News & Analysis
Brussels' Bogus Bank Regulations
Europe unveils sweeping plans to govern reckless banks ... Brussels has called for sweeping powers for regulators to seize failing EU banks, sack board members, and impose haircuts on senior bank debt, aiming to ensure that taxpayers are never again held hostage by high finance. The European Commission's "Framework for Bank Recovery and Resolution" draws on Scandinavia's hard-line approach during their banking crises in the early 1990s. The goal is to end the pattern of moral hazard and mispricing of risk that generated Europe's debt woes. "Banks will fail in the future and must be able to do so without bringing down the whole financial system," said Michel Barnier (left), the internal market commissioner Mr. Barnier's consultation paper will lead to a "legislative proposal for a harmonized EU regime" as soon as this summer, with an insolvency structure in place by 2012. The final phase will be the creation of a European Resolution Authority by 2014, adding a fourth pillar to the EU's new architecture of financial regulation. EU "authorities" typically have their own permanent staff and powers to override national bodies. – UK Telegraph
Dominant Social Theme: Regulate the banks and these cyclical depressions will occur no more.
Free-Market Analysis: Another day, another meme. This is one of the older ones and its reoccurrence shows us more clearly than ever that elite propaganda is neither innovative nor complex. Just yesterday in an article entitled "Necessity of the Plutocracy?" the Daily Bell pointed out how concerted efforts were being made to blame Wall Street for the Greater Recession that began in 2008. A steady drumbeat of anti-Wall Street and anti-banking sentiment has issued forth from the organs of the state and its enabling mainstream media – designed, in our opinion, to shift the blame away from mercantilist central banking. We also pointed out the following:
The idea is to blame the securities industry and the "plutocrats" for the West's economic woes. This is what happened in the 1930s when central banks last blew up the system. Wall Street was regulated and "populism" was encouraged as a political system. The power elite is happy to point fingers at rich securities bankers; it is central banking that is to be off limits. And even now, we observe, despite a general sense (especially in America) that central banking is a main player in the disaster of the Greater Recession, central banks remain above the regulatory conversation. The Federal Reserve in fact has received vast new powers.
Yes, hard as it is to be believed, in the United States, the Federal Reserve has been given more power. Now in Europe, banks are about to become far more highly regulated. The idea that regulators themselves are partially to blame, and central banking economies themselves are set up to create cyclical depressions is not dealt with by the people making the rules nor is it made clear by the media and certainly not the academic community.
Thus as we can see, historical narratives are created by elites and elite media, not by "the facts on the ground." The elite creates dominant social themes – fear-based promotions that are widely distributed via universities, think tanks, white papers and the mainstream media. In the 21st century, these memes have been widely checked by the truth-telling of the Internet. But what has been fascinating to see is that exposure does not stop the propagation of these memes, nor their SOLUTIONS.
It is an absolutely bizarre spectacle. Global warming is an obvious culprit. It is now rejected by the majority of people in the West and probably around the world (if they have heard of it). But the global warming meme (and the tiny network that propagated – exposed via a famous hacking) continues onward nonetheless. The UN holds meeting about it; portions of the mainstream media continue to tout it as a fact; automobile companies and power companies continue to move ahead with "solutions" to a problem that is not only seen as increasingly incidental but also actually wrongheaded, in that the world may be entering another "mini-ice-age."
Global warming is an especially important dominant social theme for the power elite because so much depends upon it, including upcoming food and water scarcity memes. But what we have observed is that when elite memes are thoroughly discredited, the elite itself – via elite promotional mechanisms – continues serenely to market its discredited propaganda as if nothing has happened.
This is not because the elite, in aggregate are genius-types; nor are they reptiles as David Icke proposes; but they are arrogant and they are, we would propose, paranoid and frightened. More importantly however, the memes of the elite are simply not reversible entities. The fear-based promotions currently in play are vast enterprises that are beyond the control of any one particular person at this point. Once they are put in play they almost, of necessity, have to run their course.
But just because a promotion is ubiquitous does not make it correct. It is incorrect to blame the Greater Recession on commercial banking, or even investment banking. The elite itself at the highest levels has created a central banking economy worldwide, and the booms/bust cycles that central banking engenders has proven inordinately destructive to Western economies especially – which have the most to lose.
How does it work? The stimulation of fiat money causes tremendous surges in temporary prosperity in a given society; but as we have seen over and over again, the "bust" cycle of central banking is tremendously destructive and when combined with the progressive income tax, tends to hollow out economies and ruin their productive capacities over time. The boom-bust cycle of central banking is also immeasurably destructive of middle classes. Throughout history it seems that elites and middle classes have been at war.
The banking reforms in the US and Europe will not do a single thing in our view to ameliorate the boom-bust cycle generated by the worldwide central banking economy. Central banks will continue to print too much money, fooling people into thinking their economies are doing well. When the distortions build up enough, a crash takes place and people lose wealth and economies lose vitality and are evermore prone to authoritarianism.
Conclusion: The regulations in Europe are in fact fairly Draconian and give government and its regulatory bodies tremendous powers they did not have before. Eventually, such regs will be "harmonized" around the world. Thus we see that despotism advances at the expense of truth and the free-market is diminished as a result of man-made catastrophes.
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Posted by The Umpire on 01/07/11 05:34 PM
Posted by Peter on 1/7/2011 4:00:54 PM
Has your mind been subliminally distorted by the meme?
You say.
"When the distortions build up enough, a crash takes place and people lose wealth and economies lose vitality and are ever more prone to authoritarianism"
You are wrong, central banking kills vitality from the outset, and to some degree it is re-established during a crash.
Reply from the Daily Bell:
Nope. While the entire process is distortive, as we have written a thousand times, it is a fact that people lose wealth when a crash occurs. It is real wealth in that it buys real goods and services and after the crash that wealth is no longer available.
Posted by Peter on 1/7/2011 4:57:00 PM
I will credit you with having missed the point, it was vitality I made comment on not wealth,
Though I could extend it to some meanings of wealth,
The OED also defines wealth as ,The condition of being happy and prosperous; well-being.and Spiritual well-being. Often in the testamentary phrase for the wealth of (one's) soul.
I trust you understand this.
Unpire
Game to peter
Reply from The Daily Bell
Ha, you make the elves laugh ... OK, Umpire, your IP address is the same as Peter's. What is it - you hang out together? Are you perhaps one? Also, you were writing about vitality and we were commenting on wealth. We will argue that within this context there is overlap. If YOU, Peter, want to declare "Game to Peter" go ahead. If you UMPIRE, wish to award the game to Peter, go ahead.
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Posted by Heuristic on 01/07/11 05:29 PM
"The power elite is happy to point fingers at rich securities bankers; it is central banking that is to be off limits."
So the Anglo-American Banking Elite are not actually bankers? There are these bankers here (Golman Sachs, JP Morgan and other members of the Federal Reserve) and then those other plutocrat bankers over there who are fair game? Hmmm. Va banque! But which banque, by what distinguishing characteristics?
Reply from The Daily Bell
Yes, there are differences between "bankers" who come from the private sectors and central bankers who may come from government bureaucracy or academia as Bernanke did. Neither the private (investment and commercial) banking crowd nor the central banking crowd are "in charge." The final decisions rest with a tiny Anglo-American power clique in our view. Hope that helps. Confusing?
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Posted by Texaninsweden on 01/07/11 05:16 PM
Off topic " but in case one of the daily bell gnomes might have any American cousins looking for a job -
"Ron Paul and his chief of staff Jeff Deist are looking for a smart, young economist, "thoroughly Austrian, and preferably with an advanced degree. The candidate needs strong knowledge of the Fed and monetary policy generally, and must be an effective writer. He or she will be responsible for organizing hearings; summarizing data and Fed actions for Dr. Paul; writing statements; dealing with Financial Services committee staff; and various other tasks."
more info on lew rockwell's site:
Click to view link
ah too bad the job post doesn't read:
**************************************
native texan needed to cruise Click to view link, Click to view link, and Click to view link multiple times a day, watching videos, reading posts, and commenting " all about ron paul, austrian economics, and the evils of the money power.
**************************************
I do have some leverage since I was delivered by Dr. Ron Paul 35 yrs ago in Freeport Texas and learned to swim in his Olympic sized pool that he had built for his son Ron to practice in. I'll put a good word in for the gnomes if they can land an interview. ;)
Reply from The Daily Bell
Congratulations. You were in good hands.
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Posted by Dogwood on 01/07/11 05:00 PM
Meme: people in the investing world are bankers. When they create wealth, it must be destoryed. ...Confuse the public and destroy the wealth created in the free markets.
Just like they want to crush the bloggers... You would have been scared as hell if you had heard my friend from the UN talk about the blogs last weekend.
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Posted by Peter on 01/07/11 04:57 PM
I will credit you with having missed the point, it was vitality I made comment on not wealth,
Though I could extend it to some meanings of wealth,
The OED also defines wealth as ,The condition of being happy and prosperous; well-being.and Spiritual well-being. Often in the testamentary phrase for the wealth of (one's) soul.
I trust you understand this.
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Posted by Dogwood on 01/07/11 04:53 PM
at DB, what I am illustrating is that these "bankers" are not financial insiders, they are elite politicans who come out of the woodwork...
The elite like to crush the financiers by confusing the public between the financiers and the central bankers, because this helps the elite destroy the decent-sized chunks of wealth that true investors can accumulate in the quasi and intertemporal free markets.
It's not only central banking. It's power elite. The guy was an environmental whack for petesake. I know you don't care about the distinction, but I do.
I know you care when they push memes about bloggers. ...On that topic you should have heard my friend from the UN last week. Wow, they hate the bloggers...
Reply from The Daily Bell
Well, why the heck don't you provide the anecdote instead of merely teasing us? What did your UN friend SAY about bloggers? And why do you have UN friends anyway? And what were you doing at World Bank wedding? You are awfully connected to these types...
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Posted by Beforebabylon! on 01/07/11 04:31 PM
California has given the 'police' the Right to search cell-fones without a warrant.People on News report saying 'they are terrified of 'police as it is' .As if they would'nt do it anyway;their warrants are their their Jackboots.
I'm on the outside ;but that's serious ,-and it goes without saying that my country (Ireland) is well down the path with state forces Terrorising & accumalating mere texts to use against the Public.Whatever they say & 'INSERT' will be used against us.Beyond belief :this Shit is.
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Posted by Dawsey on 01/07/11 04:29 PM
@ Bruun
I don't know about the glaciers in Switzerland ... In France ,they have noticeably extended during the past few years.
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Posted by Dogwood on 01/07/11 04:19 PM
Here's the thing that gets me. I'm kind of on the inside of the financial world, but these "bankers" keep popping out of nowhere.
Like Michel Barnier " how is this guy a banker now?
Point is he's not a financial guy or an investor. He is a "banker." I think people really mix the whole deal up.
Michel Barnier is a politican who somehow is now a "banker." This is a guy who was one a "Minister of the Environment."
There is no way he can even do an IRR..
So let's not confuse "bankers" with bankers. And yes, let's be afraid of Ministers of Environments who become "bankers"
Reply from The Daily Bell
OK, but the issue is not "who's a banker" but what is a central bank and why do they fail ...
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Posted by Peter on 01/07/11 04:00 PM
Has your mind been subliminally distorted by the meme?
You say.
"When the distortions build up enough, a crash takes place and people lose wealth and economies lose vitality and are ever more prone to authoritarianism"
You are wrong, central banking kills vitality from the outset, and to some degree it is re-established during a crash.
Reply from The Daily Bell
Nope. While the entire process is distortive, as we have written a thousand times, it is a fact that people lose wealth when a crash occurs. It is real wealth in that it buys real goods and services and after the crash that wealth is no longer available.
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Posted by Erik Bruun on 01/07/11 03:36 PM
I am amazed at your continuing harping on Global Warming as not occurring. Living in Schweitz you should be able to take a look at the glaciers that are retreating year by year. One may have different opinions on why the world is heating, but trying to ignore it is plain silly, and it raises a question on your other memes and promotions.
I read the Daily Bell and find the different views of the world sometimes enlightening, but this is one, I as a person with eyes and a memory, can not accept. Please leave it be and focus on issues where you are not so wrong.
Reply from The Daily Bell
You read the Bell and find it enlightening. It's just global warming you believe in, eh. Keep coming back.
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Posted by Shilo on 01/07/11 03:28 PM
"An absolutely bizzare spectacle ". Yes, discredited memes rippling out 360 degrees in all directions. The few with vision like DB, it's readers, et Click to view linke it all as derisory. (The emporer IS naked. We have begun to titter.) But the global warming meme "rejected by the majority of people in the West" ? I am not so optimistic, and would say by far the majority don't know, and don't care, despite the ready reach of truth telling on the internet. As for central banking and its fiat monetary deception, we are a very long way from widespread discreditation of that obvious enemy of economic decency.
You can rely though I think on any derision being noted, and monitored, and long before there is mass rejection of the more important memes, there will be a sudden and very severe Click to view link is possible that the blame game currently in play, and that you expose so well,is setting the scene for this.
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Posted by Beforebabylon! on 01/07/11 01:09 PM
Great that Dr.Wakefield is being vindicated & given a fair hearing that as you said;oh so not long ago would have been Miraculous.
They are playing a nasty game in UK saying that they have'nt enough flu-virus!! Remember Rumsfield huge consignment last Click to view link's a huge leap of Faith to let the state stick a needle in your kids' bodies..that very institution procure kids for paedophiles via social -(dis)services.I tried to raise the issue of the fully blown hell i went through on Seroxat/Paxil years ago & got short shrift via the snail-mail.
Frightening;cut my upper arm in a specific fashion :O (just like loadsa others to-O) & went Suicidal...& i put faith in it doing what i claimed to be -an ANTI-Depressive..t'was the Polar-opposite.Horrific withdrawals.Very sinister drug; like an intelligent homicidal chemical.Yeah the pharmaceutical giants used to be a coloring of the law unto themselves.Well done Doc' Wakefield for breaking from the dogmatic herd.
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Posted by Victor Barney on 01/07/11 12:31 PM
Dominant Social Theme: "Regulate the banks and these cyclical depressions will occur no more". Another one of my social themes. I just "know" that this will end much sooner than most people think(November'2012), but a "cashless society" is going to occur! It has been planned by man since at least Teddy Roosevelt and Wilson I'm sure(New World Order) and has more meaning to our politicians more than our constitution, I assure you! It's coming I know(New World Order Marxist Government), but when??? Watch!
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Posted by Erik on 01/07/11 12:19 PM
"More importantly however, the memes of the elite are simply not reversible entities. The fear-based promotions currently in play are vast enterprises that are beyond the control of any one particular person at this point. Once they are put in play they almost, of necessity, have to run their course."
I believe I understand why they "have to run their course", but when you have the opportunity, if you could elaborate, it would be helpful. In fact, if it would fill one out, and entire article would be great. For me, it is a fundamental aspect of understanding the elite and their memes.
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Posted by ScipioNasica on 01/07/11 12:19 PM
The DB is a forum dedicated to the exploration of economic ideas that are compatible with individual freedom. It has identified very powerful forces arrayed against these ideas.
The Bell has indicated that these forces are nearly omnipotent. So I have to ask again: Can the business cycle be suppressed forever by propaganda? How much of this stuff is dependent on people's belief and willingness to look the other way? Is the Bell just a voice out there speaking the truth and calling for fairness?
Because truth and fairness and those who call for it have always fared very poorly and found very few friends. If central banking can "work", but Austrian economics is honest and fair, then this is hopeless.
Reply from The Daily Bell
Our point endlessly restated is that the Internet, like the Gutenberg Press before it, has entirely changed the equation. It steadily and relentlessly blows up the memes of the elite.
Just today, an elite-connected journo Brian Deer accused Dr. Andrew Wakefield (see other article) of being a criminal fraud. In another era Wakefield would have had no opportunity to defend himself. His book would never have been published and the autism support groups that have thrived on the 'Net would not have been available - or certainly not in their current form - to defend him.
The fraud accusations may move ahead because the government controls the "law" and the elite controls Western governments (along with having a substantial stake in the pharmaceutical industry). But Dr. Wakefield's book will be read, Internet organizations will mount a tremendous defense based on the apparent truth of vaccine damage and even if Wakefield were found guilty and went to jail the truth will continue to circulate. The battle is basically over. In our view, the Internet has won it.
Too many parents are aware of the questions. Use of vaccines will continue to drop until the elites confront this issue head on. This they will have to do eventually in order to salvage vaccine programs that may work and are very important to them. (For a number of unfortunate reasons.)
The elites have not faced this fact yet. They are not an imaginative bunch. They are smearing him - which is business-as-usual and worked very well in the 20th century when elites owned Western communication outright. But they do not anymore.
Every time the powers-that-be accuse of Dr. Wakefield, the Internet surges to his defense (portions of it) and the ruckus grows worse. The elites - which desperately want to tamp down looming litigation on this front - keep trying to grand him as a criminally callous etc. But they no longer control information. Thus, when it comes to contentious subjects, the very command-and-control mechanisms that worked so well in the 20th century work against them.
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Posted by Albiontyke on 01/07/11 12:07 PM
The new regulations in the EU go further than giving governments more power over the banks. It is the EU monster over riding governments in so called sovereign states who are now dictating to the banks. It seems the authoritarian European Union can trample over any member state by bribing the politicians ( politburo ) to get their own way. As an example until Ireland's economy was forced into a bailout, the Irish Premier was paid more than the President of the USA despite it's population being less than that of Chicago.
Reply from The Daily Bell
Thanks. We have pointed this out as well. Entire national elites were bribed by the EU into joining under the guise of payments to bring economies in line with EU standards. But the payments, in the billions, were laxly administered and amounted to graft. The EU is a corruption machine.
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Posted by Alexsemen on 01/07/11 12:05 PM
Of course de gigantische Armada van burocratische parasiten in Bruxelles must become dubbel , therefore "austerity"and taxation until the cityzen will be absolutely poor !
Another way of continuousely bail-out of all kind of parasits and robbers attached to the Banks and Banksters !
Very nice, it is not necessary to be futurolog, to see the poverty that came !
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Posted by Adrian W. on 01/07/11 12:00 PM
Something has got to give. It can't continue on economically like this much longer...
" Central banks will continue to print too much money, fooling people into thinking their economies are doing well." -DB
Ron Paul has been an effective speaker. Lets see how he does with his new position in the House Financial Services Committee. I think Ben B. better wear two pair of shorts to the meetings! If allowed, human action will take the Fed and central banking out of commission.
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Posted by Capitalanarchist on 01/07/11 11:50 AM
Please reconsider your use of the term "hacked" in describing the CRU materials from UEA. That word strongly implies that an outsider breached the computer system.
We do not yet know who was responsible nor how the release came about. Circumstantial evidence suggests that an insider "leaked" the files.
The implications of the latter are quite different from the former; it is the difference between malicious and principled exposure of facts that the authors wanted to keep confidential.
Yes, this is a nit and not germane to your otherwise excellent commentary.
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