Economic Crisis, in Today's News 08.04.09

Economic Crisis. Read these quotes, they're important in understanding the economic crisis. From today's Wall Street Journal, page one, "Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration's faltering plan to overhaul U.S. financial regulations..."

"...the plan has been criticized by the financial-services industry, as well as by financial regulators wary of encroachment on their turf."

"Friday's roughly hour-long meeting was described as unusual, not only because Mr. Geithner's repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House."

"Mr. Geithner, without singling out officials, raised concerns about regulators who questioned the wisdom of giving the Federal Reserve more power to oversee the financial system."

One of the cryptocracy's central goals to be accomplished in the wake of the economic crisis they precipitated was to empower the Federal Reserve as the THE regulator of the financial world. This power-grab by the owners of the world's banks was chutzpah exemplified. 

And now the cryptocracy must be realizing that they didn't create a big enough crisis, because they have not intimidated the regulatory bureaucracy and the leaders of the financial world enough to go along with the cryptocracy's objective.

One of the rules of the modern political world is never underestimate the staying power of an established bureaucracy. And that is exactly what the cryptocracy did.

The frustration must be extreme as shown by the behavior of the otherwise mild-mannered Geithner. He is one of the central employees of the cryptocracy. His assignment is to manage the change-over in the regulatory world. His unsual performance at the meeting stems from the pressure his employers are putting on him to accomplish his assignment which is in danger of slipping away.

Financial Regulations Ready for Prime Time, in Today's News 06.15.09

Financial Regulations. WSJ: "Barack Obama is expected Wednesday to propose the most sweeping reorganization of financial-market supervision since the 1930s, a revamp that would touch almost every corner of banking..."

Obama has backed off a bit on his goals, but his proposal still goes a long way to institutionalizing a government-run economy. "At the center of the plan...is a move to remake powers of the Federal Reserve to oversee the biggest financial players, give the government the power to unwind and break up systematically important companies...and create a new regulator for consumer-oriented financial products..."

Why is this being done? "Administration officials say their goal is to make it less likely the economy will ever again teeter on the brink of collapse by giving policy makers more tools to arrest a crisis the next time one occurs." Remember the slogan, 'the war to end all wars'? Such slogans and verbage are a favored cryptocracy tactic: create a fear, propose a 'solution' that will supposedly end the fear forever, and under the cover of the 'solution' put through changes that will benefit the cryptocracy. In this case, ending crises has nothing to do with it, except to provide a rationale. Here's what is really at stake: the central owners of the world's wealth are attempting to set up a system that gives them far more control of the nation's economy.

How will it work? "[Administration officials] envision a less volatile marketplace where banks are encouraged...to take fewer risks that have the potential to destabilize the economy. Hedge funds would be forced to register with the government and may face federal supervision...Mortgages and other consumer products would be monitored by a new watchdog, and there would be global transparency rules over exotic financial instruments." The cryptocracy doesn't care about a 'less volatile marketplace'. What they want is control of the market so that nobody can do things to damage their wealth production, much as some of the hedge funds (not under the cryptocracy's direct control) were able to do before the economic crisis.

The key part of all this is the empowerment of the Federal Reserve, a private entity owned by the largest banks, which in turn are owned by the world's richest families. "The Fed will likely have the power to set capital and liquidity requirements for the U.S.'s largest financial companies and scour the books of a wide range of firms." IOW via the Fed, the wealth owners will be regulating themselves. How do you think that will work out?

IOW, this 'reform' is nothing short of a power grab by the world's wealthiest individuals and families to gain exclusive control over the economy. In effect, they are establishing themselves as the board of directors for all the major companies in the American economy. Does it remind anyone of the politburo as head of all enterprises in the Soviet Union?

Where is all this going? "[Treasury Secretary] Mr. Geithner said...'We need a level playing field globally, or the effectiveness of our national safeguards against risk will be undermined.'" (!!!!!) So the American reform is just a step to 'globalizing' the control by the cryptocracy. Hang on!!! It is going to become very interesting!

Geithner in China, in Today's News 06.02.09

Geithner in China.  What is US Treasury Secretary Timothy Geithner doing in China? Doesn't he have enough to do in the United States implementing the government-run economy and telling GM and Citibank what to do?

WSJ: "BEIJING--US Treasury Secretary Timothy Geithner, in a speech here Monday, touched on a contentious subject, urging China to move forward to a more flexible exchange-rate regime."

The United States has harped on China to adopt a flexible exchange rate for some time now.  To some degree the rise in the price of oil a couple of years ago was designed to pressure China on exchange rates.  So it is natural that Geithner would talk on this subject.  (BTW, it is lucky for Geithner that his speech had to be translated.  Anyone who has heard his monotone in English can easily be bored to the stage of loud snoring.)

But are exchange rates the reason for his China visit? Another quote from the WSJ a dozen pages or so later can shed some light:

"The mixture of an unprecedented amount of Treasury-bond offerings along with government support to troubled financial institutions and banks 'will cause the total amount of Treasurys and other government-backed debt to soar from roughly 25% of the total investment-grade bond market in 2007 to 80% by 2010,' according to a recent report from investment manager BlackRock Inc." (Emphasis added.)

And so one can surmise that Geithner is in China to make sure that the Chinese will fork over to invest in the 'unprecedented' increase in debt offerings.  Not too long ago the Chinese leadership expressed doubts about the wisdom of such investing. They even tried to band together with Russia to form a new world currency.

Geithner's job is to reassure the weak-hearts in China that all is well with investing in the United States.  In fact it is so well that China needs to increase its investing dramatically. And they need to do it now in 2009 and 2010 when the 'unprecedented' rise in debt is occurring.

China has been one of the bigger investors in Treasurys in recent years.  So dependent on this source of revenue is the United States that the success of the cryptocracy's 'reform' of the economy rides on China's investment continuance and increase.  

One can assume that the Chinese will go along.  They have nothing to lose, really. They get a return on their investment and their leverage on the United States government will grow.

Does the cryptocracy care that the United States is dependent on China, who could pull the plug at any time on the stability of the American economy?  Of course not. It is entirely in the cryptocracy's interest to have everyone dependent on everyone else. The resulting crises and negotiations provide abundant opportunities for the cryptocracy to make even more money.