If you blame Ben Bernanke about what a mess the Fed has made to this country in terms of income/wealth distribution inequality within the last decade, he would most likely give you an answer of defense in his typical lip’s movements beneath the mustache only that it is not his job to give it a damn. It is the Congress’ fault that they only gave him and the Fed two mandates of fighting inflation and stimulating the economy/job creation only.

So forget about downgrading and removing one of the mandates and let the Fed focus on maintaining price stability only. We should ask them to upgrade and start focusing on three mandates, fighting future inflation, lowering unemployment and avoiding income/wealth distribution inequality.

Even when that happens, I am afraid that little school boy Ben would most likely come home with a report card with 2 F’s on fighting future inflation and avoiding income/wealth distribution inequality and a D in lowering unemployment/job creation so far. He most likely would have spent too much of his time on only one subject.

Let’s hope by adding this new dimension of avoiding income/wealth distribution inequality would make the Fed’s taxpayers sponsored jobs a bit more deserving than simply doing nothing but the two dimensional game of thumbs up or thumbs down on interest rates during their Federal Open Market Committee (FOMC) meetings.

P.S. Perhaps Ben deserves an A for the extra-curricular activity and self-created mandate of helping bail out the cronies?

Governments who set up policies using those ill-advised primitive methods (e.g. the original HOPE for Homeowners proposal in 2008) have only destroyed people’s confidence in the equity sharing concept to solve the problems and let the mortgage foreclosure problems deteriorate further day by day. The Hope for Homeowners (H4H) Program is a loan program that was a part of the Housing and Economic Recovery Act of 2008. The guidelines for the product were released by FHA on October 1st, 2008.

In the original HOPE for Homeowners (H4H) offering, the Federal Reserve together with the HUD Team proposed a non-free market based arbitrary equity sharing scheme for debt principal reduction as (Ref 3)

100% if the property is sold after 1 year

80% if the property is sold after 2 year

70% if the property is sold after 3 year

60% if the property is sold after 4 year

50% if the property is sold after 5 year

There were few takers. Any further consideration by other national policy makers and economists of using equity sharing related concepts to solve our country’s severe housing-led economic problems on a large scale also quickly died with it too for now. The incompetence of these policy makers is indeed very unfortunate and lamentable.

The worrisome part is that even when the top level politicians change posts later on these same technical middle level managers may still be the ones that will continue to squat on the same positions at the Fed and at the HUD since these subject matters may be deemed too technical for the top level politicians or top level policy makers to mess around with.

Will a new President make any difference?

So economically

1. the need for economic stimulus activities to revive our national economy is agreed and accepted by all, although not agreeable on what methods.
2. the linkage between a robust local property market, i.e. increased home equity hence wealth for home owners, and local economic prosperity on Main Street is well recognized by academics and politicians.
3. using more debt to blow up more property, stock and bond market bubbles again will only be another temporary fix similar to kicking cans down the road to build up bigger problems down the road.
4. lowering interest rates further will not benefit the home owners and small businessmen on Main Street since the credit distribution channel has been impaired during most depressed time periods of the economy.
5. pumping more money and liquidity into the system will only benefit the rich further since only the rich has access to even more credit.
6. the rich top 1% in our society, their financial advisors, hedge funds, private equity firms and even US based multi-national corporations will use the excess dollar liquidity to invest in high GDP growth countries such as China, India, Brazil, Russia, Australia, … etc. to further enrich themselves.
7. the dollar liquidity created by current monetary policies conducted by Ben Bernanke and his cohorts at the Fed to date has created more jobs for foreigners than for us Americans on Main Street.

and politically

1. the bailout of big banks and Wall Street firms is both unpopular and unwise to the 99% of our population.
2. more Quantitative Easing (the various QEs) has proven to be toxic to everyone but the Wall Street professionals.
3. raising taxes could be detrimental or even fatal to the remaining careers in Washington DC for most politicians.
4. ramping up more budget deficits hoping to kick the can down the road to the next administration has become more obvious and unpopular to the public.
5. creating jobs for foreigners through pumping out more dollars while providing low cost of fund to and making the hedge fund and private equity investment gurus richer at our country’s expense has been understood by even the most economically illiterate citizens has discredited the Fed’s reputation day by day.
6. destroying American jobs and killing small businesses on Main Street through a lack of competence in the current economic policy makers has created extreme inequality and has been turning our country more and more towards the left and will further the causes of many variations of the Occupy Wall Street (OWS) movements.

Perhaps it is time for the economic policy makers and their technical staff members to learn something new and take a serious look at how our country could use the property equity sharing concepts and the various free market based business methods developed to date as a new set of economic stimulus tools?

It seems to be easier said than done. For one thing, why the economic policy alternatives using the new equity sharing concepts and made possible by FARJHO and SwapRent have not made an impact so far? Without pin-pointing where the problems are these repeated suggestions could just be further waste of efforts.

1. the equity sharing related subject matter may be deemed too technical by policy makers and their technical staff since it is new.
2. suspicion of any new innovations created by other people.
3. resistance to learn something new in order to change.
4. those people who have first spent the time to learn these new concepts and methods are still at a stage of thinking about equity sharing’s micro level application for foreclosure avoidance for distressed home owners only.
5. few people so far until this date have realized the importance of connecting these new property equity sharing concepts and methods with the macro level application to perform massive economic stimulus on either a national or a local level that would, on a free market basis without government’s monetary assistance, cover distressed home owners, big and small property speculators as well as any other free market based investors alike.

As a case in point, here is an example. Back in 2008, the respectable Founder and Chairman of the Peterson Institute Pete Peterson had forwarded the SwapRent solutions to the Republican presidential candidates and had been very supportive of the causes represented by FARJHO and SwapRent. However, David Walker, his staff and appointed CEO for the institute who was supposed to an expert on economic issues, advised him instead that

“Pete,
This proposal does not seem to differentiate between individuals who are deserving of help and those who aren’t. I don’t think that second homes, investment properties or individuals who entered into irresponsible primary residence mortgages should receive taxpayer assistance.
Dave
”
David’s failure to understand the basic principles of how free market capitalism could operate without having to rely on tax payer’s money is both surprising and lamentable.

That kind of attitude and lack of economic common sense is exactly what is stopping our government from seriously adopting property equity sharing concepts and methods as new innovative economic stimulus measures to create local jobs, revitalize local economies on Main Street in order to help save our country’s economic future.

The Obama Administration had similarly been informed with these proposals since before the election in 2008. Other than those primitive shared appreciation methods with unsuccessful results in the October 2008 Hope for Homeowners plan, there have not been other efforts in this regard. The H4H fiasco will be discussed in an upcoming article to be published this month and will be reviewed in the next blog post towards the end of the month.

Let’s hope the presidential candidates for 2012 would take a more serious consideration of using these new innovative economic policy applications of the equity sharing concepts and methods to solve our country’s economic problems in order to acquire a timely political advantage for themselves in the up-coming election.

Most economists, policy makers and concerned citizens probably have learned by now that it is the damaged credit distribution channels, not interest rate levels, that is blocking their desperate attempts to reflate the economic bubbles using debts alone. We all know that credit is a very funny thing. It is always plenty only to those people who do not need it. Therefore rich people have access to plenty and poor people can not get any. Excess money supply made possible by low interest rates have only been making the rich even richer and hence created more and more social tension on wealth distribution equality. Federal Reserve with its money pumping policies without the consideration of its negative effects of creating wealth inequality has hence been the henchman that has killed the middle class in America.

The only occasions when poor people could get credit is during the occasional irrational time of bubble building periods and when the credit process is being abused. When rationality returns, the supply of credit to the poor will come to a sudden halt as is what is happening now. On a further thought, this may not be a bad thing actually. Trying to re-energize the drug addicts with even more Cocaine in a desperate attempt is like kicking the can down the road to let other people solve the eventual real problems and could at most behave like a superficial temporary fix that may lead to much more expanded troubles down the road. A re-hab together with a new diet to create a new life would probably be a more prudent problem solving method.

Similarly, to re-energize our national economy, we will need to focus on alternative ways of financing, other than debt, to reflate our economy for both the short term and long term problem fixing purposes. As once students of finance, we all know that high risk ventures are usually financed by equities, not debts. For example, the entire industry of venture capital in Silicon Valley is focused on equity financing, shared equity financing in corporate ownership, to be precise. That same technique is exactly what we need now to reflate the home equity markets and hence our national economy.

FARJHO and SwapRent related new business methods that we provide only represent a few possible more superior business methods to implement this equity sharing or appreciation sharing economic concepts to attract more equity based fresh capital to resuscitate our national economy on a free market basis. In order to make it work, the national policy makers will need to learn and understand that the goal of rebuilding our national economy could be done through these equity sharing economic concepts. It does not matter whether they choose to use the new FARJHO and/or SwapRent methods or not. They need to open the doors and encourage free market investors to participate in all kinds of equity sharing business methods that utilize the equity sharing concepts so that there would be enough free market capital to flow back into local communities across America to re-create property market led economic booms on Main Street.

Using debt to blow bubbles should not be the only trick up their sleeves. It did not and will not work anyway since the credit distribution channels will not function properly in bad economic times no matter how low they make the interest rate levels to be. That is simply the nature of how credit works. On the other hand, as long as these new bubbles are not blown up through Other People’s Money (OPM), i.e. debt again, it would most likely be Ok for now to get us out of the recession and unemployment for most of the 99% population.

As I mentioned in earlier blogs many times before, asset bubbles are usually blown up by OPM using debt. It is a dangerous bubble that could be popped because it was blown up by hot air. Equity induced asset growth could act more like a hardened molten lava. Once it is cooled and hardened, it does not have to pop or shrink back again. This is due to the simple fact that if the asset was purchased by equity without using debt, when price level declines, there would not be any involuntary selling as would be the case if the asset was purchased with debt.

So the way to make this policy strategy works, the government will need to recognize the need to extend all kinds of smart and stupid property equity sharing methods on a massive scale and on a pure free market basis that include property speculators, not just to use these equity sharing concepts and methods on a limited basis to distressed home owners as a foreclosure avoidance tool only. That concept is similar to the same textbook difference in managing macro-economics vs micro-economics. We will need to use these new property equity sharing concepts and methods as a new way of doing massive macro-economic stimulus for our country.

When free market based investors are aware that these proactive innovative economic stimulus policies have been understood and finally adopted by the relevant policy makers, being implemented on a massive scale and most importantly that they could also participate in, free market based fresh capital will start pouring in automatically to make America rich again. These investors would come in voluntarily simply based on their views that the government is willing to ramp up the prices and hence a timely profit making opportunity for themselves.

The strategy above is a repeat of what has been said many times before in a different way on how to use the equity sharing concept and methods to get our country out of the current economic dilemma ( http://wp.me/p1Cgsz-gI ). When the economy stabilizes, how the government could continue to use SwapRent and FARJHO related new business methods as a third new way of economic policy management tools to stimulate or to slow down a country’s economic growth through the real estate property values of a country was explained more in details in an article that I have published before back in 2009 ( http://www.box.net/shared/v24qtqip4hlgff5l1646 ).

Hmmm …. I sort of got it right away why they were called socialist crabs. The socialists simply spend too much time worrying about how other people would make more money than they do rather than spending time to learn new skills to compete in the free market and make more money for themselves. They seem to enjoy more on how to pull other people down rather than working harder to learn how to climb up themselves to get out of poverty.

Why bother asking us to support their cause to indiscriminately tax all the rich people after some of the 1% may have made their money legitimately through their hard work and intelligence under a free market system? There should be no problems for them to protest to get the people power to mobilize the mass to put those crony politicians out of office and those crony capitalists in jail but blindly ask the country to tax the rich indiscriminately seem to be shooting blank and will not get anywhere. It also seems rather unfair. If those brave OWS folks have the guts, why don’t they simply stand up, shout out loud and name those cronies that have brought our country’s economy to its knees so that there could be a fair trial to bring them to justice?

Our country’s problems are the abusers, i.e. the crony capitalists and politicians that abused the capitalism system, not capitalism itself.

So if there are innovative ways (e.g. FARJHO and SwapRent) created by organizations like PeoplesAlly Foundation that common people on Main Street could finally get to bring the housing finance business and hence the money back to Main Street and let Wall Street cronies become the losers in a fair competition under the free market system, why wouldn’t that be a better choice? It did not happen before due to the intellectual power that Wall Street had long held for them to hold our nation hostage. Wall Street always seem to have the money power and political power to suck even more talents to feed on their own success. That is the situation that needs to be changed, through competition, not revolution!

Why can’t we try to bring the brainy power from Wall Street back to Main Street and have them work for common people on Main Street? If we could deploy these new equity sharing based housing finance innovations of FARJHO and SwapRent provided by PeoplesAlly Foundation through the credit union industry and the local community banks to compete directly with Wall Street with their dysfunctional mortgage securitizations system and their loan shark culture to beat the hell out of them, wouldn’t that be a more glorious battle to fight for?

If protesting could do anything for the OWS folks why don’t they focus on rallying the political power to make sure Main Street could have a level playing field to compete intelligently with Wall Street in their own games of finance in order to bring the housing finance business back into their own hands and manage it intelligently to create wealth for themselves on Main Street?

As I said before, the OWS folks may be able to occupy themselves with many more new jobs created by these new equity sharing FARJHO and SwapRent related business opportunities and in the process, they could also get themselves much more decent and comfortable shelters on Main Street through FARJHO and SwapRent than simply sleeping in cramp tents in Zuccotti Park or other city squares.

Now that they have been kicked out from occupying Zuccotti Park, I think they clearly need some intellectual leadership in setting some clear actionable goals in an OWS 2.0 movement effort next. Trying to solicit sympathy alone will most likely get them no where and offer really nothing to remove the crony establishments out of our system.

As far as our recommendation of actionable goals goes, how about trying to bring housing finance from the crony hands of Wall Street back to the common people on Main Street? That will immediately create many jobs that they could occupy themselves with, let alone getting a decent shelter for themselves, back on Main Street.

For a detailed plan, here again is the link to our public response officially submitted to FHFA, the regulator of the Fannie and Freddie, from PeoplesAlly Foundation in early September. http://www.box.net/shared/hpfqqajd1aremco716lr

Here below are some excerpts of our blog post exchanges on their site that I would like to give them an equal chance to voice their views to readers of our site.

============
Oh, I see. PAF makes the mistake of living in utopian-capitalism-fairy-land, and judging others from atop the throne in his ivory tower there ­ all the while just dividing himself from the common ground and letting himself be conquered by oligarchs who would laugh at him behind his back…

My short message to all the Mises / Libertarian crowd:

I know that the current system is not the ”capitalism” you regard religiously as near-utopia. But how in the hell do you not realize that the real world that people are living in today could not be brought to your free-market utopia for many, many, many years? How do you not realize that the money powers will not ever give you your utopia? This system is a one-way ticket to permanent, institutionalized, oligarchical collectivism. Oligarchy for the elites, collectivism for the masses.

Free-marketeers: you will be disenfranchised in the near future the way this system is going. Your idiocy is useful in think tanks and editorial pages when it comes to encouraging or justifying neoliberal economic globalization, or the latest privatization scheme, but your pesky idealism and your essential anti-authoritarianism leaves little room for you in the future of real capitalism ­ the capitalism of the real world. You need to realize that you are part of the 99.9% too, and you have to act on common ground with the rest of us now before we are divided and conquered into oblivion.

The unrealistic progressives are in the same boat as you are, and if you won’t help them now, they won’t be able to help you in the near future when Big Brother starts coming to oppress you, you unrealistic libertarian. This is about putting the brakes on a runaway capitalist machine heading for total fascism.

Why are you so paranoid that the Occupy Wall Street movement is more dangerous than the status quo? I too have grave reservations about what may come of nationalizations. The solution must be to come to the table and stand up against any tyranny that may come from any socialism that we enact to break the power of the big banks and the modern big politicos.

We don’t want to become the tyranny we despise. We don’t want to create a worse system. But the system right now is selling us out, totally abandoning us, and it will abandon you too. You won’t get your utopian free market capitalism from the status quo, ever. Just hold onto your highest ideals of liberty, opportunity, and justice and come to the table with us, and demand an end to the political bribery system, and an end to the power of the massive money-lending institutions known as the big banks and the Federal Reserve.
…………….

Okay, I checked out your website for the first time.

I see you are pitching a new way of home-ownership. By all means, continue your business and continue trying to convince people who have jobs or savings that your business is a better way for them to own a home.

Your system, which pretends that the dollar won’t collapse, and pretends that ”equity” isn’t just debt-based dollar ponzi speculation, is woefully inadequate to re-empower the people. As long as money only comes from debt, the banking money cartel will be the true government of governments and of corporations.

The ”free market” is predicated in large part upon rational individuals using their money, their savings, or their capital to make free economy. It requires a fair and just system of law. But our very system of money is too far corrupted at this point to pretend we can use a free market to save ourselves. Likewise with our system of law.
………………..

But I do respect your attempts to engineer something more fair for the common, Main Street people. Maybe your ideas will come into greater utility after we break up the money cartel and the Federal Reserve System.

The natural question that would arise next is that what generic name should we give to those organizations that offer the FARJHO program to consumers on a non-profit cooperative concept. Should it be called a “Credit and Home Equity Union” (CHEU), “Savings, Home Equities and Loans” (SHEL) or simply a “Home Equity Cooperatives” (HEC)? Of course the current technological peer-to-peer matching operations at http://www.farjho.com could be easily farmed out and be extended to service this new industry. It could be called a CUSO (Credit Union Service Organization) or more accurately a CHEUSO (Credit and Home Equity Union Service Organization), a SHELSO (Savings, Home Equities and Loans Service Organization) or a HECSO (Home Equity Cooperative Service Organization)?

The reason why that the term “Credit” is still preferably involved in the new name is to reflect the BPB (Borrow Pool Buy) member level financing that is unique in the new FARJHO structure instead of the conventional PBB (Pool Borrow Buy) way of property level financing in the conventional SEM (Shared Equity Mortgage), SAM (Shared Appreciation Mortgage) or all other equity sharing schemes as have ever been practiced in the US, UK, Australia or any other parts of the world to date.

So, should it be called a CHEU, a SHEL or a HEC? Please feel free to give us some feedback on your preferences for the new names. Thanks.

Squeaky wheels either get some oil or they get ear plug treatments. Without knowing exactly where the squeaky sound comes from, it seems most people just put on their ear plugs. I wonder why this could be an advantage for the OWS protestors that some of the OWS protestors have been trying to tout.

Without some specific goals and/or executable methods, the movement could potentially render itself to the exploitation by the extreme opportunists for a short cut ideological change. Somebody may have to come up with a way to organize them soon in order to rid the movement of these potential harmful abuses by the destructive extremists. Otherwise squeaky wheels may soon become flat tires that could paralyze our country’s economy.

Other economic pundits have predicted that this Occupy Wall Street movement might run out of steam before it gets to achieve anything significant. Personally I am not sure about it as most likely these people who made those comments did so right after they returned back from a shopping trip or from a business lunch in an expensive restaurant. While they got their living necessity fulfilled on schedule, the protestors’ situation has not change and would not change in the foreseeable future. It does not seem that the protestors would stop until they get what they need, let alone what they want, when they figure out what it is later. That sounds like a perfect hot bed for the left wing extremists.

The OWS protestors could have started out with a good cause to fight against the inequality from the abuses and abusers in our capitalistic society but if nothing drastic is done to fix the incompetent government leadership in DC and the crony establishments on Wall Street soon to correct the situations, something bad to our country would very likely evolve from here.

What PeoplesAlly Foundation’s efforts aim for is trying to provide the disadvantaged working class people in our capitalistic economic society some additional free market based choices specifically created for them to stand up and unite to fix the faulty and abused system before they get to resort to toggling between the conventional ideological switches.

There could indeed be many other new free market based alternatives brought about from new innovations such as the new equity sharing based home ownership structure of FARJHO, the new peer-to-peer cash flow sharing based housing finance system of SwapRent and the new foreign exchange rate pegging system of TARELV which could bring the economic and political power from the crony hands of Wall Street back to the common people on Main Street. Innovations on our economic policy management systems that is, not the conventional technological gadget inventions that people would normally associate the word “innovation” with.

With these new innovations on economic systems and policy management tools, disadvantaged working class people could finally get to try some new free market alternatives designed for them for the first time in order to fight for and gain equality against the privileged minorities on Wall Street and DC rather than simply giving up on capitalism and resorting to doing the futile historical toggling between capitalism and socialism/communism again.

=============
Excerpts from the debate on socialism and capitalism with left wing opportunists among the Occupy Wall Street protesters:

First of all. I’d like to let you know that I am on your side against the crony and incompetent establishment on Wall Street and in DC that have brought our country’s economy down to its knees. That is right, the crony establishment. Not capitalism. Don’t tell me you were born an egalitarian socialist and you always wanted to fight for your noble causes since you were little boy. That kind of story could only be made up afterwards for those people who did miraculously succeed and become a revolutionary hero one day. Neither Castro nor Mao cared the slightest about the ideological ideas between communism and capitalism. They just wanted their power and to win the wars.

They were all opportunists just like you are, trying to take advantage of the situation to enrich themselves with fame and power. When it is convenient for them to get people to support them they leaned towards the people’s psychological needs to win support in their power struggle. So it is really fruitless for us to go into a huge debate about capitalism and communism. I am not Adam Smith and you are no Karl Marx either.

All I know is that they both could be good individually and they both have their own disadvantages. On balance capitalism outweighs socialism and last longer because it is associated with more freedom and democracy. What is more interesting is that they both could coexist. Singapore is a good example of social capitalism and the modern day China is a good example of a totalitarian communism/capitalism by chance. It is only the extremist revolutionaries who wanted to have mutually exclusive monopolistic communism, socialism or capitalism system so that they could drive people’s naive ideological support like the power of a religion.

What I have observed in history is that socialism (communism) and capitalism come in cycles. For example, the Soviet Union in the 50′s was the strong and powerful country on earth. Due to the evil nature of people, whoever enjoyed the power for a long time, especially during a prosperity period, they started to abuse the system and enrich themselves with money and power. So it was always the abuses and the abusers of the systems that have brought the existing system down, no matter the existing system was communism or capitalism, and hence the revolution opportunity for the opportunists.

What you guys are doing was exactly what I expected when I set up PeoplesAlly Foundation earlier in the year. That was in fact the reason I had set it up because I believe in the free market system and wanted to offer an alternative to empower common people on Main Street by providing them with the necessary intellectual know-hows so that they could stand up and beat Wall Street in their own game. I could understand that when the system had been abused to the extreme the first knee jerk reaction of the disadvantaged class in the system is to ask for a change but they have not the slightest ideas what is the best change for them or for the country. So during that time it is easy to fan the disadvantaged people’s emotions and sell socialism or even communism if things really get worse to the people. That is what we wanted to help these people to avoid.

During the transitional periods in history, the revolutionaries might have succeeded through brutal forces, but after the regime changed hands, when they were bestowed the responsibility to rebuild the country, the ideological dogma could continue to hurt the people for quite a long time. Look at how long the Chinese people had suffered before they finally embraced a variation of capitalism system to bring up the prosperity. Yes the old capitalistic regime that they had toppled before was corrupt to the teeth and yes China’s class distinctions will continue to become polarized again when people get rich and start to abuse the system for personal benefits again, but at least there will be a period of prosperity for the people and many achievements for the human race. A Utopian socialism system would never be able to do that on the same scale.

In history nobody has ever tried to fix the capitalism system by toppling the crony establishment and keeping the good part of the capitalism in place when the abuse problems like what we are facing happened before. Why not give it a chance? Why do the revolutionaries always have to drag the whole system down?

Anyway, I hope you could understand, I am simply trying to offer an alternative for the change. Since it is no longer in the 30′s or 50′s, those old time communist style revolutions would have no chance to work in modern day America, nor should it. Arab Springs would not turn out to be what people had hoped it to be either since chaos simply does not produce prosperity.

All we need to do is to create a new type of capitalism to let working class people be able to stand up to compete with the corrupted Wall Street under the free market system without being held hostage by Wall Street through their superior intellectual power. That is exactly what our Foundation’s missions are. http://peoplesally.wordpress.com/foundation-missions/

One simple example, if you rally all your people to campaign and call for all American people on Main Street to stop doing business with the corrupt big banks on Wall Street and only do business with the independent community banks or local credit unions, wouldn’t that be a non-violent first step to let the corrupt big banks on Wall Street to die on their own? If the Federal Reserve Board and the Treasury Department are the crony forces that misdirected our country’s economic policies then vote them out and indict them for the sufferings they have caused us American people. All these could be done through proper channels without hurting the innocent majority of American people in a revolutionary change of a system.

Let’s be honest, these easy fixes for a revolution may be easier to accomplish but they may not make you a Che Guevara. This could be your chance in a life time to shine and you won’t let it go until something spectacular happens. The something spectacular may just hurt the millions on Main Street. So that is the choice you will have to make on whether what you are doing is for yourself or for our country.

My point is, capitalism has been abused by the economic elite exploiters on Wall Street and the crony forces in Washington DC, go fix them. We will all support you. Help shift the power and our country’s destiny back to people on Main Street. If you want to understand the blueprint of a new decentralized peer-to-peer financial system that is how we could help, beginning with bringing everybody’s housing finance back to common people on Main Street without the unnecessary participation of banks, Wall Street firms or even the federal government.

Please read the explanations and the academic papers on FARJHO and SwapRent at http://www.PeoplesAlly.org and feel free to ask me any technical questions on them. Housing is the first issue we will all need to fix for our country to have an economic future. I have repeated over and over again in other postings, it is very important that these new housing finance system inventions should not land in the wrong hands of the Wall Street exploiters or they would be totally ruined again. Let Main Street have a chance to develop a new housing finance system on its own.

After that, the capitalism system on Main Street will be back working well again without the intervention by those crooks on Wall Street. So please continue to occupy Wall Street and DC only. There is really no need for you to try to come occupy our Main Street and change our system. We love our small business capitalism here.

==============
On PeoplesAlly Foundation’s role:

You don’t have to be on the left or on the right to help working class people left and right.

Let’s help Main Street beat Wall Street in their own game. Escaping from capitalism will never be the ultimate solution. We simply need to help the working class people avoid exploitation by the privileged few and help them obtain their fair shares of the economic benefits of the capitalistic system in an intellectual way.

Singling out the abuses and the abusers of our system and fix them would be a much better way than blindly trying to topple our capitalistic system. Come up with viable constructive alternative solutions before you seek destructions.

Make innovations, not wars.

=================
Excerpts from the debate on whether to socialize the banking system:

To continue our discussions, you guys will need to read (at http://www.PeoplesAlly.org ) what academic research outcome and inventions that I have produced over the past 10 years for a new home ownership structure called FARJHO and a new housing finance system called SwapRent that could eliminate the involvements by the big banks and the Federal Reserve System to understand why I see the world differently and why there is no need to throw the baby out with the water. Mind you, big banks and the Fed are not the baby, they are the dirty water. Capitalism will always be America’s baby.

Without understanding the value brought about by new innovations, people would end up arguing the same old things over and over again and likely to repeat the same mistakes over and over again. Try to imagine, when a horse rider and a donkey rider argues against each other on who can ride faster but neither has ever seen a car before, it is hard for them to understand that we don’t need either if only you have the availability of the new invention called a car.

So why bother keeping arguing on whether to socialize the big banks vs. the free wheeling status quo of Wall Street if only you could understand that housing finance could easily be done through new inventions like FARJHO and SwapRent delivered via the new peer-to-peer method without any profiteering financial middlemen? We won’t even need the big banks and the Fed anymore. That is what I meant by saying to bring the destiny of our country’s economic future from the dirty hands of Wall Street back to the people on Main Street.

It is the Joseph Schumpeter’s creative destruction under free market that I am talking about. That is how the society improves itself, through new innovations, not by revisiting old ideologies. And the innovations that I am referring to are on social systems and financial systems, not just on tech gadgets as people usually refer to. FARJHO and SwapRent are exactly such social innovations that I had started to work on over 10 years ago.

The despair you described is a lack of understanding of the availability of new innovations to improve our society. Thanks for trying to recruit me in your guys’ efforts. In fact you will need me if you succeed. Here is why.

I wouldn’t care much if the big banks, Wall Street firms and the Federal Reserve System have a natural demise through creative destruction under a free market system or by a brutal force of a revolution, I only know that going forward for the benefits of the American people on Main Street we won’t even need them if FARJHO could become an overwhelmingly new method to own homes and SwapRent will be a new alternative way to obtain financing for people on Main Street. I hope it could be the latter because it may make it happen sooner. However, after the destruction you will need an alternative to rebuild the country’s economy, rather letting another version of Wall Street and Fed rise from the ashes again.

That is why I stated over and over again that we would need people’s help in preventing Wall Street’s crooks from laying their dirty fingers on these new inventions for them to reincarnate themselves in a the future revised capitalism. Let’s hope the transparency of the Internet could do that for us.

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On Anti-usury:

You may like this due to your expressed Muslim background but first you have to learn to understand free market enterprise and usury are by no means the same thing. Please do not try to confuse people on that. We could ban usury but that has nothing to do with a free market enterprise capitalism system. The lending abuses of Wall Street and the debt oriented culture that have led our country into so far need to go. That is what we both have agreed on. So we are really on the same side.

FARJHO and SwapRent are both pure equity based financial methods and systems. You can’t find any more anti-usury financial methods in this modern world, not even in the Muslim world. It is ironic that you call FARJHO “another old usury laden xxxx”. You should always try to read before you open your mouth or you appear uneducated.

With that ideological coincidence, I felt the Muslim people must love the new all equity based home ownership structure and housing finance methods that I had invented since that is what their God told them to have, i.e. the Riba restriction. So I devoted the whole year of 2009 studying and researching the Islamic finance principles and the current practices of Islamic mortgages in each country. I have also marketed FARJHO and SwapRent to the academic institutions and central banks in the Muslim world. I have received great feedback and support from Islamic Development Bank, Asian Development Bank, many central banks in the Gulf Region and academically from many Islamic finance scholars from Pakistan.

Although many Western academics that I had corresponded with at the time back in 2009 expressed the feeling that even the Muslim people themselves do not appreciate how valuable a concept that the Riba thing (burden people with debt) is to the society, what I had found out unfortunately is that the currently called Islamic mortgage as practiced by the Muslim people is nothing but a sham. They simply copied the same Western mortgage structure and simply called the interest payments by different names. These Islamic mortgages still contain all the evils and trappings of usury, e.g. people could still get foreclosed.

That started my interest to further extend the new all equity based FARJHO structure and SwapRent services to the Muslim world as well because these are the genuinely new methods that could coincidentally comply with the spirit of the Shariah laws. The home occupier in a new FARJHO home ownership structure will never get foreclosed, no matter they are Chinese, Muslim, Jews, Christians or Eskimos.

It is only in the US version of the FARJHO LLC that we plan to launch here for the primarily Christian-Judaic US population, we have relaxed the structure to allow borrowing but only at the member level so that the social stability value could still be maintained. As long as no FARJHO LLC borrows money or using the property as collateral to borrow money, there would still be no more foreclosure possibility.

So if you genuinely want promote Riba and defeat usury for people’s benefits, FARJHO and SwapRent are what you will need to learn. Destructively ranting about what is bad will not change the system. Constructively promoting what may work better probably makes more sense. I hope you could start behave like a respectable educated person and devote your time to more constructive causes. Thanks.

As Ron Paul was once considered nutty or even crazy with the idea to abolish the Fed, as was my blog post below at the time but now it seems the ideas are on their way to become a part of the mainstream thinking.

I have always wondered how children and grandchildren of Bernanke and his cohorts at the Federal Reserve Board would think of them in the future. After they have totally destroyed the previously vibrant middle class in America, opened the door of the opportunity to let the left wing opportunists to mislead the working poor and the mob on the streets to throw capitalism out of America and let America decay and fall into oblivion in the world state, do you really think that their children and grand children would still view them as heroes as how the current 1%’ers on Wall Street do today?

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So Barack, or Barry rather, please allow me to be casual with you. I am no Ronald and you are definitely much more handsome then Mikhail Gorbachev without a piece of salami hanging on the forehead. I’d just like to have a frank talk with you about our country’s economic policies and Matrix the movie. Perhaps you wouldn’t mind if I call you Mr. Anderson? Neo?

First I’d like to apologize for calling you a puppet subprime President in my earlier blog dated 5/23/2009. I understand what it could be like to be the only Hussein among the establishments and I feel for you.

The frustration came from the expectation we had of you, the One would not reinsert the Prime Program back into Matrix at the Source one more time again back when we voted for you to be the President. But the opposite seems to be exactly what you have been doing. You started to look more like Agent Smith now. I hope you are a Matrix movie fan as I am and you know what I meant. If so, you may find the following analogies of our country’s Wall Street culture, your economic policies and the movie story lines interesting.

You see, Wall Street is the Matrix that has been controlling us the working class (the Humans). Out here on Main Street (Zion City) in the local communities our home ownership structure has been dominated and dictated by the exclusively debt-based mortgage industry (Zero One) created by Wall Street, Fannie, Freddie and their big bank buddies (the Machines). They have in the past been placing in their local branches those docile captured humans while keeping their minds in the Matrix in order to help the Machines disseminate the credit abuse culture and ensure their control of the Earth.

The Federal Reserve, the Treasury Department and their buddies (the Architects) has been engineering the bailouts of the crony riches, printing and pumping more money into the Matrix system to maintain its vitality and crony establishments the same way the Architects have been trying to bring you, the One, together with the Source in order to reboot the Matrix and destroy the Zion yet one more cycle, the same way all your five predecessors did.

From the Berlin Wall coming down to the recent Arab unrests in the Middle East (the Prophecy), we all have witnessed the unprecedented triumph of the people power (the Oracle) in our modern history. Despite the techie’s claims that technological developments of newer tools such as CNN in the early days to the Twitter and Facebook have made the information dissemination faster and more wide-spread, it is really the underlying force of this democratic movements driven by the people’s desire for Free Will seems to be on its way to unbalance the Matrix. You Neo are the One who has been led to the Source by the Keymaker, should not be swayed by the Architects’ assertion to reboot the Matrix again. Let me tell you why.

In our modern history, the Fed (member of the Architects) has been manipulating interest rates and the supply of money in our economy by using repos/reverse repos to implement their monetary policies and the unique Quantitative Easing programs through Wall Street dealers (the Martix) in a pattern of creations and destructions of Main Street (Zion) over and over again while rebooting Wall Street (the Matrix) with revitalized new life to maintain its status quo of the continuously enriched establishments. In particular, Bernanke’s QE and QE2 seemed to have made “Greenspan Put” a child play. Although the Matrix system does have many obvious fundamental serous problems and weaknesses but it somehow kept rebooting itself at the expense of our remaining Human Race who reside at Zion.

Whipsawing the economy is really what their monetary policy doctrine or the much worshipped Monetarism is all about. Inflating bubbles, deflating bubbles, jerking our domestic Main Street economy in the past seems to be not enough, now with the free flow of dollar-based capital, they have the entire global markets to jerk around with in the world and keep playing those same bubble blowing, popping, blowing, popping games all over again, under the disguise or the much worshipped theory called “Monetarism”. In these processes, the Wall Street insiders (the Matrix) get to reap obscene profits and revitalize itself at the expense of exploiting the Main Street (the Humans) over and over again.

Simply take a look at the recent history since Bernanke and Geithner took office. Ben has been a Member of the Board of Governors of the Federal Reserve System since September 2002 to June 2005 during the bubble building years. He became the Chairman of the Council of Economic Advisors from June 2005 to January 2006 and then became Chairman of the Federal Reserve on February 1st, 2006. Timothy on the other hand was holding the key influential role to Wall Street as the President of the Federal Reserve Bank of New York from November 17, 2003 to January 26, 2009 until he became the Secretary of Treasury Department on January 26th of 2009. Together they had been a crucial part of the front men of the Architects of the Matrix to reboot the Matrix when Matrix should have been totally destroyed should there had been no crony forces at work.

Knowing there was a housing market bubble, instead of finding viable soft landing policy alternatives, from June 30th of 2004 until June 29th of 2006 they raised the Fed Fund Rates from 1% all the way to 5.25% in order to throwing darts randomly to “pop the bubble” under the doctrines of “Monetarism”. Facing a crisis in 2007, they decided that they could build more bubbles than Greenspan ever did. From September 8th of 2007 through December 16th of 2008 until today they brought down the Fed Fund Rate from 5.25% to .025% again, under the doctrines of “Monetarism” and presumed prudent “Central Banking Policies”. Furthermore with the newly invented Quantitative Easing Programs, they have started to flood the whole world with dollar liquidity to build even more asset bubbles across the board and induce further global social instability. Until today nobody could really find out what the Architects’ true motives are.

Do they really know what they are doing or have they simply been making it up along the way? If they are so smart and love asset bubble building so much then Greenspan had ever been able to, why did they even bother to “pop Greenspan’s housing bubble” back in 2004 to 2006 to begin with? Wouldn’t it be just as convenient to leave the Fed Fund Rates unchanged and find other housing equity sharing based soft landing policies to cool down the economy instead? That would have led to a Paradise Matrix rather than the Nightmare Matrix they are turning us into now.

It is really funny to observe how the Architects have been busy congratulating and promoting themselves for a presumed job well done in preserving the Wall Street (the Matrix) to avoid a depression and dodging the fact that they were actually the very one who had created the Global Crisis of 2008 to begin with by blindly popping the Greenspan’s housing bubble through their hawkish policies between 2004 to 2006.

What they have really preserved was merely the previous Wall Street crony establishments. A depression it was not. The public certainly needs to know better that there would not have been a depression and that we would all have been better off now had the Architects not done the rescuing of the privileged few at our taxpayers’ expenses in 2008. Cronyism simply means there is an artificial human intervention of the natural selection process for the benefits of the privileged few at the expense of others. We all could live just fine without Goldman Sachs, really.

Given the current economic policies and an unknown and dangerous future for both the US and the world, have any academics been paying attention to analyze how the Architects’ economic policies to date have grossly polarized the American economy between the haves and have-nots while creating the biggest destruction of the middle class in America that have shaken the working class’s faith in Capitalism? The Matrix seems to be getting more and more unbalanced from its own exploitation.

Anyway Neo, for now you seem to have been cloned to just another Agent Smith. Until the next time we talk again, I await your next act.