As the battle lines are drawn between the people and the bankers outside the ABA convention in Chicago, the question arises: Which side is the White House on, exactly?
Yes, the Obama administration is pushing to dramatically increase the regulation of consumer and other financial transactions that have run amok, but there is widespread concern from across the political spectrum that the White House is neither going far enough nor fighting hard enough. And time and again — most notably with the ongoing $700 billion bailout — Obama administration policies have put the interests of bankers and Wall Street ahead of those of impoverished families, unemployed workers or underwater homeowners.
One reason — which has never been directly addressed by Obama — may be that many of his chief financial advisers have pocketed extraordinary amount of money from banks and Wall Street, and presumably intend to do so again. They are part of the banker class, and their loyalties have been bought and paid for.
Back in April, when the White House released financial disclosure forms late one Friday, those few people paying attention learned just how stupendously beholden Obama’s top economic adviser, Larry Summers, is to the financial industry that he is ostensibly trying to rein in. Read entire article here
The sky isn’t falling, exactly. America isn’t on a fast track to irrelevance. Even in a state of total neglect, we could probably shamble along as a disheveled superpower for a few more decades.
But all empires end, and the warning signs of American decline seem to be blinking more consistently. In the latest annual “prosperity index” published by the Legatum Institute, a London-based research firm, the United States ranks as the ninth most prosperous country in the world. That’s five notches lower than last year, when America ranked No. 4.
The drop might seem inconsequential, especially in the midst of a grueling recession—except that most of the world has endured the same recession, and other countries are bouncing back faster.
China and India have recovered smartly from the recession, for example. Brazil seems to be barreling ahead. Australia is growing faster than expected, prompting worry among government officials who fear they may have overstimulated the economy. The United States, meanwhile, is muddling through a weak, jobless recovery, and we have a lot of problems that could make prosperity feel elusive for a long time.
Real household income in America has flat-lined, for instance, which means many middle-class families are barely keeping up with inflation. The exploding federal deficit hamstrings the government’s ability to help. Healthcare is too expensive, America’s manufacturing base is eroding, and two open-ended foreign wars are draining the national treasury. This is not a recipe for building national wealth….Read Entire Article Here
Is the Federal Reserve betting on the dollar to fail? There is stunning new evidence that The Fed is greatly benefiting from the collapse of the dollar. For the first time ever, The Fed’s balance sheet grew by over $500B by swapping currencies with foreign central banks. Consequently, they profit tremendously when the dollar falls against those currencies. It appears to be blatant manipulation of U.S. Dollars by the very entity that creates them. In other words, The Fed is literally betting on its own product to fail.
Fed Chairman Bernanke admits this is a new practice for The Fed and even claims they also make interest on these swaps with foreign central banks. However, those same foreign banks are now following The Fed’s lead (or orders) to dump the dollars they just received at record rates, according to an October 12th investigative article by Bloomberg. This is putting massive downward pressure on the strength of the dollar.
Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show. That’s the highest percentage in any quarter with more than an $80 billion increase.
World leaders are acting on threats to dump the dollar while the Obama administration shows a willingness to tolerate a weaker currency in an effort to boost exports and the economy as long as it doesn’t drive away the nation’s creditors. The diversification signals that the currency won’t rebound anytime soon after losing 10.3 percent on a trade-weighted basis the past six months, the biggest drop since 1991…
Intercontinental Exchange Inc.’s Dollar Index, which tracks the currency’s performance against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, fell to 75.77 last week, the lowest level since August 2008 and down from the high this year of 89.624 on March 4. The index, at 76.104 today, is within six points of its record low reached in March 2008.
And many predict continued demise of the dollar as the trend to dump dollars continues to gain steam.
“The diversification out of the dollar will accelerate,” said Fabrizio Fiorini, a money manager who helps oversee $12 billion at Aletti Gestielle SGR SpA in Milan. “People are buying the euro not because they want that currency, but because they want to get rid of the dollar. In the long run, the U.S. will not be the same powerful country that it once was.”
The Fed is betting on its own product to fail. Incidentally, they’re betting on America to fail. They’re shorting their own stock as if they plan for the end of the dollar experiment. And as a private for-profit entity, The Fed is only accountable to PROFIT like every other private company on the planet. They seem to have complete disregard for the ramifications to the American people.
The good news is that Ron Paul (R-TX) and Alan Grayson (D-FL) are beginning to ask the tough questions and have received nearly 300 house sponsors for HR 1207 to Audit The Fed. Meanwhile, the private Federal Reserve appropriately hired former Enron head lobbyist, Linda Robertson, to protect them from the investigation.
Fed Chairman Ben Bernanke ridiculously contradicts himself while being interrogated by Grayson. Bernanke first claims that the authority of The Fed to give $500B+ to foreign central banks “is not an emergency authority of any kind.” When Grayson exposes the Fed’s balance sheet to reveal no previous history of this activity, Bernanke then admits “it was zero before the crisis.” Any poker player will tell you Bernanke’s lip biting at the end of his clearly uncomfortable explanation is a major tell of a nervous bluffer.
Their bluff is finally being called and it will soon be common knowledge that the Fed is a private for-profit company that manipulates the global economy for its ends only. It will be fascinating to observe, but painful to live.
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