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http://onlinejournal.com/artman/publish/article_2452.shtml Analysis Last Updated: Sep 24th, 2007 - 01:02:38
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A Fed panic and a massive bailout of American banks paid for by the entire world
By Rodrigue Tremblay
Online Journal Guest Writer
Sep 24, 2007, 01:00
Manias, panics, and crashes are the consequence of an economic environment that cultivates cupidity, chicanery, and rapaciousness rather than a devout belief in the Golden Rule." --Peter L. Bernstein, Foreword to Manias, Panics, and Crashes (4th ed.) by C. P. Kindleberger
"In a crisis, discount and discount heavily." --Walter Bagehot (1826-1877), British economist
"The job of the Federal Reserve is to take away the punch bowl just when the party starts getting interesting." --William McChesney Martin (1906-1998), Fed Chairman (1951-1970)
"The dysfunctional state of American politics does not give me great confidence in the short run.'' --Alan Greenspan, Fed Chairman (1987-2006)
The mismanagement of money and credit has led to financial explosions over the centuries. The causes, cures and consequences of such financial catastrophes are most often repetitive. Indeed, such financial collapses are usually the result of the unbridled greed and cupidity of financial operators and of the lack of necessary supervision by public institutions designed to protect the public and the common good.
For example, after the October/November 1907 financial crisis in the United States, the idea initially advanced by banker Paul Warburg to establish a partially private and partially public Federal Reserve System of banking was finally adopted in 1913.