The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe’s exchange rate crisis in the 1990s, a team of bankers has warned.
“We see striking similarities between the transatlantic tensions that built up in the early 1990s and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe,” said a report by Morgan Stanley’s European experts
Just as then, Washington has slashed rates to bail out the banks and prevent an economic hard-landing, while Frankfurt has stuck to its hawkish line - ignoring angry protests from politicians and squeals of pain from Europe’s export industry.
Indeed, the ECB has let the de facto interest rate - Euribor - rise by over 100 basis points since the credit crisis began.
Just as then, the dollar has plummeted far enough to cause worldwide alarm. In August 1992 it fell to 1.35 against the Deutsche Mark: this time it has fallen even further to the equivalent of 1.25. It is potentially worse for Europe this time because the yen and yuan have also fallen to near record lows. So has sterling
Morgan Stanley doubts that Europe’s monetary union will break up under pressure, but it warns that corked pressures will have to find release one way or another.
This will most likely occur through property slumps and banking purges in the vulnerable countries of the Club Med region and the euro-satellite states of Eastern Europe.
“The tensions will not disappear into thin air. They will find fault lines on the periphery of Europe. Painful macro adjustments are likely to take place. Pegs to the euro could be questioned,” said the report, written by Eric Chaney, Carlos Caceres, and Pasquale Diana.
The point of maximum stress could occur in coming months if the ECB carries out the threat this month by Jean-Claude Trichet to raise rates. It will be worse yet - for Europe - if the Fed backs away from expected tightening. “This could trigger another ‘catastrophic’ event,” warned Morgan Stanley.
The markets have priced in two US rates rises later this year following a series of “hawkish” comments by Fed chief Ben Bernanke and other US officials, but this may have been a misjudgment.
An article in the Washington Post by veteran columnist Robert Novak suggested that Mr Bernanke is concerned that runaway oil costs will cause a slump in growth, viewing inflation as the lesser threat. He is irked by the ECB’s talk of further monetary tightening at such a dangerous juncture.
The contrasting approaches in Washington and Frankfurt make some sense. America’s flexible structure allows it to adjust quickly to shocks. Europe’s more rigid system leaves it with “sticky” prices that take longer to fall back as growth slows.
Morgan Stanley says the current account deficits of Spain (10.5pc of GDP), Portugal (10.5pc), and Greece (14pc) would never have been able to reach such extreme levels before the launch of the euro.
EMU has shielded them from punishment by the markets, but this has allowed them to store up serious trouble. By contrast, Germany now has a huge surplus of 7.7pc of GDP.
The imbalances appear to be getting worse. The latest food and oil spike has pushed eurozone inflation to a record 3.7pc, with big variations by country. Spanish inflation is rising at 4.7pc even though the country is now in the grip of a full-blown property crash. It is still falling further behind Germany. The squeeze required to claw back lost competitiveness will be “politically unpalatable”.
Morgan Stanley said the biggest risk lies in the arc of countries from the Baltics to the Black Sea where credit growth has been roaring at 40pc to 50pc a year. Current account deficits have reached 23pc of GDP in Latvia, and 22pc in Bulgaria. In Hungary and Romania, over 55pc of household debt is in euros or Swiss francs.
Swedish, Austrian, Greek and Italian banks have provided much of the funding for the credit booms. A crunch is looming in 2009 when a wave of maturities fall due. “Could the funding dry up? We think it could,” said the bank
Not ten minutes after IRS employees of the Austin Accounts Management center near I-35 and Ben White began protesting their office policies Tuesday afternoon, Homeland Security police began ordering them to leave.
The workers, represented under the National Treasury Employees Union, are upset about what they see as a double-standard in how managers are handling vacation days and late penalties when family is sick or when an employee is stuck in traffic.
“You can’t take leave to be with your dying father. You’re not taking care of him, therefore we have no obligation to let you go. They charged him AWOL,” Dorothy Pistole said, explaining a situation which she said happened to a colleague. KLBJ asked Pistole if the employees group has any fears of retaliation.
“We can use this as a marker to say, at this point, management didn’t have any problem with what the employee has done. But all the sudden now management is treating the employees differently? Then we have a point when we can start looking at a retaliation grievance.”
“It’s very important. The holiday is all about service to America. A lot of them, they were in the military. A lot of them have military families now,” Union President Ed Walker says. “They denied all of this leave before the Economic Stimulus Program came out, so if they began using that as an excuse, they would not be telling the truth.”
“We have filed grievances on behalf of hundreds of people here. Some people were able to get off [work] as the result of this and the embarrassment.”
The IRS has refused to comment on the Tuesday protest. VIDEO
Federal Reserve Directors: A Study of Corporate and Banking Influence
Published 1976
Chart 1 reveals the linear connection between the Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn,Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control.
N.M. Rothschild , London - Bank of England
______________________________________
| |
| J. Henry Schroder
| Banking | Corp.
| |
Brown, Shipley - Morgan Grenfell - Lazard - |
& Company & Company Brothers |
| | | |
——————–| ——-| | |
| | | | | |
Alex Brown - Brown Bros. - Lord Mantagu - Morgan et Cie — Lazard —|
& Son | Harriman Norman | Paris Bros |
| | / | N.Y. |
| | | | | |
| Governor, Bank | J.P. Morgan Co — Lazard —|
| of England / N.Y. Morgan Freres |
| 1924-1938 / Guaranty Co. Paris |
| / Morgan Stanley Co. | /
| / | \Schroder Bank
| / | Hamburg/Berlin
| / Drexel & Company /
| / Philadelphia /
| / /
| / Lord Airlie
| / /
| / M. M. Warburg Chmn J. Henry Schroder
| | Hamburg ——— marr. Virginia F. Ryan
| | | grand-daughter of Otto
| | | Kahn of Kuhn Loeb Co.
| | |
| | |
Lehman Brothers N.Y ————– Kuhn Loeb Co. N. Y.
| | ————————–
µ
| | | |
8
| | | |
Lehman Brothers - Mont. Alabama Solomon Loeb Abraham Kuhn
| | __|______________________|_________
Lehman-Stern, New Orleans Jacob Schiff/Theresa Loeb Nina Loeb/Paul Warburg
————————- | | |
| | Mortimer Schiff James Paul Warburg
_____________|_______________/ |
| | | | |
Mayer Lehman | Emmanuel Lehman \
| | | \
Herbert Lehman Irving Lehman \
| | | \
Arthur Lehman \ Phillip Lehman John Schiff/Edith Brevoort Baker
/ | Present Chairman Lehman Bros
/ Robert Owen Lehman Kuhn Loeb - Granddaughter of
/ | George F. Baker
| / |
| / |
| / Lehman Bros Kuhn Loeb (1980)
| / |
| / Thomas Fortune Ryan
| | |
| | |
Federal Reserve Bank Of New York |
|||||||| |
______National City Bank N. Y. |
| | |
| National Bank of Commerce N.Y —|
| | \
| Hanover National Bank N.Y. \
| | \
| Chase National Bank N.Y. \
| |
| |
Shareholders - National City Bank - N.Y. |
—————————————– |
| /
James Stillman /
Elsie m. William Rockefeller /
Isabel m. Percy Rockefeller /
William Rockefeller Shareholders - National Bank of Commerce N. Y.
J. P. Morgan ———————————————–
M.T. Pyne Equitable Life - J.P. Morgan
Percy Pyne Mutual Life - J.P. Morgan
J.W. Sterling H.P. Davison - J. P. Morgan
NY Trust/NY Edison Mary W. Harriman
Shearman & Sterling A.D. Jiullard - North British Merc. Insurance
| Jacob Schiff
| Thomas F. Ryan
| Paul Warburg
| Levi P. Morton - Guaranty Trust - J. P. Morgan
|
|
Shareholders - First National Bank of N.Y.
——————————————-
J.P. Morgan
George F. Baker
George F. Baker Jr.
Edith Brevoort Baker
US Congress - 1946-64
|
|
|
|
|
Shareholders - Hanover National Bank N.Y.
——————————————
James Stillman
William Rockefeller
|
|
|
|
|
Shareholders - Chase National Bank N.Y.
—————————————
George F. Baker
Chart 2
Federal Reserve Directors: A Study of Corporate and Banking Influence
- Published 1983
The J. Henry Schroder Banking Company chart encompasses the entire history of the twentieth century, embracing as it does the program (Belgium Relief Commission) which provisioned Germany from 1915-1918 and dissuaded Germany from seeking peace in 1916; financing Hitler in 1933 so as to make a Second World War possible; backing the Presidential campaign of Herbert Hoover ; and even at the present time, having two of its major executives of its subsidiary firm, Bechtel Corporation serving as Secretary of Defense and Secretary of State in the Reagan Administration.
The head of the Bank of England since 1973, Sir Gordon Richardson, Governor of the Bank of England (controlled by the House of Rothschild) was chairman of J. Henry Schroder Wagg and Company of London from 1963-72, and director of J. Henry Schroder,New York and Schroder Banking Corporation,New York,as well as Lloyd’s Bank of London, and Rolls Royce. He maintains a residence on Sutton Place in New York City, and as head of “The London Connection,” can be said to be the single most influential banker in the world.
J. Henry Schroder
—————–
|
|
|
Baron Rudolph Von Schroder
Hamburg - 1858 - 1934
|
|
|
Baron Bruno Von Schroder
Hamburg - 1867 - 1940
F. C. Tiarks |
1874-1952 |
| |
marr. Emma Franziska |
(Hamburg) Helmut B. Schroder
J. Henry Schroder 1902 |
Dir. Bank of England |
Dir. Anglo-Iranian |
Oil Company J. Henry Schroder Banking Company N.Y.
|
|
J. Henry Schroder Trust Company N.Y.
|
|
|
___________________|____________________
| |
Allen Dulles John Foster Dulles
Sullivan & Cromwell Sullivan & Cromwell
Director - CIA U. S. Secretary of State
Rockefeller Foundation
Prentiss Gray
————
Belgian Relief Comm. Lord Airlie
Chief Marine Transportation ———–
US Food Administration WW I Chairman; Virgina Fortune
Manati Sugar Co. American & Ryan daughter of Otto Kahn
British Continental Corp. of Kuhn,Loeb Co.
| |
| |
M. E. Rionda |
———— |
Pres. Cuba Cane Sugar Co. |
Manati Sugar Co. many other |
sugar companies. _______|
| |
| |
G. A. Zabriskie |
————— | Emile Francoui
Chmn U.S. Sugar Equalization | ————–
Board 1917-18; Pres Empire | Belgian Relief Comm. Kai
Biscuit Co., Columbia Baking | Ping Coal Mines, Tientsin
Co. , Southern Baking Co. | Railroad,Congo Copper, La
| Banque Nationale de Belgique
Suite 2000 42 Broadway | N. Y |
__________________________|___________________________|_
| | |
| | |
Edgar Richard Julius H. Barnes Herbert Hoover
————- —————- ————–
Belgium Relief Comm Belgium Relief Comm Chmn Belgium Relief Com
Amer Relief Comm Pres Grain Corp. U.S. Food Admin
U.S. Food Admin U.S. Food Admin Sec of Commerce 1924-28
1918-24, Hazeltine Corp. 1917-18, C.B Pitney Kaiping Coal Mines
| Bowes Corp, Manati Congo Copper, President
| Sugar Corp. U.S. 1928-32
|
|
|
John Lowery Simpson
——————-
Sacramento,Calif Belgium Relief |
Comm. U. S. Food Administration Baron Kurt Von Schroder
Prentiss Gray Co. J. Henry Schroder ———————–
Trust, Schroder-Rockefeller, Chmn Schroder Banking Corp. J.H. Stein
Fin Comm, Bechtel International Bankhaus (Hitler’s personal bank
Co. Bechtel Co. (Casper Weinberger account) served on board of all
Sec of Defense, George P. Schultz German subsidiaries of ITT . Bank
Sec of State (Reagan Admin). for International Settlements,
| SS Senior Group Leader,Himmler’s
| Circle of Friends (Nazi Fund),
| Deutsche Reichsbank,president
|
|
Schroder-Rockefeller & Co. , N.Y.
———————————
Avery Rockefeller, J. Henry Schroder
Banking Corp., Bechtel Co., Bechtel
International Co. , Canadian Bechtel
Company. |
|
|
|
Gordon Richardson
—————–
Governor, Bank of England
1973-PRESENT C.B. of J. Henry Schroder N.Y.
Schroder Banking Co., New York, Lloyds Bank
Rolls Royce
Chart 3
Federal Reserve Directors: A Study of Corporate and Banking Influence
- Published 1976
The David Rockefeller chart shows the link between the Federal Reserve Bank of New York,Standard Oil of Indiana,General Motors and Allied Chemical Corportion (Eugene Meyer family) and Equitable Life (J. P. Morgan).
DAVID ROCKEFELLER
—————————-
Chairman of the Board
Chase Manhattan Corp
|
|
______|_______________________
Chase Manhattan Corp. |
Officer & Director Interlocks|———————
——|———————– |
| |
Private Investment Co. for America Allied Chemicals Corp.
| |
Firestone Tire & Rubber Company General Motors
| |
Orion Multinational Services Ltd. Rockefeller Family & Associates
| |
ASARCO. Inc Chrysler Corp.
| |
Southern Peru Copper Corp. Intl’ Basic Economy Corp.
| |
Industrial Minerva Mexico S.A. R.H. Macy & Co.
| |
Continental Corp. Selected Risk Investments S.A.
| |
Honeywell Inc. Omega Fund, Inc.
| |
Northwest Airlines, Inc. Squibb Corporation
| |
Northwestern Bell Telephone Co. Olin Foundation
| |
Minnesota Mining & Mfg Co (3M) Mutual Benefit Life Ins. Co. of NJ
| |
American Express Co. AT & T
| |
Hewlett Packard Pacific Northwestern Bell Co.
| |
FMC Corporation BeachviLime Ltd.
| |
Utah Intl’ Inc. Eveleth Expansion Company
| |
Exxon Corporation Fidelity Union Bancorporation
| |
International Nickel/Canada Cypress Woods Corporation
| |
Federated Capital Corporation Intl’ Minerals & Chemical Corp.
| |
Equitable Life Assurance Soc U.S. Burlington Industries
| |
Federated Dept Stores Wachovia Corporation
| |
General Electric Jefferson Pilot Corporation
| |
Scott Paper Co. R. J. Reynolds Industries Inc.
| |
American Petroleum Institute United States Steel Corp.
| |
Richardson Merril Inc. Metropolitan Life Insurance Co.
| |
May Department Stores Co. Norton-Simon Inc.
| |
Sperry Rand Corporation Stone-Webster Inc.
| |
San Salvador Development Company Standard Oil of Indiana
Chart 4
Federal Reserve Directors: A Study of Corporate and Banking Influence
- Published 1976
This chart shows the interlocks between the Federal Reserve Bank of New York J. Henry Schroder Banking Corp., J. Henry Schroder Trust Co., Rockefeller Center, Inc., Equitable Life Assurance Society ( J.P. Morgan), and the Federal Reserve Bank of Boston.
Alan Pifer, President
Carnegie Corporation
of New York
———————-
|
|
———————-
Carnegie Corporation
Trustee Interlocks ————————–
———————- |
| |
Rockefeller Center, Inc J. Henry Schroder Trust Company
| |
The Cabot Corporation Paul Revere Investors, Inc.
| |
Federal Reserve Bank of Boston Qualpeco, Inc.
|
Owens Corning Fiberglas
|
New England Telephone Co.
|
Fisher Scientific Company
|
Mellon National Corporation
|
Equitable Life Assurance Society
|
Twentieth Century Fox Corporation
|
J. Henry Schroder Banking Corporation
Chart 5
Federal Reserve Directors: A Study of Corporate and Banking Influence
- Published 1976
This chart shows the link between the Federal Reserve Bank of New York, Brown Brothers Harriman,Sun Life Assurance Co. (N.M. Rothschild and Sons), and the Rockefeller Foundation.
Maurice F. Granville
Chairman of The Board
Texaco Incorporated
———————-
|
|
Texaco Officer & Director Interlocks —————- Liggett & Myers, Inc.
———————————— |
| |
| |
L Arabian American Oil Company St John d’el Ray Mining Co. Ltd.
O | |
N Brown Brothers Harriman & Co. National Steel Corporation
D | |
O Brown Harriman & Intl’ Banks Ltd. Massey-Ferguson Ltd.
N | |
American Express Mutual Life Insurance Co.
| |
N. American Express Intl’ Banking Corp. Mass Mutual Income Investors Inc.
M. | |
Anaconda United Services Life Ins. Co.
R | |
O Rockefeller Foundation Fairchild Industries
T | |
H Owens-Corning Fiberglas Blount, Inc.
S | |
C National City Bank (Cleveland) William Wrigley Jr. Co
H | |
I Sun Life Assurance Co. National Blvd. Bank of Chicago
L | |
D General Reinsurance Lykes Youngstown Corporation
| |
General Electric (NBC) Inmount Corporation
** Source: Federal Reserve Directors: A Study of Corporate and Banking Influence. Staff Report,Committee on Banking,Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976.
New York, April 25, 2008
A group of concerned citizens from around the country take to the streets of New York to draw attention to the spreading global financial crisis.
The value of the dollar is dropping like a rock and this video is to show how this is affecting the prices of everything from gas to milk. This is the first of several videos to show what is really happening to the economy of the United States and why this country is in a lot of trouble financially.
Taxes were on the forefront of many Americans’ minds this week as they scrambled to meet the April 15th deadline to file their returns.Tax policy in this country hurts taxpayers twice – once when they pay taxes, and then when the government spends the money.Americans are sick and tired of the financial burden and the endless forms to fill out. To add insult to injury, after collecting this money the government does some very detrimental things to the economy.
The burden of complying with the income tax is tremendous.Since its inception in 1913, the tax code has gone from 400 pages to over 67,000.The Tax Foundation estimates that around $265 billion dollars and 6 billion hours are spent just on compliance.That expense amounts to about 22 cents of every dollar the IRS collects.Imagine the boon to the economy if we spent that time and money expanding our businesses and creating jobs!
Aside from the direct loss of money and productivity, the funds from the income tax enable the government to do some very destructive things, such as vastly over-regulating economic activity, making it difficult to earn money in the first place.The federal government funds over 50 agencies, departments and commissions that formulate rules and regulations.These bureaucracies operate with little to no oversight from the people or Congress and generate around 4,000 new rules every year and operate at a cost of about 40 billion dollars. There are some 75,000 pages of regulations in the Federal Register that Americans are expected to know and abide by.Complying with these governmental regulations costs American businesses more than one trillion dollars per year, according to a study by Mark Crain for the Small Business Administration.This complicated system drives production to other countries and shrinks our job market here at home.
Big government is destructive when it takes your money and when it spends it.There is no economic benefit to supporting a government sector as massive as ours.In fact, this country thrived for well over 100 years without an income tax.Today, if you took away the income tax, the government would still have revenue from other sources equal to total government spending in 1990, when government was still too big.$1.2 trillion should be more than enough to fund a government operating within its constitutional confines, and that is exactly what we need to get back to.
I have introduced legislation many times to abolish the IRS and the income tax.It is fundamentally un-American to require taxpayers to testify against themselves and be considered guilty until proven innocent.Abolishing the IRS altogether would trigger an avalanche of real growth in the economy.
With these financial hard times only just beginning, this would be the most efficient and logical way to get our economy growing again, and Americans would need not dread the 15th of April every year.
Has Capitalism Failed?- Ron Paul
It is now commonplace and politically correct to blame what is referred to as the excesses of capitalism for the economic problems we face, and especially for the Wall Street fraud that dominates the business news. Politicians are having a field day with demagoguing the issue while, of course, failing to address the fraud and deceit found in the budgetary shenanigans of the federal government — for which they are directly responsible. Instead, it gives the Keynesian crowd that runs the show a chance to attack free markets and ignore the issue of sound money.
So once again we hear the chant: “Capitalism has failed; we need more government controls over the entire financial market.” No one asks why the billions that have been spent and thousands of pages of regulations that have been written since the last major attack on capitalism in the 1930s didn’t prevent the fraud and deception of Enron, WorldCom, and Global Crossings. That failure surely couldn’t have come from a dearth of regulations.
What is distinctively absent is any mention that all financial bubbles are saturated with excesses in hype, speculation, debt, greed, fraud, gross errors in investment judgment, carelessness on the part of analysts and investors, huge paper profits, conviction that a new era economy has arrived and, above all else, pie-in-the-sky expectations.
When the bubble is inflating, there are no complaints. When it bursts, the blame game begins. This is especially true in the age of victimization, and is done on a grand scale. It quickly becomes a philosophic, partisan, class, generational, and even a racial issue. While avoiding the real cause, all the finger pointing makes it difficult to resolve the crisis and further undermines the principles upon which freedom and prosperity rest.
Nixon was right — once — when he declared “We’re all Keynesians now.” All of Washington is in sync in declaring that too much capitalism has brought us to where we are today. The only decision now before the central planners in Washington is whose special interests will continue to benefit from the coming pretense at reform. The various special interests will be lobbying heavily like the Wall Street investors, the corporations, the military-industrial complex, the banks, the workers, the unions, the farmers, the politicians, and everybody else.
“The only decision now before the central planners in Washington is whose special interests will continue to benefit from the coming pretense at reform.”
But what is not discussed is the actual cause and perpetration of the excesses now unraveling at a frantic pace. This same response occurred in the 1930s in the United States as our policy makers responded to the very similar excesses that developed and collapsed in 1929. Because of the failure to understand the problem then, the depression was prolonged. These mistakes allowed our current problems to develop to a much greater degree. Consider the failure to come to grips with the cause of the 1980s bubble, as Japan’s economy continues to linger at no-growth and recession level, with their stock market at approximately one-fourth of its peak 13 years ago. If we’re not careful — and so far we’ve not been — we will make the same errors that will prevent the correction needed before economic growth can be resumed.
In the 1930s, it was quite popular to condemn the greed of capitalism, the gold standard, lack of regulation, and a lack government insurance on bank deposits for the disaster. Businessmen became the scapegoat. Changes were made as a result, and the welfare/warfare state was institutionalized. Easy credit became the holy grail of monetary policy, especially under Alan Greenspan, “the ultimate Maestro.” Today, despite the presumed protection from these government programs built into the system, we find ourselves in a bigger mess than ever before. The bubble is bigger, the boom lasted longer, and the gold price has been deliberately undermined as an economic signal. Monetary inflation continues at a rate never seen before in a frantic effort to prop up stock prices and continue the housing bubble, while avoiding the consequences that inevitably come from easy credit. This is all done because we are unwilling to acknowledge that current policy is only setting the stage for a huge drop in the value of the dollar. Everyone fears it, but no one wants to deal with it.
Ignorance, as well as disapproval for the natural restraints placed on market excesses that capitalism and sound markets impose, cause our present leaders to reject capitalism and blame it for all the problems we face. If this fallacy is not corrected and capitalism is even further undermined, the prosperity that the free market generates will be destroyed.
Corruption and fraud in the accounting practices of many companies are coming to light. There are those who would have us believe this is an integral part of free-market capitalism. If we did have free-market capitalism, there would be no guarantees that some fraud wouldn’t occur. When it did, it would then be dealt with by local law-enforcement authority and not by the politicians in Congress, who had their chance to “prevent” such problems but chose instead to politicize the issue, while using the opportunity to promote more useless Keynesian regulations.
Capitalism should not be condemned, since we haven’t had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It’s not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!
To condemn free-market capitalism because of anything going on today makes no sense. There is no evidence that capitalism exists today. We are deeply involved in an interventionist-planned economy that allows major benefits to accrue to the politically connected of both political parties. One may condemn the fraud and the current system, but it must be called by its proper names — Keynesian inflationism, interventionism, and corporatism.
What is not discussed is that the current crop of bankruptcies reveals that the blatant distortions and lies emanating from years of speculative orgy were predictable.
First, Congress should be investigating the federal government’s fraud and deception in accounting, especially in reporting future obligations such as Social Security, and how the monetary system destroys wealth. Those problems are bigger than anything in the corporate world and are the responsibility of Congress. Besides, it’s the standard set by the government and the monetary system it operates that are major contributing causes to all that’s wrong on Wall Street today. Where fraud does exist, it’s a state rather than a federal matter, and state authorities can enforce these laws without any help from Congress.
Second, we do know why financial bubbles occur, and we know from history that they are routinely associated with speculation, excessive debt, wild promises, greed, lying, and cheating. These problems were described by quite a few observers as the problems were developing throughout the 1990s, but the warnings were ignored for one reason. Everybody was making a killing and no one cared, and those who were reminded of history were reassured by the Fed chairman that “this time” a new economic era had arrived and not to worry. Productivity increases, it was said, could explain it all.
But now we know that’s just not so. Speculative bubbles and all that we’ve been witnessing are a consequence of huge amounts of easy credit, created out of thin air by the Federal Reserve. We’ve had essentially no savings, which is one of the most significant driving forces in capitalism. The illusion created by low interest rates perpetuates the bubble and all the bad stuff that goes along with it. And that’s not a fault of capitalism. We are dealing with a system of inflationism and interventionism that always produces a bubble economy that must end badly.
So far the assessment made by the administration, Congress, and the Fed bodes badly for our economic future. All they offer is more of the same, which can’t possibly help. All it will do is drive us closer to national bankruptcy, a sharply lower dollar, and a lower standard of living for most Americans, as well as less freedom for everyone.
This is a bad scenario that need not happen. But preserving our system is impossible if the critics are allowed to blame capitalism and sound monetary policy is rejected. More spending, more debt, more easy credit, more distortion of interest rates, more regulations on everything, and more foreign meddling will soon force us into the very uncomfortable position of deciding the fate of our entire political system.
If we were to choose freedom and capitalism, we would restore our dollar to a commodity or a gold standard. Federal spending would be reduced, income taxes would be lowered, and no taxes would be levied upon savings, dividends, and capital gains. Regulations would be reduced, special-interest subsidies would be stopped, and no protectionist measures would be permitted. Our foreign policy would change, and we would bring our troops home.
We cannot depend on government to restore trust to the markets; only trustworthy people can do that. Actually, the lack of trust in Wall Street executives is healthy because it is deserved and prompts caution. The same lack of trust in politicians, the budgetary process, and the monetary system would serve as a healthy incentive for the reform in government we need.
Markets regulate better than governments can. Depending on government regulations to protect us significantly contributes to the bubble mentality.
These moves would produce the climate for releasing the creative energy necessary to simply serve consumers, which is what capitalism is all about. The system that inevitably breeds the corporate-government cronyism that created our current ongoing disaster would end.
Capitalism didn’t give us this crisis of confidence now existing in the corporate world. The lack of free markets and sound money did. Congress does have a role to play, but it’s not proactive. Congress’s job is to get out of the way.-Ron Paul
If you still do not understand how far America fell, and where it really is in comparison to Russia, then I want to leave you this weekend with this. Bear Stearns, fifth largest American investment bank, voted “Most Admired” investment bank by Fortune magazine from 2005-2007, was sold off for just $237 million to J.P. Morgan. Now, compare this to a fifth-biggest Russian investment bank, UralSib. It’s a bank that is not even four years old, has maybe 60-70 guys working there, some of them know English okay, some even know mathematics. Guess how much UralSib is worth? At least $12.4 billion dollars, based on prices that investors willing to pay for UralSib shares.
That’s right, a fifth-biggest Russian investment bank is worth 50 times the equivalent in America.
Arrogant triumphalist Americans were always fond of the statement, “Russia is Upper Volta with nukes.” Really made you guys feel so superior, laughing at people who poorer that you are. So, who is the Upper Volta with nuclear missiles now, fuckers? Don’t just ask me, I’m a Russian patriot who is biased, so read your own Reuters, in the article “Some Wall St Banks Seen Riskier Than Poor Countries”:
“You could say Lehman is riskier than Nigeria,” one trader said, asking not to be named. “But it’s not a trade or a comparison people often try to make.”
Hey man, I make that comparison every day! Anyone with a working brain or understanding of financial markets understand today’s American financial system is not even at the level of Nigeria. It’s an insult to a Nigerian economy, because Nigeria has real products to sell that rest of the world wants, whereas America is completely broke and produces nothing but worthless financial instruments, which turn out to be as worthless as the collapsing American empire. It’s incredible to me that the trader quoted begs the Reuters reporter to be anonymous, like he is a scared Soviet refusnik in Stalin’s time. In fact the trader is afraid of getting killed for telling the hard truth. Can’t blame him, anyone who tells the hard truth in crazy fanatical loser America can be killed by a mob of dumbfuck retards. Only a British trader can speak openly about the hard reality:
“I think with Africa people feel they know what they are dealing with,” said Razia Khan, head of Africa economics at Standard Chartered in London. “In contrast, everything else [i.e. American financial system] is a great unknown.”
No, America your are not even Upper Volta with nukes. America is only nukes and that is it, nukes controlled by a mob of crazy bankrupt losers who know how to blow up the world but cannot do real work and make a real economy, that even Nigeria can do. Maybe that is why Americans are voting for this black guy Barack Obama. They hope that Africa will treat America well when homeless broke losers beg Nigeria for a credit line, and some oil.
The value of the dollar is dropping like a rock and this video is to show how this is affecting the prices of everything from gas to milk. This is the first of several videos to show what is really happening to the economy of the United States and why this country is in a lot of trouble financially.
