This is critical news for us all from Brass Check TV. This video shows the Chairman of the US House Committee admitting that the global financial system came close to collapse due to the Republicans financial management. More concerning is that he suggested that they don't know what they are doing, and they could benefit from the advice of a housewife on $10/hour. I actually don't disagree, as she did display greater wisdom. But here we have displayed the humility ('read' lack of responsibility) from these politicians (and that is not a good thing), as well as one of them conceding that they don't know what they are doing, and that they are relying on the US Treasury. You might wonder whether the US Treasury knows any better. Well of course they do. These events don't occur because they don't know, they occur because they will do anything to retain power.
This thinking remains me of an incidence during the 1990s, during the meltdown of the Japanese economy. Our company was a consultant to a major Japanese trading company. The General Manager of the Coal & Iron Ore Dept asked the proprietor of our company whether they should buy a particular asset, and he responded 'You should ask your financial experts'. With typical Japanese humility, the GM said 'They said to ask you'.
The problem I see with this confession by this House Committee Chair is that he is suggesting that the US financial system was only spared from collapse because the US Treasury agreed to guarantee deposits, and that central banks around the world agreed to follow suit. The implication is that the financial system is still vulnerable. The banks are still severely indebted. Let's remember that the US financial system is in even a more precarious state because it has a 2nd wave of debt which will be liquidated. From now we can expect the ARM resets to kick in. This will likely require another injection by the US Federal Reserve. The positive side is that this will be expected...or maybe the banks have kept the government in the dark. Will depositors accept the deposit insurance or guarantee this time. In Sept 25th there was a $500 billion run on US banks. The Treasury could come up with just $150 billion before they resorted to deposit guarantees. Does this not suggest that deposit guarantees are an empty insurance? Will depositors trust it the next time around. I wolud suggest that the Treasury will throw everything at the problem because it can always print USD. The probably of course is that paper money is of dubious value.
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Andrew Sheldon www.sheldonthinks.com
This thinking remains me of an incidence during the 1990s, during the meltdown of the Japanese economy. Our company was a consultant to a major Japanese trading company. The General Manager of the Coal & Iron Ore Dept asked the proprietor of our company whether they should buy a particular asset, and he responded 'You should ask your financial experts'. With typical Japanese humility, the GM said 'They said to ask you'.
The problem I see with this confession by this House Committee Chair is that he is suggesting that the US financial system was only spared from collapse because the US Treasury agreed to guarantee deposits, and that central banks around the world agreed to follow suit. The implication is that the financial system is still vulnerable. The banks are still severely indebted. Let's remember that the US financial system is in even a more precarious state because it has a 2nd wave of debt which will be liquidated. From now we can expect the ARM resets to kick in. This will likely require another injection by the US Federal Reserve. The positive side is that this will be expected...or maybe the banks have kept the government in the dark. Will depositors accept the deposit insurance or guarantee this time. In Sept 25th there was a $500 billion run on US banks. The Treasury could come up with just $150 billion before they resorted to deposit guarantees. Does this not suggest that deposit guarantees are an empty insurance? Will depositors trust it the next time around. I wolud suggest that the Treasury will throw everything at the problem because it can always print USD. The probably of course is that paper money is of dubious value.
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Andrew Sheldon www.sheldonthinks.com
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