Since 1999, non-elected bankers have been in charge of economic policy in the US and other countries, with questionable results. Are we on the verge of a new financial crisis?
“There is the possibility… that, after the rate of interest has fallen to a certain level, liquidity-preference may become virtually absolute in the sense that almost everyone prefers cash to holding a debt which yields so low a rate of interest. In this event the monetary authority would have lost effective control over the rate of interest.”
John Maynard Keynes (1883-1946), The General Theory of Employment, Interest and Money (1936).
“For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.s (Structured Investment Vehicles).
– I didn’t see any of that coming until it happened.”
Janet Yellen (1948 – ), 2010, first female Chairman of the Federal Reserve, the US central bank, since Feb. 1, 2014, Vice Chair from 2010 to 2014, and a member of the FED since 2004, (in a testimony to a congressional committee, Nov. 15, 2010). [N.B.: From 2004 to 2010, Ms. Yellen was president and chief executive officer of the Federal Reserve Bank of San Francisco, which oversaw the US’s largest mortgage lender, Countrywide Financial. Bank of America acquired Countrywide in 2008.]
The beauty of the Glass-Steagall act, after all, was its simplicity: banks should not gamble with government insured money. Even a six-year-old can understand that…”