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« Matt Taibbi Talks Vampire Squid (Video) | Main | Bill Maher's Live Broadcast Interrupted By 9/11 Truthers (Video) »

Niall Ferguson And Bill Maher Discuss Bernanke, HR 1207 & The Fed

Niall Ferguson and Rachel Maddow on Real Time Friday night with Bill Maher.  After the 9/11 Truthers were kicked out of the audience they returned to discussing the economy.  Maher brought up Ron Paul and HR 1207, as well as Eliot Spitzer's recent comments that the Federal Reserve is a Ponzi scheme. 

Ferguson immediately sprang to Bernanke's defense and somehow overlooked the abysmal failure of the Fed's regulatory oversight.  You don't give the pilot another jet to fly after he just had the most horrendous crash in the history of the world.

And as I've written before, none of us will be well-served with Congress involved in monetary policy.  I don't agree with that portion of the bill and can only imagine it was included in order to be dropped later as a part of negotiations.  It's a pretty decent discussion.



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Reader Comments (13)

The Brit is a douchebag..total Keynsian....understands nothing...his arrogance is laughable. The Fed is a ponzi scheme:
1. It prints money to pay off early investors(banks).
2. it entices more suckers to go in to debt by encouraging borrowing by keeping interest rates low. Meanwhile banks make money on the spread. When borrowers default, the Fed bailslout the original investors. Spitzer is absolutely right..

The Constitution originally gave Treasury the responsibility to manage the currency, abrogated by the 17th amendment, approved on Christmas eve when all the Congressmen were home for the holidays. BTW the Treasury did this well from 1776 to 1914.
The Central Bank has historically made its money by encouraging wars, impoverishing many by its ability to release or contract credit.. STABLE CURRENCY BACKED BY GOLD eliminates the ability of the CONgress to borrow endlessly. This in and of itself will stabilize the dollar which is vital for long term survival.

In 2008, the banks should have been allowed to collapse and the bailout money given to the FDIC to cover depositors to the original amount(100K)..ordinary people would have been made whole, not wall street. With Wall Street gone, lending would have resumed at normal underwriting framework(cash down, good credit) and reversion to a stable cash economy for those that dont have credit until they do have credit. The crisis was caused by massive credit growth and cant be fixed until the debt is repudiated.

Perhaps the best of both worlds would be to stick the Chinese with the 2Tril in our debt they hold(default the USD to all international borrowers), pay off Citizens holding dollars, and restart. There would be a war..but it would be worth fighting.

Bernanke belongs in jail and this loser Brit deported..lets hope he does go home
Aug 3, 2009 at 9:03 AM | Unregistered CommenterFred
Great post Fred. keep it coming!
Aug 3, 2009 at 10:15 AM | Unregistered CommenterSell Short
@ Fred

You may be right about sovereign default and restart, but the ensuing war could possibly wipe the US among other countries off the map entirely. China does have at least a couple hundred warheads and a not insignificant volume of conventional weapons and troops. The potential collateral damage is unacceptable. I know S. Gompers and others will take offense at this, but really, why not just hand over Alaska and other portions of the US territories piecemeal to avoid bloodshed. I would argue many existing US territories were taken less than honorably to begin with. Maybe we currently have the strength to defend our "ownership" claims. Maybe not. Why should I fight for the reckless behavior of the Fed and my own corrupt government? Sooner or later, it may be inevitable. Vae victis!
Aug 3, 2009 at 11:48 AM | Unregistered Commenterspideydouble
@ Spidey

There are a few things I hold dear to me:

• My grandchildren growing up free and safe
• Stopping any land to be ceded to old or new claims of other governments
• Return to a sound fiscal system

To the question of ceding land, what will you do with refugees? How about claims of lost property/ belongings? How about shipping / fishing/ mineral right in coastal waters?

Ever think that militias would arise to defend citizens across the border just as Tennesee and Alabama volunteers did for the Texicans. How would you address this? I’m sure Canada would be honored with a new neighbor.

As to Vae victis, I am not conquered.

Remember, the money to pay the debt has never been printed. People at the top start these rumors so you can get used to it before they sell you out (age old tactic). We are already being told our labor/resources/land are worthless compared to other nations.

“"The liberties of our country, the freedoms of our civil Constitution are worth defending at all hazards; it is our duty to defend them against all attacks. We have received them as a fair inheritance from our worthy ancestors. They purchased them for us with toil and danger and expense of treasure and blood. It will bring a mark of everlasting infamy on the present generation – enlightened as it is – if we should suffer them to be wrested from us by violence without a struggle, or to be cheated out of them by the artifices of designing men." -Samuel Adams”
Aug 3, 2009 at 1:24 PM | Unregistered CommenterS. Gompers
the fellow is gunning for a job at one of the big financial firms and dreaming of million dollar bonus checks.

that's why he's eager to defend federal reserver..etc.

the economic collapse has exposed all textbook economists as charlatans.
Aug 3, 2009 at 6:36 PM | Unregistered CommenterAA
How can Niall say that a half year ago the banking industry almost fell apart & yet now they are posting these kind of profits? Yet 69 banks have been shut down since then? Did they just hit a reset button for the too big too fail club?
Aug 3, 2009 at 10:13 PM | Unregistered CommenterJust Me
"Perhaps the best of both worlds would be to stick the Chinese with the 2Tril in our debt they hold(default the USD to all international borrowers), pay off Citizens holding dollars, and restart. There would be a war..but it would be worth fighting."

Worth fighting how? So we can stiff the Chinese out of money to which they're rightfully entitled? There's also the immense casualties that spideydouble mentioned.
Aug 4, 2009 at 4:16 AM | Unregistered CommenterAssassin
Many do not understand the history of communism, a foothold on this continent would be temporary in nature. It would be a base for further conquest of the America's. Karl Marx, told them it was necessary to kill a large segment of the population in order to attain the basic objective of Communism.

Marx states in the Manifesto of the Communist Party:

You must, therefore, confess that by "individual" you mean no other person than the bourgeois, than the middle-class owner of property. This person must indeed, be swept out of the way, and made impossible. (Published by Progress Publishers, Moscow, 1973 edition, page 66)

"If you study Marx' Communist Manifesto you will find that in essence Marx said the proletarian revolution would establish the socialist dictatorship of the proletariat. To achieve the socialist dictatorship of the proletariat, three things would have to be accomplished: (1) The elimination of all right to private property; (2) The dissolution of the family unit; and (3) Destruction of what Marx referred to as the "opiate" of the people, religion.

There will be immense slaughter wether you give up your countrymen to the communists or they attempt to take by force.
Under Communism the educated, middle class, religous, "dangerous" to society, must be eliminated. The only difference is under one of the above plans the blood will be on your hands, and your new countrymen might salute you.

Perhaps to some the "State" raising your children would be a blessing, but for me, I'll pass.



We must now face the harsh truth that the objectives of communism are being steadily advanced because many of us do not recognize the means used to advance them. ... The individual is handicapped by coming face to face with a Conspiracy so monstrous he cannot believe it exists. The American mind simply has not come to a realization of the evil which has been introduced into our midst." J. Edgar Hoover

Every collectivist revolution rides in on a Trojan horse of 'emergency'. It was the tactic of Lenin, Hitler, and Mussolini. In the collectivist sweep over a dozen minor countries of Europe, it was the cry of men striving to get on horseback. And 'emergency' became the justification of the subsequent steps. This technique of creating emergency is the greatest achievement that demagoguery attains. Herbert Hoover
Aug 4, 2009 at 6:59 AM | Unregistered CommenterS. Gompers

We forgave much of the world's debt ot us after the Depression and WW II...and I would suspect the Chinese will be forced to do the same...

Let's not forget they don't even own a trillion in treasuries...so it's not that much actually...now if you count dollar assets including GSE agency paper then the numbers are of course much higher.
Aug 5, 2009 at 4:43 AM | Registered CommenterDailyBail
"now if you count dollar assets including GSE agency paper then the numbers are of course much higher. "

Daily Bail,

Is this the real reason for the bailout of the GSE's? I've always thought so (as have hundreds of others), but can we say for sure?

Also, any thoughts on why, eight months down the road, bank bondholders have never been asked to take a loss? Is it China again, or is it that the banks own each other's debt? Is it fear of the derivatives "daisy chain"? Or is it a combo of all these?

From a marginally informed perspective like mine, the question of the bank bondholders is a giant elephant in the room, but no one in power -- as far as I know -- has explained the reason that bank bondholders are more important than taxpayers in general.
Aug 5, 2009 at 7:22 AM | Unregistered CommenterJames H
James Good Questions.

The bailouts of Fannie and Freddie are very complex. Yes the Chinese and Japanese own a tremendous amount of GSE paper. Because of this, we had no real choice but to honor all of this debt as though it were U.S. treasury paper. Not to mention the fact that both the Chinese and the Japanese were very vocal in the days leading up to the collapse of Fannie and Freddie, as they were worried about they're holdings.

To answer your second question, the reason bank bondholders have not been asked to take any losses recently, is because of the changes to MTM accounting. We have chosen the path of whistling by the graveyard just like we did in the eighties. We are now Japan. A lost decade awaits us.

And you are correct there still has not been a public discussion of taxpayers vs. bondholders, and we are not likely to get such a discussion as long as Summers and Geithner are in charge. There will be a time in the future when we will have to revisit these issues. There are more losses coming.
Aug 5, 2009 at 9:40 PM | Registered CommenterDailyBail
Man, I would love to see Tom Woods or Peter Schiff sitting at this table. Either one of them would make these people look like complete assclowns.
Aug 9, 2009 at 6:55 PM | Unregistered CommenterP.M.
"The Brit" [Ferguson] is a Keynsian??? As a credentialed Keynsian I simply do not see truth in that statement.
Aug 19, 2009 at 10:59 AM | Unregistered CommenterKeynsian

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