Yves,

I v’e said this in previous posts, the FED is stuck between a rock and a hard place. You can’t really manioulate the economy,at least for a prolonged period of time as they have tried to do. The market really does control interest rates, as evidenced by the moves in the bond market, and to all those who believe the impending implosion in the US won’t spread to the rest of the world… well banking failures here will mean banking failures everywhere.

This is to anonymous at 1:13 PM.
I wasn’t sure if you were limiting your call for a government run central bank to have as its mandate general price stability.
That would be a major part, but only part of its job.
What about fractional-reserve lending?
What about debt-money?
What about issuing the nation’s increasing money supply as credits?
I prodded the Ron Paul campaign for months – still do.
They do not believe in a solution.
Just get rid of the FED.
Maybe return to a gold standard.
Who needs that?
In one sentence for economic democracy and a return to free enterprise:
“Sound monetary reform requires the issuance of all money (legal tender) by the State, exclusively; in amounts calculated to stabilize the general price level; without debt obligation to private persons; with all lending to be performed by private legal persons, exclusively; while safeguarding the widespread ownership of private property.”

Also, it will never happen that corporations lobby the Congress for a US Central Bank. For that to happen, corporations would need to have a nationality, rather than a shareholder-oriented bottom line.

Trichet deserves a medal – he seems the lone central bank head that understands inflation and the duty of central bankers.

I agree about EURUSD going much higher in the long run, but the words “mad scramble for liquidity” come to mind.

AFTER that, yeah, it will be grim for the USD. Depending just how bad it gets, a lot of trust will have been lost. I think we will see a new currency (pauses for a moment to think about Braille and RFID chips), and a long bottom to the L.

I see the DJ Financial Index is off another 3.5% after the rout on Friday, and the DJIA is looking to take out Friday’s low. We may see that scramble for liquidity sooner rather than later. Think margin calls, lots of margin calls, on substantially everything that is marginable (short USD futures, anyone? long oil or gold futures?)

The Fed owns us, and the banks own the Fed.

I would be shocked if the Fed did not bow (to the maximum extent possible) to the will of Wall Street. To the maximum extent possible means not enough to wake up the public and through them Congress enough to have them outlaw the (unconstitutional) Federal Reserve. But the public can’t see through the forest of anacronyms, hedonistic adjustments, obfuscation and similar that characterize the interaction of the Fed with Congress and, indirectly, with the public.

Our best hope is the that the Fed and its member banks get so greedy that they cause major damage to the largest corporations, who then in turn lobby Congress to establish a Central Bank of the United States with a mandate to maintain price stability.

Sadly, there will be much grief between now and then. And no doubt the fox *will* be put in charge of a much bigger henhouse. Speak up, Ron Paul, and don’t stop talking. We need you now more than ever.

The USA’s share of global military spending is around 48%. Of the remaining 52%, European countries make up around 40% which is more than China, Russia and the Middle East combined.

You might argue that the spending is directed too much towards those parts of the military that can’t be readily deployed around the world. But I don’t think Europe ‘needs’ to spend more on its own security.

The only reason I could see for Europe to need increased military expenditures is if they saw the USA as a threat.

http://www.globalissues.org/Geopolitics/ArmsTrade/Spending.asp

I think the Fed is now completely stuck — can’t raise, can’t lower. Not even much bailout money left. It’s soon to be irrelevant to what really happens….

Republicans have dug the hole, now we’ll have to let massive government programs and tax increases dig us out. Oh noes, their worst nightmare is here. ;^)

Should read: As we expand the process and procedures of bailing out the casino-like speculations of banks and allowing them to exchange all that bad debt for newly minted taxpayer capital. We are proud to offer a new era of socialized economics where the taxpayer will pay for banks to take greater risks and to thus not have a synthetic fear of failure.

Amen and God bless and see you at the club!