Control the Federal Reserve through about 300 stockholders

What is the Federal Reserve System and how does it control the US government?

The Second Bank of the United States (SBUS), in 1816 engineered a cycle of prosperity and depression. The central bank caused inflation by creating debt/money for loans and credit and making these funds readily available. The economy boomed. Then they used the inflation which they created as an excuse to shut off the loans/credit/money.
The resulting shortage of cash caused the economy to falter or slow dramatically and large numbers of business and personal bankruptcies resulted. The central bank then seized the assets used as security for the loans. The wealth created by the borrowers during the boom was then transferred to the central bank during the bust. And you always wondered how the big guys ended up with all the marbles.

Keep in mind that when banks foreclose on a property they don't loose anything, they gain everything, they gain all the assets as security for the loan. So banks still have the assets of the property even when the bank "fails" due to not having enough cash on hand. The FED steps in and buys the assets which were security for the loans. The FED creates a crisis then buys the secured assets of a bank. We the American taxpayer pay the FED interest in the form of federal income tax. A TOTAL SCAM!

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Have you ever thought about what the "Federal Reserve System" is and who controls and owns it? It is owned by about 300 "stock holders" These 300 stock holders control the US Government by controlling the US economy through the money they print and "loan". Who are these 300 "stock Holders"? Read the article below to find out.

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The FED controls the US Government through international bankers.
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These interests control the Federal Reserve through about 300 stockholders:

* Rothschild Banks of London and Berlin
* Lazard Brothers Bank of Paris
* Israel Moses Seif Bank of Italy
* Warburg Bank of Hamburg and Amsterdam
* Lehman Brothers Bank of New York
* Kuhn, Loeb and Co. of New York
* Chase Manhattan Bank of New York
* Goldman, Sachs of New York
Because of the way the Reserve was organized, whoever controls the Federal Reserve Bank of New York controls the system, About 90 of the 100 largest banks are in this district.
Of the reportedly 203,053 shares of the New York bank:

* Rockefeller's National City Bank had 30,000 shares
* Morgan's First National Bank had 15,000 shares
* Chase National Bank had 6,000 shares
* National Bank of Commerce (Morgan Guaranty Trust) had 21,000 shares.
A June 15, 1978 Senate Report called "Interlocking Directorates Among the Major U.S. Corporations" revealed that five New York banks had 470 interlocking directorates with 130 major U.S. corporations:

* Citicorp (97)
* J.P. Morgan Co. (99)
* Chase Manhattan (89)
* Manufacturers Hanover (89)
* Chemical Bank (96)


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These are the major 'stock holders" that control the US Government

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It is believed that the Rothschilds hold 53% of the stock of the U.S. Federal Reserve. Each year, billions of dollars are "earned" by Class A stockholders from U.S. tax dollars which go to the Fed to pay interest on bank loans.

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Rep. Wright Patman of Texas said that the Federal Open Market Committee (who, in addition to the Board of Governors, decides the country's monetary policy) is "one of the most secret societies. These twelve men decide what happens in the economy ... In making decisions they check with no one -- not the President, not the Congress, not the people."

Rep Patman also said:

"In the United States we have, in effect, two governments ... We have the duly constituted Government ... Then we have an independent, uncontrolled and uncoordinated government in the Federal Reserve System, operating the money powers which are reserved to Congress by the Constitution."

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Congressmen and Senators down through the years have openly spoken of the hidden government that controls America. Only a few have told us the truth. Only a few of Americans have listened or understood what they were saying about the Federal Reserve System. The secret meetings of the "open market committee" control the US Government by controlling the economy. This is easy to understand if you take the time to learn about the Federal Reserve System which is a private banking system controlled by foreign bankers!
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Have you ever thought of who pays the interest to the Federal Reserve System? The American taxpayer. The amount of interest the taxpayer pays is controlled by Congress when it lowers or raises the amount of tax we pay each year. So there are the interest rates we pay for loans controlled by the FED Reserve and the interest rates we pay the FED, controlled...no not by Congress as you would think..., in the form of income taxes. We actually pay the FED in interest twice!

We the people live on one large plantation called THE UNITED STATES OF AMERICA

Lets think about what just happened. The FED convinced Congress to borrow money from them to "bail" out their own stockholders. This is money that the FED has loaned to the US Government with interest paid by the taxpayer along with the money borrowed.

This is called "spreading the wealth around" as Obama put it. He said he wants to spread the wealth around. The FED has been doing just that for the last century and Obama wants to spread it around even more. George Bush has been spreading the wealth around just as have all the Presidents and Congress for the last 100 years. Because the FED Reserve controls the economy the FED also controls the President and Congress. For this to have become known to me I have had to simply take the time to study who the Federal Reserve is, who owns it and what it does. Most Americans don't care or don't know about the FED Reserve. It is very strange to think that the shadow government controls America but it is true.

Rep Patman also said:

"In the United States we have, in effect, two governments ... We have the duly constituted Government ... Then we have an independent, uncontrolled and uncoordinated government in the Federal Reserve System, operating the money powers which are reserved to Congress by the Constitution."
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The Bank of England was granted a royal charter on July 27, 1694, by William III to regularize the monarchy's finances. This scheme was invented by a Scot promoter named William Paterson. The scheme was to create a bank with a "fund for perpetual interest". Fractional reserve banking was created, along with the radical monetary concept of a "monopoly" bank which would create money for loans that would never be repaid. A perpetual money machine for the monarchy was born. The permanent National Debt was born. The Bank of England would finance the emerging empire from its headquarters in the City of London. Never again would the lack of money, or liquidity, hamper the British empire under normal economic conditions. Conveniently, the monarchy also controls the City of London. This assures that the heart of the economic machine will always be protected.
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The US did everything in their power to remove British influence and control from this continent. Again and again we defeated all attempts to allow our money to be controlled by a National (Central) bank. When Central banks were established, we abolished them. Times changed, and Thomas Woodrow Wilson was elected. The intellectual who wanted the League of Nations (the progenitor of the United Nations) was elected. Under his leadership, we received the Federal Reserve, and the Sixteenth Amendment (Income Tax) shackling us into slavery to the British Crown forever. In 1917, Wilson made the world safe for democracy by plunging the US into World War I

On December 23, 1913, the Federal Reserve Act, also known as the Glass-Owen Bill, was passed. The Republican controlled Senate rammed the bill through when many members of the US Congress were home for the holiday. The President, Dr. Thomas Woodrow Wilson, signed it into law one hour after being passed by the Congress! Somebody very powerful really wanted this law passed. The Federal Reserve System is an independent central bank. Although the President of the United States appoints the chairman of the Fed, and this appointment is approved by the United States Senate, the decisions of the Fed do not have to be ratified by the President, or anyone else in the executive branch of the United States government. Buried in the legislation was the granting of total power over the monetary policies of all US banks. A very curious statement is found in the original 1913 law. SEC. 30. The right to amend, alter, or repeal this Act is hereby expressly reserved. Reserved expressly to whom, or what? No definition is provided. This is the entire Section 30 statement! "Curiouser and curiouser, cried Alice".

Stock not held by member banks shall not be entitled to voting power. This clause guarantees that no outsider can justify buying shares in the Federal Reserve.

12 USC 3019 Federal reserve banks, including the capital stock and surplus therein, and the Income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

(The private bankers don't pay any income tax of any kind on their wealth!)

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The US government has no formal control over the foreign operations of the Federal reserve banks! The Federal reserve banks are exempt from all taxation. These people are very independent. Independent of audits, independent of congressional supervision, and independent of the American voter.


SEC. 25.Any national banking association possessing a capital and surplus of 1,000,000 dollars or more may file application with the Federal Reserve Board, upon such conditions and under such regulations as may be prescribed by the said board, for the purpose of securing authority to establish branches in foreign countries or dependencies of the United States for the furtherance of the foreign commerce of the United States, and to act, if required to do so, as fiscal agents of the United States. Such application shall specify, in addition to the name and capital of the banking association filing it, the place or places where the banking operations proposed are to be carried on, and the amount of capital set aside for the conduct of its foreign business. The Federal Reserve Board shall have power to approve or to reject such application if, in its judgment, the amount of capital proposed to be set aside for the conduct of foreign business is inadequate, or if for other reasons the granting of such application is deemed inexpedient.

(The Fed's financial independence arises because it is hugely profitable due to its ownership of government bonds. (It gives the government billions of dollars each year.)

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The British Crown, or the British monarchy is the owner of the Federal Reserve. This is their real secret. The strategy of the Federal Reserve is their other secret. Again, it is right of front of us, but no one sees the obvious. The strategy of the Federal Reserve is to accumulate all the wealth through the very slow, but effective, technique of currency debasement. The monarchs of old used to shave or clip the coins as they passed through their treasuries. Now the process is more sanitary (no more clipping and scraping all those dirty coins). John Maynard Keynes clearly stated that at there is no more effective method of destroying a society than through currency debasement.

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The primary reason for its success is the inability of most people to understand that more is not necessarily better. A recent conversation highlighted Kenyes's observation. There is some agitation to raise the minimum wage in my state. I listened to a proponent of a higher minimum wage. I attempted to point out that an increase in a large number of people's income would only result in prices going up, along with the obvious tax increases. "What was I talking about?" was the response. I explained that some percentage of people might wind up dealing with tax bracket creep (increases), and all will have with the obligatory tax increases that follow from any price increase. If nothing else, the sales tax must go up because the prices have gone up. I was immediately informed that I was the most negative person they had ever talked to.

The Federal Reserve will always debase the currency to take its cut, and guarantee that the government has a tax base available to feed its bureaucratic family. The government is a total slave of the Federal Reserve. For example, analyze the latest real estate boom. There will be a major boost in property taxes based on the new valuations. Many people will be surprised when they receive their new tax bill. This will guarantee more money for the government coffers. They know that people will do almost anything to keep their homes. What's another job or two per family? Besides, the extra job will provide more tax revenue for the government. This will require more day care, or baby-sitting services for many families, which create more income for the government. This will cause more meals to be eaten out, which creates more revenue for the government Meanwhile, prices will continue to go up, which creates more sales tax revenue for the government. Are you getting the point yet? Deflation is end of the government. The local, state, and federal government will all fail!

This is the strategy of the Federal Reserve. The majority of the people will always believe that more is better. Knowing that, and now having a democracy ensconced in the US, it was time to feed and breed. Prices always go up, and everything is "Wunnerful, Wunnerful" Bring on the Champagne Lady. Alan runs the bubble machine. The illusion of money has destroyed most people since society (goverment) developed socialism. Democracy feeds on the illusion of something for nothing. As each demagogue promises more than his competition, the tax burden becomes oppressive. The monetary illusion serves to conceal the costs through currency debasement. This assures the complete destruction of the society that embraces this perversion. Any attempt to introduce logic into a dialogue will be defeated by claiming you're an elitist devoid of compassion. Envy, hate, and manipulated passions are the hallmark of democracies. While all this destruction is occurring, money diverted by the mechanism of currency debasement is constantly being transferred to the British Crown in the City of London.

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What is happening now has happened before.

OCTOBER-NOVEMBER 1907: A run begins on October 23rd on the Knickerbocker Trust Co. that wipes out that bank, many other banks fail, unemployment rises, and food prices soar. Increased bank deposits infused by the United States Treasury restore confidence, supported by loans from such capitalist leaders as J. Pierpont Morgan.


Its all the same scam over again.

March 10, 1933: By the continued use of paper money the United States had to be declared bankrupt, which was proven by the bankruptcy procedures that were followed in President Roosevelt's Executive Orders. President Roosevelt declared the United States bankrupt by Presidential Executive Order, 6073 and the subsequent Executive Orders, 6102, 6111 and 6260.[these documents are still publicly attainable in any federal depository library]

AUGUST 14, 1935: The Social Security Act [Federal Insurance Contribution Act] becomes law, the American people are told this is a insurance policy. This is actually an agreement between you and the United States government where you have agreed under tort law that you have contributed to the national debt and that you are a wrong doer under the definition of the word contribution, as it is used by the government. [see the word contribution and the words tort feasor in Blacks Law Dictionary 6th ed.

The money paid to "social security" goes directly to pay the "national debt" which is interest paid to international bankers controlled from London through the FED.

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NOVEMBER 28, 1961: President Kennedy "reached the decision that silver metal should gradually be withdrawn from our monetary reserves."

1963: Six days prior to President John F. Kennedy being assassinated, he ordered the Treasury to print United States Notes to be used as legal tender, a limited amount were printed before his untimely death. This action would have put the federal reserve out of business because they would no longer be able to collect interest on the money they would have printed. This would have eventually removed the financial and political control the international bankers had over this country. Ten days prior to his assassination President Kennedy said "The high office of President has been used to foment a plot to destroy the American's freedom, and before I leave office I must inform the citizen of his plight."

NOVEMBER 22, 1963: President John F. Kennedy is assassinated. One of the first acts President Johnson orders is the reversal of the order President Kennedy had made, which had allowed the printing of United States Notes without interest. Was President Kennedy assassinated for the same reasons as President Lincoln?

NOVEMBER 26, 1963: Prior to this date the federal reserve notes were a promise to pay and were redeemable on demand by the bearer for lawful money. After President Johnson's order to remove the United States notes, the Federal Reserve issued federal reserve notes without the promise to pay to the bearer on demand lawful money. Interestingly, the first fifty million no-promise federal reserve notes were shipped out the same day that President John F. Kennedy was buried.

Today the American economy operates under a monetary system which is completely outside the Constitution. Its fiat money is continually manipulated both in value and in quantity. [THE MAKING OF AMERICA 1985]

The definition of fiat money is: "money composed of otherwise essentially valueless things that neither have a commercial use nor constitute a claim against anyone, but do have a special legal qualification. The money is not the material bearing the stamp as authority but the stamp alone."

What is the Federal Reserve I really want to know?


Yes the Fed controls national elections also!

RCP average poll chart before election reveals what got Obama elected

Lets examine what happened to get Obama elected president

This is when Mccain's average poll lead on 9/8/2008 started to go down. From this date on Obama started to gain ground in the average poll. From this data is is real clear what got Obama elected. On Sept 7 the US government seizes control of Fannie Mae and Freddie Mac. This seemed to be timed to cause a crisis that would favor Obama and ensure his election. The rcp poll reveals the "manufactured crisis was timed to elect Obama. Mccain was leading on 9/8/2008 and on 9/15/2008 Obama started leading in the rcp poll and stayed in the lead until he was elected.

Sept. 7. In a bid to stabilize the nation's troubled housing market, the government seizes control of Fannie Mae and Freddie Mac, two publicly traded companies that together hold or guarantee about half the nation's mortgage loans. (Mccain starts going down in the polls at this date.)

_Sept. 19. Following a series of ad hoc measures, the U.S. government announces a broad rescue plan for the financial system, including a program to buy hundreds of billions of dollars of bad mortgages and other forms of toxic debt that have been weighing down U.S. financial companies. The Fed and Treasury Dept. shore up money market funds, which had also come under siege during the crisis, and the SEC temporarily bans short-selling — a way of betting that a stock will fall — against shares in 799 financial stocks. (Obama starts going up in the polls on this date)

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The sweeping financial rescue package announced by the government on Friday marks the latest phase of a wrenching upheaval that has reshaped the U.S. financial system in recent months.

The crisis started over a year ago with problems stemming from aggressive lending practices in the subprime mortgage market and has spread to infect many other forms of credit, leading to a crisis that has subsumed three Wall Street investment banks and one of the world's largest insurers.

Here is rundown of major developments:

_ March 16. Bear Stearns Cos. is bought by JPMorgan Chase & Co. in a deal orchestrated by and backed up by the government following a sharp decline in shares and a collapse in confidence in the company.

_ July 11. Federal regulators seize IndyMac Bank after it succumbs to the pressures of tighter credit, tumbling home prices and rising foreclosures. IndyMac is the largest thrift ever to fail in the U.S.

_ Sept. 7. In a bid to stabilize the nation's troubled housing market, the government seizes control of Fannie Mae and Freddie Mac, two publicly traded companies that together hold or guarantee about half the nation's mortgage loans.

_ Sept. 10. Lehman Brothers puts itself up for sale after reporting a $4 billion loss and says it will spin off its troubled commercial real estate assets.

_ Sept. 14. In a weekend of furious negotiations, U.S. regulators make it clear there will be no government bailout for Lehman Brothers. Fearful of fallout from a Lehman failure, Merrill Lynch & Co. arranges a hasty deal to be bought by Bank of America Corp.

_ Sept. 15. Lehman Brothers declares bankruptcy, the largest ever in the United States. Investor concerns turn next to American International Group Inc., a giant insurance company, after a plunge in that company's stock and downgrades to its debt by credit ratings agencies who say the slumping housing market could further undermine its finances.

_ Sept. 16. The U.S. government announces an $85 billion emergency loan to rescue AIG, saying a disorderly failure of the company could further disrupt already delicate financial markets and the economy.

_ Sept. 17. The Securities and Exchange Commission bans some aggressive forms of short-selling.

_ Sept. 18. The Federal Reserve and central banks in Europe and Asia pump up to $180 billion into money markets in a bid to free up a lending freeze between banks. Markets rally on hopes for a broader government rescue package. That night, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke ask Congress for authority to rescue banks by buying bad assets from them.

_Sept. 19. Following a series of ad hoc measures, the U.S. government announces a broad rescue plan for the financial system, including a program to buy hundreds of billions of dollars of bad mortgages and other forms of toxic debt that have been weighing down U.S. financial companies. The Fed and Treasury Dept. shore up money market funds, which had also come under siege during the crisis, and the SEC temporarily bans short-selling — a way of betting that a stock will fall — against shares in 799 financial stocks.


So the bottom line is clear, real clear. Mccain started to go down in the polls almost exactly when the government announced the plan to bailout everybody and their brother. THE GOVERNMENT OFFER OF A MASSIVE GIVEAWAY TO THE PRIVATE AND PUBLIC SECTORS TILTED THE ELECTION TOWARD OBAMA AND THE POLLS REVEAL EXACTLY THAT. OBAMA DID NOT GET ELECTED FOR ANY OTHER REASON!

Meldown Timeline or Manufactured Crisis Timeline

REAL CLEAR POLITICS TIMELINE SHOWING HOW THE ELECTION WAS MANIPULATED TO FAVOR OBAMA

Obama looks like a kid with a cool aid stand

Notice the kid type little emblem on the cool aid type sign The Office of the President Elect. This is the mentality of Obama and his hood. In reality there is no President elect until Jan 6, 2009 when a joint session of Congress meets to count the electors. This is the time Congress can close down the "cool aid" stand and sent Obama back home to Kenya.

Write your Senator and Congressman demanding they OBJECT to Obama's qualification to be president, before Jan 6, 2009 when a joint session of Congress meets to count the electorial votes, because of his dual citizenship at birth of which he has admitted. Because he was a DUAL citizen at birth he is not a natural born citizen with loyalty to one country but to two different countries. This is why the constituiton stipulates a President must be natural born with only one citizenship!

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Obama is a dual citizen at birth as he has stated on his web site: quote

"When Barack Obama Jr. was born on Aug. 4,1961, in Honolulu, Kenya was a British colony, still part of the United Kingdom's dwindling empire. As a Kenyan native, Barack Obama Sr. was a British subject whose citizenship status was governed by The British Nationality Act of 1948. That same act governed the status of Obama Sr.'s children: British Nationality Act of 1948 (Part II, Section 5): Subject to the provisions of this section, a person born after the commencement of this Act shall be a citizen of the United Kingdom and Colonies by descent if his father is a citizen of the United Kingdom and Colonies at the time of the birth. In other words, at the time of his birth, Barack Obama Jr. was both a U.S. citizen (by virtue of being born in Hawaii) and a citizen of the United Kingdom and Colonies (or the UKC) by virtue of being born to a father who was a citizen of the UKC. "
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When Barack Obama Jr. was born on Aug. 4,1961, in Honolulu, Kenya was a British colony, still part of the United Kingdom's dwindling empire. As a Kenyan native, Barack Obama Sr. was a British subject whose citizenship status was governed by The British Nationality Act of 1948. That same act governed the status of Obama Sr.'s children:

British Nationality Act of 1948 (Part II, Section 5): Subject to the provisions of this section, a person born after the commencement of this Act shall be a citizen of the United Kingdom and Colonies by descent if his father is a citizen of the United Kingdom and Colonies at the time of the birth.

In other words, at the time of his birth, Barack Obama Jr. was both a U.S. citizen (by virtue of being born in Hawaii) and a citizen of the United Kingdom and Colonies (or the UKC) by virtue of being born to a father who was a citizen of the UKC.

Obama admits he was a dual citizen at birth direct from his web site link to factcheck.org
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CLOSE DOWN OBAMA COOL AID STAND

Despite Bells and Whistles, 'Office of President-Elect' Holds No Authority. The props that decorate the stage for the Office of the President-elect serve as just that, since Barack Obama will hold no actual authority in the Executive Branch until Jan. 20.

But the props are merely that. Under the Constitution, there is no such thing as the Office of the President-elect. Technically, Obama will not even become the president-elect until the Electoral College convenes after the second Wednesday in December and elects him based on the results of the Nov. 4 general election, as stated in the Constitution.

Obama Cool Aid Stand Is A Prop As He Is


Obama Admits Dual Citizenship At Birth

Details Of Obama Forgery Exposed Obama is just a con artist

Details Of Obama Forgery Exposed



Details Of Obama Forgery Exposed

Forged images, phony photos, and felony fraud Read This Link And Know The Facts

There are current Federal laws in place that prohibit the use of false identity documents, such as a birth certificate, and they are spelled out in Chapter 18 of the United States Code, Section 1028, Fraud and related activity in connection with identification documents, authentication features, and information. In particular, there are specific paragraphs that relate to the use of a false identification document:

The term "false identification document" means a document of a type intended or commonly accepted for the purposes of identification of individuals that - (A) is not issued by or under the authority of a governmental entity or was issued under the authority of a governmental entity but was subsequently altered for purposes of deceit; and(B) appears to be issued by or under the authority of the United States Government, a State, a political subdivision of a State, a foreign government, a political subdivision of a foreign government, or an international governmental or quasi-governmental organization.

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How can anyone doubt Obama is a fraud. Only a fraud would produce a fake "certification of birth" that was a forgery.
Barack Hussein Obama has been vetted by no one.
If the democratic party "vetted" Obama they didn't find he was an illegal alien. It appears he is.

The DNC in the state of South Carolina only certifies that he was nominated on 28th Aug 2008 and nothing else! They say nothing about his citizenship. The DNC expects Americans to take it for granted he is an American citizen qualified to be president just because the DNC nominated him.

I sent a letter to my SC Secretary of State asking him how he had certified Barack Hussein Obama and he referred me to the state election commission. The SC State election commission sent me copy of "Offical Certification Of Nomination" from the DNC.

Copy of DNC certified nomination of "obama" or fraud

The only vetting that has been done on Obama is by the DNC and they will only certify that he was nominated to be president.

We are to believe the DNC and a certified forgery!


Obama's 'Born' Conspiracy: Forged images, phony photos, and felony fraud

All this is to conceal the fact he is a dual citizen at birth or an illegal alien. The fact that the certification of birth is a fraud is enough to prove obama is a fraud. Obama really is just a Chicago THUG! This is what thugs do for a living, steal identities etc. Even if by some miracle obama produces a COB the fraud on his web site reveals what he is and what he does for a living. He is a CON man and nothing else. He has managed along with his communist friends to defraud America.

The economic crisis was induced by Congress more evidence

I don't know if this comment is true but it sounds like a piece of the puzzle. Can you believe this, the seller provides the down payment through a charity to get the minority into the house then the seller gives the charity their money back. The sellers just raised their price to get their money back and unload a house on a minority that could not afford it. All the while the rev "wright" types were telling the minority to buy a house and take advantage of the free money. The US governent scam to create a crisis in the future!
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You just reminded me of something a real estate developer told me a couple of years ago... He built subdivisions in an urban (i.e. black) part of town and his marketing campaign involved putting ministers on commission.

They'd stand in the pulpit and declare that buying a home is the first step of fulfilling the American dream and their Christian duty. Every church member who bought a house, the minister got a check.

It was all legal, apparently, if the payments were structured as part of a downpayment assistance program. Legal, that is, until the IRS took the punchbowl away in 2006.

So, one of the things that pricked the Housing Bubble in 2006 was the IRS cracking down on this form of "charity."

Here's a cogent description of the scam from a recent press release by the apartment building lobby. Obviously, the people who rent out apartments are biased, but, at least they didn't plunge the world into economic chaos, so they've got that going for them:

Congress Should Protect Taxpayers and Retain the Ban on 'Charity' Downpayment Schemes

WASHINGTON, Sept. 16, 2008 /PRNewswire-USNewswire/ -- Congress should pause and carefully consider the consequences before it acts to overturn its recent ban of so-called "charity" downpayment assistance schemes, according to the National Multi Housing Council (NMHC) and the National Apartment Association (NAA).

Under these programs, a non-profit provides a downpayment to the buyer and is then reimbursed by the seller, often a home builder. In 2006, the IRS stripped several of these non-profits of their tax-exempt status, ruling that the programs benefit sellers more than buyers since sellers often raise their asking price to cover the amount they theoretically "donated."

"These circular funding programs come with good intentions but produce loans that are three times as likely to go into foreclosure and merely perpetuate the tragically failed policy of zero-downpayment lending that helped create the current foreclosure crisis," noted Jim Arbury, Senior Vice President for the NMHC/NAA Joint Legislative Program.

"Congress wisely banned these programs in the Housing Stimulus Bill that it passed in July," said Arbury. "Now it is considering stepping back and once again allowing them. This would be a mistake that would lure more individuals into unsustainable homeownership and put taxpayer dollars at risk."

"These loans skyrocketed from six percent of the Federal Housing Administration's mortgage originations in 2000 to approximately 30 percent as of 2004, and now threaten the financial viability of the FHA," said Arbury. "The FHA says it expects to lose $4.6 billion in 2008, an unanticipated loss it attributes largely to seller-financed downpayment mortgages."

"Today, the House Financial Services Committee will consider a bill (H.R. 6694) that would overturn the ban and purportedly protect the FHA by limiting the use of seller-financed downpayment assistance to households with credit scores above 620," explained Arbury. "Unfortunately, the wishful thinking that higher credit scores translate into lower default rates is not borne out by the facts. According to HUD data, even households with the highest credit scores required by the bill are twice as likely to default if they use downpayment assistance."

"This is why seller-funded downpayment assistance programs have come under fire from the IRS, the Government Accountability Office and HUD's Inspector General's Office," Arbury concluded. "For its own financial health, the FHA should not be forced to return to insuring loans that involve seller-funded downpayments."

Keep in mind there is nothing "wise" about Congress.