if there was so little such good delivery gold left by August of 1971 that Nixon had to close the gold window. […]
      The shocking admission Ft Knox holds very little good delivery gold was made to Mr. Durell by the chief official of the General Accounting Office (GAO).

      This happened a few months after the September 1974 tour. […]

      As I said above the Federal Reserve Bank is all about legalized THEFT! They have been stealing this country blind for the last 100 years.

      Like

    • G. Combs says:

      Louisiana Steve says:
      I’d still like to see an audit of the Federal Reserve. I bet it’s as empty as Al Capone’s vault.
      …………………

      Actually Wright Patman already did that. And you are correct it is completely empty. WE- The American People – are the collateral for the GAMBLING debts run-up by the banksters, THE GLOBAL Banksters….. That is why Zero Hedge said Presenting The $303 Trillion In Derivatives That US Taxpayers Are Now On The Hook For and notes that with the global reach of these banks it means ALL central banks. Or as the writer said — “The only question is when the next multi-trillion (or perhaps quadrillion now that all global central banks are all in?) bailout takes place.’

      Again from The Primer on Money
      The truth is, however, that the Private banks, collectively, have deposited not a penny of their own funds, or their depositors funds, with the Federal Reserve banks. The impression that they do so arises from the fact that reserves, once created, can be, and are, transferred back and forth from one bank to another, as one bank gains deposits and another loses deposits. [pg 37]

      Under Secretary of the Treasury Robert V. Roosa, formerly a Vice President of the Federal Reserve Bank of New York, while testifying before the House Committee on Banking and Currency in 1960, described the misconception as follows:
      “There is another misconception which occurs much more frequently-that is, the banks think that they give us the reserves on which we operate and that, too, is a misconception. We encounter that frequently, and, as you know, we create those reserves under the authority that has been described here.”
      The writer [Wright Patman] has had a couple of personal experiences which ‘have provided some amusing confirmation of the fact that the source of bank reserves is not deposits of cash by the member banks with the Federal Reserve banks. having seen reports that the Federal Reserve System had, on a given date, Government securities amounting to a proximately $28 billion, I went on one occasion to the Federal Reserve Bank of New York where these securities are supposed to be housed, and asked if I might be allowed to see them. The officials of this bank said, yes, they would be glad to show them to me; whereupon they opened the vaults and let me look at, and even hold in my hand, the large mound of Government securities which they claimed to have and which, in fact, they did have.

      Since I had also seen reports that the member banks of the Federal Reserve System had a certain number of millions of dollars in “cash reserves” on deposit with the Federal Reserve bank, I then asked if I might be allowed to see these cash reserves. This time my question was met with some looks of surprise; the bank officials then patiently explained to me that there were no cash reserves. The cash, in truth, does not exist and never has existed. [pg 38]

      Liked by 1 person

  25. lisaginnz says:

    thank you so much for this post – the financial wheeling and dealing in Washington is hard to understand fully….. this helps…. GoTrump #MAGA!

    Like

  26. jstanley01 says:

    I’ve been at a local commercial bank for a long time. How anyone would trust one of these too-big-to-fail conglomerations is beyond me. Branch banking used to be illegal in Texas. We ought to bring that back.

    Like

  27. US says:

    Dear Sundance, I am in awe of your knowledge. Thank you for illuminating US.

    Like

  28. tony5460 says:

    I am not sure your characterization of Dodd Frank’s impact on banking business concentration is accurate. There were no major M&A for the top 10 banks since 2010. All top 10 banks in 2010 are still operating today. Furthermore, the big 4 (Wells, BOA, Chase and Citi) saw only roughly 11% growth in the 6 years window. That is less than 2% per year and less than the nominal GDP growth.

    Like

  29. Sam says:

    Even local banks and credit unions have rules about how much of your money you can get your hands on quickly. That’s because your money is no longer yours. It is the financial institution’s money and they use it to make loans at many times the percentage they pay you for the use of it. That’s one way they make money. People do not understand even this basic thing about banks and credit unions.

    Liked by 1 person

    • G. Combs says:

      Sam see my comment with references HERE

      Your money is part of the ‘Reserve’ What they actually lend out is brand spanking new BANK SCRIPT printed on the spot. The only difference between your color zeroxing hundred dollar bills and a bank making a book keeping entry creating new electronic Bank Script, is the Banksters OWN the US Congress and have done for the last one hundred years and you don’t. Therefore you are counterfeiting while the Banksters are committing legalized theft of your labor/wealth with the blessings of the District of Criminals.

      EXPLAINATION of Fractional Reserve Banking

      If everyone was educated about what Fractional Reserve Banking actually is (Theft), the Left and the Right would unite to tear down the banks and hunt and …. the banksters.

      Think about this. ONLY 3% of the money supply is cash. ALL the rest is LOANS! Car loans, house loans, business loans, credit cards,…

      This is for the UK but backs up what I said here since I can’t find my original reference.
      http://positivemoney.org/how-money-works/advanced/three-types-of-money/

      Like

  30. Jeff says:

    One merely needs to revisit the words of Jonathan Gruber ….” TORTURED LANGUAGE ” Gruber being one of the author’s OBAMACARE .

    The reality is the UNIPARTY is KILLING CAPITALISM with paper cuts and using the apparatchik media to blame CAPITALISM for the woes of the sheeple .

    tortured language indeed !! with BLEEDING EYES I’m reading some of this ACT passed by the HOUSE as all eyes were on the COMEY SHOW .

    Occums Razor the simplest answer is the most likely …..CREDIT DEFAULT SWAPS & DERIVATIVES are WORTHLESS PAPER issued as a direct result of the repeal of Glass-Steagall . G-S separated commercial banks from investment banks . The repeal allowed banks to create financial instruments such as MBS ( mortgage backed securities ) credit default swaps ( insurance on risky loans ) and derivatives ( basically a BASKET of worthless mortgage mixed with sound ones )

    While I fully understand the construct of POTUS and his administration and their effort to create a parallel system to finance MAIN STREET . I wonder about the GLOBALIST alliance staging to BAIL IN remaining WEALTH to write off their worthless fraud .

    ” (1) the transfer under this section is necessary
    9
    to prevent serious adverse effects on financial stability in the United States;
    11
    ‘‘(2) the transfer does not provide for the assumption of any capital structure debt by the bridge
    13
    company;
    14
    ‘‘(3) the transfer does not provide for the trans-
    15
    fer to the bridge company of any property of the estate that is subject to a lien securing a debt, executory contract, unexpired lease or agreement (including a qualified financial contract) of the debtor unless—
    20
    ‘‘(A)(i) the bridge company assumes such
    21
    debt, executory contract, unexpired lease or
    22
    agreement (including a qualified financial con-
    23
    tract), including any claims arising in respect ~~~~ page 23 https://financialservices.house.gov/uploadedfiles/hr_10_the_financial_choice_act.pdf

    This reads to me that ” THE BRIDGE COMPANY ” that buys up companies with LIENS securing CREDIT DEFAULT SWAPS can tell the creditor to …POUND SAND !!

    WHAT DO WE WANT TO BET THAT CRONY FASCIST CHAMBER OF COMMERCE gets first crack at being a BRIDGE COMPANY ….?????

    Like

  31. kyasgrandma says:

    This article and these comments are the reason I fly to perch on a branch in the tree.

    Liked by 1 person

  32. Mickturn says:

    It is clear the original Dodd Frank and Glass Steagall setup was to squash small banks and make the big banks bigger…hence the reality. This is typically done to consolidate power, the Commies in Congress do that regularly (bribes then flow from there). Busting up the extremely large Banks is very desirable, there is NO competition the way it is…good for banks, bad for America!
    Setting up a totally low regulation bank process to support business is a good way to take that power away from all the crooks. Trump’s team also needs to bust up all the faux investing derivatives, Metals Markets and other crooked processes used to manipulate money.

    Like

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