Wall Street: Washington's money launderer

    Money laundering is process of taking illegal money (such as money from selling illegal drugs or extortion) and making it look "legal" by putting dirty money through
an investor and then taking the clean money out later through a check or money transfer.  Many methods exist to do this from: structuring (breaking cash up into smaller deposits), investments (cash based businesses like parking garages, strip clubs and casinos), round-tripping, and using shell-companies.  To make this process work it usually takes a secondary partner who is willing to look the other way because they will benefit from the transaction as well (usually in the form of a small kick back). The partner usually has a legitimate business which has a large cash supply in which the illegal money can be mixed up into and therefore difficult for the government to distinguish the good money from the bad. 

    You can say that this is what our politicians are doing as well in Washington DC through the banks and Wall Street.   While DC is not selling drugs (though many of them seem to be using a lot of drugs) they are using a similar process to hide their real activities from the American public.

   How Washington DC launders its money

   First of all you must understand that our government cannot print money directly and use it by
itself  (imagine how bad things would be if they did).  This is because  the Treasury uses the Federal Reserve to do its printing.  The government can issue bonds that can be sold which then the Federal reserve can use to order the printing of more money but that is all.  However, the Federal Reserve has been using a new system call Quantitative Easing (QE) to give the banks more "electronic" money (no printing needed at all) by going into their accounts and changing reserve amounts.  So far over 2 Trillion dollars has been distributed thus far to the banks since 2009 in this manner. The banks then can tap into these new found funds and invest the money on Wall Street.   This flood of new money is what is responsible for the NYSE reaching all time highs even though most of the news on street is not all that good.   When these short-term investments are later cashed in by the banks, the money is taxed by the IRS and the money finds itself in the governments pockets.   In this way, the "dirty" electronic money distributed by QE is washed and put back in the governments pockets as clean tax money for them to spend on their endless welfare and government programs.

    Wall Street, therefore, acts as Washington's money launderer and everyone benefits from the scheme except us the average citizen as we see our dollars we've saved destroyed by inflation.