The Scam of the Century, which you probably won't read about in your newspaper

Scam: "a confidence game or other fraudulent scheme, esp. for making a quick profit; swindle" (dictionary.com).

To understand a scam, you have to be willing to connect the dots. You know, you have to be willing to trust your judgment, and add 2 and 2 and 2 and 2 and 2 to get 10, without someone telling you ahead of time 10 is the answer. YOU have to come up with the answer, and trust what you see, not what you are told. By the time conventional wisdom has come to the conclusion the answer is 10, the scam is long since over, and conventional wisdom lost.

OK here comes the first "2" in the Scam of the Century. The term 'bailout' has become synonymous with the TARP program in the media lately. That is really not the correct term, but it sells copy. TARP stands for Troubled Asset Repurchase Program, and simply put, it was designed, in the final days of the Bush administration, to purchase bad loans from banks. Why do that? Because when banks have a bad loans, it becomes more difficult from a regulatory as well as functional standpoint to lend money. Our economy is fueled by credit. So if banks can not or will not lend, that is potentially very bad for our economy.

As the Bush's were packing boxes, and the Obama's were pulling in with the Mayflower truck behind them, someone, I do not know who, decided rather than buy bad loans, which sounds fairly unappealing, to use TARP money to buy preferred stock in the banks who are hurting for capital. And that is what they did. The federal government has purchased billions of dollars worth of stock in mostly the largest US banks. Those of us in the audience who do not blindly trust an organization as large as the US government, were OK with this program, because the stock the government purchased is of a class that does not vote. Bush went on TV before he left to describe this. The government's money was in, but it was silent.

Here's the next "2". Several weeks ago the Feds (read, the current presidential administration) announced new "stress" tests for the banks which have taken TARP money. These were announced under the guise of protecting the American people. This seemed odd to everyone in the banking industry, because banks are already heavily regulated and tested for soundness. Considered on its own, the stress tests made no sense.

The next "2" is the feds alone decided what the components of the stress test would be. No industry input. This allowed the feds to in essence decide which banks need new capital, and how much. Keep in mind, the feds make the rules for the banks. If a bank does not meet those rules, it can be shut down overnight, with no warning.

The next "2" is results were announced recently for the stress tests, and all the biggest banks were deemed to have inadequate capital for a hypothetically created extended recession. Imagine that. All these banks were told to add capital, or else Uncle Sam is going to take over.

Ok here is the final "2", which gets us to 10. One of the ways the feds said the banks could add capital, is by converting the Preferred Stock the feds recently purchased with TARP money, in to Common Stock. This is significant because Preferred Stock does not vote, Common Stock does. If the fed's shares are converted to Common, they immediately become the largest shareholder; they own that bank. This is what Obama and many in Washington want. This makes government bigger, much bigger.

Not convinced this is a Scam yet? Well here is the dead giveaway: If you convert Preferred Stock to Common Stock, how much money does that add to the balance sheet of a bank? I mean, the government is going through all these steps for the sole purpose of making sure banks are sound and have enough capital, right? Wrong. The answer is zero. Converting Preferred to Common is like converting green dollars in to silver dollars. It adds zero new capital, zero new money to a bank's balance sheet. For accounting purposes only, Common Stock counts as capital, Preferred does not. This game has been in the works since Obama was elected. Its only now become visible, and unfortunately, to only a few who are awake and love liberty.

The feds now own Chrysler, they took it over in a similar Scam to this, and gave it to their best friends forever the unions. They now own Citibank, because Citi agreed to convert the fed's preferred shared to common. Is your company next? Is your industry next? Wake up. Trust what you see not what you are told. Contact your local Totalitarian in Washington, and tell him or her enough is enough, before it is too late.