Bubble Finance Asks: Surely Government Will Support Us in Crash?
April 17, 2017 (EIRNS)—Wall Street senses an impending crash, and also senses that some version of the 1933 Glass-Steagall banking separation act will soon be adopted, and wants to get access to guaranteed funds.
Today’s piece by Bloomberg’s Mark Whitehouse, titled "What a New Glass-Steagall Wouldn’t Do," says that the problem with Glass-Steagall is that it limits the activities it supports, and cuts off activities like trading in securities and derivatives. But, the author asks, how could the Federal Reserve "responsibly" stick to such a promise, leaving money-market funds, investment banks, and real estate investment trusts, and more, outside the Fed’s safety net? Why, they would go bankrupt!
Bank of England Governor Mervyn King proposes that such "enterprises" could pledge some of their assets to the Fed, in return for guaranteed access to loans. And then the Fed would spin their straw into gold, and lend it to them.