The Federal Reserve, a private organization that is not part of the federal government and that has no reserves, but those which may be provided at the taxpayer's expense, is up to something:
The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis. - Telegraph.co.uk
We all know that deregulation got us the mess we face today, but our brilliant treasury secretary, Henry Paulson, former CEO of Goldman Sachs, now has a solution to the problem!
Further deregulation and an outright privatization of the regulatory process.
And this stuff isn't even getting rescued, let alone making the recommend list. We're being robbed, again, right now, and no one seems to care ...
I knew something was up because I've been watching the markets and I read The Automatic Earth, but this is just over the top:
A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region's economy to its knees.
You can read the full article here, but I'll try to sum it up a bit.
There are $750 trillion in derivatives, or synthetic financial instruments, floating around out there today. Putting this in perspective there is about $75 trillion in global real estate and our global GDP is about $50 trillion. Measure it any way you like; what started out as a sensible, money saving risk management method started mutating about the time Bush got into office, and now it is fraud of biblical proportion.
What can we do to save ourselves from this?
Nothing. The loss has already occurred.
Read it and weep. That junk paper, six times the combined value of all human real estate and all human commerce, is everywhere. Think it doesn't effect you? Got a parent with a pension? Do you hold a life insurance policy? Do you work for an enterprise that is publicly held? That has funded part of its operation with a bond sale?
The unwinding of this mess must come and it will be the financial equivalent of a neutron bomb; the buildings will be standing, but they'll be emptied of people and the associated commerce.
There is no avoiding the pain and what I see now is a choice: Are we citizens or enslaved "consumers"?
I think we ought to let our elected officials know that we're watching what they do about this very carefully. Today would be a fine day to make a phone call about fiscal responsibility.
The Senate banking committee's information can be found here:
http://banking.senate.gov/...
The House banking committee, with a slightly different name, can be found here:
http://financialservices.house.gov/