The spin was short lived... long live the spin.

Of course the real reason for the recent fed move to require recapitalization of the banks is to move the risk away from the big banks onto the private sector.  Yes, when this new debt goes bad the bank's reputation would be hit by default but the one really losing the money would be the person who had loaned the money, not the one who borrowed it.  The fed positions this as reducing the chance that government will have to bail out banks with taxpayer money.  I don't have time to even go into that but it should never have been allowed in the first place.  Banks are not owned by the government and thus the government has not only no obligation but in fact no right to spend taxpayer money bailing them out.  We don't need the current banks and in fact would be better off without them.

What I do want to point out is what the fed is really doing here which is picking winners and losers. 

Anyone who does not understand that the global banking system is already bankrupt simply doesn't understand what money is or how it works.  They therefore don't understand that there is no money in the current banking system.  Its all just one big set of interconnected Wimpy Promises.   It is impossible for every participant in this system to get out whole.  When interest rates begin to rise, and this will happen in a powerful way at some point, the game of borrowing from the future to pay for the past will collapse.  Collapse is built into every Ponzi and this is a global debt Ponzi, period.

The fed knows that the Ponzi will collapse at some point and so they are trying to pick who will get screwed in the deal.  There are two major classes of people in our society and they are net producers and net consumers.  If you have a job and you are paying your bills then you are a net producer.  This also means you are a taxpayer.  But if you don't have a job then you are a net consumer.  The major portion of the net consumer class is the boomer retiree class.

So what the fed is doing here is to move the risk way from net producers/taxpayers to someone.  Well, who has money to loan and who is eager to make higher rates of return?  That would be the pensions and the annuities, etc.  In other words, retirees.

Why would the fed do this?  Why would the fed favor workers over retirees?  Simply because workers are the tax base and retirees now simply want to live off their savings.  Thus, the fed wants to put their savings at risk in order to pay the bills going forward.  Also if you piss off workers they tend to strike and riot.  What happens if you rip off/piss off retirees who are locked into the corrupt system?

You get the point.  The fed is declaring open season on retiring boomers.  Watch as every decision begins to go against them.  Their tax rates will rise on their 401k leaving the whole 401k tax deferral strategy in shambles.  Inflation will be coming as well and pensions and social security will  not keep up with it.  That will be the double whammy for 401k bag holders. 

The workers will be given the breaks going forward because the fed has no more use for the baby boomers.  They will soon be considered nothing more than "useless eaters".