The New York Banks have been my adversary to say the least. Even Alan Cohen who was the court receiver running Princeton Economics was simultaneously on the board of directors of Goldman Sachs and even when the SEC said the contempt should end, it was Cohen who lied to the court to keep the contempt going without even a complaint or charges since the original charges were dropped.
The New York banks have destroyed banking when Robert Rubin of Goldman Sachs managed to get the Clinton Administration to repeal Glass Steagall, Even Mario Draghi, head of the ECB, who is taking interest rates negative, was a vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005). So the tentacles of NY spread wide and far.
That corruption in New York controlling Congress, the Justice Department, and the courts, has allowed the NY bankers to rise to the top of the world from a power elite perspective. They even control much of the media and Hollywood. This power which has transformed banking has been emulated by other banks around the world insofar as Transactional Banking has displaced Relationship Banking as the “new” way to make money.
But the banks outside the USA do not control their governments as fully as they do in the USA. Who does Hillary run to for money – the NY bankers. Yet, the battle over the banking industry’s reputation is emerging everywhere but New York. It intensified last Friday in Australia as two of Australia’s top regulators took a simultaneous shot at the “culture” at the heart of the nation’s largest financial institutions.
The banking industry suffers from Narcissistic Personality Disorder (NPD) which typically only affects 1% of the population but they all seem to be working at the top of the banks. NPD is when someone has unrealistic fantasies of success, power and intelligence. That seems to be a qualification to be on the board of the major New York Banks.
Ever since the repeal of Glass Steagall by Bill Clinton in 1999, this “new” way of making money transforming banking from Relationship to Transactional Banking has destroyed the economy in ways we are soon to discover. The VELOCITY of money has fallen to BELOW Great Depression levels. This is the destruction of Capitalism and I fear the response against the banks on the next downturn will lead to authoritarianism.
Taking interest rates NEGATIVE will not reverse this trend – it will accelerate the trend. This is all part of Big Bang. We seriously need to understand the nature of the problem or we will lose all rights and freedom because of what the bankers have set in motion. Transactional Banking only benefits the banks and fails to create a foundation for economic growth. This is not about Fractional Banking, this is all about the destruction of Relationship Banking that creates small businesses and employment.
The collapse in the VELOCITY of money illustrates the collapse in liquidity in the markets which will erupt in higher volatility we have not seen before. The VELOCITY of money declines as HOARDING rises. This is how empires, nations, and city states decline and fall.
Why isn’t this stat headline news?
Because , bitches, negros , hohomos don’t understand or care to understand it. And the Joos in the media certainly wouldn’t report it anyway.
Next, I’m guessing, we will here that the cure for lack of velocity is digital currency.
My personal velocity of money (spending) has slowed to bare minimum while the velocity of my savings has been mimicking the feds money supply charts.
As an aside, Boise, ID has to be the biggest booming city in ‘Murika right now. New malls, hotels, strip malls, industrial construction, roads, highways and housing are going even faster than 2006-2007! I’d bet Boise is growing by 100 aces every week at a minimum. Fucking ducks and Canadian geese are still trying to live in areas that were wetlands/fields last year but are now urban sprawl. I feel like one of the geese!
My brother took us to a place called Cheesecake Factory last night. Ho Lee Fuk! This place is like a Taj Mahal palace of decadent food. The fucking menu is 22 pages long and sprial bound. I asked the server if we’d been dropped off at the library when they handed it to us. The grandiose excess of it all was grotesque! The cheesecake was so sweet the hot fudge on it actually tasted bitter by comparison. My teeth still hurt!
The server came over after we finished and asked how it was. I told her I never needed to return as my wife makes better cheesecake and the server claimed she didn’t like their cheesecake either. The whole experience reminded me of this:
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@IS: All these corporate restaurants suck.
I wonder if money velocity has anything akin to the economy like an aircraft’s stall speed? At some point all lift is lost and the plane falls like a rock.
@Robert H: Good analogy. We’re about there.
Vt has collapsed since the Great-Recession for a couple of reasons – (1) remunerating excess reserves. Bankrupt U Bernanke destroyed non-bank lending. NB lending is strictly a velocity relationship. When the payment of interest on excess reserves exceeds all money market rates, then the non-banks suffer dis-intermediation (an outflow of wholesale funds in the borrow-short to lend-long savings-investment paradigm). NB lending comprised 83 percent of the lending market pre Great-Recession. The 1966 savings and loan credit crisis is the model.
Then the FDIC offered unlimited transaction deposit insurance which drew funds out from all over the world. I.e., it further bottled up existing savings within the confines of the commercial banking system (a leakage in Keynesian National Income Accounting procedures).