The Obama administration’s long-awaited proposal to remove so-called “toxic” mortgage-backed assets from U.S. banks has finally been unveiled, to huzzahs across the globe. Stocks from Tokyo to New York rallied as investors expressed relief that finally, somehow, the U.S. government was going to take care of the problem. But just what does Treasury Secretary Timothy Geithner intend to do, precisely?
Newspapers are fixated upon $160 million in bonuses given to American International Group (AIG) executives. And it’s nice to know where the millions are going (note: the bonuses could have been cancelled had the federal government let the company go bankrupt, as officials should have). But where are the trillions in TARP, TALC and Federal Reserve Bank bailout funds going?
A United Nations panel is about to recommend that the world abandon the dollar as the world’s reserve currency, according to a Reuters report. Next week, the UN will propose that the dollar be replaced with a “shared basket of currencies” similar to the old Ecu (European Currency Unit) of the former European Community (the predecessor to the European Union), which was replaced at parity by the euro in 1999. According to Avinash Persaud, a member of the UN panel, now “is a good moment to move to a shared reserve currency."
If there were any lingering doubts as to where the Federal Reserve’s expansive monetary policies are leading, they were dispelled by yesterday’s shocking announcement that the Fed intends to purchase more than $1 trillion in additional debt, which it will pay for by printing new money.
All of the feigned outrage in Washington over the millions that AIG has been doling out in bonus payments, and the tens of billions in bailout monies that it sent directly to major creditors, fails to impress. Beyond the smokescreen of How-dare-they’s, emanating from Republican congressmen and the Obama administration alike, loom larger questions which no one seems willing to ask: how dare our elected leaders give almost $200 billion taxpayers’ dollars to AIG in the first place? And how dare they presume to nationalize a private company like some two-bit cadre of Marxist putschists?