Liberty Reborn

The federal government already has too many of its grubby little fingers in the banking system. And they want even more. Their attack dog (aka the Fed) is own the prowl.

The Fed has been criticized for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers.

A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region’s economy to its knees.

It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.

Scandinavia’s bank rescue proved successful and is now a model for central bankers, unlike Japan’s drawn-out response, where ailing banks were propped up in a half-public limbo for years.

Yes, the Scandinavian solution was so “successful” that even with as bad as the U.S. Dollar is trading against some currencies, it is still worth 5x as much as the Norway Kroner, nearly 6x as much as the Sweden Kroner, and 3.75x as much as the Finland Markkaa which is no longer even used. Oops.

Now, technically the “Fed” is not the federal government but also technically is the federal government. It does have private components, but it is indebted to the federal government for its power. And if you think for one second the government cannot take it over you haven’t studied the history of how communists and socialist seize power and what they do with it.

First the government creates problems like demanding banks loan money to bad risks. Then when those risks crash the system, they send in their boys to solve the problem that they created and have them take over. And then they’ll take over the Fed at some point down the road and make your banking account federal property.

The proper solution is for government to stop demanding the banks do dumb things with their money. Then when the banks do, just let them go under. That would solve a lot of problems.

Sure, it means that Frank who works part time at McDonalds won’t be able to get a loan for a $500,000 home. But would that really be a bad thing?

This entry was posted on Friday, April 4th, 2008 at 2:06 pm and is filed under J.J. Jackson's Daily Opinion. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.