Category Archives: Federal Reserve Bank

Boobs Inadvertently Affirm Austrian Business Cycle

Business, Debt, Economy, Federal Reserve Bank, Inflation

The lower-rung boobs informing the higher-ups—the economy’s monetary central planners—require empirical studies to confirm what the Austrian School of Economics, headed by Ludwig von Mises, had deduced through reason (i.e., via praxeology) almost a century ago.

Bloomberg.com:

“[L]ow interest rates spur banks to take on too much risk, according to a study by the Bank for International Settlements. …

The study showed several ways in which low borrowing costs over an extended period can cause banks to take on more risk. It found that if market interest rates are kept below the benchmark rate for 10 straight quarters, the probability of an average bank defaulting increased by 3.3 percent. …

Central banks may have previously ignored the effect that low interest rates have on risk-taking because of a lack of empirical evidence that such a link existed, Gambacorta said.

The risk of banks defaulting jumped by more in economies where interest rates remained low for an extended period before the recent financial crisis, the report by the Basel, Switzerland-based organization said.”

The bankrolling by Barack of bad loans, on our backs, continues Give bankruptcy judges more power. It is suggested that gov. purchase more of the bad loans at a discount from the banks.”

Fed Chief Fights For Fiefdom

Debt, Economy, Federal Reserve Bank, Inflation, Socialism

Single-handedly has Rep. Ron Paul familiarized Americans with the Federal Reserve’s handiwork, and the havoc its monetary policy visits on the value of their coin and worldly goods. Three hundred and thirteen congressmen now sponsor Paul’s Audit the Fed Bill!

Mitt Romney worries that auditing the Fed might impede the Counterfeiter-in-Chief’s status as an independent, private institution. I mentioned Romney in a previous post for his knack for epitomizing the oil-and-water relationship the Republican front runners have with first principles. This is an an example. Romney is against an audit, he told Larry King, as he would like the Fed to remain … private. Where does one begin…

Like any public functionary presiding over a run-away bureaucratic tier, the chairman of the Fed, Ben S. Bernanke, is fighting for his fiefdom. In an editorial in the WaPo he fretted (or, rather, dissembled), “that a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions. Amen.

Big Brother Bernanke

China, Debt, Economy, Federal Reserve Bank

Federal Reserve chief Ben Bernanke “urged Asian leaders to build better pension systems and to increase government spending and the Obama administration to address the U.S. budget deficit,” reports the Wall Street Journal.

The audacity did not stop there. The “rebalancing of global growth,” as Bernanke put it, could not be achieved if the Chinese persisted in their errant practices:

“Trade surpluses achieved through policies that artificially enhance incentives for domestic saving and the production of export goods distort the mix of domestic industries and the allocation of resources,” and yield “an economy that is less able to meet the needs of its own citizens in the longer term.”

This from the man who, together with his predecessor, is responsible for distorting production and consumption in the largest economy in the world.

World leaders are coming to “a growing consensus … on the need to rebalance global economic growth so it depends less on U.S. consumers.”

Besides, who made Bernanke the crime boss of the world?

Updated: Loser Lindsey G. Pummeled By Paul

Constitution, Federal Reserve Bank, Foreign Policy, Neoconservatism, Political Philosophy, Race, Republicans, Ron Paul

I’ve said it before, the stupid party needs not a bigger tent, but a giant tin-foil hat. Duly, Lindsey Graham attacks Mr. Constitution, Rep. Ron Paul, by vowing to a booing town-hall gathering to rescue the GOP from white gentlemen like Paul (words you’d expect from the Party of Lincoln), and to continue shedding blood in futile, unconstitutional wars.

To which Ron Paul replied: “What does Graham have against the Constitutions?” Of course, Graham embodies everything that is wicked about the Republican Party.

Update: Glenn Beck gives it to Graham too: pro amnesty, for Sotomayor, for stimulus package; signed climate-change bill…