Paul's Int. Support Keeps Growing Thursday, September 20, 2007 -
FreeMarketNews.com
Posted September 20th, 2007 by manystrom
Posted September 20th, 2007 by manystrom
Thanks to Grant Johnston who emailed me with a slew of international Ron Paul blogs. The list of sites on the blogroll on the front page now contains fifteen (15!) international blogs! What other candidate - Republican or Democrat can boast this kind of support?International Blogs:
Asia for Ron Paul,
Bavaria for Ron Paul,
Belgians for Ron Paul,
Brits for Ron Paul,
Brazilians for Ron Paul,
Canadians for Ron Paul,
Chile for Ron Paul,
French for Ron Paul,
Europe 4 Ron Paul,
Holland 4 Ron Paul,
Hungary for Ron Paul,
Indian & Pakistani Friends of Ron Paul,
Asia for Ron Paul,
Bavaria for Ron Paul,
Belgians for Ron Paul,
Brits for Ron Paul,
Brazilians for Ron Paul,
Canadians for Ron Paul,
Chile for Ron Paul,
French for Ron Paul,
Europe 4 Ron Paul,
Holland 4 Ron Paul,
Hungary for Ron Paul,
Indian & Pakistani Friends of Ron Paul,
Panama 4 Ron Paul 2008
Poland for Ron Paul,
Romania for Ron Paul,
Venezuela for Ron Paul.
Grant also notes: "I discovered, by observation in meetup.com (http://ronpaul.meetup.com/about/), that a city gets a white pin, when 3 or more people are waiting for a meetup group. When the pin is white, no one has to pay. You only have to pay if a meetup group is started (it is not mandatory to start a group if interest is expressed). The pin then changes to red.It would be nice to at least have a white pin for each of the countries that have Ron Paul supporters (Brazil, Romania, etc.). Unfortunately, I cannot find contact information for them on their websites, to tell them how to get it.
http://www.dailypaul.com/node/2236
Poland for Ron Paul,
Romania for Ron Paul,
Venezuela for Ron Paul.
Grant also notes: "I discovered, by observation in meetup.com (http://ronpaul.meetup.com/about/), that a city gets a white pin, when 3 or more people are waiting for a meetup group. When the pin is white, no one has to pay. You only have to pay if a meetup group is started (it is not mandatory to start a group if interest is expressed). The pin then changes to red.It would be nice to at least have a white pin for each of the countries that have Ron Paul supporters (Brazil, Romania, etc.). Unfortunately, I cannot find contact information for them on their websites, to tell them how to get it.
http://www.dailypaul.com/node/2236
FIAT EMPIRE
Why the Federal Reserve Violates the U.S. Constitution
The Gross National Debt
Find out why some feel the Federal Reserve's practices are a violation of the U.S. Constitution and others feel it's simply "a bunch of organized crooks." Discover why experts agree the Fed is a banking cartel that benefits mainly bankers and their corporate clients as well as a Congress that would rather increase the National Debt to $9 trillion than raise taxes. Find out how the corporate media facilitates the partnership between the Fed and Congress and why it fails to disclose what's going on. Lastly, find out how the Federal Reserve Member Banks are owned and controlled by an elite group of insiders
This Telly Award-winning documentary features presidential candidate RON PAUL (R-Texas) and is inspired by The Creature from Jekyll Isalnd a book by well-known author and FREEDOM FORCE founder, G. Edward Griffin.
Also featured is Dr. Edwin Vieira, Ph.D., J.D. from Harvard (a foremost authority on the Constitution and the author of Pieces of Eight) who discusses the Fed and various long-term studies which indicate that the Federal Reserve System encourages war, destabilizes the economy, generates inflation (a hidden tax) and is the supreme instrument of unjust enrichment for a select group of insiders. Dr. Theodore Baehr (founder of MOVIEGUIDE®) rounds out the show by discussing the relationship between the Media, the Fed and the Government and why you never see these issues discussed on network TV or in the mainstream media.
Accordingly, the government-licensed networks and those living off the fiat money system are probably not going to distribute FIAT EMPIRE so the burden may fall upon word-of-mouth distribution from people like you -- responsible citizens that care.
Bear in mind that twice before in our nation's history, the People have voted down a central bank similar to the Federal Reserve System. We can do it again if we are able to explain to enough people why the national debt, currently at
and the trade deficit -- currently over $425 billion this year alone -- are going to crash the fiat empire sooner or later.
FIAT EMPIRE defines the problem and proposes a number of solutions to correct the situation and bring back a Constitutional monetary system to the United States.
TO GET A DVD OF FIAT EMPIRE go to http://www.FiatEmpire.com/screenerAt this URL you can also get:
Up to 165 minutes of ADDITIONAL UNCUT INTERVIEWS of Ron Paul, G. Edward Griffin, Dr. Edwin Vieira and Dr. Ted Baehr
A VHS tape for public screenings of FIAT EMPIRE
An instant, DVD-quality, Download of FIAT EMPIRE
Your purchase of the above items will help us produce additional films on this and other important subjects, but if you can't afford to any of the above, you can see a lower quality version of FIAT EMPIRE on YOU TUBE at http://www.youtube.com/watch?v=ji_G0MqAqq8&mode=related&search= or on GOOGLE VIDEO at http://video.google.com/videoplay?docid=5232639329002339531&q=FIAT+EMPIRE&hl=en
TO HELP ON ORIGINAL INTENT go to http://www.FiatEmpire.com/producerAt this URL you can:
Find out how you can help us produce our next documentary ORIGINAL INTENT - What Americans May Have Forgotten About Their Constitution
Purchase a producer screencredit on ORIGINAL INTENT
Deliver an effective blow to the enemies of Liberty and those who are ignoring the Constitution
Please forward this page to at least ten people on your mailing list (because we can be sure Wolf Blitzer and the corporate media won't be telling people about the Federal Reserve System or the original intent of the Founders any time soon). Thank you.
Ron Paul 4 President 2008: Jobs, Internships, Volunteers:
"Organize or Die!" TiTle of book by Union Carpenter in USA
By Phone703-248-9115By Mail3461 Washington Blvd., Suite 200Arlington, VA 22201 By Emailmail@ronpaul2008.comFor Jobs, Internships & Volunteering For jobs, internships and volunteering in our office fill out this application form and email your resume to opportunities@ronpaul2008.comFor Event RequestsEmail events@ronpaul2008.com For Media Inquiries & Interview RequestsEmail press@ronpaul2008.com Kent SnyderChairmanLew MooreCampaign ManagerJoe SeehusenDeputy Campaign Mgr./Iowa CoordinatorJesse BentonCommunications DirectorJonathan BydlakFundraising DirectorJustine LameCampaign DirectorAmanda LeeEvents Coordinator Jeff Frazee National Youth Coordinator Karl Golovin Security Director Dennis FusaroNational Field DirectorJeff GreenspanRegional CoordinatorAnita AndrewsRegional Coordinator Jared ChicoineNew Hampshire CoordinatorAndre CamposArizona & Utah CoordinatorPaul GarfieldMichigan CoordinatorMark ElamTexas CoordinatorBrian GentrySouth Carolina CoordinatorMarianne StebbinsMinnesota CoordinatorDrew IversIowa Campaign Chairman Joseph BeckerChief Legal Counsel,Policy DirectorAlan P. DyeLegal CounselBruce FeinLegal CounselDeana WattsTreasurer
Panama: "The Gringo Primo´s Banana Republic."
Panamá: "la república de los primos"
Por Olmedo Beluche
La independencia de Hispanoamérica fue una revolución contra la monarquía española por instaurar un régimen republicano de gobierno, inspirado por Simón Bolívar y los próceres de la época. Sin embargo, esa revolución barrió con la Corona, pero dejó incólume a la aristocracia. No era la misma aristocracia de la península ibérica, pues según las leyes coloniales los criollos estaban ubicados en un rango inferior, no sólo respecto a la aristocracia castellana, sino incluso frente a cualquier ciudadano nacido allende el mar.
Pero, de este lado del mar los criollos, hijos de los primeros encomenderos, siempre actuaron, y siguen actuando, como una verdadera aristocracia de ultramar. Por eso, la independencia dirigida por ellos costó tanto, en vidas y en tiempo, pues era evidente para indígenas y esclavos negros que la libertad por la que luchaban estos criollos no era para todos, ni el fin de la esclavitud.
Para los oprimidos de América a veces la lejana monarquía española parecía una aliada en la lucha por sus derechos frente a la explotación inmisericorde de estos criollos del patio. De ahí la derrota de la primera república caraqueña a manos del monárquico Boves, apoyado por un ejército de mulatos y negros en 1814; de ahí que en Perú y Bolivia el Virreinato se sostuviera hasta 1825, ante la indiferencia de la mayoría indígena, que se sentía al margen de los intereses de la oligarquía limeña.
Bolívar sólo pudo revertir parcialmente esta situación cuando, por consejo del Libertador de Haití, J. J. Dessalines, decretó la libertad de los esclavos que se sumaran al ejército libertador, pero no de los que siguieron trabajando en las haciendas.
Sirva esta larga introducción para señalar que, a casi doscientos años de instaurada la república en América hispana, y en Panamá, la aristocracia sigue reinando bajo una forma aparentemente “democrática”. Aristocracia vieja, herencia de la colonia, y nueva (con sus nuevos ricos, hijos del pillaje al servicio de las corporaciones multinacionales y del saqueo de la propiedad pública). Aristocracia que se ha “modernizado” y tiene ahora su fundamento no tanto en el latifundio, sino en el capital financiero local e internacional.
Para muestra, un botón: las próximas elecciones generales de 2009 en Panamá. Entre los más probables ganadores ya se disputan la presidencia tres conspicuos miembros de una misma familia. Por el oficialista partido PRD (“socialdemócrata”), lo hacen dos primos: el alcalde de la ciudad de Panamá, Juan Carlos Navarro, y el primer vicepresidente y canciller Samuel Lewis Navarro (delfín predilecto de Martín Torrijos). Ambos recién llegados al partido, lo que prueba el cambio social experimentado por su dirigencia.
Ambos, aunque precandidatos de un partido que se dice portador de una doctrina social y nacionalista, autodenominada “torrijista”, herencia del general “populista” Omar Torrijos, pertenecen a una familia de rancio abolengo oligárquico que data, al menos, de la separación de Colombia, cuya cabeza fue José Agustín Arango, abogado de la Panama Railroad Company, desde la que partió la trama separatista organizada en Nueva York para asegurarse un negociado y entregar el canal a Teodoro Roosevelt en condiciones leoninas.
Durante años el “torrijismo” sostuvo que su razón de ser era la superación del régimen oligárquico previo al golpe de estado de 1968. Pero ahora vemos a los voceros de la “izquierda torrijista” tragarse estos sapos sin un emitir el más leve eructo.
Pero, si el partido oficialista perdiera las elecciones, ya el patriarca político y económico de la familia, don Samuel Lewis Galindo (tío del otro Samuel), viene preparando el plan “B”: la postulación por la “oposición” (Partido Panameñista) de su yerno, el banquero Alberto Vallarino.
Este grupo familiar ha tenido como casa matriz el grupo financiero Banistmo, el segundo en importancia de Panamá y uno de los mayores de Centroamérica, traspasado el año pasado al inglés HSBC por la friolera de US $ 1,700 millones, tras conveniente exoneración de 400 millones de dólares en impuestos por el actual gobierno. Podemos suponer que algo quedó ahí para invertir en la próxima campaña electoral.
Es que la política y los negocios en Panamá son asunto de familia y se reparten entre, el grupo económico previamente mencionado, y el de los bancos: Continental (donde se agrupa la burguesía judía con la familia Motta a la cabeza) y el holding del Banco General, de donde provienen nuestros actuales embajadores en la ONU y en Washington: Federico Humbert y Ricardo Alberto Arias (heredero de una dinastía de presidentes).
Haciendo historia, no olvidemos que un banquero judío, Lindo, financió los 100,000.00 dólares con que se hicieron los sobornos de la separación de 1903, y que la dinastía Arias proviene de Ricardo y Tomás, miembros del pequeño grupo de “conjurados” en aquel acontecimiento.
Olvidaba agregar que de este último grupo también proviene la familia Alemán, de Alberto Alemán Zubieta, actual administrador del Canal de Panamá, que acaba de concesionar a la empresa familiar, CUSA, la construcción de la nueva esclusa del Pacífico. Lo que prueba los reales intereses detrás del proyecto de ampliación del Canal que ya denunciáramos durante el referéndum el año pasado. No vamos a entrar ahora a establecer los nexos de los directivos de la ACP con el negocio de la construcción.
Nada queda librado al azar. El resto de los candidatos hacia 2009 son peones en este juego de la política panameña, pero peones salidos de estos grupos económicos aristocráticos: Guillermo Ford y Guillermo Endara, que hicieron parte del triunvirato impuesto por la invasión norteamericana del 20 de diciembre de 1989. Y, don Ricardo Martinelli, magnate ganadero, terrateniente en la provincia de Veraguas, dueño de la importante cadena de supermercados “99”.
Algún incauto puede pensar que esta situación es casual y nueva, pero no es más que la repetición de lo que ya vivimos en 2004. En aquella ocasión los candidatos fueron Martín Torrijos (PRD), ganador, cuyo vicepresidente es Samuel Lewis Navarro, como queda dicho; Guillermo Endara apoyado por el partido Solidaridad (ahora reciclado en Unión Patriótica), cuyo jefe político es Samuel Lewis Galindo; por el panameñismo se postuló José Miguel Alemán, cuyo padre financió la campaña y que era socio en la Junta Directiva de Banistmo con los dos Lewis y Alberto Vallarino. El cuarto candidato fue Martinelli.
El libro “Los partidos políticos en Panamá”, publicado en 1984 por el sociólogo Raúl Leis, prueba el control de una generación a otra de la Presidencia de la República (con esporádicas excepciones) y de la Asamblea Nacional, por las siguientes familias: Alemán, Arias, Arosemena, Boyd, Díaz, Fábrega, Galindo, Jiménez y Arango.
Si nos remontamos a la representación provincial tenemos el claro control de los aristócratas regionales: Anguizola y Pino (Chiriquí), Jurado y Selles (Bocas del Toro), Arrocha Graell (Veraguas), Crespo (provincias centrales), Othon (Darién), Varela (Herrera), López, Barletta y Bustamante (Los Santos).
En pleno siglo XXI, la aristocracia sigue vigente porque hasta para asegurarse la “pureza de la sangre” y la continuidad de los negocios se casan entre ellos, pues el matrimonio sigue siendo un pacto de conveniencias. La única diferencia es que estos aristócratas no tienen “sangre azul”, sino verde, como el color de los dólares que mueven sus corazones.
Por supuesto, aunque no sirva de consuelo, Panamá no constituye una excepción. Este es un mal que aqueja al continente, junto al neoliberalismo y la corrupción. Baste hacer el mismo ejercicio en Colombia, donde los cargos senatoriales se heredan de padres a hijos igual que los títulos de nobleza que compraban los encomenderos a la Corona española, y que esta vendía para su déficit siempre creciente.
Por ello, concluimos recordando que la única esperanza de romper el ciclo oligárquico en el poder en Panamá es la inscripción del Partido Alternativa Popular, única opción que implica una verdadera ruptura con el nepotismo, el neoliberalismo y la corrupción institucional que se abaten sobre el país. Pero para poder participar, el P.A.P. necesita superar todas las trabas antidemocráticas impuestas en el Código Electoral por esta aristocracia plutocrática.
Ello sólo será posible zanjando definitivamente las pequeñeces que dividen a la izquierda y las organizaciones populares panameñas. Sin la unidad popular será imposible vencer a las fuerzas oligárquicas y sufriremos cinco años más de miserias. Por ello el Comité Ejecutivo del Partido Alternativa Popular sigue abierto a la propuesta de un gran acuerdo nacional electoral de los sectores populares.
Por Olmedo Beluche
La independencia de Hispanoamérica fue una revolución contra la monarquía española por instaurar un régimen republicano de gobierno, inspirado por Simón Bolívar y los próceres de la época. Sin embargo, esa revolución barrió con la Corona, pero dejó incólume a la aristocracia. No era la misma aristocracia de la península ibérica, pues según las leyes coloniales los criollos estaban ubicados en un rango inferior, no sólo respecto a la aristocracia castellana, sino incluso frente a cualquier ciudadano nacido allende el mar.
Pero, de este lado del mar los criollos, hijos de los primeros encomenderos, siempre actuaron, y siguen actuando, como una verdadera aristocracia de ultramar. Por eso, la independencia dirigida por ellos costó tanto, en vidas y en tiempo, pues era evidente para indígenas y esclavos negros que la libertad por la que luchaban estos criollos no era para todos, ni el fin de la esclavitud.
Para los oprimidos de América a veces la lejana monarquía española parecía una aliada en la lucha por sus derechos frente a la explotación inmisericorde de estos criollos del patio. De ahí la derrota de la primera república caraqueña a manos del monárquico Boves, apoyado por un ejército de mulatos y negros en 1814; de ahí que en Perú y Bolivia el Virreinato se sostuviera hasta 1825, ante la indiferencia de la mayoría indígena, que se sentía al margen de los intereses de la oligarquía limeña.
Bolívar sólo pudo revertir parcialmente esta situación cuando, por consejo del Libertador de Haití, J. J. Dessalines, decretó la libertad de los esclavos que se sumaran al ejército libertador, pero no de los que siguieron trabajando en las haciendas.
Sirva esta larga introducción para señalar que, a casi doscientos años de instaurada la república en América hispana, y en Panamá, la aristocracia sigue reinando bajo una forma aparentemente “democrática”. Aristocracia vieja, herencia de la colonia, y nueva (con sus nuevos ricos, hijos del pillaje al servicio de las corporaciones multinacionales y del saqueo de la propiedad pública). Aristocracia que se ha “modernizado” y tiene ahora su fundamento no tanto en el latifundio, sino en el capital financiero local e internacional.
Para muestra, un botón: las próximas elecciones generales de 2009 en Panamá. Entre los más probables ganadores ya se disputan la presidencia tres conspicuos miembros de una misma familia. Por el oficialista partido PRD (“socialdemócrata”), lo hacen dos primos: el alcalde de la ciudad de Panamá, Juan Carlos Navarro, y el primer vicepresidente y canciller Samuel Lewis Navarro (delfín predilecto de Martín Torrijos). Ambos recién llegados al partido, lo que prueba el cambio social experimentado por su dirigencia.
Ambos, aunque precandidatos de un partido que se dice portador de una doctrina social y nacionalista, autodenominada “torrijista”, herencia del general “populista” Omar Torrijos, pertenecen a una familia de rancio abolengo oligárquico que data, al menos, de la separación de Colombia, cuya cabeza fue José Agustín Arango, abogado de la Panama Railroad Company, desde la que partió la trama separatista organizada en Nueva York para asegurarse un negociado y entregar el canal a Teodoro Roosevelt en condiciones leoninas.
Durante años el “torrijismo” sostuvo que su razón de ser era la superación del régimen oligárquico previo al golpe de estado de 1968. Pero ahora vemos a los voceros de la “izquierda torrijista” tragarse estos sapos sin un emitir el más leve eructo.
Pero, si el partido oficialista perdiera las elecciones, ya el patriarca político y económico de la familia, don Samuel Lewis Galindo (tío del otro Samuel), viene preparando el plan “B”: la postulación por la “oposición” (Partido Panameñista) de su yerno, el banquero Alberto Vallarino.
Este grupo familiar ha tenido como casa matriz el grupo financiero Banistmo, el segundo en importancia de Panamá y uno de los mayores de Centroamérica, traspasado el año pasado al inglés HSBC por la friolera de US $ 1,700 millones, tras conveniente exoneración de 400 millones de dólares en impuestos por el actual gobierno. Podemos suponer que algo quedó ahí para invertir en la próxima campaña electoral.
Es que la política y los negocios en Panamá son asunto de familia y se reparten entre, el grupo económico previamente mencionado, y el de los bancos: Continental (donde se agrupa la burguesía judía con la familia Motta a la cabeza) y el holding del Banco General, de donde provienen nuestros actuales embajadores en la ONU y en Washington: Federico Humbert y Ricardo Alberto Arias (heredero de una dinastía de presidentes).
Haciendo historia, no olvidemos que un banquero judío, Lindo, financió los 100,000.00 dólares con que se hicieron los sobornos de la separación de 1903, y que la dinastía Arias proviene de Ricardo y Tomás, miembros del pequeño grupo de “conjurados” en aquel acontecimiento.
Olvidaba agregar que de este último grupo también proviene la familia Alemán, de Alberto Alemán Zubieta, actual administrador del Canal de Panamá, que acaba de concesionar a la empresa familiar, CUSA, la construcción de la nueva esclusa del Pacífico. Lo que prueba los reales intereses detrás del proyecto de ampliación del Canal que ya denunciáramos durante el referéndum el año pasado. No vamos a entrar ahora a establecer los nexos de los directivos de la ACP con el negocio de la construcción.
Nada queda librado al azar. El resto de los candidatos hacia 2009 son peones en este juego de la política panameña, pero peones salidos de estos grupos económicos aristocráticos: Guillermo Ford y Guillermo Endara, que hicieron parte del triunvirato impuesto por la invasión norteamericana del 20 de diciembre de 1989. Y, don Ricardo Martinelli, magnate ganadero, terrateniente en la provincia de Veraguas, dueño de la importante cadena de supermercados “99”.
Algún incauto puede pensar que esta situación es casual y nueva, pero no es más que la repetición de lo que ya vivimos en 2004. En aquella ocasión los candidatos fueron Martín Torrijos (PRD), ganador, cuyo vicepresidente es Samuel Lewis Navarro, como queda dicho; Guillermo Endara apoyado por el partido Solidaridad (ahora reciclado en Unión Patriótica), cuyo jefe político es Samuel Lewis Galindo; por el panameñismo se postuló José Miguel Alemán, cuyo padre financió la campaña y que era socio en la Junta Directiva de Banistmo con los dos Lewis y Alberto Vallarino. El cuarto candidato fue Martinelli.
El libro “Los partidos políticos en Panamá”, publicado en 1984 por el sociólogo Raúl Leis, prueba el control de una generación a otra de la Presidencia de la República (con esporádicas excepciones) y de la Asamblea Nacional, por las siguientes familias: Alemán, Arias, Arosemena, Boyd, Díaz, Fábrega, Galindo, Jiménez y Arango.
Si nos remontamos a la representación provincial tenemos el claro control de los aristócratas regionales: Anguizola y Pino (Chiriquí), Jurado y Selles (Bocas del Toro), Arrocha Graell (Veraguas), Crespo (provincias centrales), Othon (Darién), Varela (Herrera), López, Barletta y Bustamante (Los Santos).
En pleno siglo XXI, la aristocracia sigue vigente porque hasta para asegurarse la “pureza de la sangre” y la continuidad de los negocios se casan entre ellos, pues el matrimonio sigue siendo un pacto de conveniencias. La única diferencia es que estos aristócratas no tienen “sangre azul”, sino verde, como el color de los dólares que mueven sus corazones.
Por supuesto, aunque no sirva de consuelo, Panamá no constituye una excepción. Este es un mal que aqueja al continente, junto al neoliberalismo y la corrupción. Baste hacer el mismo ejercicio en Colombia, donde los cargos senatoriales se heredan de padres a hijos igual que los títulos de nobleza que compraban los encomenderos a la Corona española, y que esta vendía para su déficit siempre creciente.
Por ello, concluimos recordando que la única esperanza de romper el ciclo oligárquico en el poder en Panamá es la inscripción del Partido Alternativa Popular, única opción que implica una verdadera ruptura con el nepotismo, el neoliberalismo y la corrupción institucional que se abaten sobre el país. Pero para poder participar, el P.A.P. necesita superar todas las trabas antidemocráticas impuestas en el Código Electoral por esta aristocracia plutocrática.
Ello sólo será posible zanjando definitivamente las pequeñeces que dividen a la izquierda y las organizaciones populares panameñas. Sin la unidad popular será imposible vencer a las fuerzas oligárquicas y sufriremos cinco años más de miserias. Por ello el Comité Ejecutivo del Partido Alternativa Popular sigue abierto a la propuesta de un gran acuerdo nacional electoral de los sectores populares.
***********************************
A Fed panic and a massive bailout of American banks paid for by the entire world
Online Journal September 24, 2007 Rodrigue Tremblay
Manias, panics, and crashes are the consequence of an economic environment that cultivates cupidity, chicanery, and rapaciousness rather than a devout belief in the Golden Rule." --Peter L. Bernstein, Foreword to Manias, Panics, and Crashes (4th ed.) by C. P. Kindleberger
"In a crisis, discount and discount heavily." --Walter Bagehot (1826-1877), British economist
"The job of the Federal Reserve is to take away the punch bowl just when the party starts getting interesting." --William McChesney Martin (1906-1998), Fed Chairman (1951-1970)
"The dysfunctional state of American politics does not give me great confidence in the short run.'' --Alan Greenspan, Fed Chairman (1987-2006)
The mismanagement of money and credit has led to financial explosions over the centuries. The causes, cures and consequences of such financial catastrophes are most often repetitive. Indeed, such financial collapses are usually the result of the unbridled greed and cupidity of financial operators and of the lack of necessary supervision by public institutions designed to protect the public and the common good.
For example, after the October/November 1907 financial crisis in the United States, the idea initially advanced by banker Paul Warburg to establish a partially private and partially public Federal Reserve System of banking was finally adopted in 1913. The Fed thus became the lender of last resort for banks that find themselves in an illiquid position. It was only after the stock market crash of 1929, however, that the Securities and Exchange Commission (SEC) was established, in 1934.
(Article continues below)
But even with institutions and regulations in place, when they are inoperative, corrupt or ill-adapted, financial crises can still occur. And the current financial crisis is there to remind us of this fact.
On September 18, the Fed showed some panic and announced a larger than expected half percentage point cut in both the federal funds rate and in the discount rate, and this after having slashed its discount rate by a half point on August 17, in order to facilitate borrowing by America's largest banks and to facilitate the bailout of their affiliates and other operators, such as hedge-funds, caught in the sub-prime loans crisis. In so doing, the Bernanke Fed is following Bagehot's advice for aggressive discounting in a situation of financial crisis. The only problem is that Bagehot's rule calls for the central bank to lend copiously in times of critical credit stringency . . . but at a high rate of interest. By lending to troubled lenders at reduced preferential rates, the Fed is acting as their "government," i.e. subsidizing their risky loans operations and taxing anybody else who holds American dollars. It is not only attempting to make them more "liquid," but also more "solvable" and less likely to fail.
This raises three interesting questions. First, who pays for the bailout of U.S. financial institutions? Second, what are the longer-run consequences of the massive bailout undertaken by the Fed? And third, why did the Fed let the financial situation deteriorate to such an extent that an entire sector of the economy is being clobbered and its collapse is threatening the whole economy?
First, we must consider that the U.S. dollar is still a key reserve currency, although losing ground to the euro, and it is still being held in massive amounts by most central banks in their foreign reserves, and also by private banks, commercial and economic entities and individuals around the world. For example, in early 2007, foreign central banks alone held some two and a quarter trillion in U.S. dollars reserves, which represented about 66 percent of their total official foreign exchange reserves, with a bit more than 25 percent being held in euros.
Since the dollar is losing its purchasing power, both in absolute and relative terms, central banks and other foreign investors have been "taxed" by the American Fed's policy of benign neglect regarding the dollar. In real terms, the seigneurage tax on foreign holders of the dollar can be measured by taking the difference between the annual rate of depreciation of the dollar vis-à-vis major convertible currencies and the short-term rate of interest on these reserves. For example, if the annual rate of depreciation of the dollar is 5 percent and the short-term rate of return on U.S. T-bills is 4 percent, central banks are losing some $22.5 billion. Since private foreigners hold more than two trillion in short-term dollar denominated debt, the net annual loss of foreign holders of U.S. dollars can easily reach $50 billion a year. The conclusion is easy to see: Not only have foreigners been heavily financing the large U.S. government's deficits over the last six years, but they are now being called upon to help finance the generous bailout of American financial institutions.
Investors both abroad and in the U.S. know that official inflation figures are tilted on the low side for many people, essentially because they are designed to reduce the weight given in the indexes to goods and services whose prices increase the fastest, but also because housing costs and asset prices are only partly taken into consideration. This could explain why inflation expectations are on the rise, even though official inflation figures do not register an increase in inflation. Too much easy money as experienced over the last few years at first fuels asset inflation, but sooner or later it shows its ugly head in the prices of all commodities and in the prices of all goods and services. With the current drop of the dollar, Americans can be expected to pay more for a lot of items, such as fuel and food. This will translate to a lower standard of living.
Already, the price of gold, the price of oil and the prices of other commodities are on their way up and can serve as inflation bellwethers. The behavior of long-term interest rates that incorporate inflation expectations is also a good indicator of future inflation. With the Fed printing money and increasing the money supply on a high scale as if it were dropping money from a helicopter, thus the nickname of Fed Chairman Ben "Helicopter" Bernanke, short-term interest rates will drop for awhile, but long-term interest rates will be edging up, unless a deep recession steps in.
Secondly, a massive bailout as the Bernanke Fed has undertaken raises the question of moral hazard present in any massive central bank rescue intervention, after it has failed to properly regulate the risky activities of the banks it supervises. Indeed, by accepting mortgage-backed securities as collateral for huge more or less longer-term loans to American banks and brokers, at reduced interest rates, the Fed is in effect rewarding the very institutions which acted the most irresponsibly over the last four or five years, while saving its own face for having failed in its regulatory mission. The message is loud and clear: American financial institutions can indulge in creating "innovative" risky artificial credit instruments, shifting the risks to unsuspecting borrowers and investors while reaping juicy fees and rewards, and when things turn sour, as can be expected, the Fed will come to their rescue and bail them out with cheap and extended loans. That is a good way to carelessly encourage greedy and out-of-control financial institutions to create successive disorderly and disruptive financial crises.
Indeed, the Bernanke Fed is presently taking the pain of the consequences away from financial institutions that acted irresponsibly, and for some, as former Fed Chairman Alan Greenspan has said, which have acted criminally. This is a clear case of moral hazard.
If old regulations are not implemented or if no new regulations are put into place, such a massive bailout will insure that American financial institutions will continue in the future to pursue the fast buck in creating risky artificial capital, without due regard to the risks involved for small borrowers and small savers, while the Fed will take responsibility for shifting losses partly on itself but mainly to holders of American dollars. In effect, the Fed is suspending market discipline for the big financial players it puts under its protection, while letting market discipline crush small homeowners and small investors who bought now foreclosed houses on shaky mortgages or who invested their savings in fraudulent and risky collateralized debt obligations (CDOs). That is the net result of applying Bagehot's rule only in part.
The third question is why both the Greenspan and the Bernanke Fed did not remove the punch bowl of easy money and easy credit sooner when things began getting ugly in the sub-prime mortgage market during the 2003-2007 period. Why did they appear paralyzed and do nothing? Former Fed Chairman Alan Greenspan has an easy and self-serving explanation. Before 2003, he was afraid of an onset of deflation and that is why the Fed brought its key lending rate to 1 percent (from June 2003 to June 2004) for only the second time in history. He also says that there was too much "global savings" around the world and that is what pushed interest rates down. This is a sleight of hands explanation, because if globalization and global savings kept inflation low and long-term interest down, short-term interest rates and money supply increases were under the Fed control at all times. The Fed had no obligation, after 2003, to keep real short-term interest rates so negative for so long. Indeed, as the Bush administration was cutting tax rates to enhance its 2004 reelection prospects and was spending money like a drunken sailor in wars waged in remote lands, the Fed should have taken the contrary route to counterbalance the fiscal impetus this created for the macro economy. In other words, it should have taken the punch bowl away. It did not.
As a consequence, mortgage debt as a percentage of disposable income in the U.S. is at the highest level it has been in 75 years, reaching 100 percent, while consumer debt has risen to its highest level in history. All this makes the economy more vulnerable than it has been since the 1929-39 depression. Another consequence of this binge of easy money has been the frenzy of leveraged buy-outs and industrial concentration that we have observed over the last few years.
Finally, let's put the cherry on the cake. Indeed, there is a most disturbing piece in former Fed Chairman Alan Greenspan's recent memoirs (The Age of Turbulence) and in the explanations he gave in interviews granted to promote his book, and it is his confession that while he was chairman of the Fed he actively lobbied Vice President Dick Cheney for a U.S. attack on Iraq. If this was the case, it was most inappropriate for a central banker to act this way, especially when he had other things to do than lobbying in favor of an illegal war. Does it mean that Mr. Greenspan was an active member of the pro-Israel Lobby within the U.S. government and joined the Wolfowitz-Feith-Abrams-Perle-Kissinger cabal? It would seem to me that such behavior would call for an investigation.
Indeed, to what extent was the pro-Israel Lobby responsible for the Iraq war and the deficits it generated? Already, polls indicate that 40 percent of American voters believe the pro-Israel Lobby has been a key factor in going to war in Iraq and that it is now very active in promoting a new war against Iran. This figure is bound to rise as more and more people confront the facts behind this most disastrous and ill-conceived war. Indeed, how many wars can this lobby be allowed to engineer before being stopped? And, to what extent can the current financial turmoil in U.S. and world markets be traced back to the influence of this most corrosive lobby?
Online Journal September 24, 2007 Rodrigue Tremblay
Manias, panics, and crashes are the consequence of an economic environment that cultivates cupidity, chicanery, and rapaciousness rather than a devout belief in the Golden Rule." --Peter L. Bernstein, Foreword to Manias, Panics, and Crashes (4th ed.) by C. P. Kindleberger
"In a crisis, discount and discount heavily." --Walter Bagehot (1826-1877), British economist
"The job of the Federal Reserve is to take away the punch bowl just when the party starts getting interesting." --William McChesney Martin (1906-1998), Fed Chairman (1951-1970)
"The dysfunctional state of American politics does not give me great confidence in the short run.'' --Alan Greenspan, Fed Chairman (1987-2006)
The mismanagement of money and credit has led to financial explosions over the centuries. The causes, cures and consequences of such financial catastrophes are most often repetitive. Indeed, such financial collapses are usually the result of the unbridled greed and cupidity of financial operators and of the lack of necessary supervision by public institutions designed to protect the public and the common good.
For example, after the October/November 1907 financial crisis in the United States, the idea initially advanced by banker Paul Warburg to establish a partially private and partially public Federal Reserve System of banking was finally adopted in 1913. The Fed thus became the lender of last resort for banks that find themselves in an illiquid position. It was only after the stock market crash of 1929, however, that the Securities and Exchange Commission (SEC) was established, in 1934.
(Article continues below)
But even with institutions and regulations in place, when they are inoperative, corrupt or ill-adapted, financial crises can still occur. And the current financial crisis is there to remind us of this fact.
On September 18, the Fed showed some panic and announced a larger than expected half percentage point cut in both the federal funds rate and in the discount rate, and this after having slashed its discount rate by a half point on August 17, in order to facilitate borrowing by America's largest banks and to facilitate the bailout of their affiliates and other operators, such as hedge-funds, caught in the sub-prime loans crisis. In so doing, the Bernanke Fed is following Bagehot's advice for aggressive discounting in a situation of financial crisis. The only problem is that Bagehot's rule calls for the central bank to lend copiously in times of critical credit stringency . . . but at a high rate of interest. By lending to troubled lenders at reduced preferential rates, the Fed is acting as their "government," i.e. subsidizing their risky loans operations and taxing anybody else who holds American dollars. It is not only attempting to make them more "liquid," but also more "solvable" and less likely to fail.
This raises three interesting questions. First, who pays for the bailout of U.S. financial institutions? Second, what are the longer-run consequences of the massive bailout undertaken by the Fed? And third, why did the Fed let the financial situation deteriorate to such an extent that an entire sector of the economy is being clobbered and its collapse is threatening the whole economy?
First, we must consider that the U.S. dollar is still a key reserve currency, although losing ground to the euro, and it is still being held in massive amounts by most central banks in their foreign reserves, and also by private banks, commercial and economic entities and individuals around the world. For example, in early 2007, foreign central banks alone held some two and a quarter trillion in U.S. dollars reserves, which represented about 66 percent of their total official foreign exchange reserves, with a bit more than 25 percent being held in euros.
Since the dollar is losing its purchasing power, both in absolute and relative terms, central banks and other foreign investors have been "taxed" by the American Fed's policy of benign neglect regarding the dollar. In real terms, the seigneurage tax on foreign holders of the dollar can be measured by taking the difference between the annual rate of depreciation of the dollar vis-à-vis major convertible currencies and the short-term rate of interest on these reserves. For example, if the annual rate of depreciation of the dollar is 5 percent and the short-term rate of return on U.S. T-bills is 4 percent, central banks are losing some $22.5 billion. Since private foreigners hold more than two trillion in short-term dollar denominated debt, the net annual loss of foreign holders of U.S. dollars can easily reach $50 billion a year. The conclusion is easy to see: Not only have foreigners been heavily financing the large U.S. government's deficits over the last six years, but they are now being called upon to help finance the generous bailout of American financial institutions.
Investors both abroad and in the U.S. know that official inflation figures are tilted on the low side for many people, essentially because they are designed to reduce the weight given in the indexes to goods and services whose prices increase the fastest, but also because housing costs and asset prices are only partly taken into consideration. This could explain why inflation expectations are on the rise, even though official inflation figures do not register an increase in inflation. Too much easy money as experienced over the last few years at first fuels asset inflation, but sooner or later it shows its ugly head in the prices of all commodities and in the prices of all goods and services. With the current drop of the dollar, Americans can be expected to pay more for a lot of items, such as fuel and food. This will translate to a lower standard of living.
Already, the price of gold, the price of oil and the prices of other commodities are on their way up and can serve as inflation bellwethers. The behavior of long-term interest rates that incorporate inflation expectations is also a good indicator of future inflation. With the Fed printing money and increasing the money supply on a high scale as if it were dropping money from a helicopter, thus the nickname of Fed Chairman Ben "Helicopter" Bernanke, short-term interest rates will drop for awhile, but long-term interest rates will be edging up, unless a deep recession steps in.
Secondly, a massive bailout as the Bernanke Fed has undertaken raises the question of moral hazard present in any massive central bank rescue intervention, after it has failed to properly regulate the risky activities of the banks it supervises. Indeed, by accepting mortgage-backed securities as collateral for huge more or less longer-term loans to American banks and brokers, at reduced interest rates, the Fed is in effect rewarding the very institutions which acted the most irresponsibly over the last four or five years, while saving its own face for having failed in its regulatory mission. The message is loud and clear: American financial institutions can indulge in creating "innovative" risky artificial credit instruments, shifting the risks to unsuspecting borrowers and investors while reaping juicy fees and rewards, and when things turn sour, as can be expected, the Fed will come to their rescue and bail them out with cheap and extended loans. That is a good way to carelessly encourage greedy and out-of-control financial institutions to create successive disorderly and disruptive financial crises.
Indeed, the Bernanke Fed is presently taking the pain of the consequences away from financial institutions that acted irresponsibly, and for some, as former Fed Chairman Alan Greenspan has said, which have acted criminally. This is a clear case of moral hazard.
If old regulations are not implemented or if no new regulations are put into place, such a massive bailout will insure that American financial institutions will continue in the future to pursue the fast buck in creating risky artificial capital, without due regard to the risks involved for small borrowers and small savers, while the Fed will take responsibility for shifting losses partly on itself but mainly to holders of American dollars. In effect, the Fed is suspending market discipline for the big financial players it puts under its protection, while letting market discipline crush small homeowners and small investors who bought now foreclosed houses on shaky mortgages or who invested their savings in fraudulent and risky collateralized debt obligations (CDOs). That is the net result of applying Bagehot's rule only in part.
The third question is why both the Greenspan and the Bernanke Fed did not remove the punch bowl of easy money and easy credit sooner when things began getting ugly in the sub-prime mortgage market during the 2003-2007 period. Why did they appear paralyzed and do nothing? Former Fed Chairman Alan Greenspan has an easy and self-serving explanation. Before 2003, he was afraid of an onset of deflation and that is why the Fed brought its key lending rate to 1 percent (from June 2003 to June 2004) for only the second time in history. He also says that there was too much "global savings" around the world and that is what pushed interest rates down. This is a sleight of hands explanation, because if globalization and global savings kept inflation low and long-term interest down, short-term interest rates and money supply increases were under the Fed control at all times. The Fed had no obligation, after 2003, to keep real short-term interest rates so negative for so long. Indeed, as the Bush administration was cutting tax rates to enhance its 2004 reelection prospects and was spending money like a drunken sailor in wars waged in remote lands, the Fed should have taken the contrary route to counterbalance the fiscal impetus this created for the macro economy. In other words, it should have taken the punch bowl away. It did not.
As a consequence, mortgage debt as a percentage of disposable income in the U.S. is at the highest level it has been in 75 years, reaching 100 percent, while consumer debt has risen to its highest level in history. All this makes the economy more vulnerable than it has been since the 1929-39 depression. Another consequence of this binge of easy money has been the frenzy of leveraged buy-outs and industrial concentration that we have observed over the last few years.
Finally, let's put the cherry on the cake. Indeed, there is a most disturbing piece in former Fed Chairman Alan Greenspan's recent memoirs (The Age of Turbulence) and in the explanations he gave in interviews granted to promote his book, and it is his confession that while he was chairman of the Fed he actively lobbied Vice President Dick Cheney for a U.S. attack on Iraq. If this was the case, it was most inappropriate for a central banker to act this way, especially when he had other things to do than lobbying in favor of an illegal war. Does it mean that Mr. Greenspan was an active member of the pro-Israel Lobby within the U.S. government and joined the Wolfowitz-Feith-Abrams-Perle-Kissinger cabal? It would seem to me that such behavior would call for an investigation.
Indeed, to what extent was the pro-Israel Lobby responsible for the Iraq war and the deficits it generated? Already, polls indicate that 40 percent of American voters believe the pro-Israel Lobby has been a key factor in going to war in Iraq and that it is now very active in promoting a new war against Iran. This figure is bound to rise as more and more people confront the facts behind this most disastrous and ill-conceived war. Indeed, how many wars can this lobby be allowed to engineer before being stopped? And, to what extent can the current financial turmoil in U.S. and world markets be traced back to the influence of this most corrosive lobby?
