Kleptocrats cannot understand that stimulus funds stimulate government, not the economy. Downturn in a business cycle is painful but necessary medicine for restoring equilibrium to the economic system. Reject further lowering of the interest rate (stimulative monetary policy) or any other attempts (for example, deficit spending or stimulative fiscal policy) to stimulate demand. http://venitism.blogspot.com
Stimulus spending is like morphine. It might feel good in the short term for the beneficiaries of the money, but it doesn't help repair the economy. And it causes more damage if it gets in the way of a proper recovery.
If dollar devaluation becomes too pronounced, Washington threatens to kill the goose that lays the golden eggs: namely, the dollar's reserve status. If that were to happen, a global financial crisis of staggering intensity would surely erupt, the resolution of which would not favor the United States.
Fiat currencies trade people's freedom and security for the government's freedom to squander the wealth of the nation on wasteful pet programs, wars, and corruption. This is why the freedom of the people is so intertwined with a sound monetary unit. This is also why we like gold and silver, and supporters of big government hate them.
Most crises are similar. There is a stage of boom and bubble before the bust and the crash. People will see the value of certain assets like homes or equity go up, then they will use these assets as a collateral for borrowing too much and therefore you have a build-up of leverage in the financial system. And then, once the bubble goes bust, the value of the assets falls and people are stuck with all this debt they can't repay.
Kleptocrats are creating zombie banks and companies that are kept alive artificially. We started with a too-big-to-fail problem, and part of the policy response to the crisis has been even more financial consolidation. JP Morgan took over Bear Stearns and Bank of America took over Merrill Lynch. What we have now is financial institutions that are even bigger. Those institutions, even more than before, know if they do something very risky, something reckless, they will be bailed out again. http://venitism.blogspot.com
The Federal Reserve refuses to give a public accounting of the trillions in recent taxpayer-backed loans. Congress has the responsibility to force a public audit of the Federal Reserve, and the American people deserve to know how their tax dollars are being spent. Allowing the Fed to remain out of control and shrouded in secrecy clearly allows for abuse and the continued stealing of our tax dollars through inflation and unaccounted electronic bank loans.
The Federal Reserve's abuses lead to constant economic crises like the current housing crisis, international banking crisis and the resulting chaos. The Federal Reserve System forces fuel, food, housing, medical care and education costs upward, meaning that everyone who is not on the government dole is forced to make do with less as the value of money slowly decreases. History shows us that riots, violence and full-scale police states can result when people finally realize fiat money isn't worth the paper it's printed on and refuse to accept it.
Individuals and banks should be free to choose what money they use. This is an especially controversial, but absolutely essential, component of a truly free society. The government may not force us to use infinitely-inflatable, green pieces of paper. Historically, when left free from government-dictated currency, the overwhelming choice of individuals has been gold money, which has objective value, a stable quantity, and other qualities that make it an excellent form of money. Interest rates on a gold standard are set by supply and demand in the marketplace; there should be no governmental manipulation of interest rates, and thus no ability of the Federal Reserve to create massive bubbles such as the dot-com and housing bubbles. http://venitism.blogspot.com
Since its inception in 1913, the Federal Reserve has helped to devalue the dollar by 96%. During the recent economic crisis, it has poured trillions of dollars into the economy with no oversight, made secret agreements with foreign banks and governments, and has refused to tell Congress who is getting the money or to give it the details of what deals are being made. We demand full transparency from the central banks.
Neil Barofsky warns to not make Timothy Geithner angry. You wouldn't like Geithner when he's angry. Here are some funny excerpts from Barofsky's new book, Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.
I said that I thought our capacity as a nation to deal with what could be a continuing financial crisis was being undermined by a loss of faith in government. Then I said that the current loss of government credibility could be traced to Treasury's mishandling of TARP.
Neil, you think I don't hear those criticisms? I hear them. And each one, they cut me, he said, pausing and then making an emphatic cutting motion with one hand as he said like a knife.
I am not suggesting that the secretary has failed in transparency, I am stating it. Mr. Secretary, you've failed to be sufficiently transparent, and that is one of the reasons why people are so angry. But you can still fix it.
Neil, I have been the most fucking transparent secretary of the Treasury in this country's entire fucking history! No one has ever made the banks disclose the type of shit that I made them disclose after the stress tests. No one! And now you're saying that I haven't been fucking transparent?
Geithner looked as if he was going to get out of his chair and throttle me. I never would have imagined that one day one of the most powerful government officials in the world would be dropping f-bombs on me, Barofsky writes.
