WOW .... The Fed Is At Risk Of Failing .... According To This Article
The author is Kenneth Rogoff, professor of economics and public policy at Harvard, writing in the U.K.'s Guardian newspaper. His core point is that central banks, in shoring up national banking industries by taking on financial firms' bad debt, are only putting themselves at risk.
http://www.guardian.co.uk/commentisfree/2008/sep/08/creditcr...
Of course, they wouldn't let themselves fail .... guess what they'll do to avoid it? Pull themselves out thru inflation, or recapitalize from the public, according to this article.
A few clips from the article:
"A year into the global financial crisis, several key central banks remain extraordinarily exposed to their countries' shaky private financial sectors. So far, the strategy of maintaining banking systems on feeding tubes of taxpayer-guaranteed short-term credit has made sense. But eventually central banks must pull the plug. Otherwise they will end up in intensive care themselves as credit losses overwhelm their balance sheets.
The United States Federal Reserve, the European Central Bank, and the Bank of England are particularly exposed. Collectively, they have extended hundreds of billions of dollars in short-term loans to both traditional banks and complex, unregulated "investment banks". Many other central banks are nervously watching the situation, well aware that they may soon find themselves in the same position as the global economy continues to soften and default rates on all manner of debt continue to rise.
In order to need a balance sheet
wouldn't they first need a budget ?
~Mikael / Peace, love, Light and unity ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Stop the NWO....It's just illumi..Naughty !
I must be missing something - but
If the US Government owes the Fed billions and they have the power to create money, how could they go bankrupt?
According to this one it failed already
http://silveraxis.com/todayinsilver/2008/10/04/the-fed-is-ba...
Susan, thanks.
Your article is important enuf that I'm going to post the link on another thread.
I have one started called the Helicopter is loaded and ready to
go...yes if accurate it's quite the nugget!
Mr. Rogoff assumes
that there is a way to run a central bank with integrity and a way to do it ineptly. A central bank that just trades treasuries for junk to bail out reckless unregulated financial intermediaries is eventually not going to be able to serve its function without transparent shams or inflations, destroying what it was intended to preserve. He is working from within the central bank paradigm. Bright guy, I wish he was working creatively outside the current framework.
"And, while calculating the size of the financial sector is extremely difficult due to its opaqueness and complexity, official US statistics indicate that financial firms accounted for roughly one-third of American corporate profits in 2006." Scary mis-allocation of our resources, probably understated. There is no easy way out of this for us...we not only bought the farm, but borrowed to do it.
None of these criminals have
None of these criminals have balance sheets.
"You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning." --Andrew Jackson,
1828
“It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds”
-Sam Adams
refresher
http://www.youtube.com/watch?v=rfKSXcme60I
Truth exists, and it deserves to be cherished.
How cool
to see it from another angle!
Here is my clip, it's a bit longer @ 5:40.
http://www.youtube.com/watch?v=GdRA04iIFtI
Huh?
Can somebody please explain to me how a central bank could be having difficulties? They can just type in some more money.
The trouble is that when
The trouble is that when they "type in some more money" they instantly inflate our money supply, causing inflation and devaluation of the currency.
Here's somewhat of an easy way to explain this. I use this example with friends and family when talking about this stuff....
Let's say you have a great tasting glass of iced tea which is approx 1/2 full. Then the waitress comes over and tops it off - with WATER! The water did increase the quantity, but now it tastes like s**t. What happened there was that the iced tea, each sip, was diluted by the additional water. The "taste" of the iced tea would be like the "value" of our dollars. When the Fed prints more dollars, the taste/value is diluted for all of them.
When the Fed prints, they simply create more quantity but not more value. This is the sort of reason why bread, milk, eggs and other things increase in price over time. The government and media like to call this the "cost of living" increase, but it actually is nothing of the sort. It's an invisible tax that we all (well, most of us) think is simply the cost of living going up... it's actually the value of your dollars going down when the government causes inflation.
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