The Great Citibank
Nov 24, 2008
Citibank is probably the most visible symbol of Babylon, "the great city" (Rev. 16:19) in America.
Its demise could prove to be the destruction of Babylon's central pillar. So it is not surprising to see its lap dog--the Federal Government--doing whatever it takes to bail it out. The people who run the show would rather see the Federal Government go bankrupt than to see their "great Citi" go down. Lotsa luck, fellas.
The timing of this is interesting. Back in 1993 we fought the first phase of the Jubilee Prayer Campaign from Nov. 21-29. A year later we saw Tom Foley resign after passing GATT on Nov. 29, 1994. He followed the biblical pattern of Daniel 4, where the tree was defoliated and cut down precisely 12 months after the Word of the Lord had been given to Nebuchadnezzar.
Last year, on Nov. 21, 2007, near the beginning of the mortgage crisis, Citibank needed a bailout. This was when it was learned that a Dubai finance group was going to help bail out Citibank to the tune of $7.5 billion.
Well, then two months later, in January of 2008, they needed twice that amount, mostly from China.
So here we are a year later, and last week on November 21, 2008 the news of the impending bailout was revealed once again. Their timing was perfect as usual. Just in time for Thanksgiving, so our children can say, "We're thankful for the Federal Government and its generosity with our money."
These paltry 7.5 billion and 14 billion weren't nearly enough in 2007, and the latest $320 billion bailout will prove to be insufficient as well. It's like a man putting up his arms to stop the collapse of a building. If he doesn't get out of the way, he will simply be crushed.
Apparently, the plan is for the government to create more debt (by borrowing from the Fed). It's so easy to create money. All it takes is a keystroke or two. One doesn't even need much paper and ink any more, now that things are computerized. How many zeros did you say, sir? Pooh, that was easy. Oh, by the way, the national debt just went up again. Merry Christmas, taxpayers. Oh, look--the reverse Santa.
Somebody up there knows that it will take trillions to really bail out Citibank. As one economist said on the news last night--"You thought Lehman Brothers was bad; Citibank's problem is a few times greater."
So the government plan is to make Citibank pay the first $37 billion in toxic mortgage losses, after which the Treasury Department will assume the next $5 billion in losses. Then the FDIC will cover the next $10 billion. After that, the Fed will cover $300 billion in losses. That's according to the following site:
Since Citi is on the hook for the first $37 billion, the government is planning to give Citibank $20 billion as an early Christmas gift. That should cover all but $17 billion. Then they are home free. That's the plan, anyway.
The government always looks in its own special dictionary to find out how to word things so that their stupidity is at least partially hidden. In this case, everyone knows it's a bailout, but the government is admitting only to a $20 billion bailout. The other $300 billion is called a "guarantee." In other words, they will use it ONLY IF Citibank really does have that much tied up in toxic mortgages worth 35 cents on the dollar.
But in reality, we are being asked to pay for $300 billion worth of junk that is really only worth $105 billion at today's prices. Today's prices are probably not realistic because no one is in the market to buy up those toxic mortgages. The mortgage market is frozen.
If the government attempted to provide a trillion-dollar bailout to Citibank all at once, the people would stage an open revolt. They know this, so they have come up with a new reverse trickle-down theory, where they trickle the money, a few hundred billion at a time. That way the problem never looks quite as bad as it is; and the solution is more palatable to the people.
Obviously, last September's $700 billion did not resolve the problem. Neither will this latest $300 billion giveaway. By the way, that totals a trillion dollars just in two months. Until now, most people did not even know money existed in such quantities.
The bottom line is that the Fed can create as much money as it wishes. That part is easy. But saving itself is going to be more difficult, because they are in a high-stakes card game with God Himself. God still has a few trump cards left. And if He runs out of them, He can always create more.