Starve the Beast
“The budget should be balanced, the treasury should be refilled, the public debt should be reduced and the arrogance of public officials should be controlled.”
-- Ross Perot
As a country we face an extremely difficult challenge. The deceptive scheme instituted by the government bureaucrats, dishonest bankers, corrupt politicians and the Federal Reserve has convinced millions to believe their deceit. The foundations of their scheme are built upon a blizzard of lies. The only way to confront lies is with the truth. They are counting on some givens. Doug Casey describes a large portion of the U.S. population as Boobus Americanus. These are the functionally illiterate who have been pushed through our government run public school system. They don’t know the name of our Vice President. They can’t add, subtract or write a sentence. They will believe anything they are told by Obama. There are also the ultra-liberals who will believe anything their Messiah utters. Lastly, the large banks, Treasury, and Federal Reserve will do anything to maintain their wealth and power. This coalition of greed, sloth, and avarice presents a daunting challenge.
The cards have been stacked against Americans who don’t borrow too much, save for a rainy day, drive 10 year old cars, and didn’t spend all the equity in their houses. But, all is not lost. The large portion of middle class Americans who have lived their lives prudently have more control than they might think. I recently refinanced my mortgage. I’ve had a mortgage with Citadel Federal Credit Union since 1995 and have refinanced to a lower rate three times. Even though I have been banking with them for 25 years, they required an appraisal and shockingly, proof of income before allowing me to refinance. What a concept. While speaking with the mortgage specialist at the Credit Union, I asked how the financial crisis had impacted them. She said their insurance had gone up dramatically to pay for a few big credit unions that had collapsed due to bad lending practices. I asked how many mortgage loans they had to write off. The answer was NONE. Amazingly, if you get a legitimate appraisal, proof of income, and proof of assets, and keep the loans on your books, you can make loans that will be repaid. It is called prudent banking. My question is why are we saving the worst run banks in the history of the world when we have thousands of prudent banks willing and able to step up to the plate?
“Disobedience is the true foundation of liberty. The obedient must be slaves.”
-- Henry David Thoreau
My plan to reinstitute prudence and common sense into our economic system has two parts. The first part is to heap ridicule and scorn upon Congress, the Federal Reserve, the Treasury, and the banking cartel trying to maintain their stranglehold upon the American people. This part is quite easy. Since their entire plan is based upon lies, just telling the truth will weaken the foundations of their plan. The results of their past policy decisions, lack of transparency, proof of insider dealings, covering up of secret deals, and examples of incompetence and fraud makes it easy to undermine the solutions put forth by these people.
Part two of my plan is more difficult, but with a concerted effort by millions of sensible Americans, we can bring the country back from the brink of disaster. The plan is to put the banks responsible for the collapse of our financial system out of business. The Federal Reserve and the Obama administration do not want creative destruction to revive our economy, so we will have to force creative destruction upon them.
The 20 biggest banks in the country control $3.5 trillion of the $7.1 trillion deposits in the country. There are 8,400 banks in the country and 20 banks control 50% of the deposits. The list below reads like a who’s who list of the worst run banks in history that took the greatest risks and lost the most money.
|Bank Holding Company Name||State |
June 30, 2008
|BANK OF AMERICA CORPORATION (NYSE:BAC)||North Carolina||6,146||701,485,101|
|JPMORGAN CHASE & CO. (NYSE:JPM)||New York||3,195||497,215,362|
|WACHOVIA CORPORATION||North Carolina||3,363||422,002,374|
|WELLS FARGO & COMPANY (NYSE:WFC) ||California||3,378||293,406,008|
|CITIGROUP INC. (NYSE:C)||New York||1,079||271,290,597|
|U.S. BANCORP (NYSE:USB)||Minnesota||2,597||127,849,616|
|SUNTRUST BANKS, INC. (NYSE:STI)||Georgia||1,759||115,603,668|
|NATIONAL CITY CORPORATION (NCC) ||Ohio||1,568||97,764,933|
|ROYAL BANK OF SCOTLAND GROUP PLC, THE (NYSE:RBS) ||Foreign *||1,654||95,255,161|
|TORONTO-DOMINION BANK, THE (NYSE:TD) ||Foreign *||1,090||89,756,985|
|CAPITAL ONE FINANCIAL CORPORATION (NYSE:COF) ||Virginia||740||88,916,281|
|REGIONS FINANCIAL CORPORATION (NYSE:RF)||Alabama||1,924||86,225,760|
|BB&T CORPORATION (NYSE:BBT) ||North Carolina||1,492||85,930,565|
|HSBC HOLDINGS PLC (HBC)||Foreign *||477||83,045,865|
|PNC FINANCIAL SERVICES GROUP, INC., THE (NYSE:PNC)||Pennsylvania||1,200||82,424,564|
|FIFTH THIRD BANCORP(NASDAQ:FITB)||Ohio||1,356||74,656,971|
|BANK OF NEW YORK MELLON CORPORATION, THE (NYSE:BK)||New York||49||55,028,475|
|BANCO SANTANDER, S.A. (NYSE:SAN)||Foreign *||806||53,824,517|
|BNP PARIBAS (OTCQX:BNPQY)||Foreign *||739||43,887,185|
The total credit card debt outstanding in the U.S. at the end of 2008 was $960 billion. The top 15 credit card issuers hold $793 billion of this credit card debt, or 83% of all the debt. They also hold a major portion of auto loans, home equity loans and personal loans. Do any of these banks ring a bell?
Top 15 issuers of general purpose credit cards for 2008 based on outstandings
1. Chase - $183. 32 billion
2. Bank of America - $166.32 billion
3. Citicorp - $106.74 billion
4. American Express (NYSE:AXP) - $88.02 billion
5. Capital One - $60.08 billion
6. Discover (NASDAQ:DISCA) - $49.69 billion
7. Wells Fargo - $36.36 billion
8. HSBC - $29.97 billion
9. US Bank - $18.53 billion
10. USAA - $17.48 billion
11. Barclays (NYSE:BCS) - $11 billion
12. Target (NYSE:TGT) - $8.65 billion
13. GE Money (NYSE:GE) - $7.51 billion
14. Advanta - $5.02 billion
15. First Natio nal - $4.93 billion
(Source: Nilson Report, March 2009)
There are currently $15 trillion of mortgage loans outstanding in the U.S. You may be surprised to learn that the biggest banks in the U.S. hold the majority of the mortgages in the country. These banks issued the subprime and Alt-A toxic mortgages that brought the financial system to the brink of collapse. There is no doubt after examining these figures that the mega-banks control the country’s financial system. Ben Bernanke, Hank Paulson, and Tim Geithner have decided that these banks need to be saved at the expense of senior citizens and the American taxpayer.
Top 10 originators of mortgage loans in 2008
- Wells Fargo
- Bank of America
- JPMorgan Chase
- Citigroup Inc.
- SunTrust Bank Inc.
- U.S. Bank Home Mortgage
- Residential Capital LLC
- Flagstar Bank
- PHH Mortgage
Fiscal Sanity Movement
“How does it become a man to behave towards the American government today? I answer, that he cannot without disgrace be associated with it.”
-- Henry David Thoreau
The largest banks in the United States have balance sheets populated by trillions in toxic worthless assets. The lifeblood of any bank is deposits. If a bank is denied its deposits, it will collapse. There are 8,000 other banks and 8,000 credit unions in the country. Thousands of these institutions never made a bad loan. If you have money on deposit with one of these mega-banks withdraw the money and deposit it into a small local bank or credit union. You will have the same FDIC insurance and won’t sacrifice any income, since these mega-banks are paying less than 0.5% on your deposits, while charging you 8% for car loans and 20% on credit card balances.
These banks continue to write-off billions in bad credit card and mortgage debt, quarter after quarter. These banks make billions in late fees and interest income by charging 20% to people who pay their debts over time. If the good credits take their business elsewhere, the mega-banks will be left with only bad credits. Most people have 5 to 10 credit cards. Stop using your mega-bank credit card and use a credit card issued by a local bank or credit union. With mortgage rates near generational lows many people have an opportunity to refinance. If this opportunity arises, choose a local bank or credit union. If you decide to buy a car, don’t buy a General Motors or Chrysler vehicle. The government controls these entities. Don’t finance your car through GMAC. By denying the government beast its revenue stream, it will slowly die.
The average individual tax refund for 2008 was $2,700. This was effectively a $200 billion interest free loan to the U.S. government. If every working American walked into their place of employment on Monday morning and increased their W-4 exemptions by 2, we would deny the politicians in Washington of billions for a year. This is a legal way of starving the beast. The corrupt political machinery in Washington DC is dependent upon Americans to spend money. Our spending accounts for 70% of the U.S. economy. Surprisingly, American citizens have more control over the situation than we know. The mega-banks and our government are rotting from the inside like a diseased Oak tree. A gale force wind provided by the prudent Americans can topple the diseased tree.
“If you would convince a man that he does wrong, do right. Men will believe what they see.”
-- Henry David Thoreau
The current fiscal course of the country is unsustainable. We can choose to let the country drift toward a corporate fascist run government which will collapse under the weight of debt, corruption and mismanagement or we can make a stand today with our own money. If enough Americans choose to put the horribly run mega-banks out of business it can be done. There would be absolutely nothing that Obama or Bernanke could do stop it from happening. It is time to do the right thing. Do you know what’s worth fighting for?
“All endeavor calls for the ability to tramp the last mile, shape the last plan, endure the last hours toil. The fight to the finish spirit is the one... characteristic we must posses if we are to face the future as finishers.”
-- Henry David Thoreau