Wow. It’s distinctly possible that the government actually OK’d misrepresentation of balance sheets. This guy has an axe to grind, he’s a gold acolyte, but the technical analysis here is interesting, and rebuts Greenspan’s recent claims that he couldn’t do anything to stop the housing bubble because of the derivative markets, in fact claiming that Fed policy was designed to increase the derivative markets, and ensure that government bonds would always be in demand.
http://www.321gold.com/editorials/kirby/kirby031809.html
First reported by Dawn Kopecki back in 2006 when she reported in BusinessWeek Online in a piece titled, Intelligence Czar Can Waive SEC Rules,
“President George W. Bush has bestowed on his [then] intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.”
What this means folks, if institutions like J.P. Morgan are deemed to be integral to U.S. National Security – they could be “legally” excused from reporting their true financial condition.
One other stunning piece of information, which scares the shit out of me, is that we’re now going to try to solve the problem by essentially printing money (at the same time that we’re running massive federal budget deficits):
http://www.salon.com/tech/htww/2009/03/18/printing_money/
I mentioned this to some of you privately, but the scary thing about this is that the Fed is essentially going to buy a bunch of ‘toxic assets’ and take them off the books by just printing up some dollars, giving the banks a fresh infusion of cash. This is going to greatly increase the money supply over the short term, and will undoubtedly lead to high inflation very soon. We could be headed for that fun ‘stagflation’ we had in the mid 70s, high unemployment coupled with high inflation. The only way to get that money back is to either sell Treasury bonds to U.S. investors, and to find buyers for all those ‘toxic assets’, which ain’t gonna happen quickly, it might take 10 years, and they aren’t all going to be saleable.
We are going to be walking a tightrope for the next few years on the macroeconomic level, and we damn well better hope that oil prices don’t skyrocket again because that disruption would have catastrophic consequences. This just doesn’t seem to make much sense to me, it’s a massive roll of the dice in order to protect the interests of a very small segment of the population who benefits from keeping these institutions afloat without restructuring them. It does answer critics like Paul Krugman who have said that the stimulus spending isn’t enough to turn the economy around — this amount of money in circulation will either save the economy or destroy, with about an equal chance of either.
I will be surprised if we get back 20 cents on the dollar for this outlay, which means we will have spent something like 10 to 12,000 dollars for every man, woman, and child in this country to keep up the false impression that the banks are sound. Absurd, and it makes me want to just go off the grid and hide underground — and it may provide us all with the chance to do so still, if we don’t all become fascists, or roving packs of Mad Maxes using greenbacks to stoke our random bonfires.
Related Articles
No user responded in this post