Virg Bernero, the mayor of Lansing, Michigan, just won the Democratic nomination for governor of his state, making a state-owned Bank of Michigan a real possibility. Bernero is one of at least a dozen candidates promoting that solution to the states’ economic woes. It is an innovative idea, with little precedent in the United...
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As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974. Ebay is offering a well-thumbed volume of “Dying of Money: Lessons of the Great German and American Inflations” at a starting bid of $699 (shipping free.....
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The housing depression will last for a decade or more. This is by design. The Fed has been working with the banks to withhold inventory so prices do not fall too fast or too far. That way the banks can manage their write-downs without slipping into insolvency. But what’s good for the banks is...
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Financial services are reaching the world’s poorest by mobile phone. Thanks to a mobile banking system launched last month in Senegal, people with no previous access to bank accounts were able to watch the World Cup via satellite services that they paid for electronically with a few taps on a mobile phone. The service...
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Thamizarasi does not know job safety or regular income. Work comes and goes for this 40-something agri-labourer in Alakudi, a village in Thanjavur district in Tamil Nadu. This month, for instance, farm owners did not need labourers like her because the local dam was yet to release water to irrigate their fields. During such...
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Thomas Ferguson: A few small useful measures, but the bill strengthens the Fed and is weak on big issues. Thomas Ferguson is Professor of Political Science at the University of Massachusetts, Boston and a Senior Fellow of the Roosevelt Institute. He received his Ph.D. from Princeton University and taught formerly at the Massachusetts Institute...
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Recently we were again witness to three gold market takedowns. The first was engineered just prior to and into gold and silver options expiration. Then prior to the ETF GLD gold option expiry and the last manipulative attack commenced just prior to the dreadful unemployment housing and inventory statistics. This sort of action began...
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Banks Profit from Near-zero Interest Rates: Another Reason for States to Own Their Banks While individuals, businesses and governments suffer from a credit crisis created on Wall Street, the banks responsible for the crisis are tapping into nearly-interest-free credit lines and using the money to speculate or to make commercial loans at much higher...
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Most Americans know that the U.S. economy is in bad shape, but what most Americans don’t know is how truly desperate the financial situation of the United States really is. The truth is that what we are experiencing is not simply a “downturn” or a “recession”. What we are witnessing is the beginning of...
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Derivatives come to the movies As if attacks from paparazzi and star-crazed fans weren’t enough, Hollywood stars may soon have a literal price put on their heads by investors in the Cantor Exchange, a real-money trading platform where people can bet on the gross profits of upcoming movies. Sales of The Dark Knight skyrocketed...
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While the SEC is busy investigating Goldman Sachs, it might want to look into another Goldman-dominated fraud: computerized front running using high-frequency trading programs. Market commentators are fond of talking about “free market capitalism,” but according to Wall Street commentator Max Keiser, it is no more. It has morphed into what his TV co-host...
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The financially stricken Greek government is beginning talks with the EU and the International Monetary Fund about a possible bailout. Greece has found borrowing from banks too costly recently and is struggling to refinance old debts. Let’s get some analysis with economist and author William Engdahl. Source.
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A Crackdown on Financial Crime or a Kabuki Play Maneuvre to Avoid Bringing Criminal Charges Fox Business News was engrossed in interviewing a blonder than thou reality TV bimbo when the news that the Securities And Exchange Commission was filing fraud charges against Goldman Sachs broke on Friday afternoon. The breaking news bulletins were...
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As the states’ budget and credit crises deepen, four states have initiated bills for state-owned banks, and candidates in seven states have included that solution in their platforms. “Hundreds of job-creating projects are still on hold because Michigan businesses and entrepreneurs cannot get bank financing. We can break the credit crunch and beat Wall...
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Evidence of a Financial Coup in America How much more evidence of a financial coup and the THEFT of TRILLIONS of DOLLARS do we need before the media and our politicians do something, anything, to restore a rule of law in this nation? What is it going to take? About four months ago, I...
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This is an open letter to the economics, finance and banking communities. I don’t have any dog in the fight, other than to figure out and then publicize what is best for the greatest number of people. People I greatly respect advocate for federal-level public banking, state public banks or a return to the...
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Or Why the Market Was Down for 7 Days in a Row We are witnessing an epic battle between two banking giants, JPMorgan Chase (Paul Volcker) and Goldman Sachs (Geithner/Summers/Rubin). Left strewn on the battleground could be your pension fund and 401K. The late Libertarian economist Murray Rothbard wrote that U.S. politics since 1900,...
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People have asked whether moving your money from your giant bank to a small community bank or credit union will have any real affect on the too big to fails, given that most of their profits come from speculative investments instead of normal banking deposits. According to the Nation, the answer is yes: The...
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It is said that a near-death experience forces one to reevaluate priorities and values. The global economy has just escaped a near-death experience. The crisis exposed the flaws in the prevailing economic model, but it also exposed flaws in our society. Much has been written about the foolishness of the risks that the financial...
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The president has packed his economic team with Wall Street insiders The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in...
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Questions for Bernanke’s Senate Confirmation Hearing The Senate Banking Committee will be chatting with Ben Bernanke this Thursday to vote on his reappointment. Demand that the Committee ask the following questions for our esteemed Esteemed Chairman (and contact your own Senators also and demand that they find out the answers to the following questions)....
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What Is India and China Doing That Malaysia Has Neglected To Do? On 27th August 2009 I wrote an article, “An Appeal To Malaysia’s Prime Minister Cum Finance Minister – Re-Examine the Country’s Strategy For Foreign Reserves”, to urge our Prime Minister to examine the critical need to diversify our foreign reserves, specifically to...
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Interest rates. The Fed does not need slinky women in plunging necklines to peddle money. All it needs is low interest rates. When rates are pushed lower than the rate of inflation, the Fed provides a subsidy for borrowing. This is not as hard to grasp as it sounds. If I offered to give...
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Greg Gordon: There is nothing that can prohibit or stop the Wall St. firms from making secret bets. Bio: Greg Gordon, an investigative reporter, has spent 30 years uncovering waste, fraud, abuse and misconduct in Washington. Since joining McClatchy’s national staff in 2006, he has helped expose partisanship in the Justice Department and gaps...
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Goldman climbed into bed with New Century Financial Corp’s unreviewed and off shore deals. Goldman Sachs was among the last Wall Street giants to enter the lucrative world of subprime mortgages, but it didn’t take long before the elite investment house was cutting deals with firms whose reputations would soon be tarnished, at best...
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Inside investment circular were the details of a secret $2 billion deal channeled through a tax haven. Inside the thick Goldman Sachs investment circular were the details of a secret, $2 billion deal channeled through a Caribbean tax haven. The Sept. 26, 2006, document offered sophisticated U.S. and European investors an opportunity to buy...
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Goldman didn’t tell buyers of $40 billion in securities it was secretly betting the other way In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers that it also was secretly betting that a sharp drop in...
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McClatchy’s Greg Gordon reports that Goldman knew that mortgages were not being properly reviewed Transcript: GREG GORDON, MCCLATCHY (VOICEOVER): This is Greg Gordon of McClatchy Newspapers. When the housing bubble burst and millions of Americans defaulted on their subprime mortgages, few places were harder hit than the Southern California city of Moreno Valley. As...
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Pouring money into the private banking system has only fixed the economy for bankers and the wealthy; it has not done much to address either the fundamental problem of unemployment or the debt trap so many Americans find themselves in. President Obama’s $787 billion stimulus plan has so far failed to halt the growth...
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On February 1, 1960, four students sat down at a lunch counter at
the former Woolworth’s store in Greensboro North Carolina. 4 students! Just four! They were protesting racial segregation. They were denied,
service, harassed and arrested. Greensboro was and still is a backwater, yet their courage and
commitment sparked and helped drive a national movement that
would,...
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State and local leaders are considering creating publicly owned banks that can funnel credit to where it is needed most: directly into the local economy. The credit crunch is getting worse on Main Street, despite a Wall Street bailout now in the trillions of dollars. The Federal Reserve’s charts show that “base money” is...
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Focus on the face at the top of Federal Reserve neglects questioning the institution and the system President Obama has re-nominated Ben Bernanke to sit as Chairman of the Federal Reserve for another four-year term. Most of the media has praised Bernanke for his handling of the current economic crisis, Obama himself suggests that...
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Richard Posner writes in the FT. Read the whole thing! I doubt academic economists are to blame for the crisis in any direct sense — the real perps are on Wall Street and Main Street — but they do deserve blame for the “ideological capture” of regulators and policy makers, many of whom, through...
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Entering the Greatest Depression in History Introduction While there is much talk of a recovery on the horizon, commentators are forgetting some crucial aspects of the financial crisis. The crisis is not simply composed of one bubble, the housing real estate bubble, which has already burst. The crisis has many bubbles, all of which...
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Bankrupt US Financial System: The Bubble Bursts and the Economy goes into a Tailspin. We’re making this way too complicated. It’s simple really. The Fed has only one tool at its disposal; to create more money. Typically, the way the Fed adds to the money supply is by lowering interest rates. When the Fed...
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In the real economy, unemployment is at Depression-era levels (see this, this and this). In the real economy, bank loan loss rates will be higher than the Depression. In the real economy, government revenue is at its lowest level since the Depression, and most states are on the verge of bankruptcy. In the real...
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Fed Chairman Ben Bernanke is a man who knows how Washington works and uses that knowledge to great effect. His appearances on Capital Hill are always worth watching. He sits politely with his hands folded in front of him playing the bashful professor while one one preening congressman after another makes a fool out...
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“Blowing Bubbles” and “Using Palliatives” which “Make Things Worse” BIS Slammed Federal Reserve and Other Central Banks for Blowing Bubbles and then “Using Gimmicks and Palliatives” which “Will Only Make Things Worse” If you have any doubt that the Fed and other central banks should have known that a crash was coming, all you...
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At the start of this week, German-based Deutsche Bank announced a huge increase in its profits. The bank reported a net profit of €1.1 billion in the second quarter of this year, nearly doubling its earnings over the same period last year (€645 million). The massive increase in Deutsche Bank’s profits follows record earnings...
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A senior OECD official says the global financial crisis is far from over and the world faces a serious risk of another credit crunch and a double dip recession. Adrian Blundell-Wignall is the deputy director of financial and enterprise affairs at the Organisation for Economic Cooperation and Development (OECD). In an interview with ABC...
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The Conservatives have pledged to hand the Bank and its Governor Mervyn King power to control the balance sheets of all Britain’s major banks and finance houses, as well as regulation of the broader financial system. With its existing power to control interest rates, the proposed reforms will mean the Bank will rival the...
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Bank of America Corp is operating under a secret U.S. regulatory sanction that requires it to overhaul its board and address perceived problems with risk and liquidity management, The Wall Street Journal reported, citing people familiar with the situation. Rarely disclosed publicly, the so-called memorandum of understanding (MOU) gives banks a chance to work...
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William White predicted the approaching financial crisis years before 2007′s subprime meltdown. But central bankers preferred to listen to his great rival Alan Greenspan instead, with devastating consequences for the global economy. William White had a pretty clear idea of what he wanted to do with his life after shedding his pinstriped suit and...
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President Obama has repeated his call for a public option in health care, in order to create some competition for the insurance companies and keep them honest. We the people need to call for a public option in banking, in order to create some competition for the private banks and keep them honest. In...
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“The empire of the dollar is crashing.” Hugo Chavez, Venezuelan President “The U.S. dollar is a worthless piece of paper.” Mahmoud Ahmadinejad, Iranian President “losing its status as the world currency.” Xu Jian, vice director, People’s Bank of China, “It is the policy of the United States and it will...
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Upswing in stocks comes from profits due to cutbacks and concessions, worse is yet to come
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Introduction Humanity is on the verge of entering into the most tumultuous period in our history. The prospects of a global depression, the likes of which have never been seen before; a truly global war, on a scale never before imagined; and societal collapse, for which nations of the world are building totalitarian police...
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California has over $17 billion on deposit in banks that have refused to honor its IOUs, forcing legislators to accept crippling budget cuts. These austerity measures are unnecessary. If the state were to deposit its money in its own state-owned bank, it could have enough credit to solve its budget crisis with funds to...
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A careful reading of Federal Reserve chairman Ben Bernanke’s op-ed in Tuesday’s Wall Street Journal, shows that Bernanke thinks the economy is in a deflationary spiral that will last for some time. Ben Bernanke: “The depth and breadth of the global recession has required a highly accommodative monetary policy. Since the onset of the...
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Bank that is repossessing homes by the hundred, turns a massive profit The bank that is repossessing homes by the hundred, turns a massive profit with bonuses to match. Faisal Islam reports. Just six months ago, they were on the ropes, begging for government bailouts to survive. But billions of taxpayer dollars later, America’s...
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I don’t post with the aim of being contrarian, but lately I’ve found myself swimming against the tide of Democratic/progressive conventional wisdom. I questioned the strategy of elevating Rush Limbaugh’s profile and engaging him from the White House podium; I criticized President Obama’s Cairo speech for being tepid on women’s rights; and I argued...
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Economist and writer Max Fraad Wolff says Goldman Sachs is making huge profits because it got special help from the government and because it is still taking the same sort of risk that sent the financial world into a tailspin last year. But, he cautions, that the bank may end up suffering severe losses.
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Details emerge of how the Fed secretly doled out trillions of dollars during the financial crisis The Federal Reserve is one of the most powerful and secretive institutions in Washington, long considered beyond the reach of lawmakers. But now, as details emerge of how the Fed secretly doled out more than a trillion dollars...
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Pollin: Obama plan to ‘empower’ the Fed won’t reign in casino capitalism; finance must be democratized Barack Obama recently announced that his new plan for Wall Street regulation would be hinged upon an enhanced oversight role for the Federal Reserve. Robert Pollin, while welcoming a first attempt at regulation, points out that the Fed...
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“Our wallet is empty, our bank is closed and our credit is dried up.” – Governor Arnold Schwarzenegger, June 2, 2009 California State Controller John Chiang has warned that without a balanced budget in place by July 1, he will begin using IOUs to pay most of the state’s bills. On June 25, California...
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As global leaders struggle to rescue their nations from economic breakdown, the legitimacy of the dollar as the world’s reserve currency is under attack. Perhaps the problem lies with the Fed. A large part of the “super” in the American superpower is based on the modern creed of liberal democracy, which serves as the...
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Any coming rally will be built on sand, Fed over a barrel and will act that way, big leverages led to a the big collapse, we know financial institutions should never be allowed to self regulate, production decreasing, liquidations rise, lies of Cheney exposed, GM in chapter 11. Ron Paul’s Audit the Fed bill...
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Dollar vulnerability no surprise to us, collapse is the cost for not paying attention, Fed failures the cause of devaluations, stimulus plans may well be insufficient to bolster economy, Jobless rate indicates where we stand now in our weakened economy Re-emergence of dollar vulnerability has taken almost all professionals by surprise. That has been...
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Wall Street is bankrupt. Instead of trying to save it, we can build a new economy that puts money and business in the service of people and the planet—not the other way around. Whether it was divine providence or just good luck, we should give thanks that financial collapse hit us before the worst...
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New Ways To Do Money Old Economy: The measure of a healthy economy is a growing GDP. Get Real: A healthy economy meets real needs within ecological limits. Old Economy: All you need is money. Get Real: You can’t eat money. What we need is healthy families, communities, and ecosystems. Old Economy: Booms and...
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During the Great Depression, my grandfather ran a butter creamery in rural Minnesota. Growing up, I heard how a group of farmers stormed in one day and threatened to burn the place down if he didn’t stop production. I had no idea who those farmers were or why they had done that—it was just...
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The way money is created and issued, who creates it and in what form—as debt or debt-free, in one currency or another—largely determines whether a financial system works fairly and efficiently or not. In our global village, money shapes our lives at personal, household, local, national, and international levels. The system now in place...
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Buying local isn’t just about freshness. Source: Published in Yes! Magazine.
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Local currencies value time, build community, and keep business moving even when credit dries up. Total dependence on one currency is like total dependence on one crop, or, for that matter, a single energy source: there’s always the risk that crop failure or a cutoff in supply will topple the whole system. This is...
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Americans want to invest locally: here’s how. The Obama Administration believes that the best way to repair our financial system after the Great Crash of 2008 is to improve the performance and oversight of global banks and investment firms. A growing number of Americans, however, would prefer to pull their retirement savings out of...
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Social activist and local living economies advocate shares her investment secrets I have always felt uneasy about the stock market. As a longtime organizer and a local restaurant founder and owner, I put nearly all of my money, time, and energy into my local community, rather than into global corporate investments. When I inherited...
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Local banks can change the world, one neighborly investment at a time. William Spademan is a radical banker. In an era when Wall Street executives frequent talk shows to defend lavish bonuses “earned” through reckless speculation, Spademan has been working to create a new kind of bank that would empower communities instead of enriching...
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Financial Deregulation has Opened Up A Pandora’s box Is it possible to make hundreds of billions of dollars in profits on securities that are backed by nothing more than cyber-entries into a loan book? It’s not only possible; it’s been done. And now the scoundrels who cashed in on the swindle have lined up...
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What began with a loan of $27 to 42 women in a small village 33 years ago has grown into a global microcredit movement that has changed the lives of millions of poor people around the world. Muhammad Yunus, founder and managing director of Bangladesh’s Grameen Bank, was the guest speaker at Wharton’s MBA...
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According to a new Wall Street Journal analysis that uses data from the Center for Responsive Politics, during the first three months of 2009, 31 financial institutions and trade groups spent a combined $27.6 million on federal lobbying and gave $286,000 in campaign contributions to lawmakers tasked with the oversight of the financial rules...
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Congress may establish a commission to investigate the causes of the economic crisis. This may be a useful exercise in publicly shaming those who are responsible for an enormous amount of unnecessary suffering. That would be a good thing. These people should be held accountable. Those in the financial sector who broke the law...
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Screw the autoworkers. They may be crying about General Motors’ bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won’t spoil Jamie Dimon’s day. Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while...
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The best illusionists deflect audience focus away from the heart of the trick until the final moment of revelation. The way Goldman Sachs has worked its multi-prong bailout is like that. During last week’s chatter about submitting their TARP payback application, the firm deftly diverted attention away from all the real money they took...
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In 1900, Argentina was one of the richest, most promising countries in the world. Just 100 years later it was, well…Argentina. A beautiful, cultured, wonderful place that’s such an economic basket case that many of its promising young people emigrate to Mexico to find work and opportunities. What happened to this country so rich...
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With the annual U.S. government deficit recently projected at $1.2 trillion (not counting additional spending expected from the fiscal stimulus package now before Congress) and President Barack Obama warning about “red ink...
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The world economy is not only showing few signs of recovery, but we are also looking at the end of the American century, according to German author and economist William Engdahl. In an exclusive interview with RT, he highlights the different ways in which the crisis has affected America and Europe and their subsequent...
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The U.S. Treasury and the Federal Reserve have arguably two of the least transparent balance sheets known to humankind. This wouldn’t be such a big issue if the amount of money funneled into these organizations was small. That is not the case. The Federal Reserve since October of 2008 has held on its balance...
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This week couldn’t end fast enough for the Treasury bond market or the dollar, both of which were hammered again today as investors bailed out in thin pre-holiday trading. The yield on the 10-year T-note jumped to 3.45%, up from 3.35% on Thursday and 3.14% a week ago. The yield now is the highest...
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Bill Murphy and Chris Powell, co-founders of the Gold Anti-Trust Action Committee Inc. (www.gata.org), will be in London, England. Their trip is part of GATA’s ongoing effort to raise awareness of the gold cartel and its surreptitious intervention in the gold market. Bill and Chris will meet with the British news media to explain...
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Almost completely lost in the drama over the war supplemental for Afghanistan, Iraq and Pakistan is a sneaky play by the US Treasury Department to get $108 billion in tax dollars for the International Monetary Fund through the supplemental. Of course, if Treasury can get the money through the supplemental, it can avoid any...
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Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George A. Akerlof and Robert J. Shiller Princeton University Press, 230 pp. The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to Do About It by Robert J. Shiller Princeton University Press, 196 pp. By now...
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Marginalist Panaceas to Today’s Structural Problems It looks like bookstores are about to be swamped this summer and fall by a forest of advice for which publishers gave respectable advances a year ago as the economy was going off the rails. Seeking to minimize the risk of cognitive dissonance, the marketing strategy seems to...
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The Earth stood still, the seas parted and a member of the U.S. political class admitted last week that the Federal Reserve helped to cause the financial meltdown. OK, only the last of those happened, but it’s a welcome miracle nonetheless. The revelation came from Timothy Geithner last Wednesday with PBS’s Charlie Rose, who...
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Treasury Secy Tim Geithner Testimony Senate Banking Committee, May 20, 2009 – Full Text Good morning. Chairman Dodd, Ranking Member Shelby, members of the Senate Banking Committee, thank you for the opportunity to testify before you today. On October 3, 2008, during a time of tremendous financial upheaval and economic uncertainty, Congress passed the...
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The US dollar is not Russia’s basic reserve currency anymore. The euro-based share of reserve assets of Russia’s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent, The Vedomosti newspaper wrote. The dollar has thus lost the...
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Zhou did not mention the dollar by name but said the financial crisis had shown the need for reform. The head of the Chinese central bank has called for a new global currency controlled by the International Monetary Fund (IMF), saying such a move would give governments particularly in the developing world the ability...
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So many of us know in detail about all the false warnings and exaggerated claims that were used to justify the war in Iraq. By now, six years later, and after many books, reports, news stories and films (hopefully including my two books and film, Weapons of Mass Deception), we see the pattern of...
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But, you may ask, won’t the powers that be step into the breach again and abort the crisis before it gets a chance to run its course? Yes, certainly. That, by now, is standard operating procedure, and it cannot be excluded that it will succeed in the same ambiguous sense that it did after...
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Some worried commentators are predicting a massive hyperinflation of the sort suffered by Weimar Germany in 1923, when a wheelbarrow full of paper money could barely buy a loaf of bread. An April 29 editorial in the San Francisco Examiner warned: “With an unprecedented deficit that’s approaching $2 trillion, budget proposal...
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Introduction Following the 2009 G20 summit, plans were announced for implementing the creation of a new global currency to replace the US dollar’s role as the world reserve currency. Point 19 of the communiqué released by the G20 at the end of the Summit stated, “We have agreed to support a general SDR allocation...
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It is payback time for Rothschild in Dubai. The 200-year-old banking house, perhaps the bluest of the blue bloods of the world’s financial dynasties, has always prided itself on the strength of its relationships, especially with governments and global power brokers. Now, after years of cultivating Dubai corporations with advice and assistance, it has...
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For more than a year, the U.S. Federal Reserve System has been increasingly acting as the world’s central bank, injecting hundreds of billions of dollars into foreign government treasuries in an effort to increase liquidity in those countries. The foreign central banks have used the U.S. currency to bail out financial institutions within their...
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Taming the Speculators: What Should Countries Do With Their Central Bank Reserves? Last week Izvestiya published an interview with former Premier Yevgeny Primakov, now president of the Chamber of Commerce and Industry. (Johnson’s Russia List published a translation on May 8). The discussion centered on a universal problem – what China and other Asian...
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The Federal Reserve Act was legislated in 1913 to end recessions, panics and depression. Over that almost 100-year period they have been eminently no more successful then their predecessors. The Fed is a private corporation, which guides US monetary policy. Its staff is from Wall Street, banking, and transnational conglomerates and occasionally from academia....
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Calls for nationalizing the banking industry have been bubbling since at least last September 2008, when the current Banking Panic began in the wake of the Lehman Brothers bank collapse, the initial AIG bailout, and the quick absorption of Merrill Lynch-Wachovia-Washington Mutual banks by their larger competitors, Bank of America, Wells Fargo, and JP...
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THE LEVEL OF PUBLIC IGNORANCE on the topic of the U.S. and world monetary system is astonishing. This is part of the plan, of course, because the monetary elite control not only the financial system but also the news media, the publishing industry, and the educational system. The blueprint for control was put together...
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On May 5, Rep. Alan Grayson (D-FL) grilled Federal Reserve inspector general Elizabeth Coleman. What knowledge did she have of Bloomberg’s report that the Fed had made trillions of dollars in off-balance sheet transactions? Did she know who received the trillion dollars that was added to the Fed’s balance sheets since last September? Was...
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By far the most secret and least accountable operation of the federal government is not, as one might expect, the CIA, DIA, or some other super-secret intelligence agency. The CIA and other intelligence operations are under control of the Congress. They are accountable: a Congressional committee supervises these operations, controls their budgets, and is...
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Ronald Paul is an American physician and Republican Congressman for the State of Texas, who gained widespread attention during his unsuccessful bid for the 2008 Republican Party presidential nomination. He supports low taxes, free markets, and the restoration of the gold standard. He is strongly opposed to the American involvement in the War in...
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Obama promised a transparent administration. But his incredible policy of bailouts and nationalizations hides behind a secretive agency. The Federal Reserve, a central bank, runs monetary policy, sets interest rates, pumps liquidity into insolvent banks, buys and sells government securities, issues paper currency and controls the money supply. Since its founding in 1914, this...
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President Obama has made an impressive commitment to run an open administration, posting contracts and spending on the Internet wherever possible. For some reason, there has been no effort to extend this openness to the Fed. This creates a bizarre disjuncture in public policy. When the Treasury loans money to a troubled bank or...
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In 2000, Big Oil teamed up with the nation’s largest investment banks and Enron to achieve the mother-of-all deregulatory loopholes. We are all paying the price today. In a monumental about-face, U.S. Security and Exchange Commission Chairman Christopher Cox became the latest deregulation devotee to confess utter failure, repudiating the policies to which he...
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IMF Using Global Crisis to “Re-Launch” Itself The International Monetary Fund (IMF) is attempting to reinvent itself with the global financial crisis, in the process using the opportunity to promote policies that exacerbate the recession by shrinking rather than growing economies. This is the opinion of Deborah James, director of international programmes at the...
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We are so inured to tales of business corruption that even a devastating exposé in The Wall Street Journal no longer shocks us. The fact that the chairman of the New York Federal Reserve Bank made millions off his secret purchase of Goldman Sachs stock, “in violation of Federal Reserve policy,” as the WSJ...
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Michael Moore: Bernie Madoff, Scapegoat Elie Wiesel called him a “God.” His investors called him a “genius.” But, proving correct that old adage from the country and western song, you never really know what goes on behind closed doors. Bernie Madoff, for at least 20 years, ran a Ponzi scheme on thousands of clients,...
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SHARE Microcredit Program from E. F. Schumacher Society The Self-Help Association for a Regional Economy (SHARE) is a model community-based nonprofit that offers a simple way for citizens to create a sustainable local economy by supporting businesses that provide products or services needed in the region. SHARE makes micro-credit loans available at manageable interest...
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£50bn more injected into UK economy The worst is over, or so some of the experts keep telling us. But if there are signs of green shoots of economic recovery, why did the Bank of England suddenly inject another £50 billion into the British economy? As expected, the bank said it was keeping interest...
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We take a look at how one North Carolina town is trying to become more self-sufficient by moving toward being able to feed, fuel and finance itself. The town of Pittsboro houses the nation’s largest biodiesel cooperative, a food co-op, a farmers’ market and, most recently, its own currency, the Pittsboro Plenty. Pittsboro is...
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E. F. Schumacher Society Local Currencies and Self-Financing Tools The theory, history, and practice of the Schumacher Society’s work with local currencies is detailed in Local Currencies: Catalysts for Sustainable Regional Economies. Additionally, Bob Swann, founder of the E. F. Schumacher society, wrote several clear, compelling essays on local currencies, which can be found...
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Some of the major misconceptions about microfinance — small loans of under $100 that enable Third World residents to become entrepreneurs — can be summed up by what happened roughly a decade ago, when the pioneering Grameen Bank decided to help female villagers in Bangladesh enter the mobile phone business. Alex Counts — CEO...
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There is a long list of professions that failed to see the financial crisis brewing. Wall Street bankers and deal-makers top it, but banking regulators are on it as well, along with the Federal Reserve. Politicians and journalists have shared the blame, as have mortgage lenders and even real estate agents. But what about...
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What are BerkShares? BerkShares are a local currency for the Berkshire region. Dubbed a “great economic experiment” by the New York Times, BerkShares are a tool for community empowerment, enabling merchants and consumers to plant the seeds for an alternative economic future for their communities. Launched in the fall of 2006, BerkShares had a...
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Almost everyone wants to help the poor. In a world where many demand profits of 10%, 20%, 30% or more on their money, people donate to the poor despite a return of “negative 100%,” said Alex Counts, president and chief executive of the Grameen Foundation, which is dedicated to lifting people out of poverty...
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With good reason, progressive economists reflect positively on Roosevelt’s New Deal even though: – it failed to end the Great Depression; – had many flaws; – did too little for blacks, women, immigrants, small farmers, agricultural workers, and the poor; – let blacks be persecuted, discriminated against, and in the South denied their voting...
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A Video in Six Parts Written and Produced by Richard C. Cook This is a six-part professional-quality video that is over two hours in length. Each part consists of a lecture by Richard C. Cook on the economic crisis and its solution. This is the most in-depth and complete critique of our debt-based monetary...
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How Cash Starved States can Create their Own Credit On February 19, 2009, California narrowly escaped bankruptcy, when Governor Arnold Schwarzenneger put on his Terminator hat and held the state senate in lockdown mode until they signed a very controversial budget. If the vote had failed, the state was going to be reduced to...
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Speaking about President Obama’s stimulus package and newly announced budget, William Engdahl says the fundamental causes of the economic crisis were missed. Until Obama reinstates Glass-Steigel restraints on banking which were repealed by the Clinton administration in 1999 and begins to re-regulate the financial system, there will not be a flow of healthy...
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Part5: Understanding Money Borrowing from Peter to Pay Paul Bernie Madoff showed us how it was done: you induce many investors to invest their money, promising steady above-market returns; and you deliver – at least on paper. When your clients check their accounts, they see that their investments have indeed increased by the promised...
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Do we really want the Bank for International Settlements (BIS) issuing our global currency In an April 7 article in The London Telegraph titled “The G20 Moves the World a Step Closer to a Global Currency,” Ambrose Evans-Pritchard wrote: “A single clause in Point 19 of the communiqué issued by the G20 leaders amounts...
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Professor Muhammad Yunus established the Grameen Bank in Bangladesh in 1983, fueled by the belief that credit is a fundamental human right. His objective was to help poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound financial principles so they could help themselves....
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Patrick Carmack, Producer of The Money Masters DVD open letter to American citizens on the $700 bailout Dear Fellow American Citizen: The ongoing, severe economic turmoil in our nation – destined to get worse if the right remedy is not enacted – was predicted in our video The Money Masters as the inevitable result...
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Banker to the Poor: Micro-Lending and the Battle Against World Poverty by Muhammad Yunus It began with a simple $27 loan. After witnessing the cycle of poverty that kept many poor women enslaved to high-interest loan sharks in Bangladesh, Dr. Muhammad Yunus lent money to 42 women so they could purchase bamboo to make...
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Yes, the government prints our paper money. But that’s only a small fraction of the money in use. Most of the money in national economies is created when banks write it into their customers’ accounts out of thin air as bank loans. 1. You earn $100 and put it in the bank. And then…...
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Since 2007, India and European Union (EU) are negotiating a free trade agreement (FTA). The negotiations not only cover trade in goods but also services, rules pertaining to intellectual property rights, cross-border investments, competition policy, government procurement and regulatory issues. EU as a bloc is India’s largest trading partner. EU accounts for around one-fifth...
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Are you aware that the U.S. Constitution states that only Congress has the authority to create money; this money must be backed by gold and silver; and “bills of credit,” also known as Federal Reserve Notes, are illegal under Article I? Are you aware that our government is violating all of these stipulations at...
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Just how did we get into this economic mess? The answers are both complex and troubling. Blame greed, irresponsibility, lax government oversight, conflicts of interest and especially blind faith in a housing boom that seemingly had no end. But end it did, setting off a chain reaction that has left the economy in tatters...
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Naming the top 25 lenders and their Wall Street backers that juiced the subprime industry. The following report is part of a larger study by the Center for Public Integrity on the roots of the financial meltdown. The list of the top 25 lenders responsible for nearly $1 trillion of subprime loans, according to...
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1. Losing Lehman Of all the decisions made by Hank Paulson and Ben Bernanke, the one to let Lehman go under stands as the most pivotal. And the most controversial. The Federal Reserve and Treasury decided to let Lehman fail and set a “moral hazard” example: from now on, you can’t rely on Uncle...
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On Friday November 21 the world came within a hair’s breadth of the most colossal financial collapse in world history according to bankers on the inside of events with whom we have contact. The trigger was the bank which only two years ago was America’s largest, Citigroup. The size of the US Government de...
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Finally US authorities have gotten ‘tough’ with the predator financial institutions. The world has been waiting for such decisive intervention since an unending series of Government bailouts of financial institutions began early in 2008 amounting to now trillions of taxpayer dollars. Now, with the world’s largest insurance giant, AIG, the White House Economic Council...
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The Federal Reserve has bluntly refused a request by a major US financial news service to disclose the recipients of more than $2 trillion of emergency loans from US taxpayers and to reveal the assets the central bank is accepting as collateral. Their lawyers resorted to the bizarre argument that they did so to...
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Emmy-winning journalist Danny Schechter investigates America’s mounting debt crisis in this latest hard-hitting expose. The film reveals the unknown cabal of credit card companies, lobbyists, media conglomerates and the Bush administration itself who have colluded to deregulate the lending industry ensuring that a culture of credit dependency can flourish.
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Paul Grignon’s 47-minute animated presentation of “Money as Debt” tells in very simple and effective graphic terms what money is and how it is being created. In many nations debt is becoming a serious problem, with a huge proportion of people living in a world of loans and credit cards, building up unmanageable debts....
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On January 5, Ron Paul addressed the House Financial Services Committee’s hearing on the Madoff Ponzi scandal. He pointed out that Bernard Madoff was operating under the supervision of the SEC, that more regulation will only make the job of cunning fraudsters easier because they can claim to be approved by the government, and...
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Fuelling a new world money supply A paper written ahead of the recent G20 summit by Zhou Xiaochuan, governor of the Chinese central bank, caused quite a stir. Zhou called for the establishment of a global reserve currency, a step which would firmly tip the balance of economic power in the direction of emerging...
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Attention around the world in recent weeks has been focused on microfinance and its untapped potential in developing countries like India, triggered by the 2006 Nobel Peace Prize that went last month to Muhammad Yunus and Grameen Bank, the microfinance organization he founded in Bangladesh three decades ago. The prize helped reemphasize the appeal...
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The American economy has gone away. It is not coming back until free trade myths are buried six feet under. America’s 20th century economic success was based on two things. Free trade was not one of them. America’s economic success was based on protectionism, which was ensured by the union victory in the Civil...
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At a Cambridge House Investment Conference I received a question about Bear Stearns. In my answer I alluded to the possible financial benefit of some from its implosion. When pressed I had to explain how credit default swaps worked and then we were out of time. Because the owners of the majority of the...
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Peter Millar: Seven-fold increase in gold needed to avert debt depression While it is almost three year old, a study of the enduring importance of gold in the world economic system by R. Peter W. Millar, founder of Valu-Trac Investment Research Ltd. in Scotland (www.valu-trac.com), seems ever more compelling to share with you. Millar...
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The Capitalist Conspiracy: An Inside view of International Banking Written and narrated by G. Edward Griffin (1960′s) An old film, made sometime in the 60′s. This is an adaptation of a documentary filmstrip tracing the history of a small group of people who control the money systems of the world. It shows how this...
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The Money Masters is a documentary, produced by Patrick S. J. Carmack and directed and narrated by William T. Still. It discusses the concepts of money, debt, and taxes, and describes their development from biblical times onward. It covers the history of fractional-reserve banking, central banking, monetary policy, the bond system, and the Federal...
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It’s 2009. You’re laid off, furloughed, foreclosed on, or you know someone who is. You wonder where you’ll fit into the grim new semi-socialistic post-post-industrial economy colloquially known as “this mess.” You’re astonished and possibly ashamed that mutant financial instruments dreamed up in your great country have spawned worldwide misery. You can’t comprehend, much...
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What is a fiat currency? A currency that’s created and controlled by a government. In other words, it exists by government “fiat.” Using the dollar as an example, the U.S. Federal Reserve creates new dollars simply by printing them or injecting electronic “reserves” into the banking system. The supply of dollars thus depends on...
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Could the IMF run out of money? Who’s your bailout daddy? Well, if you’re Ukraine, Iceland, Hungary, Belarus, and Pakistan right now, it’s the International Monetary Fund. New loan commitments made by...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) I’ve had two posts so far on the terms under which Treasury sold back to Old National the warrants on Old National stock that Treasury got in exchange for its TARP investment,...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) The big news on the banking front this week will be the public release of the stress test results, currently scheduled for Thursday (originally it was supposed to be today). Over at...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) My post about French sociology got a wide range of comments, ranging from “Without a doubt, your best post yet” to “Reading this post made me think, for the first time, of...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) Kevin Drum pointed me to Ryan Avent’s insightful review of Ben Bernanke’s recent speech on financial innovation. (How’s that for the Internets in action?) Bernanke’s brief was simple: to defend financial innovation...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) Only a few years ago, the accepted remedy for a recession was for the Federal Reserve to lower interest rates – namely, the Federal funds rate. Now, however, the economy has been...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) This is more of an advanced beginners topic – I already covered CDOs (collateralized debt obligations) in my first Beginners article – but I imagine that most of our readers are already...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) “Nationalization” has been the word of the last month, with support not only from the usual suspects, but from Lindsey Graham, Alan Greenspan, and (to some degree, although they won’t say the...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) There is nothing inherently wrong with convertible preferred stock. In Silicon Valley, for example, venture capitalists almost always invest by buying convertible preferred. The idea is that in the case of a...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) You may have seen in the news that the government is thinking about exchanging its “preferred stock” in Citigroup for “common stock.” Here’s one of many articles. Which, if you are at...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) One of our readers sent in a question which can be paraphrased roughly as: “During the boom everyone said we should be saving more. Now people are saying we should be spending...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) With the regularity of a pendulum, the focus of discussion has swung back to the banking system (September: Lehman and AIG; November: Citigroup; January: Bank of America, and everyone else). And as...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) What is a bad bank? . . . No, I don’t mean that kind of bad bank, with which we are all much too familiar. I mean the kind of “bad bank”...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) Joe Nocera has an article in today’s New York Times Magazine about Value at Risk (VaR), a risk management technique used by financial institutions to measure the risk of individual trading desks...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) Or, as I thought of titling this post, SEC does something useful! Accounting can seem a dreadfully boring subject to some, but it gets its moment in the sun whenever there is...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) An interest rate is the price of money. If you buy a 5-year CD from your bank, it will pay you something like 3% annual interest. You are selling the bank the...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) The most common point of comparison for our current economic crisis is, far and away, the Great Depression. The Depression is most often bracketed with some version of the phrase, “but we’re...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) No, this isn’t another article about how credit default swaps (CDS) have ruined or are going to ruin the economy. It’s about one of the nice side benefits of CDS: the habit...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) We had a comment last week asking for an explanation of, roughly, what it is that the Federal Reserve does, so I thought that would be a good topic for a Beginners...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) So, it looks like we’re in a recession. What’s a recession? A recession is a period when overall economic activity contracts. In most times, overall economic activity increases, for two reasons. First,...
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(One of our objectives is to help non-specialist readers understand what they are reading in the news. Read Financial Crisis for Beginners.) In honor of Paul Krugman, recent Nobel Prize winner and “inventor” of the currency crisis, we seem to be experiencing a global currency crisis. This may prompt the question: what is a...
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What happened to the global economy and what we can do about it We believe that everyone should be able to understand how the financial crisis came about, what it means for all of us, and what our options are for getting out of it. Unfortunately, the vast majority of all writing about the...
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The Fed now owns the world’s largest insurance company-but who owns the fed? “Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers;...
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