The Associated Press is reporting today that the Federal Reserve is running ads in movie theaters urging consumers to pay their credit card bills on time. Apparently, this is their latest idea for insuring that you and I continue to bail out the biggest banks and protect them from the consequences of engaging in legalized fraud.

As I explained in The Money Suckers, the activity of lending money that doesn't belong to them (without the owners' permission) is one of the three forms of legalized fraud in which banks have long engaged. It is one of the primary causes of the current financial crisis, as well as all financial crises in the past. After their latest binge of irresponsible behavior, the Fed rewarded them by creating even more money out of thin air for them to use.

Of course, that new money could never be enough. Big banks, according to the "too big to fail" theory, shouldn't be allowed to suffer the consequences of their actions. Yet, someone has to pay for all that lost income. The Fed believes that someone should be you, in the form of endless interest charges on credit card borrowing.

They've couched their position in terms that make it sound like they're trying to protect your interests as a consumer. In the movie ad, they suggest: (a) paying bills on time to avoid late fees; (b) staying below credit limits to avoid fees and higher interest rates; (c) paying more than the minimum payment each month, which over time will cut down on interest charges; (d) paying attention to transactions fees for things like cash advances or paying a bill by phone; and (e) watching for changes in account terms.

This sounds like great advice doesn't it? And it is, except for three crucial points. First, when the economy is floundering, many people find it impossible to pay more than the minimum on their credit card bills. Second, when the Fed eventually acts to attempt to counteract all the new money they created out of thin air, they'll do it by raising interest rates. Many people are already seeing their credit card interest soar into the 20-40% range. And most importantly, third, they don't insist that the banks follow the same kinds of advice with their own finances. When push comes to shove, the banks should be bailed out every time they can get away with doing so.

I predict that the year 2010 will see a sharp rise in personal bankruptcy filings. No one has reported this yet, as far as I've seen, but I'm certain it will happen. As unemployment continues to rise (and it will), the huge amounts of debt being carried by Americans will coming crashing down on them.

You can be sure the Fed won't be arguing to bail you out the way they bailed the banks out.