Posted tagged ‘banking’

Warning – Economic Storm Clouds Gathering

October 5, 2009

mushroom_cloudI scan a lot of econ news every day. Today’s econ news is making me a little nervous, though, because there seems to be an awful lot of reports of very, very bad news. And it’s not just awful predictions from the usual doom & gloom crew. It’s coming from everywhere. And that makes me think it’s very likely that another economic hurricane is on the way.

 So take whatever steps you need to take to protect yourself as much as possible. It sounds like whatever is coming could hit any day.

 Three Government Reports Point to Fiscal Doomsday

 Soros Says US Banking System Basically Bankrupt

 Joseph Stiglitz The Market Is Irrationally Exuberant

 World Bank could run out of mone’ within 12 months

 INSIDERS CONFIRM THAT THE RALLY IS FAKE, ECONOMY IS GETTING WORSE

 Peter Schiff Agrees with Jim Rogers, Invest in Gold and Commodities

 HSBC Chief Warns Of Second Downturn

 CAUTION Stock Market Crash -Collapse Dead Ahead Say Faber, Rogers, Dent and Celente

 Bob Prechter Quite Sure Market Will Crash And Break March Low

 Entering the Greatest Depression in History: The Bank for International Settlements (BIS) Warns of Future Crises

 Note: Apparently, the BIS is a sort of uber-central bank. From this article (emphasis mine):

In September of 2009, the BIS reported that, “The global market for derivatives rebounded to $426 trillion in the second quarter as risk appetite returned, but the system remains unstable and prone to crises.” The BIS quarterly report said that derivatives rose 16% “mostly due to a surge in futures and options contracts on three-month interest rates.” The Chief Economist of the BIS warned that the derivatives market poses “major systemic risks” in the international financial sector, and that, “The danger is that regulators will again fail to see that big institutions have taken far more exposure than they can handle in shock conditions.” The economist added that, “The use of derivatives by hedge funds and the like can create large, hidden exposures.”

 The day after the report by the BIS was published, the former Chief Economist of the BIS, William White, warned that, “The world has not tackled the problems at the heart of the economic downturn and is likely to slip back into recession,” and he further “warned that government actions to help the economy in the short run may be sowing the seeds for future crises.” He was quoted as warning of entering a double-dip recession, “Are we going into a W[-shaped recession]? Almost certainly. Are we going into an L? I would not be in the slightest bit surprised.” He added, “The only thing that would really surprise me is a rapid and sustainable recovery from the position we’re in.”

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The Fed Under Fire

September 8, 2009

End The Fed Book Excerpt

September 7, 2009

EndTheFedThe good folks at the Ludwig von Mises Institute have made a chapter of End the Fed by Ron Paul available for preview.

Read Chapter 2 here.

I read the entire book this weekend and I highly recommend it to anyone who is at all concerned about freedom and our economic future.

The Mises Institute says this about it:

A blast against central banking this powerful hasn’t been seen since the 19th century. The Fed itself has never been subjected to such a whithering critique. And it is from a man who has been fighting the Fed his entire political career. in fact, several chapters here provide documentary evidence of Congressman Paul’s own verbal exchanges with Chairman Greenspan and Chairman Bernanke.

What is especially impressive here is that Paul’s book goes far beyond old-time populist attacks on the banking elites. He understands Austrian theory as well as anyone, and he has learned from Mises and the whole of his tradition. So here we find patient explanation of the workings of the Fed and how it has distorted the legitimate business of banking, through every manner of intervention.

The political analysis in here is sound but expected. The theoretical analysis is the robust part, and something that few politicians in U.S. history could have provided. In this sense, Ron Paul is unique: courage in public service combined with intellectual rigor. This combination has made him a machine in opposition to the Fed, and this is by far his best presentation of the subject.

It turns up the heat on the Fed as never before. He shows that the central bank bears a large responsibility for the creation of the Leviathan state. It has wrecked our money, funded ghastly wars, and made possible the creation of the social welfare state that is bankrupting us financially and making the population dependent on the state. It has given rise to economic crisis and turmoil of all sorts.

Paul also offers a realistic plan for abolishing the Fed, if not immediately then with incremental steps to reduce its power and eliminate its dominance in American economic life.

Paul wrote this book as a personal statement. But it serves two additional purposes. It educates. And it inspires toward effective action.

Get your copy soon – we really do not have much time to lose.

A Black Hole Called the Federal Reserve

September 5, 2009

A Trillion Here, a Trillion There…

March 23, 2009

us-economy-771581The Associated Press reported today that the Treasury’s toxic asset plan (details to be unveiled tomorrow) could cost $1 trillion.

The Obama administration’s latest attempt to tackle the banking crisis and get loans flowing to families and businesses will create a new government entity, the Public-Private Investment Program, to help purchase as much as $1 trillion in toxic assets on banks’ books.

The new effort, to be unveiled Monday, will be followed the next day with release of the administration’s broad framework for overhauling the financial system to ensure that the current crisis — the worst in seven decades — is not repeated.

A key part of that regulatory framework will give the government new resolution authority to take over troubled institutions that would pose a threat to the entire financial system if they failed.

Administration officials believe this new power will save taxpayers money and avoid the type of controversy that erupted last week when insurance giant American International Group paid employees of its troubled financial products unit $165 million in bonuses even though the company had received more than $170 billion in support from the federal government.

Under the new powers being sought by the administration, the treasury secretary could only seize a firm with the agreement of the president and the Federal Reserve.

Continue reading…

Forget the trillion dollars for a minute, what about that huge power grab? If Barack, Ben and Timmy decide a firm’s possible failure might threaten the entire financial system, they can seize control of it- and so far there is no detail about whether this means only financial firms or any firm.

Isn’t this the kind of thing the Soviets did when the USSR’s economy and government began to collapse?