Elites have always ruled the world even in open democracies. Sure this was expected in dictatorships regardless of political persuasion but in democracies? What happened to “government of the people, by the people, for the people”?

In his new book, “Superclass: The Global Power Elite and the World They are Making“, David Rothkopf explores the globalisation of the new elites, naming some 6000 players who basically run the whole show. From media to banking he lays out how close these people are and how they are shaping and making the world in their own images. The link between politicians and business is crystal clear. In some countries its hard to tell the difference with the US a great example of this.

If anyone felt the US financial authorities were in collusion with the banking system look no further. The current US Treasury Secretary, Henry Paulson, is a former Goldman Sachs Chairman and Chief Executive. Rothkopf reveals the shennanigans that took place over the bail out of Bear Stearns. He tells how bank heads met over the weekend to hammer out a deal for Bear Stearns. Clearly the deal had to be done that weekend lest the market really fall apart on the Monday. This type of round table pow wow is becoming more and more common as the fragility of financial markets continues to be revealed.

On one hand this sounds good: we have capable people in government and business to take charge of managing a crisis. They all know each other and have worked with each other. They know the score.

But: are they not the same people who caused and are part of the crisis? Is there any chance we get to hear the truth of the matter? Do ordinary shareholders and citizens matter anymore?

Well there have always been plenty of stories about how the Fed operates and the murky manner in which its was founded.

But one thing is clear from this article and the activities of those in power. They run the show in a “we know best” style. The question all concerned people should have is whether power should be so concentrated and in the hands of so few.

I wonder what Lincoln would have made of it.

Following on from my piece on the AMRA, I’m posting a message from Stephen for all Washington D.C. locals who can attend his meeting below. Spread the word if you cannot.

Dear Friends of the American Monetary Institute

Please take a moment to concentrate on this message, and consider the very particular action it asks of you, to help our nation achieve meaningful change to assure that no “Wild West” banking system ever again despoils our people.

Place: Busboys and Poets Restaurant (Langston Room)
2021   14th St.   NW,    Washington DC  20009

 Date:  Thursday, April 10, 2008                  Time: 6:00 PM to 8:00 PM

Late arrivals OK                 Dress: Informal; all are welcome

 

Reservations not necessary but really appreciated 

Call 224-805-2200  or email  ami@taconic.net

RETURN TO AMI HOME PAGE

This is in response to Dave’s post on a new wave of financial regulation. It’s a great 5 minute potted history of money to a stunning tune from Prince Charles and the City Beat Band. They rock!

Watch it here

With the financial system gutted and exposed like big swordfish from the Grand Banks, it’s time to have a look at a proposal for monetary reform. Stephen Zarlenga from the American Monetary Institute has put together a proposal that rests on the US constitution no less.

As many people are starting to learn, the 1913 Federal Reserve Act “effectively ceded the sovereign power to create money delegated to Congress by the Constitution to the private financial industry”. It was led by none other than JP Morgan himself. There is some interesting history of how the Act was actually passed during the small hours of the morning whilst no one was looking.

As Jim Rogers suggested yesterday, the Fed could be abolished or as Stephen proposes, be purely a bank of issue, supplying money as required by the government.

Now there are many ways to approach the issue of interest free money into an economy but for now I would just like people to read through the proposal and see what they think. Pass it to friends, schools and universities. People should be discussing this openly.

The AMI hold talks around the US all year round so get in touch and find out when they are coming your way.

Its your Congress and its your money.

Thanks to Christoph for this story. Jim Rogers has been on the wires lambasting the Fed for pumping out cash left, right and center. He has called the bailing out of investment bank Bear Stearns as “socialism for the rich“.

I like that. He calls for the Fed to be abolished. Now we’re talking.

Let’s face it, market rally or not, the $ is still in serious trouble and banks are still going to be under severe pressure. Watch for the lawsuits to come flying out now. Charles Schwab is being sued for “untrue” statements regarding the diversification of certain funds. We are going to see this more and more as people start to take a closer look at the way investment products have been sold.

You could say this is an outcome of an asset bubble bursting. People rush round looking for someone to blame when they lose all their money. “Caveat Emptor”  is conveniently forgotten and another investment generation is left to learn the lessons that previous ones failed to pass on or more likely were ignored in their attempt to do so.

How do people feel out there? I know 95% of my readers are from the US so maybe you have had some first hand experience you would like to share.

Fed just cut the fed funds and discount rate by 75bps voting 8-2. The 2 against were for less aggressive cuts.

Overall the market wanted a bit more but still rallied initially. Better than expected numbers from Goldman Sachs and Lehmans helped with overall confidence

So what now? Well it’s hard to say. I don’t think much has changed and its hard to justify a big market rally from here. So the best to hope for is some stability from here.

I think the focus will now shift back to the banking sector and who is next up for refunding.

As for the market I expect that to come under further pressure.