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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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ajtj99
To: bull_dozer who wrote (41356)10/29/2021 2:36:47 PM
From: Sun Tzu1 Recommendation   of 97263
 
I strongly suspect they are "paraphrasing" him to make a clickbait. I like people who dare to think out of the box. Except for #3, the other 4 are good ideas if implemented properly:

>> (1) Moving all commercial bank deposits from commercial banks to so-called FedAccounts at the Federal Reserve;

This will achieve a couple of good things: (a) It keeps the assets safe as the Fed can never go bankrupt or experience a run on the bank (b) This means that we'll rarely ever have to bail out the banks again since their failure will not have an outlier effect on the economy.


>> (4) Eliminate the Federal Deposit Insurance Corporation (FDIC) that insures bank deposits;

This goes with above. If the deposits are at the Fed, then you don't need FDIC.

>> (2) Allowing the Fed, in “extreme and rare circumstances, when the Fed is unable to control inflation by raising interest rates,” to confiscate deposits from these Fed Accounts in order to tighten monetary policy;

More likely he wants some control over use of those accounts as collateral for what the money will be used for. He may for example not allow some companies to barrow money to buy back their stock if he perceived the market to be in a bubble and the cashflow iffy. This "confiscation" can happen if the bank puts forth different requirements for collaterals and interest rates for different uses. IF I am right, it a more fire tuned version of what the commercial banks are supposed to be doing but never do b/c they know the Fed will always bail them out.


>> (5) Consolidate all bank regulatory functions at the OCC – which Omarova has been nominated to head.

I don't enough about the checks and balances of the regulatory bodies, but the US has had a financial crisis once every 10 years like clockwork. Clearly something needs to change in the governance of the finance industry.

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PS: I agree with AJ that this guy should not have this job. The right person is the chairman of PBOC <G>

PPS: Much of the world is envious of the fine grain policy controls Chinese regulators have. Unfortunately for China, it's regulators are still inexperienced and blunder.
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