“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should
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I’ve dubbed the 9th August, 2007 ‘debtonation day’ – because on that day banks froze lending to each other, central banks panicked and began providing ‘liquidity’ – i.e. new loans to banks in trouble – and the Credit Crunch took hold. By strange coincidence, it was on the 9th August (see Charles Kindleberger in ‘The World in Depression’) that the Federal Reserve Bank of New York raised interest rates from 5 to 6% – an act that helped precipitate the Great Crash and then the Great Depression. The Fed had started ‘tightening’ i.e. increasing the real cost of borrowing in 1928, and persisted in this tight monetary policy after the Crash had started. The Fed had been determined to raise interest rates to (finally) prick a bubble of its own creation: the easy credit bubble that fuelled the stock market of the roaring 20s. Taking away the punch bowl by raising interest rates, proved very unhelpful to bankrupts and debtors – of which there were many millions in 1929. The Commentariat are spooking themselves themselves with ‘frightmares’ about the “spectre of inflation”. The charge is led by the BBC’s economics team with Hugh Pym warning in his News At 10 report (17th June) that inflation was “haunting the economy….” . Tonight Michael Crick of Newsnight piled on the horror by flashing images of the strikes and inflation that brought down Callaghan’s government…… The Governor of the Bank of England, dismayed by the shock-horror his earlier inflation-hype has caused, has belatedly tried to calm nerves and contradict these irrational fears in his now famous ‘Letter to the Chancellor’ of 16th June. Recanting of his earlier assertions he wrote: “there are good reasons to expect the period of above-target inflation we are experiencing now to be temporary” (my italics). (More about this inflationary squeeze being temporary in my next blog.) Listen to Ann respond to Alistair Darling’s speech at Mansion House tonight, 18th June, 2008, on Radio Four, 10pm (93.5FM). We trust Central Bank governors. They are after all, civil servants – not masters of the universe – there to serve the citizenry, not just the finance sector. And they are charged to act as ‘guardians of the nation’s finances’. So when the deputy governor of the Bank of England says in a report |
In the September 2003 edition of openDemocracy I wrote: 
Click here to read the full story in openDemocracy BOOKS:
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Copyright © 2012 Debtonation: The Global Financial Crisis - All Rights Reserved |
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