Central Banking 101: What the Fed Can Do as ‘Lender of Last Resort’ by Ellen Brown

by Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
December 17, 2010

Official portrait of Federal Reserve Chairman ...

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We’ve seen behind the curtain, as the Fed waved its magic liquidity wand over Wall Street. Now it’s time to enlist this tool in the service of the people.

The Fed’s invisible hand first really became visible with the bailout of AIG. House Speaker Nancy Pelosi said in June 2009:

“Many of us were, shall we say, if not surprised, taken aback when the Fed had $80 billion to invest — to put into AIG just out of the blue. All of a sudden we wake up one morning and AIG has received $80 billion from the Fed. . . . So of course we’re saying, Where’s this money come from? ‘Oh, we have it. And not only that, we have more.’”

How much more — $800 billion? $8 trillion?

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Is QE2 The Road To Zimbabwe-style Hyperinflation? Not Likely by Ellen Brown

by Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
December 1, 2010

Unlike Zimbabwe, the U.S. can easily get the currency it needs without being beholden to anyone. But wouldn’t that dilute the value of the currency? No.

A month ago, the bond vigilantes were screaming that the Fed’s QE2 would be the first step on the road to Zimbabwe-style hundred trillion dollar notes. Zimbabwe (the former Rhodesia) is the poster example of what can go wrong when a government pays its bills by printing money. Zimbabwe’s economy collapsed in 2008, when its currency hyperinflated to the point that it was trading with the U.S. dollar at an exchange rate of 10 trillion to 1. On November 29, Cullen Roche wrote in the Pragmatic Capitalist:
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The Stench of US Economic Decay: Russia and China Dump the US Dollar by Dr. Paul Craig Roberts

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by Dr. Paul Craig Roberts
Global Research
November 29, 2010

On Thanksgiving eve the English language China Daily and People’s Daily Online reported that Russia and China have concluded an agreement to abandon the use of the US dollar in their bilateral trade and to use their own currencies in its place.  The Russians and Chinese said that they had taken this step in order to insulate their economies from the risks that have undermined their confidence in the US dollar as a world reserve currency.

This is big news, especially for the news dead Thanksgiving holiday period, but I did not see it reported on Bloomberg, CNN, New York Times or anywhere in the US print or TV media. The ostrich’s head remains in the sand.

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U.S. “Quantitative Easing” is Fracturing the Global Economy by Michael Hudson

https://dandelionsalad.wordpress.com/

by Michael Hudson
www.globalresearch.ca, November 1, 2010

Moreover, it may well be asked whether we can take it for granted that a return to freedom of exchanges is really a question of time. Even if the reply were in the affirmative, it is safe to assume that after a period of freedom the regime of control will be restored as a result of the next economic crisis. (Paul Einzig, Exchange Control (1934)).[1]

Great structural changes in world trade and finance occur quickly – by quantum leaps, not by slow marginal accretions. The 1945-2010 era of relatively open trade, capital movements and foreign exchange markets is being destroyed by a predatory financial opportunism that is breaking the world economy into two spheres: a dollar sphere in which central banks in Europe, Japan and many OPEC and Third World countries hold their reserves the form of U.S. Treasury debt of declining foreign-exchange value; and a BRIC-centered sphere, led by China, India, Brazil and Russia, reaching out to include Turkey and Iran, most of Asia, and major raw materials exporters that are running trade surpluses.

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Time for a New Theory of Money by Ellen Brown

by Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
October 29, 2010

The reason our financial system has routinely gotten into trouble, with periodic waves of depression like the one we’re battling now, may be due to a flawed perception not just of the roles of banking and credit but of the nature of money itself. In our economic adolescence, we have regarded money as a “thing”—something independent of the relationship it facilitates. But today there is no gold or silver backing our money. Instead, it’s created by banks when they make loans (that includes Federal Reserve Notes or dollar bills, which are created by the Federal Reserve, a privately-owned banking corporation, and lent into the economy). Virtually all money today originates as credit, or debt, which is simply a legal agreement to pay in the future.

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From Global Depression to Global Governance by Andrew Gavin Marshall

by Andrew Gavin Marshall
Featured Writer
Dandelion Salad
October 21, 2010

The following is the text of Andrew Gavin Marshall’s presentation at the book launch of The Global Economic Crisis: The Great Depression of the XXI Century, Michel Chossudovsky and Andrew Gavin Marshall (Editors). September 29, 2010, Montreal, Canada.

We now stand at the edge of the global financial abyss of a ‘Great Global Debt Depression,’ where nations, mired in extreme debt, are beginning to implement ‘fiscal austerity’ measures to reduce their deficits, which will ultimately result in systematic global social genocide, as the middle classes vanish and the social foundations upon which our nations rest are swept away. How did we get here? Who brought us here? Where is this road leading? These are questions I will briefly attempt to answer.

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Keiser Report: Episode 87: Ellen Brown on Foreclosuregate

with Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
October 19, 2010

RT

This week Max Keiser and co-host, Stacy Herbert, look at the full scale currency war launched by the “tomb maker” and at hiring hair stylists as scabs to cross the bankers’ picket line. He also talks to Ellen Brown about Foreclosure-gate.

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Predatory Finance: The New Mode of Global Warfare by Michael Hudson

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by Michael Hudson
October 12, 2010

“Coming events cast their shadows forward.” – Goethe

What is to stop U.S. banks and their customers from creating $1 trillion, $10 trillion or even $50 trillion on their computer keyboards to buy up all the bonds and stocks in the world, along with all the land and other assets for sale, in the hope of making capital gains and pocketing the arbitrage spreads by debt leveraging at less than 1% interest cost? This is the game that is being played today. The outflow of dollar credit into foreign markets in pursuit of this strategy has bid up asset prices and foreign currencies, enabling speculators to pay off their U.S. positions in cheaper dollars, keeping for themselves the currency shift as well as the arbitrage interest-rate margin.

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Energy crisis: Turning-point of humanity By Rudo de Ruijter

By Rudo de Ruijter
Guest Writer
Dandelion Salad
Independent researcher
www.courtfool.info
Netherlands
July 2008, updated 4 October 2010

Today's Harvest: Lots of Cucumbers!

Image by Dandelion Salad via Flickr

After more than 150 years of constant increases in the availability of energy and an explosive growth of the world population, we are now entering an era of declining availability of energy. This will cause the world population to shrink. For this new era, new economic principles are needed to maintain prosperity. Part of this is a bank-reform that members of Parliament can compel if they want.

From January 2007 to July 2008 oil-prices rose explosivily. This time it was not about some action of OPEC, a threat of war or a cold winter. Instead, prices rose because of a turning-point in the oil supply. Demand continues to grow while oil extraction has reached its ceiling. And, as the oil exporting countries use more and more oil themselves, they have less oil to sell.

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America’s China Bashing: A Compendium of Junk Economics by Michael Hudson

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by Prof Michael Hudson
Global Research
September 29, 2010

It is traditional for politicians to blame foreigners for problems that their own policies have caused. And in today’s zero-sum economies, it seems that if America is losing leadership position, other nations must be the beneficiaries. Inasmuch as China has avoided the financial overhead that has painted other economies into a corner, nationalistic U.S. politicians and journalists are blaming it for America’s declining economic power.

I realize that balance-of-payments accounting and international trade theory are arcane topics, but I promise that by the time you finish this article, you will understand more than 99% of U.S. economists and diplomats striking this self-righteous pose.

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Time for Helicopter Ben to Drop Some Money on Main Street by Dr. Ellen Brown

by Dr. Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
Sept. 8, 2010

The Federal Reserve is proposing another round of “quantitative easing,” although the first round failed to reverse deflation. It failed because the money went to banks, which failed to lend it on. To reverse deflation, the money needs to be funneled directly to state and local economies. The Fed may not be authorized to “monetize” state bonds, but it COULD buy bonds issued by state-owned banks.

In 2002, in a speech that earned him the nickname “Helicopter Ben,” then- Federal Reserve Chairman Ben S. Bernanke famously said that the government could easily reverse a deflation, just by printing money and dropping it from helicopters. “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent),” he said, “that allows it to produce as many U.S. dollars as it wishes at essentially no cost.” Later in the speech he discussed “a money-financed tax cut,” which he said was “essentially equivalent to Milton Friedman’s famous ‘helicopter drop’ of money.” You could cure a deflation, said Professor Friedman, simply by dropping money from helicopters.

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Escaping the Sovereign Debt Trap: The Remarkable Model of the Commonwealth Bank of Australia by Dr. Ellen Brown

by Dr. Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
Aug 4, 2010

The current credit crisis is basically a capital crisis: at a time when banks are already short of the capital needed to back their loans, capital requirements are being raised. Nearly a century ago, the Commonwealth Bank of Australia demonstrated that banks do not actually need capital to make loans — so long as their credit is backed by the government. Denison Miller, the Bank’s first Governor, was fond of saying that the Bank did not need capital because “it is backed by the entire wealth and credit of the whole of Australia.” With nothing but this national credit power, the Commonwealth Bank funded both massive infrastructure projects and the country’s participation in World War I.

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The Corbett Report: Ellen Brown on Historical Currencies

James Corbett
The Corbett Report

with Dr. Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
July 24, 2010

Ellen Brown, the author of the popular Web of Debt, joins us to discuss the historical colonial scrip currency and its possibility as a model for our future.

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Why the U.S. Need Not Fear a Sovereign Debt Crisis: Unlike Greece, It Is Actually Sovereign by Dr. Ellen Brown

by Dr. Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
July 23, 2010

Last week, a Chinese rating agency downgraded U.S. debt from triple A and number one globally, to “double A with a negative outlook” and only thirteenth worldwide. The downgrade renewed fears that the sovereign debt crisis that began in Greece will soon reach America. That is the concern, but the U.S. is distinguished from Greece in that its debt is denominated in its own currency, over which it has sovereign control.  The government can simply print the money it needs, or borrow it from a central bank that prints it. We should not let deficit hawks and short sellers dissuade the government from pursuing that obvious expedient.

We did not hear much about “sovereign debt” until early this year, when Greece hit the skids. Investment adviser Martin Weiss wrote in a February 24 newsletter:
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Michel Chossudovsky: Major currencies can simply collapse

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RTAmerica

June 18, 2010 — Obama is urging China to review its currency policy despite Chinese officials made it clear that they are not going to tolerate any interference from abroad to this issue. Is this going to become a major topic of the G-20 meeting in Canada and what’s the mood their on the eve of the summit? Michel Chossudovsky says that the financial crisis is not over as President Barack Obama has hinted at.

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