Generally speaking it is good to be a large Swiss bank.
It hasn’t GONE global. Its long been global and on a massive scale. But China is freaking people out.
Play this game if you want. But understand that it is a game which is run by cronies, for cronies, and that cronies are very fallible. Can you handle the kind of downdraft which may come when reality catches up with the hubris of central bankers?
It’s an important question, and one which should be asked when things (in the USA) are still relatively calm.
The word “cascade” comes to mind. China is the world’s second largest economy. The continued crash has real implications for the rest of the world economically and probably politically. What those implications are at his point we do not know but it is certainly time now to keep one’s eyes on the horizon.
The Export-Import Bank (Ex-Im) provided millions of dollars in financing to a Miami small business perpetrating a Ponzi scheme, according to a recent report by the Department of Justice (DOJ). The business had already defrauded private lenders out of $8 million in loans and used $2 million in Ex-Im financing to pay off these lenders and continue their scam.
The business, run by three family members defrauded private lenders out of millions of dollars by creating fictitious invoices for the sale of merchandise that never occurred.
Ralph Nader is one our favorites here at ACC. We disagree with him on a myriad of issues. He likes government quite a lot. We, well are more skeptical of the state. Saying that though, there is no doubt that Mr. Nader is an enemy of crony capitalism and one of the good guys running around Washington. (There are a few.)
Below is a declaration. A call to town halls. A call to take the rhetorical fight directly to our elected officials during their summer recess. If our representatives are going to ignore us in DC they will have a much harder time ignoring us at community meetings and grandstanding events. Turn on your iPhones. Record responses to hard questions. See what happens.
They do work for us.
Caterpillar sales have been declining for over 2 years. Latin American sales have fallen off a cliff. Caterpillar makes heavy industry construction equipment. Draw your own conclusions.
It is interesting to note that the decline is not as sharp as during the “Great Recession,” it’s more stretched out and has been shallower. However it has been steady and steady declines are the thing of maturing depressions.
In the effort to inject interesting economic thought into the discussion at ACC we present the following video by Jeff Deist recorded at the Mises Institute. This lecture will likely challenge many of your assumptions about money.
We have a copy of this book and will be doing a review of it soon. In the meantime, if you’re headed to the beach or lake this summer this might be a good one to take along.*
As I watch the calamity in Greece and the chaos in China I am struck by how much things have changed in 10 years. “Wealth” looks very different to many people these days.
Wealth is time with one’s family. Wealth is time to think. Wealth is a good roof over one’s head. Wealth is good food and good friends. Wealth is walking through a field first thing in the morning with few bills to worry about. Wealth is swimming in the ocean and catching flounder in the surf. Wealth is peace of mind.
Be thankful you aren’t an unskilled worker in Athens or a newly middle class manager in Shenzen who has leveraged his home to play the stock market. Be thankful that you are not feeling the hottest of the world’s economic flames. At the same time be aware that fires do spread.
The Export-Import Bank’s charter was not renewed earlier this summer. The vehicle for blatant crony capitalism, “Boeing’s bank,” closed its eyes. But it is not dead – yet.
Most Dems and a good number of particularly corporate inclined Republicans in the Senate and the House would like to see the bank resurrected. Ex-Im means big bucks to some very large companies. As such the lobbyists have descended on Capitol Hill en masse.
Put this thing into the ground. Or better yet, cremate it.
Obamacare is a giant jack. And no, single payer is not the solution. That is the last thing we need. Single payer is an excuse for all sorts of other cronyism. Not to mention that socializing healthcare in the 21st Century is just a backward idea. We should be opening up healthcare not centralizing it.
There is some debate around here as to the world’s most crony company. There are many candidates but consistently in the top 5 or so is Goldman Sachs, Government Sachs.
Few companies have exploited the taxpayer and political connections to the extent Goldman has. Truly it is a company built fundamentally on cronyism.
In 2008 Goldman Sachs was leveraged more than 100 to 1 on its assets. (That is probably a conservative estimate.) When the economic tide turned it was fully exposed. It should have died the disgraced death it deserved. It should have been crushed under the wheel of the market.
Goldman however had a former CEO at Treasury, Hank Paulson, who bailed out his buddies with money taken from taxpayers.
The a new front opens up for the Federal Reserve.
Also one definitely gets the sense that the recent decline in gold is looking more and more like an opportunity to put away some real wealth at relatively low cost. This is definitely on the mind of the Chinese, and perhaps the guys in 10 gallon hats.
This is a very interesting article. The author basically makes the case that there are 2 distinct kinds of billionaires, crony and generally non-crony. And he argues that though non-crony billionaires have little if any impact on growth (I haven’t looked at his data but this doesn’t seem crazy to me.) the crony billionaires have a huge negative impact on economic growth.
Though the author implies that that non-crony billionaires are a neutral factor (in growth terms) in an economy is some sort of surprise to we free market types, it is not. Sub-billionaires (the non-crony version) are probably WAY more important to growth. They are still building fortunes, and businesses, etc. In other words Bill Gates might not have that much impact on growth now but he sure as heck did as he was building Microsoft.
As we’ve said before, the Fed is independent. It is NOT sovereign.
But the Fed thinks that it is above Congress, and the law in many regards. That any effort to shine light into the dark halls of the Eccles Building is too much to ask. That even a little bit of sun would undermine the system.
Consider that for a moment. If that were true, which it’s not, but if it were, I ask whether we should be concerned that Federal Reserve system is so fragile.