What Is The FED?, Part One, or I’ll Take Foreclosures For $200, Alex.

What Is The FED?, Part One.

When we think of “The Feds” we think of the federal government, like the guys who busted John Dillinger and Bonnie & Clyde.  So when we hear the term “the FED,” aka The Federal Reserve, it sounds like some government agency.  But that’s just a clever disguise.

The Federal Reserve Board is a private organization.  It’s like a private Central Bank that loans money to the federal government, then charge interest on it. The government borrows the principal; the American people pay the interest.  That’s why we pay income tax: interest payments on the federal debt, paid to the Federal Reserve.  It’s a trap that we can never escape.

But the government doesn’t repay the principal; they just borrow more.  Meanwhile, the interest keeps compounding, and the Federal Reserve Board can adjust the rate whenever they want, without notice.  Did we mention compound interest?

This deal is rigged, sort of like an interest-only, monthly adjustable, reverse amortized loan, built to fail.  The American economy is like a home loan in default.  The government is the landlord and the taxpayers are the tenants. The landlord owes more than the house is worth and is using the tenants’ rent to try to make the interest-only payments, but is falling behind.

Sound familiar?  If this was a home loan, it would trigger a notice of default, followed by a trustee’s sale and foreclosure.  The tenants would get locked out by the sheriff, quite to their surprise (just paid their rent) and would have no place to go.  The landlord would be nowhere to be found, having fled with the rent.

Is the government in foreclosure?  Maybe they’re asking the FED for a loan mod.  Maybe they’re just walking off with the rent.