Actually, it’s pretty clear: Greenspan would be re-appointed as Fed chief. Remember, Greenspan is a republican and wasn’t considered particularly exceptional until later (His fanboys in Wall St. didn’t start slobbering over him until later 90s). Thus, I’m sure Clinton was planning to appoint a democrat, especially given Greenspan’s well known conservative, anti-tax, anti-regulation stances. But Greenspan threw the Fed and his own principles under the bus in order to feed his own ego and preserve his own job security. Once you have a man eager to be your servant and do your bidding, who cares if he’s nominally a republican or democrat?

Point is that far from being ‘independent’ Greenspan, and Bernanke are clearly involved in propping up the status quo politically — if we’d had Bear Stearns go under do you think Edwards might have been more of a force? I do.

Thanks so much! I greatly appreciate the answer. Extremely convincing!

Now that the looming threat of the CDS has become public and evident, and knowing the nature of CDS,
there is already talk of the banks coming together to form a “safety net” together so they can absorb the blow.

The proper solution here would be of course to aim for a stable dollar and try to revive America’s industry which was sacrificed for easy profits through outsourcing. But that involves a rate hike and total freeze of the real estate market. The whole economy will have to adjust very abruptly that way and things will easily slip out of control, both economically and politically. Capitalism doesn’t have the means of dealing with this kind of crisis.

Once again this has all happened before. And this is where fascism comes into play – the last metamorphosis of capitalism.

Knowing that the banks are already hooked on the Fed’s rolling loans and knowing that regulations are being worked on which will give the GOV much more control over banking and loans etc.it is clear that free market(as much as it ever existed) is a thing of the past. We have entered an age of central planning.

Central planning without expropriation is fascism by definition. It was given as the middle ground between free market economy and Marxism.

The privately owned and operated Federal Reserve System is a broken financial model.

A Public Central Bank that creates money without debt and does not set interest rates, only monetary expansion for population, growth and productivity is the model we need for the future.

A new system would give the government the power to manage credit creation so that sustainable economic activity takes preference over resource depletion.

What we are facing now is the perfect storm. Massive credit default, peak oil and water, public and private debt at 350% of GDP , our productive capacity has been neglected and out sourced while real governance is almost non existent.

We need structural reform of our financial sector and I mean back to basics.

The Fed, together with the GOV, sabotaged the financial, by keeping the rates low for a long time, promoting leverage, then by the end of his term Bill Clinton repealed the glass-steagle act, which opened the gate for all the problematic “products and tools” which created this whole mess.

In a way the Fed and the GOV baited everybody into a ridiculously leveraged situation, while in the same time outsourcing America’s economy and limiting jobs. They knew all along that much of the loans that are being given out will default and that will shake the financial sector.

Now that this has become a fact, what does the Fed do? It hooks all banks on rolling loans, without which it knows they will start bankrupting. The Fed knows more defaults are coming and with that more dependency.

The reason the Fed bails out certain players and cooperates closely with a handpicked few banks on Wall Street is that these same banks and organizations are owned by the owners of the FED ITSELF. The Fed is not a gov institution, never was. It is owned by the same big banking dynasties who own JP Morgan and a lot of the rest.

Bear Stearns itself was bailed out and subordinated to JP Morgan, because it was a major player in the CDS market and a domino effect would come out of its collapse.

It was too early for that. This whole plan needs time to unfold, so that everything comes into play.

They can’t allow the crash to be sudden, because different pieces need to come into play first.

If there is a total market crisis, the resulting disaster for the standard of living in America will trigger a lot of political unrest and they will need to establish martial law to keep their power.

We have seen much preparation in that direction also and when the time is ripe we will see it come into fruition.

Politics and Economics are inseparable. One needs a very good understanding of both, else he is divorced from reality.

Transferring interest rate risk from banks to the public (i.e. ARMs) is transferring risk from those who understand it to those who don’t. With 30 year fixed rates at an all time low the choice between an ARM and a fixed mortgage was a no-brainer for anyone who understood both products. Greenspan’s support for ARMs was irresponsible.

While I know Bush 41 wasn’t reelected, does anybody else read the extraordinarily loose monetary policy of 1991 – 92 as attempt to get him reelected? The yield curve in ‘91 indicates that Greenspan dropped rates way below what markets were expecting.

Would you be so kind to clarify?

I really respect your work and your analysis is golden. There is one thing I’d like to point your attention to.

You seem to believe or at least express an opinion in your writing, that the Fed is going about this the wrong way. I think this is not the case. I think the Fed is intentionally sabotaging the financial sector to bring it to its dependence. Together with the proposed regulations which legislation is working on, this will result in a centrally planned and controlled economy WHILE maintaining private property (i.e big corps own everything). This is by definition fascism and is the same way fascism took over in the beginning to middle 20th century. They blamed the reforms, regulations and dependency on gov/quasi-gov institutions exactly on the failure of free market as they are doing now.