US dollar "backed by bananas" Press TV interviewed Paris-based financial analyst Max Keiser on the US financial meltdown on September 20. What follows are his free-wheeling comments on the US government bailout of Wall Street and the potential consequences for America.Commentsview comments in forum Page 1 2 You need to be a member of CKA and be logged into the site, to comment on news. |
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"We have a treasury secretary in America - Hank Paulson. I'm afraid he's gone insane. He's become like the Colonel Kurtz of Treasury Secretaries. He's gone native. He's co-opted trillions of dollars of American taxpayers' money and he's playing hedge fund like a rogue trader. We have got a rogue trader in the Treasury Secretary's office. He's being aided and abetted by Ben Bernanke who's been discredited as the entire Federal Reserve Bank has been utterly discredited. We're looking at a possible inflationary depression in America and the worse is yet to come, much worse is yet to come."
"To pay for all this insanity from Hank Paulson, they have two options. They can either raise taxes or they can inflate the money supply. They can destroy these things US dollars [waves a dollar bill at the camera]. Dollars 30 years ago used to be backed by this stuff - gold [waves a gold coin at the camera]. Now thanks to Hank Paulson and Ben Bernanke US dollars are backed by these - bananas [waves a banana at the camera]. They're absolutely worthless. Anyone buying US dollars today is going to lose money."
"For the average American, this is what they will experience. The price of food and oil are going to skyrocket due to hyperinflation. The only way they can possibly pay for all these bailouts is to inflate the money supply. This means hyperinflation in America like you had in Germany in the 1920s. This is what the average American will experience: destitution, poverty, social unrest due to flagrant bank mismanagement - and it could have been avoided. But unfortunately the banks in the USA are run by greedy, insane private marketeers and this is the result."
"It's not really a doomsday scenario for the rest of the world. Take Iran for example, you've got a lot of oil and gas. Those prices are going to go up. China has huge savings. The Indian people have huge gold reserves. For the rest of the world this is actually a fantastic thing. Only the US and Britain are going to experience this horrible disconnection with the rest of the world economy. So it's a doomsday for them but there's a certain symmetry here. They spent 20 or 30 years with this neoliberal model hoisting trillions of dollars of debt onto themselves and now it's gone belly up."
"Well if you go back to the 1970's when a similar inflationary spike hit the country you had Paul Volker who was an excellent Fed Chairman, probably the best of the past 100 years - much better than Alan Greenspan or Ben Bernanke who have really discredited the Federal Reserve Bank. Paul Volker at that time did what had to be done which was which was to raise interest rates. You've got to force the recession's last depression onto the American economy but it's necessary. This is what the next president is going to face - a choice which is not going to be tenable for the American people. They're going to have to experience a severe economic contraction so that there is some balance restored to the economy."
"Unfortunately the fear at this point is that is that the laws have been changed. Hank Paulson has done a power grab. When George Bush came into office he did a power grab. When 9-11 happened they did another power grab. They have dictatorial powers now. So now you've got this lunatic, Hank Paulson with a multi-trillion dollar hedge fund who's basically running the economy like a rogue trader."
"Hank Paulson has a multi-trillion dollar hedge fund and he doesn't appear to be in control of his own mental faculties. He appears to have gone insane."
"There wasn't really ever a strong American economy. There was a lot of debt over the past 30 years and this debt has built up. Just look at the average American. They weigh 300 pounds, they waddle around the malls shopping all day. They're not healthy. This is because there's too much debt in the system, too much easy money. Cheap money is what created this problem and it's been going on for 20 or 30 years. Unfortunately the labor movement in America has been decimated. They've been told for 20 or 30 years that it's a trickle down economy and that everyone can get rich in America."
"The problems are here but the people who created this nightmare are gone. Cheney has already got his Halliburton corporation headquartered in Dubai. He's already out of the picture. All these crooks are going to be leaving this country. They're not going to stay for all of the rioting there's going to be in America."
"Remember in Karachi a few weeks ago there was rioting at the Stock Exchange because of the very same thing that Paulson and Bernanke are doing today on the New York stock Exchange, imposing price-fixing and government intervention."
"For the average American, this is what they will experience. The price of food and oil are going to skyrocket due to hyperinflation. The only way they can possibly pay for all these bailouts is to inflate the money supply. This means hyperinflation in America like you had in Germany in the 1920s. This is what the average American will experience: destitution, poverty, social unrest due to flagrant bank mismanagement - and it could have been avoided. But unfortunately the banks in the USA are run by greedy, insane private marketeers and this is the result."
"The problems are here but the people who created this nightmare are gone. Cheney has already got his Halliburton corporation headquartered in Dubai. He's already out of the picture. All these crooks are going to be leaving this country. They're not going to stay for all of the rioting there's going to be in America."
Dead on.
http://mwhodges.home.att.net/nat-debt/debt-nat.htm
a period primarily driven by debt instead of by productive activity.
Bush I, Clinton and Bush II.
One point I disagree with the author is regarding Gold Standard. Even if Gold backed the $US, Inflation would be a result of recent events, unless the US suddenly found a pile of Gold sitting around.
It really goes all the way back to Ronnie Rayguns, Scape.
Yeah the mantra of government is the problem (especially when it is run by people who see their job as a problem) no doubt hatched this gigantic goose egg however I am strictly looking at the numbers and the vast majority of debt has been created by Bush/Clinton/Bush II. Imagine if the US had a debt that is only $11 trillion right now how things would be different. Instead because of them the US will have more in common with then Germany in the 1930's
This is absolutely idiotic. The guy has zero clue what he is talking about. He's a fool.
I have a stamp from the Weimer Republic that was worth 50,000,000,000,000 marks. To compare the two eras and situations shows a complete ignorance of history.
[quote="Reverend Blair":1gexa9fa]It really goes all the way back to Ronnie Rayguns, Scape.
Yeah the mantra of government is the problem (especially when it is run by people who see their job as a problem) no doubt hatched this gigantic goose egg however I am strictly looking at the numbers and the vast majority of debt has been created by Bush/Clinton/Bush II. Imagine if the US had a debt that is only $11 trillion right now how things would be different. Instead because of them the US will have more in common with then Germany in the 1930's
Current debt/GDP for the US government is about 67%. It was 100% for Canada in the mid-90s.
http://cnews.canoe.ca/CNEWS/Canada/2008 ... 76-cp.html
OTTAWA - Confronting the deepest money market crisis since the Great Depression, central bankers around the world pledged as much as a quarter of a trillion dollars Thursday to support confidence in the global financial system.
The central banks' move to ease the global financial crisis that has dried up credit for millions of consumers and businesses around the world helped stock prices recover in Canada and the United States.
The Toronto market gained nearly 200 points and Wall Street closed about 400 points higher, reversing big losses the previous day.
Investors were also reassured by a report that the U.S. government might create an entity to absorb banks' bad debt, which has been at the heart of the turmoil on Wall Street that has threatened to tip the U.S. economy deeper into recession.
In a statement issued at 3 a.m. ET and matched by other central banks, the Bank of Canada said it was acting with the U.S. Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan and the Swiss National Bank in "co-ordinated measures designed to address the continued elevated pressures in U.S.-dollar short-term funding markets."
In particular, the Bank of Canada and the Federal Reserve set up a US$10-billion reciprocal currency arrangement to provide U.S.-dollar liquidity in Canada. This could be drawn on by the Bank of Canada to support any Canadian financial institutions that ran short of ready cash.
"The bank judges that it is not necessary for it to draw on this swap facility at this time, but that it is prudent to have the agreement in place," the statement said.
"The Bank of Canada continues to closely monitor global market developments and remains committed to providing liquidity as required to support the stability of the Canadian financial system and the functioning of financial markets."
The central banks "continue to work together closely and will take appropriate steps to address the ongoing pressures," it added, echoing the statements from the other central banks.
Credit market pressures have intensified since the weekend collapse of Lehman Brothers Holdings Inc. and Tuesday's effective U.S. nationalization of American International Group, and central banks had already injected billions of dollars this week in an effort to keep banks from hoarding cash.
While investors reacted warmly to the central bank cash injections into global finance, the report of a broader U.S. government vehicle to sweep up bad debt was even more reassuring to the markets.
Late Thursday, U.S. Treasury Secretary Henry Paulson said the government was crafting a plan to rescue banks from bad debts that are at the heart of Wall Street's worst financial crisis in decades after meeting with congressional leaders to brief them on the options they are considering.
Paulson, Federal Reserve chairman Ben Bernanke and Securities and Exchange Commission chairman Christopher Cox asked lawmakers to pass legislation giving the government power to buy distressed assets.
Still, volatility persists over fear in the markets about the future of such major U.S. financial players as thrift bank Washington Mutual Inc. and investment bank Morgan Stanley.
"We're seeing a tremendous amount of nervousness. That nervousness is leading to volatility," said Anthony Conroy, head trader for BNY ConvergEx Group. He said the markets hadn't seen as much fractiousness since the 1920s.
In its statement on market infusions, the Fed said it has authorized swap lines similar to the Canadian arrangement totalling US$247 billion: $110 billion with the ECB, $60 billion with the Bank of Japan, $40 billion with the Bank of England and US$27 million with the Swiss National Bank.
This represents a $180-billion expansion of the swap facilities the Fed previously had in place with the other central banks.
At home, the Fed injected another $55 billion into the U.S. domestic system Thursday to ease overnight lending rates.
"Banks have a target for overnight funds and they are obligated to inject more liquidity into those markets if overnight rates rise above their targets," explained Avery Shenfeld, senior economist at CIBC World Markets.
"If each bank holds on to excess reserves rather than lending them to other banks, then the effective overnight rates will rise even if the central banks have not moved their target."
The Bank of Canada's involvement followed a statement by Finance Minister Jim Flaherty emphasizing "that Canada's banking and insurance industries are well capitalized and our financial system is sound."
The move by the Fed and its overseas counterparts was aimed at boosting waning confidence and getting banks around the world to open their ever-tightening purse strings. Banks have been increasingly reluctant to lend to each other as distrust spread throughout the financial system.
A sharp rise in borrowing costs has worsened as bad bets on dodgy mortgage-backed securities claimed more Wall Street giants. The total amount of commercial paper fell by $52.1 billion for the week that ended Wednesday, as banks cut back the short-term loans companies from small garment factories to General Electric Co. depend on for their daily operations. At the same time, the interest rate on those short-term loans more than doubled, with rates for seven-day paper jumping to 4.5 per cent from 2.5 per cent.
Troubles have not been confined to North America and Western Europe.
Russia closed its stock exchanges for a second day Thursday as President Dmitry Medvedev pledged a 500 billion ruble ($20 billion) injection into financial markets to stem a dizzying plummet in share prices - and quash fears of a repeat of the country's 1998 financial collapse.
If the assets that these companies hold are worthless - let them fail! That is a free market. free to fail, not free to get bailed out by the public purse and have everyone pay twice for the mistakes of big greedy corporations.
And they will have to pay twice - their retirement fund (if they had any) is worth less now, and they will have to suffer higher taxes for it.
Well done.
If the assets that these companies hold are worthless - let them fail! That is a free market. free to fail, not free to get bailed out by the public purse and have everyone pay twice for the mistakes of big greedy corporations.
And they will have to pay twice - their retirement fund (if they had any) is worth less now, and they will have to suffer higher taxes for it.
Exactly!!
85 billion of taxpayers money to bail out AIG and the CEO parachutes away with 8 million?
These guys should not be getting multi million dollar golden parachutes while everyone else just gets screwed, they should be getting tossed in jail or fired.