The Shotgun Blog
« ALERT dismantles two marijuana grow ops in Medicine Hat | Main | Alberta Chambers of Commerce backs province on its court challenge of national securities regulator »
Monday, December 21, 2009
Maybe Anthony Marshall should run the U.S. economy
I’d sooner trust my mother’s modest estate with Anthony Marshall, than trust President Obama with the U.S. economy.
Marshall, son of the late New York philanthropist Brooke Astor, was sentenced to three years in prison today for looting millions from his mother’s estate.
President Obama, by contrast, is looting the U.S. taxpayer of trillions and setting the U.S. economy on a path to hyper-inflation.
Last week, Ian McGugan with the Financial Post wrote:
Spare a moment this holiday season to pity "fat-cat bankers."
After pinning the disparaging label on Wall Street in a weekend interview, Barack Obama, the U.S. President, devoted part of yesterday to lecturing a dozen of the fat cats on the need to open their wallets and lend, lend, lend to get the economy moving again.
U.S. bankers now have their marching orders. They're supposed to fight a recession caused by lax lending with even more lax lending.
Bankers lend money only when they expect to get paid back. That’s the business they're in, and they do it well when the government stays out of their way. Of course, the government never stays out of their way. Instead, organizations like Fanny Mae and Freddie Mac are created to de-risk lending. In Canada, the Canadian Mortgage and Housing Corporation (CMHC) does the same thing.
Obama is now asking U.S. banks to start lending their excess reserves. That’s the money they got from the US central bank. It’s over $1 trillion and growing – a staggering 55,000 per cent increase in excess reserves from 2007.
If the banks lend this money at the standard 10 to 1 ratio, as per Obama request, it will flood the economy with money. The total U.S. dollars in circulation is $15 trillion. What will an additional $10 trillion do to inflation and consumer and corporate indebtedness? (By the way, the U.S. money supply (M0) went up over 100 per cent in 2008/2009 - compared to the historical average annual growth rate of about 6 per cent.)
(This research was taken from Agcapita research reports. You can request that information here.)
Posted by Matthew Johnston
Posted by westernstandard on December 21, 2009 | Permalink
Comments
The comments to this entry are closed.