Will these two events be enough to calm wobbling markets?
Ben Bernake has been re-appointed to a second term as Chairman of the Federal Reserve, while from London, reports have come that Europe will bailout Greece as a last resort to halt its financial crisis from damaging the euro.
The two moves, on either side of the Atlantic, have been absorbing more and more attention in markets that have been slowly selling off from their peaks over the last month.
Both moves had desperation written into them: Bernanke’s re-appointment for a second session was seen as maintaining confidence in the administration of the US economy and in President Obama.
And, stopping the escalation of concern about Greece’s financial position (yes it’s only 2.6% of European GDP, but that’s not the point) was vital to protecting the euro’s strength and position as the world’s second most important currency.
Bernanke’s second term was reaffirmed 70 votes to 30 in the second and final vote by the US Senate, ending the possibility that an unlikely coalition of Democrat Senators facing re-election and a group of mavericks and rightwing Republicans could stop his re-appointment as punishment for “causing” the crunch and recession.
That of course ignored their own, inglorious and highly complicit role in the whole collapse, along with others in the US Upper house. Such a move would have sent a tremor through markets.
For all his errors leading up to the crunch, and in the early stages (underestimating the impact of the subprime collapse, for instance) Bernanke helped stabilise the slumping US financial system in later 2008 and early 2009.
In Europe the whole financial system of the eurozone and beyond has been starting to freak at the prospect of Greece going broke and defaulting on its debts.
Yesterday we told you of the improbable story that the Vampire Squid of Wall Street (AKA Goldman Sachs), was trying to raise money from the Chinese Government to bail out the profligate Greeks.
Today the Greek Government vehemently denied that and attacked speculators for spreading stories.
The Financial Times reported at 17.14 London time:
“The Greek prime minister on Thursday rounded on speculators who are selling his government’s debt, blaming those with “ulterior motives” for his government’s difficulties in financing its debt.”
Just over two hours later, at 19.42, the Financial Times reported:
“The European Union made clear on Thursday it would not abandon Greece and let Athens mounting debt crisis jeopardise the eurozone, even as Germany and France played down suggestions they had already formulated an emergency response scheme.”
“According to high-level EU officials, Greece would in the last resort receive emergency support in an operation involving eurozone governments and the Commission but not the International Monetary Fund.”
So the reality is that while the Americans rescued car companies, banks, insurance companies and mortgage insurers, as well as helping make bankers rich, but vilified, the European Commission is heading for the first sovereign bailout. Not even that option was offered to poor old Iceland.
But Iceland was small and outside the inner group of the eurozone, the 17 countries that share the euro. Threaten that, as Greece is doing, with yields on its bonds continuing to rise as more and more holders of its debt sell (someone is buying!) and suddenly the wagons gather and a bailout is offered.
The Financial Times said that:
“Eurozone countries and EU authorities are reluctant to spell out how they would assist Greece, for fear that it would relax pressure on Athens to attack its problems and unsettle rattled financial markets.”
Seeing that Greece is a serial avoider of its financial and other responsibilities and has been forging and fudging its accounts, statistics and other measures since it joined the euro, who is to know the real position of the country. Maybe the only way we will find out for certain is when Greece’s cheques start bouncing.
Bernanke is home and hosed, Greece is a continuing story. The credit crisis might have eased, but it hasn’t gone away.
A pity about Bernanke but whoever is boss of the most powerful institution in the world doesn’t matter. It is the institution that is the blight on humanity (my view). Bernanke is the man who reigns supine before the world’s banking elite who own the American Central Bank, a toxic institution that Presidents Jefferson (poisoned), Madison, Jackson (attempted assassination), Lincoln (assassinated) McKinley (assassinated), Harding (assassinated), Kennedy (assassinated) fought against during their terms not to mention congressmen Lindburgh, McFadgen (poisoned), Cox (died suddenly), Reece (closed down) and more recently Paul and Kucinich. Incidentally Executive order 101.11 to abolish the Fed still exists today so there is no problem in getting rid of it if someone has the bottle.
The Fed is not part of the US Govt but through a series of magic tricks throughout the preceding years, in 1914 it became responsible for controlling the biggest economy in the world . Poor Woodrow Wilson later lamented how he had been duped into signing into law, the Federal Reserve System Act and the Federal Income Tax Act, both of which are unconstitutional.
Here is what happens as I understand it. The Fed (a privately owned bank) prints the money and then loans it at interest to the US govt to spend. In return it receives the pledges of the American people in the form of US Treasury Bills. Neat eh?
The Fed as best I can determine is a corrupt privately owned institution serving its own as well as its insider cabal’s interests at the expense of the American people and the world. If Ron Paul’s Audit the Fed bill is supported by the feckless US Senate in their version (it already has House of Reps backing), then only Obama stands in its way. That will prove once and for all where this man’s loyalties truly lie or whether his knowledge of the history of American presidents holds sway.
I might bet $100 on that but maybe the people’s champion will surprise. Just remember what happened to every other president who has opposed the Fed.
So Bernanke Schmenanke doesn’t mean a fig. His days are numbered no matter what.
For America and the world, its abolish the Fed or Bust!
Richard Wilson – you have just confirmed my suspicions that you’re a conspiratorial nutcase. Bit of LaRouche in there?
Go read the Congressional records – The Reece Committee or the Cox Committee reports, or The Creature from Jekyll Island by Edward Griffin for starters MS.
Better still get it from the horses mouth. Go read “Modern Money Mechanics” by The Federal Reseve Bank of Chicago. I would also be happy to reel off a series of presidential quotes to make you feel better if you are having cognitive dissonance problems.
Lyndon Larouche knows a lot of the history of this con trick but his take on things is vastly different from mine. He thinks Rooseveld was a hero whereas I think he sold out the American people when he confiscated their gold and ensured their ongoing poverty with his ridiculous New Deal (Socialism for Dummies). It took a contrived war to kickstart the world and leave the US as the only superpower. And before you go Ooh Ahh… you might read Hoover Institute researcher Anthony Sutton’s work on “Wall Street and the Rise of Hitler”. Sutton spent several years examining Congressional records and insider documents in his capacity as Hoover Institute researcher during the 1970’s and noted:
“This is the third and final volume of a trilogy describing the role of the American corporate socialists, otherwise known as the Wall Street financial elite, in three significant twentieth-century historical events: the 1917 Lenin-Trotsky Revolutionin Russia, the 1933 election of Franklin D. Roosevelt in the United States, and the 1933 seizure of power by Adolf Hitler in Germany.
Each of these events introduced some variant of socialism into a major country — i.e., Bolshevik socialism in Russia, New Deal socialism in the United States, and National socialism in Germany.
Contemporary academic histories, with perhaps the sole exception of Carroll Quigley’s Tragedy And Hope, ignore this evidence. On the other hand, it is understandable that universities and research organizations, dependent on financial aid from foundations that are controlled by this
same New York financial elite, would hardly want to support and to publish research on these aspects of international politics. It is also eminently clear from the evidence in this trilogy that “public-spirited businessmen” do not journey to Washington as lobbyists and
administrators in order to serve the United States. They are in Washington to serve their own profit-maximizing interests. Their purpose is not to further a competitive, free-market economy, but to manipulate a politicized regime, call it what you will, to their own advantage.
It is business manipulation of Hitler’s accession to power in March 1933 that is the topic of Wall Street and the Rise of Hitler”.
ANTONY C. SUTTON
July, 1976
This Wall Street financial elite owns the Fed.