The sooner Greenspan and the politicians let JPM and Citi sink, the better off the whole world would be. Taxpayers are bailing out those corrupt bankers again.
Richard W.
Comments and opinions welcome.
Richard W.
they are understanding that some of the biggest offenders are from their own party.
Some excerpts:
Many political obsevers have been clamoring for Robert Rubin to return as Treasury Secretary but not even he could reinflate the burst bubble his policies helped to create.
Rubin helped to orchestrate the bailout of Mexico and South Korea, and advised the International Monetary Fund (IMF) on the Russian, Brazilian, and Southeast Asian financial crises. All in all, an estimated $250 billion in international loans went to prop-up faltering currencies and restructure debts.
While it is not immediately clear why bailouts would help prop up the dollar, as distinguished financial economist Allan Meltzer has noted, support for exchange rates “gives the people who want dollars a better price at which to buy them” as they have to pay less of their own currency for every dollar purchased. As Meltzer says, “Give people more opportunity to leave and on better terms, and more will leave.” As a result nearly all of these nations have larger international debts than before the bailout and the dollar appreciated following each intervention.
In addition, the infusion of cash allowed the developing countries to continue to service the debt owed to international bankers like Banc of America, JP Morgan Chase, HSBC, and Citigroup. Often the loans were restructured, but this did not matter to the Wall Street speculators since they would charge banking fees and a commission for their troubles. Rubin was a hero to his former colleagues as IMF and Treasury bailouts attenuated the default risk on highly speculative loans. Bankers got the high-yields that accompany high-risk investments and very little of the actual risk.
I trust that Bush will do a number on the terrorists during his watch. Perhaps he couldn't have done all that much, like going into Afghanistan, until the public was behind him. Now we are, and he is rolling.
And he's doing a pretty good job of pushing back the rolling tide of liberalism that is strangling this fine country in the long term, though that battle will continue as long as America lives. For each opportunity to take a conservative stand that the Bush Bashers are quick to notice Bush has missed, there is another action he has taken in the Right direction, that Clinton or Gore would not have.
But the other biggie for him will be this debt, foreign and domestic, public and private. Someday, I suspect in the next few years, maybe sooner, it will come rushing down like a huge avalanche, taking out a few large banks and sharply reducing the supply of liquid capital. Most of our liquid capital, our money, isn't anything more than a figment of some banks imagination. Not only no gold backing it, but not even any greenbacks or even any demand account checking deposits. For each dollar deposited in a bank, it can loan ten or twenty more. Those dollars are spent, at that bank or some other bank, creating more deposits that leverage more loans. It's called the fractional reserve system, and its how banks manage our nations money.
This keeps up until the bank gets scared, or broke.
As we will be seeing, someday soon.
They will never let them sink while they still have the power to intervene. JPM and Citi are the government.