“It’s all the same, only the names will change. Everyday it seems we’re wasting away. Another place where the faces are so cold. I’d drive all night just to get back home” – John Bon Jovi, Wanted Dead or Alive
The global banking industry, the global “lend money into existence and blow asset bubbles at all costs” industry, is facing a severe collapse. They seemed to have stemmed the slide a little after the late 2008 crash, but now we’re starting to pick up steam again. This time it’s not just commercial banking but also central banking. Greece, Ireland, Spain, Portugal – all facing collapse as they just owe too much money. It’s not our turn yet in the US, but we can’t be too far behind.
Amidst this, we see the following headline over at the drudge report: “BOMBSHELL: European banks took big slice of Fed aid.” I think John Bon Jovi nailed this one. It’s all the same , only the names have changed.
A few years ago freedom-minded, limited government types like me were outraged that the Federal government, and the Federal Reserve bank took taxpayer money (whether via taxation or printing) and gave it to private investment banks to prop them up. It was truly outlandish. I suppose the Fed felt some responsibility – they are the ones that have promoted the bubble blowing and easy money for the last decade or five. Now that it was finally collapsing they sort of felt guilty. That said, the taxpayers (like me) wondered why it was our responsibility to rescue the banks, just so the banks would agree to lend our own money back to us.
Underlying all of this was the “need” to rescue the bank bondholders. We made sure that the bondholders didn’t take any hits; that the American citizenry absorbed the pain.
Now we see that Federal Reserve aid also went to bail out foreign banks. The natural response is outrage – but I propose that it should not be more outrage than before. After all, we live in a global economy. The bondholders for American banks may well be foreign citizens, and the bondholders for foreign banks may well be American citizens. That the US is laying a heavy burden on its citizenry to protect the wealthy from harm is highly immoral. That the mechanism for that protection should be a bank registered in a foreign country is of rather little concern.
The whole thing stinks. If people can be worked up over the issue because foreign banks were involved, well, fine – as long as they’re worked up. This nonsense has got to stop. We should audit the Fed now. We should expose just how bad things are, just how deep the problems go. We need to admit that the emperor is not wearing clothes. Only after we get to the bottom can we start to build again.
“But you have dishonored the poor man. Are not the rich the ones who oppress you, and the ones who drag you into court? Are they not the ones who blaspheme the honorable name by which you were called?” – James 2:6-7