How many of you have heard of this? I have mentioned it a time or two, but my focus remains on domestic economics.
It was the idea, as I recall, of John Maynard Keynes, Hjalmar Schacht (“Hitler’s Financier”, I believe was one of his nicknames), and, if memory serves, Montagu Norman, the President of the Bank of England for some time, and a likely participant in the dollar inflation whose end brought on the stock market crash of 1929. Google, of course, no longer readily pops up the pages I’m looking for. Why they apparently feel so little shame interfering in the free exhange of opinion and information, I have no idea. Sometimes it seems as if the accumulation of great wealth, especially when combined with recalling the methods used, creates crises of conscience for which no remedy short of working tirelessly to force other people to give up their wealth will do.
Or perhaps they are merely ignorant of basic economics and history. They will not have learned them in most American universities.
In any event, look at a recent report:
We need to build improved resolution regimes within jurisdictions and create agreements across them. And we need to continue building a regulatory perimeter that is sufficiently robust and extensive to encompass every institution that acts like a bank.
Who are these people? I don’t have time to do exhaustive research, but let me submit one idea, and another idea which was the original point of this post.
This group is an organization of Central Bankers, which is apparently quite literally working on redesigning our international financial system with no feedback from any of the sovereign governments involved.
Ben Bernanke, for example, went to Basel II, and he can sign what he wants, because he does not have to ask for Congressional approval for ANYTHING. Other than hyperventilate, there was nothing any member of Congress, the President, or the Supreme Court could have done to stop Bernanke from his money printing schemes that, unless I miss my mark, went almost exclusively overseas, to people and parts unknown. As I point out often, THIS IS INSANITY.
But consider the even greater insulation from the opinions of those whose lives they are affecting profoundly–if invisibly–of a GROUP of people like Ben Bernanke. I don’t know how most central banks work, but I suspect many of them are much like the Fed, largely insulated from “political pressure”, which is to say accountability. These people, who stay in the best hotels, drink the best wine, and chase the finest hookers, are literally writing our financial destiny without even asking us.
The main point I wanted to make is that the only concrete detail from the Basel II meetings that I understood was that bank reserve ratios will be raised, starting about 2016, if memory serves. This is one of those things where you announce it, but it is so far out nobody squeaks about it, then it comes, and they can point out with justice that we were warned.
Let’s return to my favorite tax table.
What will be happening in 2016, according to Obama’s people? We will be taking in $3 trillion and spending $3.5 trillion, in inflation adjusted dollars. Put another way, tax receipts are scheduled to increase by 50% over 2011 (1.9 trillion) in five years. How does this happen? PFM: pure fucking magic.
This is patent nonsense. We are not going to raise tax revenues that much without causing major economic dislocation in the process, which in turn will horribly impede the economic growth that HAS to happen to increase the tax base that much. No possible tax increases on the “rich” could amount to more than a small fraction of what will be needed.
So what will we have to do? Borrow, borrow, borrow. So we have on the one hand the largest economy on the planet sitting in the corner with a duncecap on, and begging for money, and we have the international financial system engaging in DEFLATIONARY policies.
For those who don’t read much, the inflation/deflation cycles is the most basic form of economic assault. It was plainly the cause of the Great Depression, which was simply used by FDR, in sustained acts of amoral political cynicism, to engineer a political order and propaganda regime that got him elected 4 times, despite assiduously pursuing over long periods of time economically ruinous ideas, and causing thereby unprecedented suffering.
No conspiracy theory is needed to point out that policy is being made without the input of our elected representatives.
The BIS, the IMF, the World Bank: we have to end them all.