Rolling Over Loans, Federal Prosecutions - Open Letter

Hello..,

As a concerned citizen I've been very worried about all of the free money that mayor has said that city is getting from non-tax revenue.

Anytime someone starts bragging about money for nothing, you know there's always a catch. I assumed at the time that I heard it, that the city was rolling over loans, so they would balloon and explode later. I knew that municipalities and governments were doing this, as I keep up with topical financial issues and enjoy researching economics and science.

After all, when people who are accustomed to living in a certain way, find their costs going up, it's typical for them to begin running up debts. They start using their credit cards for income or take on a second mortgage, in hopes that their personal downturn is temporary. This is fine so long as the downturn is temporary.

In our current nation's downturn, I cannot find a single reason to believe that recovery is co,ming in the next few years. Sure the Federal Government shows happy figures demonstrating that we're being flushed down the toilet at a slower rate. But later, like clockwork, they come out with the corrected reports that tell us that the flushing is going faster.

In fact, none of the problems that led to our nation's crisis has been repaired. Instead, the Federal Government has given their rubber stamp of approval to continued fraud on multiple levels. The Federal Government has no choice. Foreign investors have been dropping out of the Treasury Auctions. Our Federal Government's parabolically rising deficit, is being supported by a form of rollover refinancing. Much the same sort of shgenaighan that many US cities are doing. The same sort of creative financing that brought down Greece. The same sort of financing, that I suspect, but cannot prove, that The City Of Irving is getting it's 'free' money from.

What the Federal government is doing is guaranteeing loans from the Federal Reserve to the major banks, at effectively 0% interest. These loans are guaranteed by the taxpayer and will have to be repaid by the taxpayer, if the banks don't pay it back. The banks then loan this free money to the Federal Government at 4% interest. The taxpayer is on the hook of course to pay this back and to make interest payments, effectively on money it loaned to the banks. When these banks run into financial trouble again, and they will, then the taxpayer will have to repay $Trillions of dollars to the Federal Reserve. $Trillions to the banks when they call the loans. Then $Trillions again to bail out the banks. The US Gov will likely just speed up the rate of borrowing in order to pay this off. Rolling over debt is like that. It tends to go parabolic and the borrowing has to increase in speed with every crisis.

In the mean time, the biggest banks are operating with effectively no reserve requirements. They are marking dead beat loans at full value, and Goldman Sachs is actually front running trades, by illegally operating computers inside the Exchanges to to act as an illegal middle man to suck the difference out of third party trades. The Federal Government has sanctioned all of this, while buying up toxic loans at face value, not market value, to cut their losses and transfer them to the taxpayer. The Federal Government has allowed this in order to help banks, that are actually too big to profit from business dealings on a finite planet, to keep growing.

When the next crisis comes, the Federal Government will have to find even more outrageous ways to keep the majors growing.

I know this email is getting long, but I'm getting to my point. This next crisis increase the rate of job loss and do more damage to state and city revenues. Irving, because it's in the middle of the country (East West Vantage), sees a lag in the nation's economic problems. But as you well know, it's not immune. In the upcoming downturn, I expect Irving to take a bigger hit.

If as I suspect, Irving is rolling over loans in some creative accounting games, the banks are likely to call the notes. They have been doing this in city after city already. They know that they have been selling time bombs to our nation's cities. And they make counter bets that these creative loans will fail. Counter bets that they know will be guaranteed by the US taxpayer. It's fraud that they are engaging in. But it's government sanctioned fraud. Even as city council members and contractors in cities all over the USA are going to prison for taking these deals, the bankers themselves appear to have immunity from the law. The US Gov owes them so much money, it dares not hold them accountable.

I've been worrying about how the upcoming crash is going to affect my city. I suspect that the city is getting this free money through such creative accounting tricks, even as it's residents see their jobs lost and salaries cut. I could well be wrong. Our Mayor and his lavishly salaried City Manager buddy, may have found a magical money tree. But the lack of transparency in their statements about where the money is coming from, has me assuming the worst.

And have you followed the City of Birmingham Alabama? According to a recent Matt Taibbi article, almost everyone in the upper levels of the City government and many in the county, went to prison for their dealings with the banks. "If you go into the county courthouse," says Michael Morrison, a planner who works for the county, "there's a gallery of past commissioners on the wall. On the top row, every single one of 'em but two has been investigated, indicted or convicted. It's a joke.". The bankers ran off with the money and no persecutions.

http://www.rollingstone.com/politics/story/32906678/looting_main_street/print

I heartily suggest that you read Matt Taibbi's article. When the City of Irving crashes financially, Federal Prosecutors will be combing the personal records of everyone in the city government. I hope and pray that our city leaders are not engaged in the same shenanigans that have swept our nation like a cancer. But the odds are, that the City of Irving has walked into the same trap that many other cities have walked into.

If my suspicions are correct, then it's not a matter of if, but when. Because you can't keep rolling over loans on a declining income. Eventually, you'll come up short and you'll fall into arrears. The banks have really done a number on our economy, just as they did in South America in the 1990s. There is no reason to believe that we'll fare better.

I hope that I am wrong. I hope that our city has not fallen for these traps. When the decision to give the City Manager a princely luxury salary was made, at the beginning of our crisis, I have to admit, my hopes were all but lost. When magical non-specific reassurances of free money were announced, I began to fear the worst.

I wait now, for the next wave crisis to wash over our nation, to see if my fears will be confirmed.

Are you ready for the upcoming mass layoffs the city will have to engage in, to cover the bonds?

Sincerely,
An Irving Resident.