Rick writes: "Yes. Volcker. He dispenses some nasty tasting medicine. He was appointed by Carter to do the dirty work of wringing out inflation. He did it by raising rates to 20% in 1981."
RESPONSE:
VOLCKER may be a 1 trick pony, Rick.
My arguments?
1)
Volcker has disagreed vocally about Ben's handling of this situation, calling it "barely legal" in one excerpt, and wondering aloud about the legalities of CB Ben's responses in other published direct quotations.
2)
This current OTC crisis cannot be addressed by either raising nor lowering interest rates. That's been amply demo'd to my satisfaction.
3)
Rick continues:
"This crap would not have happened on his watch, the dollar being world currency or not."
RESPONSE:
Oh, but Rick... THIS OTC EXPLORATION AND EXPLOSION DID HAPPEN ON VOLCKER'S WATCH, and he's not owning up to it!! Examination of the calendar convicts him of his complicity.
HE WAS the retained Central Banker Chair on Reagan's watch. He either didn't understand the exploration and poliferation of the OTC confetti that was happening right under his nose, or V. chose to turn a blind eye. Either way, it began in the '87/'88 years of Reagan's reign, while Paul V. was on duty.
Turning to him now, and listening to his advice with only a track record of hiking rates to "wring out inflation" now is like retaining the chief architect of the Titanic to rebuild the ship of state.
Volcker scares the hell out of me, and inflation is not only falsified currently, hyperinflation is a'coming, on that I suspect you and I both agree.
Now, V. endorses openly, as of this very week, this land grab, this Goldman Sach's engineered, Rubin sponsored, Obama promoted, Askenazi approved emergency OTC deriv re: mortgages only solution. What hubris.
Rick continues: "When Bernanke was lowering rates, Volcker would have raised them.
Response:
Based upon what metric, Rick... Where did the appearance of inflation arise, providing the one trick Volcker pony his patented "excuse" for hiking rates during this Bernake term?
I believe you are arguing that higher interest rates would have choked off people buying houses, and builders building houses, and quelling lax mortgage qualification underwriting. I frankly don't see the connection.
Rick continues:
"The derivatives are a good point. They were created outside the realm of regulation and are still a huge unknown here. Fingers crossed. Maybe we will pronounce them a bad experiment. Same with hedge funds."
RESPONSE:
Not as long as Volcker is the "new and improved old Titanic architect, giving the CB advice.
Rick continues:
Deregulation was a good idea in Reagan's day. However, the Republicans since 1994 have turned it into dogma. In 2000, Phil Gramm ultimately removed banking regulations put in place by FDR to prevent another Depression. Bush has filled government agencies with people told to look the other way."
RESPONSE:
Well, my friend, Sarbanes and Oxley obviously didn't get that "Bush" memo to look the other way. Quite the contrary!
GOD BLESS those two for surfacing the OTC Deriv submarine, embedded in this run amuck culture of greed!
Had it not been for Sarbanes and Oxley requiring MARK TO MARKET accounting for this OTC SIV paper blizzard, on the books of
Countrywide,
Merrill Lynch,
Bear Stearns,
GS,
Morgan Stanley,
Citibank,
Bank America,
Wachovia,
WaMu,
Wells Fargo,
US Bank,
Indy Mac (who was the largest Reverse Mortgage originator in the nation)
and the other 790 some odd "financial institutions we can no longer short"
....yes, if it wasn't for S&O when they created and GUTSY passed "the sanity in accounting" bills into law, we would have never known for the most part, just how doomed we are.
While Phil Gramm may be the chump, Sarbanes and Oxley are MY heroes.
Rick continues:
"Now we have no choice but to move back the other way. And all of us PM investors will have to wonder how Paul Volcker might influence the economy and the POG if Obama is elected.
"That is probably a very worthwhile discussion here.
"I wonder if he is stunned by the devastation."
Response
It would appear he is dumbfounded and confounded both. Toss in conflicted, and backing the wrong horse, aka a black liberation theology apologist who would rather "hug and mug" for the camera than actually propose a bill or vote for one during his 20 months in the senate, well, Volcker is just another bad running mate choice from where I sit.
We're in for some reeeeeally bad economic years going forward if BO is elected.
Volcker is no saviour, sorry. |
