I don't go out of my way to read conspiracy theories so no I haven't read that House Banking Report you refer to. Edify me and name the current Fed Reserve directors and governors and draw their link to the European banking families you think control the Fed.
nobody has a monopoly on credit. The only difference is the Fed can print money, therefore by definition cannot go into default (although it would be entirely possible). Other institutions may experience credit freezing up (including the government) so that they may go into default at any point in time. This is by the way a crisis of liquidity and confidence and not of credit. Lehman and BS went into default at their particular times because of the loss of confidence by other counterparties. (According to the FED LEH did not even tap the FED liquidity facility all the way until default). I dont understand why people make things so complicated. It all boils very quickly down to the human aspects of greed and fear. In LEHs case most counterparties lost all confidence in Lehman and stopped lending even short term. Others such as KfW still had confidence (out of negligence and lack of due diligence) and transferred 350 million Euros to Leh on the same day Leh went into default. Simple as that.
safe your time man, those guys are the same who claim the US has never landed on the moon. LOL. And they are the same who spend day and night to find out who to blame for this mortgage bubble. The Fed, the government, the bankers, the Europeans, who whatever. THe fail to see that it was created by simple greed and fear. Greed when people with 40k annual salaries thought they also deserve a home without down payments, without sufficient credit. Greed when the average American consumer STILL TODAY AS WE STAND thinks he/she deserves 3-4 maxed-out credit cards, at least 2 cars (one of which exceeds the annual net salary), and the list goes on. People have grown to expect the impossible. The virtue of patience has gotten lost and been replaced by an "I deserve NOW" attitude. That there are others who feed from this greed is expected and will NEVER change. So, why are we surprised, why shall rather blame all of us outselves. Why everthing so complicated?
Thank you for the comment. I find it amusing though to see how far they can stretch their bizarre theories and still maintain a straight face without realizing how ridiculous they are sounding.
Wrong. Leverage fuels *and* causes bubbles. Tulip Mania is a perfect example of excess liquidity causing bubbles. The Netherlands "Free coinage" and Bank of Amsterdam's stability created an influx of specie (gold and silver) into the Netherlands in the early 1600's. By 1638, the Netherland Mint had coined 1800% more gold and 800% more silver than was in circulation, 10 years earlier. That doesn't sound like a money bubble!! Enjoy http://mises.org/story/2564 btw, please show us any bubble that wasn't first preceded by a huge run-up in money supply.
Go look it up for yourself. And while you're at it, do us the favor and explain why Jefferson, Jackson and Lincoln railed against, what you call, a "banking conspiracy theory". Or do you not read the Founders Writings either? Wouldn't be surprised......
Keeping interest rates as low as they were, the Federal Reserve created artificial demand of credit. This artificial demand coupled with lax lending standards transferred the asset bubble from tech stocks to the housing bubble (The government needs higher asset prices to collect more tax dollars on). In such environments risk gets overly mispriced and MMs take advantage of it in pricing ABS. MMs bid up asset prices and pawn them off on Joe Public and Municipalities. This has been happening from the start of the Federal Reserve System. A "free market" would call for 6-8% rates so that the bonds can at least outpace inflation. The balance between greed and fear is a very fine line. Government intervention is never the answer. Name one thing that the government got involved in that it helped. This writer is clueless. Cognitive dissonance is the problem here.
Nobody has a monopoly on credit? Except the Federal Reserve who prints the money. But prove us all wrong and start using your own bills of credit at the local grocery store, and see what happens... Wow. When you boil it down in such simple (minded) terms, I guess you're right! FED funds at 1% for 2 years certainly had nothing to do with it. Ever notice how bubbles don't form when rates are 10%+ ? Every bubble was the result of loose credit. I suggest doing some research.