Responsible Bank Holdings

The Central Bank of China, Asian countries and Arab oil-producing nations account for the bulk of foreign treasury holdings. They are responsible for safeguarding their nation’s wealth and if they allowed the U.S. Federal Reserve to rob them they would be criminally negligent.

To prevent massive sell-offs of U.S. treasuries, leading central banks injected over $300 billion into the financial system and lowered the rates at which they lend to private banks. In America, Citigroup, Bank of America and JP Morgan Chase, the three largest U.S. banks reached an agreement to form an $80 billion fund to help unfreeze the market for short-term debt. The fund is another bad joke given to American taxpayers to again clean up bankers mistakes while we pay for the cleanup job. Warren Buffet said it best. “One of the lessons that investors seem to have to learn over and over again in the future, is that not only can you not turn a toad into a prince by kissing it, but you cannot turn a toad into a prince by repackaging it.”

Marc Faber, the Hong Kong-based publisher of The Gloom, Boom & Bust Report voiced my sentiments in October 2007 when he said: “The Fed feeds its customers with booze, and when they get totally drunk and are about to fall of their chairs, the bartender gives them more booze to keep them going. One day it will lead to the ultimate breakdown” ─ and it did. Those that really need government help are not the banks that created the problem in the first place but the homeowners who are the victims of the banks predatory practices. Why do We the Maids allow the government and its career politicians to save the guilty and punish the innocent?

Austerity measures are not the way to correct global imbalances. America needs to export its way back to balancing its books with countries like China and OPEC members increasing their imports from America.