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Posts Tagged ‘Banks’

Arkady at Right Condition Blog has an interesting essay on Shay’s Rebellion and lessons for today’s Big Government. A snippet:

Believe it or not there are two very important lessons we can learn today from a 1786 rebellion. For those not familiar, Shays’ rebellion took place in Massachusetts and involved Daniel Shays and hundreds of other poor farmers crushed by taxes and debt to launch a full scale rebellion.  However the story is not about citizens rioting because of injustices they felt were thrust upon them, but a state and federal government printing “money” to finance a war and ultimately failing to deliver the gold and silver promised to the holders of the printed “money”.

Alexander Hamilton wrote in Federalist #6:

“If Shays had not been a desperate debtor, it is much to be doubted whether Massachusetts would have been plunged into a civil war.”

Think how often a similar tactic has been employed recently using a very similar approach.

  • The Federal Reserve was created to prevent banking panics and preserve the dollar strength, even though the state and federal government encouraged regional banks to print money,create inflation and actually honored suspension of specie payment (paying out in gold/silver).
  • Social Security was created to handle people’s retirements, even though Hoover/FDR prolonged the Great Depression by destroying companies and private pensions with price fixing, crushing taxation and unprecedented federal intervention.
  • Congress wants to pass universal coverage because HMOs are too expensive and too many Americas are uninsured, even though Congress essentially created the HMOs while subsidizing their costs via federal tax credits to employers.

What is the second lesson you are wondering?  This is the very lesson that Hamilton never understood as can be demonstrated by his central bank, an institution he agitated for despite the objection of Madison and Jefferson.  Government cannot be allowed to print money.  It is really that simple.  Whether it was via the individual state banks during the colonial times or the “private” Federal Reserve, the result is always the same.  Printing money systematically bankrupts and impoverishes the citizenry allowing governments to spend with impunity.

Over two hundred years ago Daniel Shays and his neighbors felt the injustice and cruelty of a ruling class without truly understanding how he and others were being systematically plundered.  Not much has changed.

There’s much, much more of this very thoughtful essay at Right Condition Blog. You’ll wonder why you haven’t bookmarked it yet.

~Johnny~

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Example One: A Federal judge ruled on Fox news’ Freedom of Information Request from the Federal Reserve:

TELEVISION-US-FEDERALRESERVE-FOXNEWSNEW YORK (Reuters) – A U.S. judge on Thursday denied a bid by Fox News Network LLC seeking details from the Board of Governors of the Federal Reserve about the central bank’s loans to companies affected by the financial crisis.

The owner of the Fox Business cable network made an initial request for documents in November last year under the Freedom of Information Act (FOIA) about the companies and funds they received between August 2007 and November 2008.

“In all other respects, I grant the Board’s motion and deny Fox’s motion, finding that the Board performed an adequate search and that Exemption 4 permits the Board not to disclose the documents that Fox seeks.”

Under Exemption 4 of the FOIA, an agency must demonstrate that the information sought is a “trade secret” or “commercial or financial” in character and “obtained from a person” and “privileged and confidential.”

In short, the Federal Reserve is not part of the Federal Government; it’s a private company that is federally chartered to manage federal monies. So, no Freedom of information act applies.

I’m reasonably certain that established a precedent. I can’t think of any private company that was engaged by the Federal Government that didn’t have to comply wiht FOIA requests before. I may be wrong . . . but I doubt it.

Meanwhile Senator Chris Dodd, in the political fight of his life, has a fellow Democrap covering his substantial behind:

chris-dodd-pissedWASHINGTON (AP) – House Democrats have declined to subpoena available records that might reveal whether other members of Congress got discounted VIP mortgages from subprime lender Countrywide Financial Corp. similar to the sweetheart deals given Democratic Sens. Chris Dodd and Kent Conrad.

Republicans say they are willing to risk that the records now held by Bank of America may show that GOP lawmakers were also “friends of Angelo” who got preferential terms on personal mortgages at the behest of then-Countrywide CEO Angelo Mozilo.

Countrywide, after losing billions of dollars on defaulted subprime loans that triggered last year’s financial crisis and the consequent recession, was taken over by Bank of America a year ago.

Rep. Edolphus Towns, D-N.Y., chairman of the House Oversight and Government Reform Committee, said he has other work to do on the causes of and fixes for the financial crisis and will not interfere with other investigations of the VIP loans.

Yep. “Most Ethical Congress in the Last Fifty Years.” Yep.    Suuuuuuure it is.

~Johnny~

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It’s a certified fact of life that due to the requirements for lending by banks, the only people who are qualified to get loans are those who don’t actually need them. If you have the collateral, you really don’t need the loan – but if you need the loan, you probably don’t have the collateral.

Well, this guy had the collateral and the bank still said “No.” Shows you how stupid some MBA’s can be:

roger griffithsDefiant artist Roger Griffiths today made a stand against Westpac (Bank) by withdrawing his $190,000 savings in $20 notes. Mr Griffiths, a loyal Westpac customer for 25 years, decided to withdraw his money after the bank rejected his application for an $80,000 mortgage. “It’s about time normal people took a stand.”

He said the bank turned down his application because he did not have a regular income as an artist. However, he was a successful artist, exhibiting his paintings at the World of Wearable Art complex, in Christchurch and New York, he said.

He wanted to buy a $385,000 property in Mapua, had $200,000 in cash and was going to sell his $110,000 campervan.

That more than met the bank’s criteria for a 20 per cent deposit, and the property which included a home and commercial premises would have returned $500 a week, he said.

He was disappointed when his loan application was rejected, but it was Westpac losing $111 million to Lane Walker Rudkin Industries that tipped his decision to withdraw his money.

“They can lose $110 million with LWR but turn down a normal customer who has never missed a loan payment,” he said. “If they don’t have the trust in me after 25 years, there’s a problem for Westpac.”

Having decided to withdraw his money, he then decided to make it hard for the bank by requesting payment in $20 bills.

He said the Nelson branch told him it did not have that amount and he would have to also go to other branches at Stoke, Richmond and Motueka. However, he insisted the bank have the money ready to collect at 9am today. He then took it to the Nelson Building Society, saying he would rather deal with NBS because it was part of the community.

I can’t quite figure out if this is the stupidest bank in the world; or if it’s just symptomatic of the state of banking today:

bernie madow jumpMr Griffiths’ protest comes after a series of embarrassments for Westpac. On Tuesday its former Alexandra bank manager admitted defrauding the bank of more than $400,000, and it has been left red-faced over the slip-up that allowed $10 million to be wrongly credited to a Rotorua service station co-owner who had since fled to China.

And here’s the part where we see “the stupid is still in operation” at this silly bank:

Westpac media relations manager Craig Dowling said today that when the bank lent money it required certain information to be provided to enable that lending to be done prudently.  “It’s about providing evidence of an ability to meet regular repayments.”

“We would like to welcome Mr Griffiths back. We just need the confidence regular repayments can be met.

I guess that $200,000 in the bank account doesn’t compare to a regular paycheck from, say, a McDonald’s or something.

~Johnny~

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