Fed: No big banks will be allowed to fail
Is this any real surprise? Of the 19 major banks undergoing so-called government “stress tests”, none will be allowed to fail if the recession worsens. The Fed has effectively promised to print as much money as it deems necessary to prop up the banking system. Most banks are considered to be well-capitalized, or at least claim to be, but some banking giants may be facing further deterioration due to increasing unemployment, falling GDP & home prices, surging credit defaults, and a potential commercial real estate crisis on the horizon.
The Fed has already printed, loaned, spent, and guaranteed almost $13 trillion to rescue the financial system. Since January, the value of the US Dollar has already dropped about 1.5%.
Some claim the Fed is laying the foundation for a future surge in inflation. Others maintain the Fed is preventing the onset of the Great Depression II. Some believe the “too big to fail” philosophy will prevent a catastrophic meltdown. Others hold that the “too big to fail” philosophy will merely extend the crisis.
What do you say?
Read the article here.
Jim Wahler said:
The more fiat money they authorize (It’s no longer necessary to PRINT it.) the lower the value of the dollar will go.
Yes. What the FED is doing pretty well guarantees future inflation on a BIG scale.
No. They are not ‘preventing’ anything. They are merely delaying the inevitable.
‘Too big to fail’ is a philosophical economics idiocy that creates failure. Bankruptcy laws don’t eliminate a company, any more than they eliminate an individual. They simply allow the company to resize itself by selling some of it’s assets and writing off some of their debts. The assets they sell can then be used by someone, or another company, for better purposes.
I have created a new Maxim:
If government is doing it, it will either fail, or destroy something in the process.
I believe that, with a few minor exceptions, History proves this.
I don’t claim to be an expert, but that’s what I say.
April 24th, 2009 at 1:31 pm
Marshall brown said:
it is a whole feel good thing. They give you credit for helping out, but none can fish. Let them fail.
April 24th, 2009 at 3:55 pm
Cherie Overbaugh said:
RE: JIM WAHLER…Right on Jim…If we don’t learn from history it is bound to repeat itself..
April 24th, 2009 at 4:40 pm
Nanette Parratto-Wagner said:
Did these numbnuts at Treasury not learn any history? They are repeating the mistakes that were made in Germany prior to World War II. They are repeating the mistakes that were made in France in the mid 19th century. They are repeating the mistakes that have been made by every government prior to its own collapse and demise. Could this really be an innocent error on their part or this intentional?
April 25th, 2009 at 3:52 pm
Todd Kading said:
Power Grab. Plain and simple.
April 25th, 2009 at 9:21 pm