Poor Innovations

I do not like the ideation defined in this article. Why? The authors are not the problem; the ideas they expressed remain the core problem; let me explain. Bankers, by their very nature, want funds; Money which they can lend at higher rates than they pay Investors. This is How they make their own Income. Past performance has shown that Bankers are not all that ethical in that practice, and Investors often lose their funds in this process. Bankers are currently on a course where they are paying Depositors relatively nothing for their deposits of Cash, and making their Profits by maintaining the same rate structure on their extension of Credit. Bankers correctly fear for the amount of funds which they find coming into themselves through those same deposits.

Everyone who has studied the financial crises of the Past know that the Bankers utilize innovation of new financial instruments to raise the desired funding; such practice often bringing on the crises described. The elemental criteria behind these movements is Selling, basically requiring Bankers to convince Investors that they are purchasing relatively safe investments; often when the Bankers themselves know the high Risk involved in such instruments. Let Us face it: these instruments are designed to finance high Risk ventures, and Investors have to be introduced to delusional belief about them in order for the Bankers to get the level of funds necessary. Investors want Blue Chip, while Bankers are cognizant they are getting Blue Sky! Bankers, and by the term I mean Investment Bankers, currently want the Image that the Federal Reserve somehow guarantees such investments. This holds the rationale behind the current Move to extend the Fed greater power; legislation in which the small Print takes away what the large Print has given.

Bankers want the Fed to become the new Barker of the new Sales Pitch, and one wonders whether this is good practice. I think that Taxpayers have overpaid over the years for the claims made by Investment Bankers. I believe that any legislation passed altering the position of the Fed should include actual legislation expressing an inhibition forbidding the Fed to extend any funds above a set amount to any singular bank, and the total number of banks per specific year; and I would make this amount no greater than $50 billion per year for the entirety! It would outline to Investors that the Fed is no more confident in Investment Banking than they themselves. Congress will obviously not do this, so I would advise all Taxpayers to oppose any extension of the Fed legislation at this or any Point; knowing that the Fed has functioned fairly well since its inception, and further activity could not possibly be good for Americans. lgl