The Trump Administration has presented the first part of its plan to overhaul a number of Wall Street financial regulations. Many of these were enacted in the wake of the 2008 financial crisis. The administration's proposals are included in a report released by the U.S. Department of the Treasury the entitled "A Financial System That Creates Economic Opportunities" (6th June, 2017).
The report was prompted by Executive Order 13772. This ordered the US Treasury Department to examine the United States’ financial regulatory system and detail "executive actions and regulatory changes that can be immediately undertaken to provide much-needed relief."
In the report, Treasury Secretary Steven T. Mnuchin states:
"Properly structuring regulation of the U.S. financial system is critical to achieve the administration's goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy. We are focused on encouraging a market environment where consumers have more choices, access to capital and safe loan products – while ensuring taxpayer-funded bailouts are truly a thing of the past."
The report makes the following points:
Quite simply: the fundamental cause of the 2008 financial crisis was fractional-reserve banking (FRB). FRB is the practice whereby banks keep a "fraction" of the funds deposited by customers in their vaults, lending out the rest at interest and "profit." Banks are thus inherently unstable, since, if all depositors came at once and demanded their money (a "bank run"), banks would not be able to redeem their deposits. Moreover, FRB encourages banks to engage in exceedingly speculative and risky behavior, which creates unsustainable bubbles throughout the economy.
The nation’s central bank, the Federal Reserve, was created by the banksters and politicos to enshrine this immoral and economically ruinous practice into the heart of the American financial landscape. Any "reform" of Wall Street's financial practices that does not advocate doing away with FRB and the institution (the Fed) which enables it to exist, is doomed.
The banks in collusion with the Fed are able to expand the money supply through this process, while enriching the banksters' balance sheet. On the macro level, the creation of money through FRB is the genesis of the destructive boom-bust cycle.
This is why banks and the entire financial system are so prone to recurring crisis, and no regulation, reform, or Treasury Department "findings," can make such a system "stable." The only true reform is to abolish FRB and establish a monetary order that requires all financial institutions to keep 100% reserves of depositors' assets.
The Treasury Department’s recommendations are mere window dressing by the very banksters whose opulent livelihoods stem form FRB.
The elimination of FRB would go beyond a beneficial financial revolution, but would affect the foreign policy of the USA. Without the ability to create money via FRB, the murderous American Empire could simply not exist, nor would the nation’s draconian domestic security apparatus.
With his selection of crony capitalists and members of Goldman Sachs to his economic team, it is apparent that President Trump does not understand the true nature of the nation's financial woes or what precipitated the last financial crisis and what will assuredly lead to a far bigger mess down the road. If he did, his next Executive Order would be to implement steps and procedures to eliminate the scourge of fractional reserve banking forever.
The report was prompted by Executive Order 13772. This ordered the US Treasury Department to examine the United States’ financial regulatory system and detail "executive actions and regulatory changes that can be immediately undertaken to provide much-needed relief."
In the report, Treasury Secretary Steven T. Mnuchin states:
"Properly structuring regulation of the U.S. financial system is critical to achieve the administration's goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy. We are focused on encouraging a market environment where consumers have more choices, access to capital and safe loan products – while ensuring taxpayer-funded bailouts are truly a thing of the past."
The report makes the following points:
- Community financial institutions – banks and credit unions – are critically important to serve many Americans
- Capital, liquidity and leverage rules can be simplified to increase the flow of credit
- We must ensure our banks are globally competitive
- Improving market liquidity is critical for the U.S. economy
- The Consumer Financial Protection Bureau must be reformed
- Regulations need to be better tailored, more efficient and effective
- Congress should review the organization and mandates of the independent banking regulators to improve accountability
Quite simply: the fundamental cause of the 2008 financial crisis was fractional-reserve banking (FRB). FRB is the practice whereby banks keep a "fraction" of the funds deposited by customers in their vaults, lending out the rest at interest and "profit." Banks are thus inherently unstable, since, if all depositors came at once and demanded their money (a "bank run"), banks would not be able to redeem their deposits. Moreover, FRB encourages banks to engage in exceedingly speculative and risky behavior, which creates unsustainable bubbles throughout the economy.
The nation’s central bank, the Federal Reserve, was created by the banksters and politicos to enshrine this immoral and economically ruinous practice into the heart of the American financial landscape. Any "reform" of Wall Street's financial practices that does not advocate doing away with FRB and the institution (the Fed) which enables it to exist, is doomed.
The banks in collusion with the Fed are able to expand the money supply through this process, while enriching the banksters' balance sheet. On the macro level, the creation of money through FRB is the genesis of the destructive boom-bust cycle.
This is why banks and the entire financial system are so prone to recurring crisis, and no regulation, reform, or Treasury Department "findings," can make such a system "stable." The only true reform is to abolish FRB and establish a monetary order that requires all financial institutions to keep 100% reserves of depositors' assets.
The Treasury Department’s recommendations are mere window dressing by the very banksters whose opulent livelihoods stem form FRB.
The elimination of FRB would go beyond a beneficial financial revolution, but would affect the foreign policy of the USA. Without the ability to create money via FRB, the murderous American Empire could simply not exist, nor would the nation’s draconian domestic security apparatus.
With his selection of crony capitalists and members of Goldman Sachs to his economic team, it is apparent that President Trump does not understand the true nature of the nation's financial woes or what precipitated the last financial crisis and what will assuredly lead to a far bigger mess down the road. If he did, his next Executive Order would be to implement steps and procedures to eliminate the scourge of fractional reserve banking forever.
Originally published at Antonius Aquinas
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