Posted on 05/30/2007 9:47:17 AM PDT by Tolerance Sucks Rocks
Today's Financial Times headline ("Spitzer to Streamline Rules for Wall Street") is an example of government allowing good old Yankee free enterprise to become more competitive with other international challengers.
The Financial Times also contains additional evidence of increasing inflationary pressures and of interest rates around the world, particularly in the European Union (E.U).
Meanwhile, in face of growing inflationary evidence and increasing interest rates among our key competitors, our Fed has kept our rates on hold.
While it warns of inflation as its main concern, our Fed appears "frightened" to compete either against inflation or with the rising interest rates of other competing currencies, most notably the Euro, against which it has depreciated by 12.24% in under a year and by about a third in the past two years.
There is a legislative reason why our Fed understandably feels "frightened" and seemingly unwilling to do more that utter warnings of inflation.
In the old days, our country was the undisputed master of the world's economy and our mighty dollar was keenly held, often in preference to gold, as the crucial reserve of other competing nations.
From this dominant position, our past Congress was tempted to give our Fed not just the single mandate, of its competing international central banks, of controlling inflation, but a second (often competing contra) mandate of encouraging economic growth.
This government action made our Fed and thereby our currency, inherently uncompetitive, over the long term. The problem was not evident when our economy remained not just highly competitive but overridingly dominant around the world.
America was so dominant then that it is now hard to relate to in today's world.
When I worked as an investment banker at Morgan Stanley & Co (in the late 1960"s), the market capitalization of just one major U.S. company (IBM) was greater then the total capitalization of all the European Stock exchanges (excluding London) added together!
Today, after a series of Democrat Presidents and the luxurious, almost hedonistic, spread of liberalism in the U.S., the situation is very, very different.
The end of World War II allowed the countries of Europe to compete with the U.S.
The end of the Cold War opened free competition to some 3 billion hard working, tough and hungry people around the world.
Meanwhile, our Congress felt it could carry on in the same hedonistic, high-spending, liberal manner.
The countries of Europe got together, sacrificing much of their individual cultures and sovereignty to compete, on equal terms, in the form of the European Union.
The E.U. is an increasingly competitive threat to the U.S. Today, its stock and government bond markets are larger that those of America, and its currency, the euro, has more units in circulation than the U.S. dollars.
This past January, Germany alone (facing high interest rates and a greatly appreciated currency) knocked us into second place as the world's largest exporter. A month later, China pushed us into third place.
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Yesterday's New York Times ran an article asserting that the E.U. had recently displaced the U.S. as the "economic engine" of the world economy.
Worse still, the Euro has increasingly displaced the U.S. dollar as the "reserve currency" of the world's central banks.
The fact that our dollar was the world's "reserve currency" was of great strategic and economic advantage to our country. Worldwide demand for U.S. dollars allowed the U.S. to have relatively lower interest rates than our main economic competitors. This helped our economic growth, to a crucial degree.
In the "oil shock" of 1973, our Secretary of State Henry Kissinger was able to pull off a major strategic coup by persuading OPEC to take U.S. dollars as the exclusive payment for their oil. This allowed America to inflate with impunity without doing serious damage to our dollar in the foreign exchange markets.
Despite this vastly changed world, our Congress continues to "interfere" and even to threaten far greater "controls" over our free enterprise system.
Worst of all, in the face of a plunging dollar (threatening its credibility as a currency, not just as a reserve currency) and the growing evidence of inflation (despite the "cooked" CPI figures), our Congress continues to leave our Fed in a fettered and highly uncooperative position.
Last week we witnessed the galling experience of delegations of our government facing two of our biggest strategic competitors (China and Iran). The saddest thing of all was to see our negotiators with no "Royal" cards in their hands.
As we said last week, we believe our government must quit bleating and start competing, by freeing up good some old Yankee free enterprise competition (Sarbanes-Oxley, etc).
One place it could start and have immediate effect upon our entire economy would be to free our Fed from its second debilitating mandate to encourage economic growth.
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Free of its government imposed second mandate, our Fed would be put on a level playing field with its competing central banks.
Our dollar would be allowed to compete and so allow American business to compete, not just on price (the downward slope to long term failure) but on the essential long-term success determents of the "Product Marketing Mix", just as Germany and Switzerland have done so successfully for years.
Of course, it will be tough, particularly as interest rates will rise, and our government will have to face their financial realty of the liberal profligate policies by actually paying a market rate for their debt and their social security promises.
We believe that, in order to become truly competitive, our government must face international realty by freeing our Fed. Thus allowing us, the people, to compete.
Regardless of Congressional inaction, we note that at long last, the long bond market is beginning to signal increased interest rates as the yield curve steepens slowly to become more normal and in our view more realistic!
In light of this, we continue to urge our readers to remain averse to accepting the great risks we see as inherent in the price of long bonds.
Maybe you can use your Wikipedia skills to show me a source for Wilson’s apparent “I have unwittingly ruined my country” quote. Or did you make that up to?
They voted before they left.
Its not here...
Have your "sources" been spouting disinformation again?
Dumb people are often susceptible to falling for that sort of thing.
And poor debaters often resort to name calling when they run out of brain power. As do Democrats quite often.
Yes because in 1913 when it might have been a 3 or 4 day train ride back home for Christmas, they would have stuck around for the House vote on 12-22-1913 and the Senate vote on 12-23-1913. Now it overwhelmingly passed in the House, but the Senate vote was 43 yeas, 25 nays, and the rest not voting. I haven’t found an exact number yet, but in 1913 there were 48 states so I assume there were 96 Senators so that leaves 28 not voting, more than enough to have voted it down. Also I find it hard to believe that a bill could be voted on by the House on the 22nd, by the Senate on the 23rd, the two bills reconciled with each other, and the President signs it into law on the 23rd as well. None of this sounds fishy to you??? And you are the self-proclaimed intelligencia????
If it was that important and they were all going to vote against, they should have stayed. But they weren't all going to vote against.
Also I find it hard to believe that a bill could be voted on by the House on the 22nd, by the Senate on the 23rd, the two bills reconciled with each other, and the President signs it into law on the 23rd as well.
They used to be more efficient back then.
None of this sounds fishy to you???
No.
And you are the self-proclaimed intelligencia????
I'm smarter than you. Not a very high hurdle.
I’m glad you think so, humility seems to be your strong point as well. Don’t let your wrists get tired slapping yourself on the back. They used to be more efficient back then, you’re either obtuse or unable to take off your blinders.
Lets look at your convincing argument:
Oh my, yes they have to answer some soft-ball questions every once in awhile. There has never been an audit of the Federal Reserve system. Ooops, not true
And lets talk about that act of Congress, undertaken just prior to the Christmas break when many of the members of Congress had already gone home, it was 1913, no 777’s to jet back and forth on. Ooops, not true again, (if your inference was that it only passed because senators had gone home, forty eight votes plus the tie-breaking vote of vice-President Thomas Marshall would have been sufficient to approve the bill even if all absent votes not already on record had been cast against the bill... And the house approved 298-60.)
Signed by Woodrow Wilson who later said, “I have unwittingly ruined my country”. Ooops, not true once again
It all sounds so on the up and up.
Great debater - Just not too good with the facts.
It's obvious from your posts that you're not very bright. I loved the "We pay the Fed $1 trillion each year". That was classic.
They used to be more efficient back then, you’re either obtuse or unable to take off your blinders.
So why did the 28 Senators leave without voting?
The quote that I found was:" I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.
Allegedly said in 1916 so it will be next to impossible to find concrete proof on Youtube.
The OIG audits I believe are of the Board of Governor's which is only one part of the Federal Reserve System. That'd be like saying the CIA was audited based upon the accounting done at their cafeteria. Let's agree to disagree at this point before more ugly ad hominem attacks are hurled by you and your tag team partner. In my opinion either your last name is Rockefeller or your paycheck comes from the Federal Reserve.
I never said it got 48 votes. I said it needed 48. I posted a link to the google image of Wilsons book that contains your supposed quote. Note the first two sentences you got from your source are not there. You shouldn’t believe all the crap spouted on conspiracy theory websites.
And they left knowing this incredibly important bill (that you think they'd have voted against) would pass?
Either way I forgot the cardinal rule of the internets:
There's more than one? That is a cute picture of you.
Merry Christmas!
"Internets" (sometimes "internets") is a Bushism-turned-catch phrase used humorously to portray the speaker as ignorant about the Internet or about technology in general, or as having a provincial or folksy attitude toward technology (in a similar fashion to portrayals of rednecks' referring to television as "the tee-vee box"). United States President George W. Bush had used the improper pluralization of the word "Internet" publicly during the 2000 election. However, the term gained cachet as an Internet humor meme only following Bush's use of the term in the second presidential election debate on October 8, 2004.
Once again Wikipedia FTW.
That picture says far more about YOU than anyone else. You ought to be ashamed.
Great, let me know when you find a real source. LOL!
Part of the $1 trillion we pay to the Fed each year? LOL!
When I laugh at your silliness, is that an ad hominem attack?
This from a guy with a schlong joke as his signature. Please.
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