An Epochal Land Grab

The Federal Reserve just purchased  $1.24 Trillion on mortgage bonds.    That means.   The Fed has just swept $1.25 Trillion OF LAND ownership into their pocket.
That central banks create money from nothing is confusing to the public, but there is not enough gold for a world with over 6 billion folks, and money gets its value from work, not rocks.  But banks claiming land out of the confusion they themselves created  is over the top.
PT Barnum said there was one born every moment.   I have been paying attention for a long time and it was only after my 60th year that I understood that the Fed was as Federal as Federal Express.  I am not being cute here, I wrote a thesis on the monetary system in 1978.  Economics does not teach about the creation of money.  Even some bank managers do not understand this.  Who holds the Bag at the Fed… are the member banks, called the ‘money center banks’, not the US government.*
Here is my alarm point:  The private creators of money have just swept 1.25 trillion of our land into that bag by “purchasing” mortgage bonds.   I understand how it is (necessarily) mystifying that money is created from nothing.  This is only understood in rarified central bank circles. The money supply must vary with the volume of commercial activity. But claiming land out of nothing is another issue entirely.  That is claiming income streams that produce in perpetuity into private hands at the stoke of a pen.  I am OK with the Treasury owning land that has gone into limbo because of banking missteps in the old walnut shell trick.   This represents some semblance of the commons.   And it would lighten our tax load.  The banks are not a commons, they are private, and by the way, caused the crash of 2008.   It came to pass because of bad gambles with derivatives by money center banks and AIG.  (when the subprime market was $1.3Trillion which got all the press, because people could understand it , whereas the bank and hedge fund derivative trades were $60Trillion, got little ink outside the business press because they were hard to describe.)
The result of the transfer of $1.25 Trillion of mortgage paper to the Fed is a World Class land grab.
This is a violation of the commons, of house holders, of the American people in my opinion.

*Understanding Central Banking is a head scratch.   It was a bone of contention between Jefferson and Hamilton and Jackson to boot.   It’s previous incarnation was with the Federal Reserve Act of 1913 and created a central banking function ( a lender of last resort) but left the ownership of that power in private hands.   What is now going on in August of 2010 is seat of the pants and brand new territory.    My recommendation on understanding this is by reading the book: Web of  Debt by Ellen Hodgson Brown.  It is clearly written, and an amazingly well told story.     If only the younger generation can get ahold of the old walnut shell trick before I did.

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