Donnerstag, 9. Dezember 2010

Ron Paul bekommt einen neuen Posten

Er wird wohl Vorsitzender dieses Kommittees: United States House Financial Services Subcommittee on Domestic Monetary Policy and Technology. Vielleicht kann er ´mal die Frage klären, ob man QE mit "Geld drucken" umschreiben kann oder nicht.


Anonym hat gesagt…

Dem kann ich mich nur anschliessen:

Ron Paul Is Now Out Of Excuses
The Market Ticker ® - Commentary on The Capital Markets
Posted 2010-12-09 15:31
by Karl Denninger
in Editorial
Ron Paul Is Now Out Of Excuses

There's something particularly delicious when a politician has to start cashing the checks they've been writing with their mouth for more than a decade.

Such a day is today, with Ron Paul, starting in January:

Representative Ron Paul, Texas Republican and author of “End the Fed,” will take control of the House subcommittee that oversees the Federal Reserve.

House Financial Services chairman-elect Spencer Bachus, an Alabama Republican, selected Paul, 75, to lead the panel’s domestic monetary policy subcommittee when their party takes the House majority next month, the committee chairman said today.


I've sat through years of watching Mr. Paul during Humprey-Hawkins "testimony" where he has spent most of his alloted couple of minutes railing about the gold standard and inflation, never putting forward to Mr. Bernanke - or anyone else - an actual question that can be answered, or allowing the deponent to prattle on with abject nonsense.

The excuse of "limited time" and "mission creep" is now gone.

Here's the problem, as I see it. Mr. Paul has an allegedly-laudable claimed goal - ending The Fed, or at least shackling its excesses and outrages.

But he hasn't done anything with this goal, despite multiple years of attempts, other than filing his "End (or Audit) The Fed" bill every session.

Yes, there was some traction this last legislative session with that, and part of it got into Dodd-Frank. And yes, legislation is the art of making sausage - and it's pretty messy.

But that doesn't change the fact that the most-outrageous acts are not about audits at all, but rather intentional blindness when it comes to supervision and allowing essentially-unlimited leverage to be taken by institutions doing knowingly-unsound things.

Such as, for example, having 80% of your loan production be unsound - which we now have under oath testimony on related to one of the TBTF banks under the Fed's putative "supervision."

Then, as Janet Tavakoli put forth in withering detail yesterday, you have the essential characteristics of a Ponzi Scheme, where a more-and-more frenzied pace is necessary to maintain the pyramid as the top of the inverted cone becomes heavier and heavier - lest it all collapse. And Janet did not mince words - she essentially charged criminal conduct occurred and that an organized cover-up was perpetrated.

But perpetrated on whom?

Well, not on the regulators such as FRBNY. That's impossible when you're posting collateral on a daily basis and clearing transactions. Either they clear or they do not! And incidentally, that was Geithner's gig during that period of time - he's complicit here too, although nobody wants to talk about that either.

Bernanke has claimed all along that "nobody could have seen it coming." But we now know this lacks credibility of any sort - not only both did he and Geithner have to have the ability to see it coming it is a near-certainty that they were both explicitly aware. That is, unless you believe that Rubin and others in Citi shared nothing and FRBNY knew nothing to share with the FOMC. Like, for instance, that Lehman had been unable to post good collateral for overnight loans weeks before they blew up, as Citi, among others, had rejected their repos.

Anonym hat gesagt…

Teil 2

That this somehow remained "a secret" from The Fed is flatly impossible. The Fed has alleged supervisors in all these big institutions and every one of them deals with FRBNY on a literal daily basis for routine repo and other overnight operations.

So now we find out - does Mr. Paul have a sack?

And more importantly, is he willing to go where we must if we're going to drain this swamp - to use the "F" word ("Fraud"), to use the "C" word ("Criminal"), to use the "I" word ("Indict") and to use the "P" word ("Prosecute")?

We shall soon see.

Yes, The Fed should lose it's "dual mandate." Yes, The Fed should lose the 13.3 authority it still has (most of which is gone under Dodd-Frank. The Fed should be forced to disgorge all of the instruments it took in and holds that, through any devices, are out of compliance with Section 14, which is all of the MBS and all of the Maiden Lane LLCs. The Fed's "mandate", if we're going to keep something like The Fed, should be zero price inflation over an intermediate (e.g. 5 year) term for core goods and modest deflation in all other goods that reflect advances in technology and decreases in cost. That's what we have in computers and other areas of technology - why is this not part of policy? After all, we have an entire business model in the form of WalMart that is dedicated to the idea of modest deflation and they're "in your face" about it! (What else is "falling prices"?)

Let's cut the crap - if we have sound money - which simply takes an honest accounting and a zero-price-change foundation, then expansion of credit as a means of faking "growth" disappears and so does the ability to run nearly all financial Ponzi schemes. You either actually produce more or you don't - there is no more fake "wealth" produced through asset bubbles (one of which Bernanke publicly claims to be trying to produce right now!), because borrowing becomes relatively expensive - too expensive to do for other than either essential or productive purposes. That is, nobody borrows 100% of a house's price any more, nobody borrows 100% of a car's purchase price over 7 years, and almost nobody borrows except on an emergency basis (e.g. to fix said car) for "retail" purchases. They certainly don't use their house as an ATM machine nor do we have kids borrowing $150,000 for 4-year degrees in Sociology.

Without all that bubble-style credit creation prices contract back to a balance point with actual consumer surplus - that is, extra funds available after the necessities of life are paid for.

I'd love to see Mr. Paul actually do what he claims he wants. For years he and his supporters have been able to hide behind the "I'm only one of 435." That's no longer true - now, with a subcommittee chair seat, he's got a bully pulpit and, assuming the committee chair accedes, subpoena power.

The time for excuses is over, and the time for action has arrived.

You can bet I'll be reporting on whether or not the checks written by Mr. Paul over the previous years actually get cashed, now that he's got the keys to the drawer holding the cash to make 'em good.

I'm skeptical, but willing to be convinced.

Show me.

Oliver Knittel hat gesagt…
Dieser Kommentar wurde vom Autor entfernt.
Oliver Knittel hat gesagt…

Jop Sehe ich ähnlich, jetzt sehen wir ob er " Walks the walk" oder ob er nur " Talks the talk " ist. Ob sich was ändern kann, ist auf einem anderen Blatt , aber Denningers Einwand ist z.t. Berechtigt, denn die bekanntesten Videos sind meists Statements, und keine konkreten Fragen.

Fabio Bossi hat gesagt…

Was für "Excuses"? Wo hat sich Ron Paul denn "versteckt"?
Ich schätze Denninger grundsätzlich, er ist aber auch ein ziemliches Großmaul und Ron Paul hat er u.a. in einem Mail an mich persönlich schon als "Nut Job" bezeichnet. Von mir aus kann er ja gerne seine Skepsis äußern, aber er sollte vielleicht den Ball etwas flacher in puncto Unterstellungen von Charakterschwäche halten.

Oliver Knittel hat gesagt…

Die Verbalentgleisungsgeschichte @ Seh ich genauso wie du. Den rest wird die Zukunft sortieren. :)

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