What Should Be Done About The Economy – The Opposite Of What Is Currently Being Done. Dr. Doom Speaks Truth

Peter Schiff (AKA – Dr. Doom) a prophet of profit, brings some badly needed reality to the economic discussion.

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The Over Reaching Arm of the Fed

The fed is seeking to expand its reach and tighten its grip.

For all the talk of fascism during the Bush administration we are seeing actual moves in that direction right now and the word never comes up in the MSM or from those who were supposedly in fear of Bush bringing fascism to America.

I of course do not know that fascism is the Obama administrations desired end but when all the moves against business by this administration are considered, you have to wonder if fascism is not on the way.

This is but one more example of the fed over reaching.

Washington Post

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document. […]

The government also would assume the authority to seize such firms if they totter toward failure.

I would much prefer, and believe it better for the economy in the long run (consider the finical crisis in the 1920s) if the government would allow failing businesses to fail.

Propping these businesses up does nothing more than delay economic problems and increase the intensity of the pain that will be experienced when the house of cards comes down.


New Government Entity

Here a Trillion, there a Trillion, print a Trillion, every where a Trillion.

By the time Obama and  Geithner are finished we will all speak of a Trillion in the same way we currently speak of a Billion.

My Way News

The Obama administration’s latest attempt to tackle the banking crisis and get loans flowing to families and businesses will create a new government entity, the Public-Private Investment Program, to help purchase as much as $1 trillion in toxic assets on banks’ books. […]

A key part of that regulatory framework will give the government new resolution authority to take over troubled institutions that would pose a threat to the entire financial system if they failed. […]

According to administration and industry officials, the toxic asset program will have three major parts:

_A public-private partnership to back private investors’ purchases of bad assets, with government support coming from the $700 billion bailout fund. The government would match private investors dollar for dollar and share any profits equally.

_Expansion of a recently launched Fed program that provides loans for investors to buy securities backed by consumer debt as a way to increase the availability of auto loans, student loans and credit card debt. Under Geithner’s plan for the toxic assets, that $1 trillion program would be expanded to support purchases of toxic assets.

_Use of the FDIC, which insures bank deposits, to support purchases of toxic assets, tapping into this agency’s expertise in closing down failed banks and disposing of bad assets.

Yeah… this should work.