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By Cody Willard

So PPIP, one of the largest wealth redistribution upwards in the history of our planet (second only to TARP and ahead of TALF…but then where does Fed setting rates below the market for banks fit it?…I digress) is a go after all.

U.S. Treasury May Tap Eight to 10 PPIP Asset Managers This Week – Bloomberg

You should be sickened, angered and ready to fight the implementation of this scam. Here’s basically how it came about, at least in my own head:

Ben Bernanke, our Fed Chief meets up with his buddy Timothy Geithner our Treasury Secretary and their other buddy Bill Gross, the head of PIMCO, the largest bond fund in the world and a part of the German bank, Allianz.

Bennie and Timmy walk up to Billy. Timmy says, “Hey man, all of our banker friends are still insolvent because they still have lots of worthless derivatives that they need to get off their balance sheets somehow. And they told me that would be bad for Cody and the other taxpayers. You have any ideas how we can erase those losses?”

Bennie chimes in, “Yeah, we’ve got to do something for my partners – Remember, the Fed’s not a government agency…we’re literally, by charter, owned by the banks we’re supposed to regulate. And they need more help or they’re bankrupt…again. Oh, and that would be bad for Cody and the other taxpayers. I keep telling Cody that. Billy, please help us help Cody.”

Billy says, “Here’s what I think we should do – and remember, this is for the good for Cody and the other taxpayers. I’ll buy $1000 worth of some of that junk the banks are still pretending have some value.”

Bennie leans over to Timmie and says, “We’re saved!”

Timmie says, “Great. We’ll set it up.”

Billy says, “Just one more thing. I’ll only put in $100 of my money to buy $1000 worth of junk. It’s junk after all.”

Bennie sheepishly asks, “Where’s the other $900 come from?”

Billy replies, “From Cody and the other taxpayers. Just tell them you’re only borrowing it for a little while and that you’ll even make them a profit on it.”

Timmie and Bennie say together, “We get Cody to put in $900 while you put in $100 and we split the profits 50/50? Sounds good to us. Thanks, Billy, we’ll set it up.”

Billy says, “Just one more thing. Since I know this stuff is junk and you know this stuff is junk, we all know this stuff is quite possibly totally worthless. In that case, you guys have to give me back my original $100 investment. You can take it from Cody and the other taxpayers at the end, if there’s any losses. They’ll understand, I assure you. Just remember to tell them if they don’t the world will end.”

Timmie says, “Is that it? You put in a $100 to buy $1000 worth of junk and if we make money you get half and we get half but if it loses money we make sure you don’t lose anything?”

Billy answers dryly, “Yup. That’s it. It’s good for the country, I assure you.”

Timme and Bennie, “Let’s go get some money from Cody and fix this economy!”

I really can’t believe that these don’t see the political ramifications of this down the road. I mean, if it does work out somehow and there are huge profits, we, the people, are going to be angered at the insane profiteering off taxpayer largesse by these firms involved in PPIP.

And since it more likely won’t work out, we, the people are going to be angered that in the midst of ongoing economic hardships, we’re reimbursing these firms for their losses with taxpayer largesse.

The vicious cycles of bailouts and creating profiteering systems with taxpayer funds are killing our economy. Seems rather straightforward when you think about it, no?

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