Author Archives: George Washington

→ Washington’s Blog. Dylan Grice, a top analyst for European financial giant Société Générale, writes: Developed market governments are insolvent by any reasonable definition. Who could have known? Everyone, actually. As I wrote in December 2008, “The “Central Banks’ Central Bank” says Bailouts Putting Nations at Risk, as Confirmed By Higher Credit Default Swap Spreads“: […]

→ Washington’s Blog. As the New York Federal Reserve Bank explains on its website: Reserve requirements affect the potential of the banking system to create transaction deposits. If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a […]

→ Washington’s Blog. Preface: Most people think that banks lend solely from their base of deposits. Some also know that with fractional reserve banking, they can loan out many times more than they actually have in reserves. But very few people – with the exception of those in the banking industry and financial experts – […]

→ Washington’s Blog. I recently provided evidence that banks create credit out of thin air. I’ve just found two more pieces of evidence: (1)  William C. Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, said in a speech last July: Based on how monetary policy has been conducted for […]

Washington’s Blog. Greg Mankiw noted in January 2009: Econ prof Bill Seyfried of Rollins College emails me: Here’s an interesting fact that you may not have seen yet. The M1 money multiplier just slipped below 1. So each $1 increase in reserves (monetary base) results in the money supply increasing by $0.95 (OK, so banks […]

By Washington. Upton Sinclair said: It is difficult to get a man to understand something, when his salary depends upon his not understanding it. Bestselling financial writer Michael Lewis is now saying the same thing. In an interview with 60 Minutes, Lewis said: Wall Street is able to delude itself because it’s paid to delude […]

By Washington.  Note: I can’t get the videos to embed. Please click here to see videos. This is an open letter to the economics, finance and banking communities. I don’t have any dog in the fight, other than to figure out and then publicize what is best for the greatest number of people. People I […]

By Washington. As I wrote last August: Commonly-accepted wisdom says that we can inflate our way out of our debt crisis. *** But as I have previously noted, UBS economist Paul Donovan has demonstrated that governments can’t inflate their way out of debt traps, saying: The problem with the idea of governments inflating their way […]

By Washington. 82% of the American public wants tougher regulation of Wall Street. Most top independent financial experts say that we need to break up the big banks and otherwise rein in the financial giants in order to save the economy. But Summers, Geithner, Bernanke and Congress like things just the way they are. Of […]

Posted by Washington. There are at least 6 theories about why the stock market has rallied some 70% off its lows a year ago, even though nothing has been done to actually reverse the financial crisis. What The Dumb Money Believes The dumb money believes what CNBC and their trusty stock churner … er, broker […]

I’ve read countless news headlines recently about how economists are “surprised” over an “unexpectedly bad” economic indicator. But it’s not surprising at all. It’s no mystery. The government hasn’t taken the necessary actions, and has instead been doing all of the wrong things. Let’s recap. The leading monetary economist told the Wall Street Journal that […]

You know the big banks have gotten bigger. As Rolfe Winkler noted last September: For the big have gotten even bigger since the start of the financial crisis. At the end of 2007, the Big Four banks — Citigroup, JPMorgan Chase, Bank of America and Wells Fargo — held 32 percent of all deposits in […]

Free market capitalism is based on the idea that “the invisible hand” of the market will create the best possible outcome for the most people. But as I noted a couple of weeks ago, the man who came up with idea of the invisible hand did not believe in unrestrained free market capitalism: Americans have […]

Preface: When I first heard Ron Paul’s questions to Bernanke today, I thought he had totally lost it.  Even with the information conveyed below, I don’t want to make it sound like a proven conspiracy.  I am solely providing background. Today, Ron Paul accused the Federal Reserve of having a hand in nefarious plots such […]

Greenspan just said that the current credit crunch is “by far the greatest financial crisis, globally, ever” — including the 1930s Great Depression. Bloomberg notes: Greenspan said that while the economy was in worse shape in the Great Depression, the recent financial crisis was potentially more harmful than that in the 1930s because “never had […]