("Quid coniuratio est?")
THE SPREAD, MEXICO, THE PESO, AND SILENCE
In Conspiracy Nation Volume 1 Number 12, mention was made by the estimable gentlemen, the monsieurs Mueth and Estabrook, of something called "the spread".
MUETH: But what I thought was happening -- and then I heard from a person from NPR [National Public Radio]. I forget who it was, but it was on the nightly business report on Thursday. What really was going on was keeping the "spread" wide. The "spread" is historically high, uh, 3 percent, roughly, I think.
ESTABROOK: You should say what we mean by the "spread" here. That's the difference between the real interest rate -- the difference, basically, between what banks are lending money at and what they're paying for the money themselves.
In Volume 1 Number 12 I went on to give my own attempt at an explanation of "the spread".
[CN Editor -- In other words, the Fed loans money to the banks at 3 percent interest. If the banks then charge customers, say, 4 percent to borrow this money, the "spread" is the difference between the two rates of 3 and 4 percent: 1 percent. If the spread is high (e.g. the bankers do not pass on the Fed's lower rates to their customers), the banks make more profit on the money they lend.]
So the banks made some big bucks.
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Money Masters May Have Gone Too Far
[Excerpts from The Spotlight, 1/16/95]
To bail out Wall Street's foundering megabanks, Federal Reserve Chairman Alan Greenspan secretly looted millions of small savings accounts and retirement incomes in 1991-1993, accumulating evidence -- first unearthed by The Spotlight -- has now conclusively confirmed.
New documentation has come to light, presenting ordinary Americans, acting individually or in class action suits, with a historic opportunity to press charges of fraud, malfeasance and racketeering against the Fed and its manipulative chairman.
The opportunity arose on New Year's Day when the New York Times finally revealed, for the first time, that beginning in late 1990 "The Fed and its chairman engineered a prolonged period of falling interest rates." Their sole purpose was "to save the American banking system" which was "reeling."
Business writer Allen Sloan, a leading Wall Street market- watcher, confirmed the same fact in his column the same day: "Federal Reserve Board Chairman Alan Greenspan drove short-term rates to ultra-low levels in the early 1990s to bail out the banking industry, setting off a wave of wild speculation that's still causing trouble," Sloan disclosed.
[...]
To refill the banks' leaking vaults, the Fed gave them vast cash injections -- tens of billions of dollars -- disguised as short- term credits at minimal rates around three percent. Then the Fed borrowed the same money back from the banks at sharply higher long-term rates. It was a thinly disguised taxpayer bailout...
Small, loyal depositors got a raw deal, too. Used to receiving around six or seven percent interest on their savings, they saw their modest incomes shrink under Greenspan's hammer -- often by half or more. The Fed's moves plunged millions of older Americans below the poverty line in 1991-1993.
[...]
[According to Dr. Paul Adler,] "The result was that ordinary Americans ended up paying painfully for yet another giant bank bailout, both as taxpayers and as savers -- and never even knew it."
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"Once again the formula had been capitalism for profits, socialism for losses."
Conspiracy for the Day -- November 1, 1993
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Mexico Round 2 of Profit Grab
[Excerpts from The Spotlight, 1/23/95]
[...]
It heartened the speculators to know that they had a determined protector -- in reality, a co-conspirator -- at the Fed. The game of debt-financing, currency arbitration, price-fixing, corporate takeovers and artful fraud expanded into Mexico and beyond, into a number of so-called "emerging markets," knowledgeable observers say.
"U.S. speculators realized that trade and investments in smaller and poorer nations was a lot easier to manipulate," explained Dr. Paul Adler, the noted economic consultant. "To move in on Mexico, all they needed was a pliable president who spoke their language, [CN -- presumably either "Yalie" Clinton or "Yalie" Salinas de Gotari] and a 'makeover' -- a major promotion that would give the Mexican markets the gloss of stability and sophistication that invited foreign investment."
[...]
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Now Commander Billy Jeff has opened what they are calling a "$40 billion line of credit" to Mexico. What this means to me is that $40 billion that could have been spent here in the United States is going, instead, to Mexico Lindo.
Where is the $40 billion "line of credit" coming from? They don't say.
Is the $40 billion "line of credit" going to appear out of thin air? They don't tell us.
Gee, will this $40 billion "line of credit" ultimately come out of our pockets? These questions aren't even being asked.
Let's run down the game so far:
1) 1980s -- S&Ls robbed by S&L owners. We pay for it.
2) 1990-1991 -- Banks in trouble. We bail them out and we
don't even know we bailed them out! 3) 1993 -- Nobody wants NAFTA. Commander Billy Jeff opens up the
U.S. Treasury and buys the votes he needs. We, the taxpayers, have paid for NAFTA even though we don't want it. 4) 1995 -- Mexican Peso collapses. Commander Billy Jeff orders a
$40 billion "line of credit" be opened for Mexico; i.e. he sends $40 billion of our money to Mexico. I read the papers and I see no questions being asked. For example: (1) Where is the $40 billion coming from? (2) Why do we have to pay $40 billion to bail out their peso? (3) Who will lose money if we decide not to bail out their peso? (4) Why isn't the laissez-faire option being considered? The option of letting Mexico handle its own peso crisis isn't even being considered. We are being given the "choice" of either (a) bail out the peso or (b) bail out the peso. Why not (c) hang on to our money 'cause we need it here!?
Once again we are getting screwed and nothing is being said.
I encourage distribution of "Conspiracy Nation."
Coming to you from Illinois -- "The Land of Skolnick"