For years we have railed against federal interference in every aspect of banking and the economy. Not only do we object to the interference, we object to the actions taken that will have a sustained negative impact on economic structure. This article is truthful and accurate. The author headed the Federal Reserve agency responsible for buying toxic MBS from banks. In brief:

Federal banking regulators created and sustain what we call “The Second Liquidity Crises” through irrational and dictatorial regulatory actions against commercial banks. Lack of Commercial Bank lending, because of regulatory interference, is the root cause of the dismal recovery. Tell me, how ignorant is the Fed Reserve when they create vast amounts of money, then stop that liquidity from getting to the Main Street businesses (who create over 60% of all new jobs) through commercial bank lending?

Federal Reserve purchases of toxic Mortgage Backed Securities, using QE money, is one of many pay-offs to the Too Big To Fail Banks. 70% of all domestic banking is controlled by only 0.2% of the TBTF banks. Effectively, the federal Congress created the toxic MBS bubble (SubPrime Mortgages), TBTF banks took full advantage of the subprime windfall and when that went bad, the a federal Reserve bails them out. Cronyism is despicable, and rampant.

The Fed Reserve, again through QE, decided to manipulate the long end of the Treasury market. The Fed bought 90% of Treasury issues in order to keep the appearance, not reality, of lower interest rates. The Stock Market fell for it and drove stock indexes to unsustainable highs.

We are left with a crippled economic structure, with extreme and unnecessary federal debt, and a declining US$. The solution will fall to individuals, as it always does, and not to a faceless, basically incompetent federal bureaucracy. It will be born on the backs of the taxpayer. We tax payers did not benefit from federal excess, but we will have pay for it for generations.

The federal government, the Federal Reserve, TBTF banks, and Wall Street can’t solve our nations problems, but do they have to accelerate the nations possible failure through their actions? The sooner we realize that our nations enemy is within, the sooner we can start on the road to recovery by taking back our Private Economic Freedom from a power-mad Public Government.