Busted: Bankers and The Global Economy

June 17, 2009

Federal Reserve Discovers Deviancy

affordable bankingAbout 16 years ago, Senator Daniel Patrick Moynihan offered a striking view of the degradation of standards in society. He observed that deviancy was measured as increases in crime, broken homes, and mental illness. These reached levels never seen by earlier generations in the U.S. As a means of coping with the onslaught, society often sought to define the problem away. The definition of customary behavior was expanded. Actions once considered deviant from acceptable standards became, almost immaculately, within bounds. In the case of the authority by the Federal Reserve, deviancy has been all but ignored.

After opening up with a classic comparison of standards in society, Kevin Warsh has other observations about the Federal Reserve that would lead one to wonder if central bankers are really lost, but couching this misdirection as a new philosophy of public exploration of purpose and policy. No such luck fellow Americans and globalists.

fed_warsh_kevinWarsh asks: “Will deviancy be defined down with the understanding that a rare crisis is the price for dynamic, robust economic growth?” The Federal Reserve is exploring new philosophy of social and monetary control, but is still thinking within the same old box of capitalism and economic growth via Wall Street and bankers instead of the real economy where the mainstream actually live and grow their lives.

Even Warsh recognizes that over the last few decades that America has not lived in a golden age. He says that periodic, cyclical weakness occur. There were lessons to be learned. Did we learn lessons at any point along the way? Now Kevin Warsh is asking bankers and economic pundits what they want in a new ‘touchy-feely’ approach of philosophy to the recent banking crisis. That’s right…this was a banking crisis, not just another recession. If bankers had not become economic and social deviants, the U.S. and the world would not be in this recession.

Still, Warsh is asking his friends and banking associates whether they choose stability or performance. What do you think bankers will say? The Fed is not really talking change, just more of the same boilerplate economic policies, unchanged for decades and augmented with more control measures and power for central bankers. The Fed doesn’t seek to reform anything, but has plenty to say that supports the status quo. The U.S. and the Fed, through the brotherhood of central bankers, has misused a position of trust. Now the Fed is printing vast sums of money (credit) that will ultimately tumble the dollar and create a larger crisis. ~ E. Manning

October 21, 2008

Global Financial Overhaul Recommended

A new form of capitalism is needed, based on values which put finance at the service of business and citizens, and not vice versa,” Nicolaus Sarkozy told leaders at an EU economic summit today. “The system must be completely overhauled, an overhaul that must be global.”

Now the Great Depression of America is being used as the classic example of economic failure, even though that crisis was focused in the United States. That is not the case this time. Toxic banking instruments have turned the world on its collective ear. This articulated radical overhaul undoubtedly will involve the relatively new digital economy with all kinds of security and financial protections in the name serving global citizens. In fact, the digital economy has become the de facto global economy, connecting the world as a singular body of people for information, global data sharing and ecommerce. Authorities just haven’t arrived at the global genesis of the New World Order of Finance and Government.

Authorities want global stability as well as financial security. Finance Ministers and Government leaders are looking for a new way to bring that possibility into reality. You should watch the financial accord overseas very closely, especially as the United States is brought increasingly into the picture. Central bankers as the main recipients of the ultimate solution have everything to gain and nothing to lose, creating a new global empire of power and wealth, even if it does take some time. ~ E. Manning

August 23, 2008

Economic Gale Force Winds Blow in the States

Another Friday passed with the closing of The Columbian Bank and Trust of Topeka, Kansas. Ben Bernanke is speaking in an amazing feat of poetry, comparing the economic storm in the United States to gale force winds that have not subsided. This is an almost startling admission from a man so conservative in his explanations. Bernanke is feeling confident about his strength and position.

The appearance of the economy has weathered well so far without truly significant collateral damage for the public to see. Bernanke admits to being challenged with the “softening in economic activity and rising unemployment.” He readily admits that commodities boom is partly responsible for the dramatic rise in inflation instead of simply blaming inflation on energy futures.

The Fed is weathering the gale force storm by hanging tough and hoping for stability. Even “the experts” admit that the inflation outlook is uncertain, but will be a major concern through next year. If the Fed could find a way to control commodity prices, they would probably think they had it made. Bernanke hasn’t devised a way to harness the commodities market yet. Undoubtedly, that is in the works soon.

The Fed continues to work with other central bankers to provide plenty of liquidity for needy banking institutions that are still fearful of interbank lending. Banks continue to use Fed auctions liberally, with demand in excess of supply.

Bernanke admits the need to somehow strengthen the financial system beyond the sustenance that has already been provided. Suddenly, Bernanke is speaking about thorny issues “raised by the existence of financial institutions that may be perceived as ‘too big to fail’ and the moral hazard issues that may arise when governments intervene in a financial crisis.” In other words, Bernanke is expecting some large financial failures. Whether he is alluding to Fannie Mae and Freddie Mac or holding banks like Citi isn’t being admitted. He is sounding warning by his comments as the gale force winds blow. He also defended the need to cover for Bear Stearns almost six months ago. He apparently expects to do so again.

Bernanke has also admitted that the Fed is involved in finding a way to protect bankers from their own financial politics through automation and standards rather than avoiding the risk altogether. In other words, the Fed is seeking to minimize risk by continuing to engage in what has been discovered to be risky banking conduct. Hey, it’s good for business.

Bernanke even discusses covering pools of securitized bonds while seeking more power from Congress to settle a crisis without government intervention. That is good for the Fed’s business as well as the corporate oligarchy takes ever more responsibility for monetary policy and legal oversight from the hands of government. That is the idea in the eyes of the Fed.

Bernanke believes that the more power that the Fed has, the less risk that there is to the system. He is convinced that by having more regulatory power to monitor individual institutions, he can eliminate moral hazard and promote financial resistance, perhaps by increasing capital requirements for banking. He wants to conduct “stress tests” to monitor liquidity, risk exposure and adverse circumstances. He wants to build a new financial regulatory empire operated by corporate global banking. Who is watching the Federal Reserve while all this wonderment is going on? Not a soul is watching the Fed. The Fed monitors itself and as far as the government and Congress are concerned, is “above reproach.”

The reality is that politicians have become thoroughly dependent on the International Society of Bankers. Fear should be firmed rooted in the hearts of politicians. World bankers have the nation of sheep by the private parts and are leading it down the primrose path of banking for sheering.

~ E. Manning

November 28, 2007

Fed Seeks Avoiding Moral Hazard

Filed under: banking, federal reserve, government, money — Tags: , , , , , , — digitaleconomy @ 3:17 pm

The Fed reminds all that will listen that they don’t cover the increasing losses in the market place and that these losses should be borne by the market and borrowers. Too bad the Bush Administration hasn’t felt the same way by allowing the reckless conduct of the finance and mortgage industry. Ultimately, the citizens of the U.S. pay, not the profit takers. The Fed is padded at 110% for every loan they make. The U.S. banks and finance industry haven’t been so wise. Their short-sightedness and speculative nature has come back to haunt them.

“Central banks seek to promote financial stability while avoiding the creation of moral hazard. People should bear the consequences of their decisions about lending, borrowing, and managing their portfolios, both when those decisions turn out to be wise and when they turn out to be ill advised.”
~ Fed Vice Chairman Donald L. Kohn

Financial Markets and Central Banking, November 28, 2007

October 27, 2007

Interest of Fed is in Economic Performance

Filed under: banking, federal reserve, government, passport, security — Tags: , , , , , — digitaleconomy @ 2:56 am

Fred says it well. It’s all about money and performance of the economy so the Fed can profit. Obviously, the Fed is concerned. The Bush Administration hasn’t said a thing.

“The interest of the Federal Reserve in financial stability does not arise out of a concern for the functioning of financial markets as such or out of a desire to aid distressed investors or institutions. Rather, the Federal Reserve vigorously promotes financial stability because of the intimate connection between a stable financial system and solid macroeconomic performance.”
~ Governor Frederic Mishkin, October 26, 2007

Financial Instability and the Federal Reserve as a Liquidity Provider

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