The Fed is making three kinds of bad loans. First, the Fed is lending to banks that are in bad shape and need the funds badly. They are simply bad risks. If the Fed were a profit-maximizing banker, it would not make such loans, throwing good money after bad. The […]
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FT.com: “AIG has ‘a day’ to stay afloat”
According to the FT: AIG, the troubled insurer that sits at the heart of the financial system, has one more day to come up with the capital to stay afloat, according to David Paterson, New York governor. … Asked how much time he thought AIG had, Mr Paterson replied: “I […]
Read MoreFT.com: “AIG forms keystone of financial system”
According to the FT: The head of equities at one of the UK’s biggest investors said the repercussions should AIG fail were “potentially bigger than Lehmans. It is too big to go bust. If it does, we will be eating baked beans out of a tin.” Alarmist perhaps, but the […]
Read MoreMises.org: “Has Capitalism Failed?”
Reflecting on the demise of Lehman Brothers and on Bank of America’s purchase of Merrill Lynch, I revisited an article by recent US presidential candidate Ron Paul, posted on mises.org: Capitalism should not be condemned, since we haven’t had capitalism. A system of capitalism presumes sound money, not fiat money […]
Read Moreft.com: “Wall Street in turmoil”
According to the FT: Wall Street was in turmoil on Monday as Merrill Lynch found shelter in a $50bn takeover by Bank of America and Lehman Brothers said it would file for bankruptcy protection. Now we get to find out what happens when the public is not forced to support a major financial institution. And what […]
Read MoreFT.com: House prices show sharpest monthly fall since 1992
More housing market woe: The FT House Price Index recorded a drop of 1.3 per cent in August, the single largest monthly fall since October 1992, according to the latest figures released on Friday. This article places the problem into another perspective, that of the Austrian School of economics: The […]
Read MoreInvestor Jim Rogers: US is “More Communist than China”
Investor Jim Rogers, CEO of Rogers Holdings, incredibly, told CNBC Europe on Monday that the nationalization of Fannie Mae and Freddie Mac shows that: America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich… it’s […]
Read MoreSharp US money supply contraction
An unprecedented fall in broad money growth in the USA makes for an unhappy set of economic indicators. read more | digg story
Read MoreContinuing a study of money
In continuing my sometimes-reported study of money, I have been reading Milton Friedman’s “Capitalism and Freedom”. After dismissing a thoroughly automatic commodity standard, chiefly on the grounds of practicality, Friedman moves on. Reviewing the establishment and effects of the Federal Reserve System, he writes: No sooner was the [Federal Reserve] […]
Read MoreTelegraph: “We will foot the bill for banks’ excesses”
Is it time for ordinary people to ask how the world’s system of money works? Consider the words of Wright Patman, a US democratic congressman and Chairman of the Committee on Banking and Currency, 1963-1975: I have never yet had anyone who could, through the use of logic and reason, […]
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