Gold Prices Per Gramme
The scruples of Paul Volcker gagging
If there is someone worth listening to in Washington these days, Paul Volcker. Why is the great man anywhere?
When it comes to the ups and downs of the economy, there is only one man who can say they've seen it all – Paul Volcker. At six feet seven years, Volcker stands on all political leaders in both the literal and figurative sense.
In a later paper be considered "the man who broke the back of inflation," Volcker took charge of a weakened and disillusioned by the Fed in August 1979. Known for his no BS attitude and style closed, conservative, Volcker's appointment was made only under great pressure in the Carter White House to lick the problem of inflation.
After years of weak policy – and a general sense that the Federal Reserve simply do not have the guts to cope with inflation once and for all – the intense pain that Volcker was willing to impose (through high interest rates) led to moderate inflation market conditions as the late, great bull jumped in 1982.
Volcker was also in the mix on 15 August 1971, when President Nixon closed the window gold. As Tricky Dick informed the world that "we are all Keynesians now," marking the beginning of a decade of runaway prices and platform shoes, Volcker was sent an urgent, mission two years globetrotting in his role as undersecretary of the Treasury for Monetary Policy and International Affairs.
The objective of Volcker's mission: to celebrate together the long-term currency exchange system that Nixon had been shattered in 1971 … and convince the rest of the world the United States had not crazy.
Nobody has more right to "been there, done that" Volcker. Perhaps most importantly, Volcker has demonstrated an ability to perform under pressure – and to make tough decisions when necessary. In his role as Chairman of the Fed, having a dragon (inflation) than many thought unslayable at the time, Paul Volcker, endured scathing criticism and sharp reversals of fortune that would have broken lesser men.
So where gone?
All this counts as good news when, in 2008, it was learned that Volcker was to advise the Obama campaign. Many of those who had doubts As for team unknown and untested Obama's political agenda subsided, at least in part, by the idea of a wise and experienced hand Volcker played a role.
Unfortunately, the review of the policy proposed by Washington, until now, the man's fingerprints are nowhere to be found. The White House gave Volcker a sound impressive title – head of the Consultative Board of the economic recovery "- and then seemed to completely ignore him from then on.
It is true that Volcker, now in its 80 years, has a greater taste for fishing in those days. But one has to wonder if there was a bit of bait and switch going on here. Use the height of a man seriously give a fresh face political campaign, the promise to listen carefully and pay attention to their wisdom and then …
A train of Wall Street
We here at Taipan Daily have no special permission to why the meatheads in Washington do what they do.
But we do have the ability to make a guess or two … education and the assumption here is that Volcker ended up getting unfairly. It's a good bet that Volcker made the mistake (if one could call it an error) to be too outspoken in his views – not enough to want to "play the ball ", so to speak.
You see, the White House staff, funding is dominated by a mentality of Wall Street. So dominated, in fact, privileged culture that pervades the place like the smell of the guts of trout in a fish market.
One can see this (or rather smell this) in the observation Obama team's top sellers of financial, Tim Geithner and Larry Summers. As president of the New York Fed, Geithner was a creature of Wall Street, bought, sold and paid from the first day. Even the sober New York Times has called Timmy Turbo, taking into account their unique "dependence on bankers, fund managers and others. "
And if Obama adviser Larry Summers does not aspire to be an accomplice started up the hill, then ended up settling the role very well, having raked in a cool $ 8 million (more or less) to talk about coverage rates and consulting fees from funds in these recent years.
Besides the above, add in the fact that Goldman Sachs is not just an investment bank mega-powerful these days, but a rare species of temporary employment with a quasi-official role in the filling of all senior government positions on funding.
The net result is a kind of noxious cocktail toxic showing interest to anyone not considered a tried and true friend of Wall Street. And that includes Paul Volcker.
-Steagall Glass blasphemy
In the eyes of Wall Street, Volcker apparent sins are twofold. First, openly supported Glass-Steagall-like " restrictions on investment houses on Wall Street. Second, heat was the idea of banks and utilities.
Glass-Steagall Act was approved in two parts in 1932 and 1933. The second half of the Glass-Steagall Act, also known as the Banking Act of 1933, the activity requires commercial banks and banking activity investment to be segregated by law.
For 66 years, the Glass-Steagall was the law of the land. Under the Glass-Steagall, investment banks can not capture customer deposits or make commercial loans. Commercial banks, meanwhile, could not engage in high-powered investment banking-type activities.
Glass-Steagall was repealed in 1999 (Thanks Phil Gramm!) By a majority of Republican votes. Thanks to this movement, the blind, stupid giant known as Citigroup born. Before the repeal, Citi had more or less stick to your boring customer deposit point. After the repeal, Citi was free to gorge on things-power and the influence of bank deposits from customers and FDIC insurance on your back … resulted in a trembling mass of financial wreckage now widespread at our feet.
In suggesting that a new "Glass-Steagall-like" reform would be a good idea, Volcker declared enemy of Wall Street. Through the eyes of bankers, leverage without restrictions is good – even if it operates across the country, from time to time – because anything that fattens the kitten at the time of raw is good. To return to the days of the Glass-Steagall would be a step backwards in the eyes of bankers ", as any move that threatened to reduce a permanent power.
The same thought process applies to the adoption of Volcker's "banks and utility companies' idea. This is the idea that any business back-stopped by the government should be a safe and boring business by law. The logic runs something like this: "Do you want to do things exotic sexy? You want to take big risks with their own capital investors? Fine. Just do not do it with taxpayer funds, do not as a government-backed entity, and not expect a bailout if flying. If you want to enjoy the FDIC insurance, "too big to fail" support, or any another form of government support or generosity, then you need to make plain-vanilla restrictions that come with it. "
It seems that a fair exchange, Right? In the eyes of Wall Street, which is exactly the problem.
Maintaining the Agreement
At this time of Wall Street has an agreement very sweet, which some memorably characterized as "socialism for the rich." One can also think of it as "I take the head, is taken down." As in, when a crazy scheme goes well, players get tens or hundreds of millions … but when it does not work out, the taxpayer receives punch with the bill.
If the White House came to embrace the idea of making banks and utilities, as suggested by Volcker, then Wall Street sweet deal disappear. Pleasantly asymmetrical nature of the equation – heads of Wall Street wins, someone loses more lines – would be lost.
And so Most probably this is why Volcker has been gagged. Summers Geithner and live in the back pocket of Wall Street. They are complicit or possibly worse Moreover, the lunar … the task of ensuring that the interests of the true teacher is serving. President Obama seems either not known or not to care. Either way the result is the same … the financial interests of the United States has been more or less kidnapped by an oligarchy calm. Worse, when the specific interests of the oligarchy directly contradict the country's economic interests, which is the country that loses. Every time.
Paul Volcker, however, is not an impostor. There is a mole. Or at least, has shown no clear sign of being such. If Volcker had been "committed", which would be not tow the party line – putting credibility to work in the service of the program, much like Colin Powell and the Iraq war.
One can only speculate as to the thoughts in Paul's head Volcker. I assume your humble editor, however, is that the man feels snooker. It may well have been trapped in the spirit bright glare of the presidential election , 2008 campaign … the idea of a new day, a new broom sweeping clean, and help America out of a serious problem (as did every year before).
But one can only do so much, and good intentions only extend so far. Realizing the truth, the 81-year-old Volcker may well have gone fishing and shrugged.
About the Author
Justice Litle is Editorial Director for Taipan Publishing Group. He is also a regular contributor to Taipan Daily, a free investing and trading e-letter, Executive Editor of Taipan’s Safe Haven Investor and Justice Litle’s Macro Trader.
Gold Price Per Gram Skyrockets! www.kbgold-info.com!
