Glass-Steagall Act: Panacea or Just a Single Piece of the Puzzle?

The U.S. and its promissory notes of today are of ghostly contrast to their former utility; a certificate entitling the bearer to gold. Banking certainly revolutionized transactions, and promissory notes of the past did allow the bearers to make payment without transporting around their gold, however, once America divorced the certificate from entitling the bearer to gold, these promissory notes were only worth the confidence that people had in them. Goodbye intrinsic value.

According to textbooks and most professors, central banks inflate the money supply by the money multiplier theory, although I believe the ‘credit creation theory’ is more accurate (the public somewhat still believes in financial intermediation theory, although this is not a surprise as the education system leaves much to be desired in these matters). This chicanery has allowed a privileged few to benefit from the manipulation of the gold price, LIBOR, FOREX, securities, and given birth to the odious and colossal derivatives leviathan. Perhaps this issue deserves some scrutiny? Why do I doubt Bernie Sanders will sincerely take on the money men? Perhaps Andrew Jackson could shed some light on this?

Problems? A class of privileged, rent-seeking parasites that have disproportionate influence over legislation. Central banking and misguided neo-Keynesian economic theories together responsible for pushing America into an abyss of wage stagnation, debt, misadventure, and lost productivity. So, where to now in regard to the federal funds rate? Languishing at 0-0.25 upper bound, there is very little room for monetary stimulus if another crisis were to hit. Perhaps it’s time to bail in the chosen banks with other peoples money? The enormous imbalances created by loose monetary policy, the taxpayer funded bail outs of the insolvent and fraudulent banking establishment, the over reliance on borrowing by issuance of debt securities and debt monetization. The Federal reserve balance sheet of roughly 4.5 trillion dollars, further quantitative easing looking imminent, disingenuous unemployment and inflation statistics. How will Bernie Sanders fix this utter nightmare? Tax increases and the reinstatement of the Glass-Steagall Act? If you open your door, you may hear my laughter echoing from the other side of the planet?

The problem facing America is beyond the Democrat-Republican voting paradigm. The obsession with political correctness and partisanship has restricted public discourse, and left the intelligentsia divided and cowardly. An unknown portion of them live in fear of character assassination, social ostracism, termination of employment, if they dare stray from the sanctioned and popular narrative propagated in the media, popular culture, universities, and government. The dumb majority are not capable of rational thought, and are defenseless against the fallacious rhetoric of their leaders. Is Bernie Sanders really seeking change, or merely rearranging the deck chairs on the titanic?

Your three branches of government are compromised. They are concerned solely with their career, and their contemporaries. Is it any wonder there are so many parasites sucking the life blood out of the USA? It is amazing it hasn’t collapsed already. I put this down to having the global reserve currency privilege, an expanding central bank balance sheet, and a population of despondent, docile, apathetic, indifferent, corrupt, celebrity worshiping imbeciles, still unaware of the crisis they are in. If people are not interested in educating themselves, if they refrain from challenging their abilities to critically think and analyze the fallacious rhetoric of their democratically elected leaders, then parasitic rent-seeking elites will continue to wield disproportionate influence on legislation, and finance both sides. Imagine if Greece had the world reserve currency and their own central bank free to expand its balance sheet like the Federal Reserve does?

How are these S&P500 companies borrowing the credit to buy back their stocks? Has it anything to do with the Federal Reserve and its interest rates? Like the PBOC in China, the central banks are fighting the market to keep the ponzi scheme afloat. The BOJ is the main purchaser of Japanese treasuries. The FED may purchase debt securities, mortgage backed securities, it may participate in the naked shorting of the gold futures via proxies in JPM. Is anyone still in denial that we have allowed financial cartels to dominate and enact such ruinous policies. We are being extracted. Power and control isn’t Republican or Democrat, it is above politics.

Since the dumb majority are content to distract themselves with television, sport, alcohol, or whatever, and the intelligentsia have lost their balls in the guillotine of political correctness, is it wrong that I have decided to take pleasure from watching the show come crashing down, and the pursuant nightmare that will follow? Humans aren’t that great at identifying slow-moving disasters, it needs to be fast moving and direct.

Which populist demagogue will be elected next?

 

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3 thoughts on “Glass-Steagall Act: Panacea or Just a Single Piece of the Puzzle?

  1. http://home.earthlink.net/~gfeldmeth/chart.art.html

    Articles of Confederation vs. the Constitution (confederation served freedom-loving people well until co-opted)

    The following chart compares some of the provisions of the Articles of Confederation with those in the Constitution.
    It’s important to note that most commentators see the Articles period (1781-1789) as a weak one in terms of governmental power.
    Whether that is a positive or negative for the United States depends on one’s point of view regarding the size and influence of a national government.
    Libertarians would view the Articles period as the pinnacle of American freedom, while those favoring a strong central government would see it as a failure.

    Articles of Confederation vs Constitution

    Levying taxes
    Congress could request states to pay taxes
    Congress has right to levy taxes on individuals

    Federal courts
    No system of federal courts
    Court system created to deal with issues between citizens, states

    Regulation of trade
    No provision to regulate interstate trade
    Congress has right to regulate trade between states

    Executive
    No executive with power. President of U.S. merely presided over Congress
    Executive branch headed by President who chooses Cabinet and has checks on power of judiciary and legislature

    Amending document
    13/13 needed to amend Articles
    2/3 of both houses of Congress plus 3/4 of state legislatures or national convention

    Representation of states
    Each state received 1 vote regardless of size
    Upper house (Senate) with 2 votes; lower house (House of Representatives) based on population

    Raising an army
    Congress could not draft troops, dependent on states to contribute forces
    Congress can raise an army to deal with military situations

    Interstate commerce
    No control of trade between states
    Interstate commerce controlled by Congress

    Disputes between states
    Complicated system of arbitration
    Federal court system to handle disputes

    Sovereignty
    Sovereignty resides in states
    Constitution the supreme law of the land

    Passing laws
    9/13 needed to approve legislation
    50%+1 of both houses plus signature of President

    Please cite this source when appropriate:

    Feldmeth, Greg D. “U.S. History Resources”
    http://home.earthlink.net/~gfeldmeth/USHistory.html (31 March 1998).

    Back to Outlines & Charts Index

    Back to U.S. History Resources main page.

  2. ‘is it wrong …’ If you are trapped in the Theatre of the Absurd, all exits are chained shut, stage left and stage right exeunt in the same abysmal direction, and the decades long Mad Hatter’s tragicomedy is booked for decades more; then why not raise a glass, laugh and toast the show and laugh …

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