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Title: Former Fed Chief Volcker Says Financial System is Insolvent and Broken
Source:
WRH/Goldmoney
URL Source: http://goldmoney.com/gold-research/ ... m-is-insolvent-and-broken.html
Published: Oct 1, 2010
Author: Roman Baudzus
Post Date: 2010-10-01 14:34:29 by Original_Intent
Keywords: Financial, Fraud, Federal, Reserve
Views: 289
Comments: 25
Paul Volcker, former head of the American central bank Federal Reserve, announced last Thursday at a conference of the Federal Reserve Bank of Chicago that the US financial system is largely insolvent and "broken". Volcker indicated that not only the banks are to blame for this situation, but also the federal regulators. During the last few years, they could have tried a lot harder to stop the investment banks from turning the global markets into a casino. The investment banks were also responsible for attracting large parts of the former core business of the commercial banks, which consequently led to major problems, as everyone could now see. Thus, Volcker considered that the credit business generally had taken a negative path. The size of the losses from toxic assets so far hidden by banks would not be assessable anymore. Therefore it would not be hard to imagine that the present situation holds big risks for the future stability of the financial system as well as for the broader economy. He blamed the international central banks of overshooting the mark, when trying to acquire skills that were not part of their original fields of activity. Additionally, a lax monetary policy stirred up the existing problems instead of tackling them. Volcker added that he was not sufficiently content with the new financial markets bill, since the legislation, known as Dodd-Frank, and the included Volcker rule, was strongly diluted by individual lobbies. Nowadays it was not the financial regulators, who provided the banks and lenders with rules that generally had to be observed. In fact, a major part of the market participants resented the financial authorities, since they find the regulations disruptive and bad for business. He lambasted a lack of respect that led to a refusal to obey the federal rules and to fully execute them. Volcker described the American mortgage market as "completely broken". It would take a long time to get the problems of the housing market under control and to reinstall an economic equilibrium. This situation would weigh on the economic development for a long time, since it causes a big problem for the American consumer and has already led to huge wealth destruction. Published by GoldMoney Copyright © 2010. All rights reserved. Written by Roman Baudzus - Contributing Writer Michael Rivero at What Really Happened had a very interesting and well written commentary on this point. "And the reason is simple. The entire Federal Reserve Bank System is a giant "Ponzi": or pyramid scheme. This nation fought a war with England to free itself from the predatory banking practices of the Bank of England, enforced on the colonies by King George III's Currency Act, which mandated the use of British Pounds for all commerce. But pounds were only available as loans from the Bank of England, at interest. It took only a few years for this scheme to reduce the formerly prosperous and productive colonies down to the poverty and unemployment typical of London at the same time period. While the state-run schools teach that the revolution was about the Stamp act and the Tea tax, it was the rage created by the enforced impoverishment of the Currency Act which fueled the revolution. Following the American Revolution, the Founding Fathers reverted back to the system which had worked so well before the Currency Act. Government issued the public currency and spent it into circulation where it was used by the public free of interest. Then the money was taxed back into the governments hands, then to be re-spent back into circulation. This is a system which has worked very well for the civil population throughout history and which for the obvious reasons, bankers loathe to the point of starting wars to prevent it! The US has been cursed with three private central banks issuing the public currency at interest and all three brought this nation to the edge of ruin. The mechanism is simple. Because all currency is the product of a loan, the moment that first bill goes into circulation, more money is owed to the Federal Reserve banking system than is actually in existence, and the population is trapped; sold into debt-slavery by their own government, as happened to us all in 1913. The system perpetuates only so long as an ever-larger group of new borrowers can be found to create new money to pay the interest on the old money. That is what makes it a pyramid. That is why the government and media always talk about the "growth" of the economy. "Growth" may sound like a good thing to the unenlightened, but in a debt-based economy, "growth" means "deeper in debt. And because it is a pyramid, if the economy does not grow, that is, if more new debt cannot be created to service the interest on the old debt, the pyramid collapses, which is what is happening now. The Federal Reserve System is designed to suck the real wealth out of the nation and put it in the pockets of the bankers, and now that they have succeeded, the system is breaking down, too cash-poor to operate efficiently, just as it did in the colonies in the early 1770s. The system is broken because the bankers have all the wealth, and absent a new source of wealth to pay the bankers' interest charges and fees, the system is locking up. Of course, it is all paper debts and make-believe obligations. The money owed to the bankers by the government never existed in the first place. It's just part fo the scam by which the bankers enslave the world, which is the real essence of banking; to hold nations and people perpetually in debt-servitude or indentured service, with the government bribed to not take action to ameliorate the situation!" "This is the very essence of the banking industry,; to make us all, whether we be nations or individuals, slaves to debt!" -- mp3 clip from the film "The International"
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#1. To: Original_Intent (#0)
Thanks for having contributed your share to the problem, Paul.
Democrats don't mind war as long as they can have big government. Republicans don't mind big government as long as they can have war.
Exactly. He deserves a hearty handshake - on his way to visit Monsieur Le Guillotine. "One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
((((((Thought youse' guys might be interested Ping.))))))
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
I gues I read this too carelessly, I missed Volkers suggestions for sure-fire fixes!
He wouldn't dare. He'd have a "heart attack" the next day. Of course the solution is actually simple. Eliminate the bloodsucking middle man i.e., Da' Fed and begin issuing U.S. Treasury Notes and Silver Certificates.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
And he is just now figuring out that fractional reserve banking and creating "money" out of thin air was a fraud and swindle and couldn't last indefinitely?
Liberty is not a means to a higher political end. It is itself the highest political end. He (Gordon Duff) also implies that forcibly removing Obama, a Constitution-hating, on-the-down-low, crackhead Communist, is an attack on America, Mom, and apple pie. I swear these military people are worse than useless. Just look around at the condition of the country and tell me if they have fulfilled their oaths to protect the nation from all enemies foreign and domestic. No, he is getting old and the black weight of his crimes are beginning to get heavier and heavier.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
Maybe he will break down, get on tv and tell everyone how they have been swindled. Ya think? Nah. This is about as close as he will come to that.
Liberty is not a means to a higher political end. It is itself the highest political end. He (Gordon Duff) also implies that forcibly removing Obama, a Constitution-hating, on-the-down-low, crackhead Communist, is an attack on America, Mom, and apple pie. I swear these military people are worse than useless. Just look around at the condition of the country and tell me if they have fulfilled their oaths to protect the nation from all enemies foreign and domestic. No, no outright confession. That would require a level of conscience and courage beyond his capacity. His wife, Andrea Mitchell, is a real piece of work too. A gold plated Presstitute.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
I've tried to explain how central banking works to some people around me. They still don't get it. All most all politicians don't understand our monetary system. It is entirely based on ever expanding debt, without it, it collapses.
Mark If America is destroyed, it may be by Americans who salute the flag, sing the national anthem, march in patriotic parades, cheer Fourth of July speakers - normally good Americans who fail to comprehend what is required to keep our country strong and free - Americans who have been lulled into a false security (April 1968).---Ezra Taft Benson, US Secretary of Agriculture 1953-1961 under Eisenhower
Thanks. I was able to pull up a WSJ article on the speech. * September 23, 2010, 4:38 PM ET Volcker Spares No One in Broad Critique By Damian Paletta Former Federal Reserve Chairman Paul Volcker scrapped a prepared speech he had planned to deliver at the Federal Reserve Bank of Chicago on Thursday, and instead delivered a blistering, off-the-cuff critique leveled at nearly every corner of the financial system. Standing at a lectern with his hands in his pockets, Volcker moved unsparingly from banks to regulators to business schools to the Fed to money-market funds during his luncheon speech. He praised the new financial overhaul law, but said the system remained at risk because it is subject to future “judgments” of individual regulators, who he said would be relentlessly lobbied by banks and politicians to soften the rules. “This is a plea for structural changes in markets and market regulation,” he said at one point. Here are his views on a variety of topics. 1) Macroprudential regulation — “somehow those words grate on my ears.” 2) Banking — Investment banks became “trading machines instead of investment banks [leading to] encroachment on the territory of commercial banks, and commercial banks encroached on the territory of others in a way that couldn’t easily be managed by the old supervisory system.” 3) Financial system — “The financial system is broken. We can use that term in late 2008, and I think it’s fair to still use the term unfortunately. We know that parts of it are absolutely broken, like the mortgage market which only happens to be the most important part of our capital markets [and has] become a subsidiary of the U.S. government.” 4) Business schools — “We had all our best business schools in the United States pouring out financial engineers, every smart young mathematician and physicist said ‘I don’t want to be a civil engineer, a mechanical engineer. I’m a smart guy, I want to go to Wall Street.’ And then you know all the risks were going to be sliced and diced and [people thought] the market would be resilient and not face any crises. We took care of all that stuff, and I think that was the general philosophy that markets are efficient and self correcting and we don’t have to worry about them too much. 5) Central banks and the Fed — “Central banks became…maybe a little too infatuated with their own skills and authority because they found secrets to price stability…I think its fair to say there was a certain neglect of supervisory responsibilities, certainly not confined to the Federal Reserve, but including the Federal Reserve, I only say that because the Federal Reserve is the most important in my view.” 6) The recession — “It’s so difficult to get out of this recession because of the basic disequilibrium in the real economy.” 7) Council of regulators — “Potentially cumbersome.” 8) On judgment — “Let me suggest to you that relying on judgment all the time makes for a very heavy burden whether you are regulating an individual institution or whether you are regulating the whole market or whether you are deciding what might be disturbing or what might not be disturbing. It’s pretty tough and it’s subject to all kinds of political and institutional blockages as well.” 9) On procyclicality — “It’s the hardest thing as a regulator in my opinion…when things are really going well, the economy is going well, the market is not disturbed, but you see developments in an institution or in markets that is potentially destabilizing, doing something about it is extremely difficult. Because the answer of the people in the markets is, ‘what are you talking about? Things are going really well. We know more about banking and finance than you do, get out of my hair, if you don’t get out of my hair I’m going to write my congressman.’” 10) Risk management — “Markets that are prone to excesses in one direction or another are not simply managed under the assumption that we can assume that everybody follows a normal distribution curve. Normal distribution curves — if I would submit to you — do not exist in financial markets. Its not that they are fat tails, they don’t exist. I keep hearing about fat tails, and Jesus, it’s only supposed to occur every 100 years, and it appears every 10 years.” 11) Derivatives — “I’ve heard so many stories about how important” derivatives are but “there doesn’t seem to be much doubt that the creation of derivatives has far exceeded any pressing need for hedging.” 12) Money market funds — “Money market funds have encroached so much on the banking market. They are nothing, in my view, but a regulatory arbitrage. The purpose that they serve in handling payments and short term paper is a commercial banking function” but they don’t hold the capital or face the regulation of banks. 13) The Fed and Dodd-Frank — Volcker said it was a “miracle” that despite all the criticism aimed at the Fed the central bank “came out with enhanced regulatory authorities rather than reduced regulatory authorities.”
he who wants bread is the servant of the man that will feed him, if a man thus feeds a whole people, they are under his control.
It is entirely based on ever expanding debt, without it, it collapses. Must be something in the water - fluoride perhaps? Seriously though I think it is more because people have been brainwashed by the talking heads into thinking it is something much more complex that it is. All basic truths are fundamentally simple. Some reference for the value of anything must be had. In the case of the Fed it is the common faith in the "good faith and credit" of the U.S. Goobermunt. You might have to start at step O and first get them to cognite that the Fed is a PRIVATE institution which has a sweetheart deal with the U.S. Federal Government. Then that the U.S. Feral government sells Bonds to the Fed to create currency. Then you have the next babystep of what is a Bond? An agreement to repay a sum with interest at some future date. Then you can get them to understand that a Bond is a debt. Then your argument, which is valid, might make sense to them. The real leap would then be to get them to understand how ever increasing taxes go hand in hand with the continual expansion of the money supply and that they are the relief valve that helps to treat some of the symptoms of the disease. However, I am convinced that most ordinary people really don't understand even basic supply and demand despite lip service to that effect And that goes double for the media.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
Like, uh, Duh Dude. When the fundamental productive capability i.e., the production of real value added goods is shipped out of the country then you have shipped out the basis from which everything else derives. "Money is an idea backed by confidence." That confidence derives from the willingness of a country's people to work and to produce valuable goods and services. And that is the source of all real wealth. When the ability to work and produce is inhibited by government regulation, taxation, cronyism between government the financial markets and other industries, and the outsourcing of industry to other climes then the fundamental confidence is eroded. It is now vanishing rapidly. With the confidence goes the value of the currency and the productive capability that made that currency of value.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
Sure, OI....so you didn't think I would be interested. Hummmmppppffff!!
"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. ... We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of." Edward Bernays, Father of Public Relations
Didn't know. So, I just pinged the people whom I thought would be for sure interested. Please excuse the oversight oh wondrous Madam of great virtue and intellect. ;-)
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
Oh, okay. Shucks, I'm all a blush. : ) I was feelin' upset for a minute there....just about ready to go find a turtle to kick around. hehehehe
"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. ... We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of." Edward Bernays, Father of Public Relations
Always good for the spirit. And a public service to boot. The larger the shoe size and the more pointed the toes the better.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
You know, after reading ALL of his statements, I can give everybody a real good Synopsis ---- We're F***'ed!
A person's willingness to produce excess wealth is predicated on his expectation that he will be able to save that wealth for later use. Without a functioning currency or other means of "storing" wealth, very little production would take place above what is needed for survival. So the confidence actually precedes the (excess) production.
Stop being so unrealistically optimistic. I think I need another lemon.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
A person's willingness to produce excess wealth is predicated on his expectation that he will be able to save that wealth for later use. Without a functioning currency or other means of "storing" wealth, very little production would take place above what is needed for survival. So the confidence actually precedes the (excess) production. A currency facilitates ease and speed of transactions resulting in greater expansion at a more rapid rate, but is not sufficient unto itself nor is it a prerequisite. Barter, and exchange of commodities preceded formal currencies. Prior to the establishment of modern formal currencies means of exchange were items such as salt, pepper, and other items of more or less enduring value - even Tulip Bulbs (see Dutch History). Gold became a common and accepted medium, along with silver, as far back as the Roman Empire and likely before. The first paper money was gold deposit receipts issued by medieval goldsmiths who had secure vaults and so would store gold for others - for a fee of course. Traders discovered that they could exchange receipts and they would very often exchange hands many times before they were redeemed. Goldsmiths quickly figured out that they could issue more receipts than they had gold because it was unlikely for everyone to show up at once demanding payment in gold. Thus fractional reserve banking was born. People left unfettered almost naturally produce more than mere survival necessity dictates. Real survival, beyond mere subsistence, requires production in abundance. However, I do agree that a store of nonperishable wealth does inspire greater production as it makes exchange much easier. I would even go a bit further in suggesting that inheritance taxes cut directly against that desire to accumulate wealth beyond immediate needs as one of the manifestations of the urge to survive, the common denominator of human existence, is to ensure the welfare of the next generation(s). Where the confidence derives from is the knowledge that the individual has that others will accept these pieces of paper for goods and services. When that confidence lessens the value of the currency recedes and vice versa. Inflation could almost be called a crisis in confidence as price signals, brought about by an excess of currency in circulation, cause prices to be bid upwards and thus each individual unit of currency becomes that much less valuable.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
Which made them de-facto currencies. Liquidity and marketability may vary. Mises called money the "most marketable commodity".
Which made them de-facto currencies. Liquidity and marketability may vary. Mises called money the "most marketable commodity". That is reasonable and even correct. But even more basic it becomes what makes it marketable? The desirability of that commodity to many people. The more people to whom it is desirable the more marketable the commodity. Our current paper currency is essentially universally desirable. And one of the implicit requirements is that people have confidence that a commodity is fit for a purpose. In other words their level of confidence that they can use that commodity to fulfill their needs and wants. That returns us to: "Money is an idea backed by confidence".
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
Psalms 137:1 By the rivers of Babylon, there we sat down, yea, we wept, when we remembered Zion.
I think I like Milton Friedman's idea better. Which was to essentially nationalize the Fed under the control of the Department of the Treasury. He said do away with it all together transferring essential functions to the Department of the Treasury, but "a rose by any other name...". The Fed, despite its current corruption, does fulfill a few legitimate functions which do aid economic activity. The problem is that the Fed IS corrupt and is run for the benefit of a very small number of hyperwealthy banksters. When I say legitimate functions I mean things like: Check clearing. This aids the economy by speeding up monetary flows thus increasing the willingness of businesses to accept Bank Drafts i.e., checks. Issuance of currency. Lender of Last Resort for Banks. The other part of Friedman's suggestion was to fix in law the requirement that the money supply not be expanded at a rate of growth greater than the expansion of the economy and its production of new goods and services. Historically it is about 3% and so his suggestion was to use the fixed number of 3%. Following such a rule would virtually eliminate inflation. I have no problem with private issuance of gold and silver coin assayed and certified, but I do have a problem with the issuance of currency because it provides too much opportunity for mischief.
"One of the least understood strategies of the world revolution now moving rapidly toward its goal is the use of mind control as a major means of obtaining the consent of the people who will be subjects of the New World Order." K.M. Heaton, The National Educator
#2. To: PnbC (#1)
Thanks for having contributed your share to the problem, Paul.
#3. To: christine, Deacon Benjamin, Kamala, James Deffenbach, Lod, TwentyTwelve, wudidiz, all (#0)
#4. To: Original_Intent (#0)
#5. To: ndcorup (#4)
#6. To: Original_Intent (#0)
Paul Volcker, former head of the American central bank Federal Reserve, announced last Thursday at a conference of the Federal Reserve Bank of Chicago that the US financial system is largely insolvent and "broken".
Lord Acton
OsamaBinGoldstein posted on 2010-05-25 9:39:59 ET (2 images) Reply Trace
#7. To: James Deffenbach (#6)
And he is just now figuring out that fractional reserve banking and creating "money" out of thin air was a fraud and swindle and couldn't last indefinitely?
#8. To: Original_Intent (#7)
Lord Acton
OsamaBinGoldstein posted on 2010-05-25 9:39:59 ET (2 images) Reply Trace
#9. To: James Deffenbach (#8)
#10. To: Original_Intent (#3)
#11. To: Original_Intent (#3)
#12. To: Kamala (#10)
I've tried to explain how central banking works to some people around me. They still don't get it. All most all politicians don't understand our monetary system.
#13. To: DeaconBenjamin (#11)
6) The recession — “It’s so difficult to get out of this recession because of the basic disequilibrium in the real economy.”
#14. To: Original_Intent (#3)
#15. To: abraxas (#14)
#16. To: Original_Intent (#15)
Please excuse the oversight oh wondrous Madam of great virtue and intellect. ;-)
#17. To: abraxas (#16)
I was feelin' upset for a minute there....just about ready to go find a turtle to kick around. hehehehe
#18. To: Original_Intent (#5)
#19. To: Original_Intent (#13)
That confidence derives from the willingness of a country's people to work and to produce valuable goods and services. And that is the source of all real wealth.
#20. To: ndcorup (#18)
#21. To: duckhunter (#19)
That confidence derives from the willingness of a country's people to work and to produce valuable goods and services. And that is the source of all real wealth.
#22. To: Original_Intent (#21)
Prior to the establishment of modern formal currencies means of exchange were items such as salt, pepper, and other items of more or less enduring value - even Tulip Bulbs (see Dutch History)
#23. To: duckhunter (#22)
Prior to the establishment of modern formal currencies means of exchange were items such as salt, pepper, and other items of more or less enduring value - even Tulip Bulbs (see Dutch History)
#24. To: Original_Intent (#0)
#25. To: Red Jones (#24)
(Edited)
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