Exceedingly important video for Americans to watch. Thanks for this. I know most of Black's major talks, but missed this one. An A-rated winner.
For background and for those who don't know, this public radio show explains how derivatives really work. Simply, with an analogy grandma and teenage cousin can understand without filigreed gobbledegook. It was produced in the weeks following the September 2008 collapse. www.thisamericanlife.org/radio-archives/episode/365/another-frightening-show-about-the-economy It costs to download it, I think. But you can listen online. Makes you feel smart by the end, albeit betrayed.
For "#1 knowledge," look for Dr. Stephanie Kelton's articles and video appearances. She's Dr. Black's colleague at UKMC, and a Federal Reserve expert. Fortunately, she has the same ability as Black to explain things simply. NEWSFLASH: she will challenge everything you (rhetorical) thought you knew about how macroeconomics and federal accounting work. I don't mean challenge, I mean <b><i>f**king challenge</b></i>. I've spent two years verifying it. I'm not stupid, unaware, or uneducated, but I had a profound shock that I could be so misinformed, so stupid, unaware, and uneducated about how the US economy works. Those lucky kids at UKMC are getting a great education.
John Truman Wolfe authored "Crises By Design" which is an easy quick read that gives insight into the fact that the middle class was intentionally coaxed into "debt bondage" by the unjustified minimal interest rates at the Federal Reserve level, combined with the lack of oversight of regulators and the pressure put on appraisers.
Since real estate was traditionally a "safe but slow" investment, never having such a draconian, sustained collapse in the 100 years prior to 2008, it was the most ingenious method of draining middle class wealth which is traditionally held in equity in their homes.
Many believe that the banks cut back lending after TARP for reasons other than what really occurred. In fact, Basel I, set the scam up, prior to TARP, then Basel II was issued by the Bank for International Settlements, which required member banks to "mark to market". That required banks to lower the resale value of mortgages they already held (even the most solid up-to-date) by mandating that foreclosures be included when calculating resale values in a particular neighborhood. By decreasing the equity (in which mortgages are considered assets and added to bank equity) it reduced the bank's lending ability based on the fractional reserve lending practices employed by banks. (For every $10 in equity, banks are authorized to lend $90 (that can vary) producing a 90% bank profit on loans, plus whatever interest rate is charged for the loan.
Fifth amendment property rights are eliminated in Agenda 21. The guaranteed right of American citizens to own property in the constitution, enabled the mortgaging of property (no other country has such), since government was restricted from confiscation of personal property without just compensation. U.S. growth in wealth and progress that led to the superiority of this nation was greatly attributable to the increase in equity in real estate ownership that provided a basis for collaterally backed loans, subsequently used to fund small businesses and encouraged entrepreneurs to develop their ideas and projects.
Although the derivatives were the main cause of the collapse, failure to recognize that the Federal Reserve Bank is only one of 55 central banks, controlled by the B.I.S. in Switzerland, intentionally designed by FEDERAL Reserves efforts in deluding the public into believing that it is "our bank". Anyone who understand economics, knows that whomever controls the money of a nation controls the nation. If Americans were aware that their government has been controlled by a foreign bank (formerly know as "Hitler's bank) for the last hundred years, just as the other 54 governments controlled by central bankers, that would've been a major cause of concern...perhaps even protest.
But it gets better. Having produced all the bad debt instruments intentionally, the "doomed to fail" sub-prime mortgages were bundled with traditionally sound Triple A investments that were sold to investment fund managers (retirement funds). The collapse was extended world-wide when foreign countries who based their domestic policies on the profitability of investing in what they believed were unquestionably sound investments.
Greenspan, Robert Rubin and Larry Sommers were well-aware of this, evidenced by the actions of Brooksley Born, then head of The Commodities Futures Trading Commission, who did everything in her power to urge congressional oversight and transparency in the markets where the derivatives were being sold. By choice, congress listened to Greenspan's advice when he falsely stated that he believed the evidence brought forth was an "anomaly". So the opportunity to avoid the collapse was given to congress and they refused to consider the advice given by the CFTC.
After the congressional hearing in which Ms. Born testified, all three...Greenspan, Rubin and Summers did everything in their power to destroy her career.
Understanding the nature of derivatives is only part of the puzzle that evolved from that point on. Once any threat of oversight or transparency was assured by that congressional hearing, there was nothing for the thieves to fear.