Busted: Bankers and The Global Economy

January 15, 2008

The Prophecy of Paul Volcker

Former Federal Reserve chief Paul Volcker foretold upcoming events at the second annual summit of the Stanford Institute for Economic Policy Research. In his keynote speech he warned that the nation is facing “huge imbalances and risks”.

“Altogether, the circumstances seem as dangerous and intractable as I can remember.”

“Boomers are spending like there is no tomorrow.”

“Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security.”

“I come now to the heart of the problem, as a Nation we are consuming and investing, that is spending, about 6% more than we are producing. What holds it all together? – High consumption – high leverage – government deficits – What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 Billion per day.”

“What I’m really talking about boils down to the oldest lesson of financial policy in Central Banking: A strong sense of monetary and fiscal discipline.”

Stanford University: February 11,2005

At least someone involved in the Federal Reserve banking system has some common sense and the willingness to speak his mind.

~ E. Manning

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