Stop wasting my time
You know what I want
You know what I need
Or maybe you don’t
Do I have to come right flat out and tell you everything?
Gimme some money, gimme some money
—Spinal Tap (performing as “The Thamesmen”)
Based upon the revelation that dozens of foreign-owned banks as well as American corporate titans like McDonald’s and General Electric were among the recipients of the Federal Reserve Bank’s $3.3 trillion worth of emergency loans, it’s no wonder that Fed Chairman Ben Bernanke would have preferred not to have been compelled to come right flat out and tell the American taxpayers everything about the way their money was loaned out in the months after the Lehman bust.
As markets everywhere seized, institutions worldwide were begging for someone to “gimme some money’ and the Fed appears to have stepped in as global banker to the world. You can bet this morning as millions of Americans once again ask “where was my bailout?”, that the rising anti-Fed sentiment recently on display in our nation’s capital will continue to intensify.
I’m nobody’s fool
I’m nobody’s clown
I’m treating you cool
I’m putting you down
But baby I don’t intend to leave empty handed
Gimme some money, gimme some money
Expect to hear more put-downs of Bernanke and company as congressional posturing reaches new heights of absurdity, yet despite the outpouring of feigned outrage, Congress is unlikely to do anything substantive to reign in the Fed’s powers since our so-called “leaders” know deep in their hearts that they can’t be trusted with keys to the central bank’s printing press.
Even so, the grandstanding will continue since the calculation has been made that there are more political points to be scored through demagoguery than through public education regarding the central bank’s proper role.
Since it’s likely that the Fed will seek to strike a cautious tone in coming months, let’s hope that no new crises rear their heads anytime soon.
After reading the details of the emergency lending programs, it’s obvious that things were as bad as or worse than the most pessimistic of us believed back in late 2008-early 2009. I don’t know how you feel, but I’m thankful that we have a truly independent central bank.
Don’t get me wrong
Try getting me right
Your face is OK
But your purse is too tight
Much of the Fed’s recent actions have been designed to force money out of riskless investments by rendering the return on them nil. A concurrent goal has been to get consumers to open their tightly shut purses, and it appears that they are seeing success on both fronts. Money has been returning to the stock market and recent measures of consumer sentiment have been improving dramatically.
Despite the ridiculous media hype over Black Friday and Cyber Monday (Why don’t we just call it “Spending Week” and get it over with?), it appears that folks are starting to return to the shopping aisles, even though many of those are virtual ones embedded within online sites. American corporations are much leaner than they were two years ago, and as consumer spending rises, corporate earnings should get a nice boost.
I’m looking for pound notes, loose change, bad checks, anything
Gimme some money, gimme some money
Meanwhile, our friends across the Atlantic are feeling the pressure as bond vigilantes continue to train their fire on the weakest members of the European Monetary Union. American observers, mindful that German Finance Minister Wolfgang Schaeuble recently characterized the Fed’s QE2 policy as “clueless”, can be forgiven for chuckling as rumors circulate that the ECB is snapping up member country bonds by the fistful. As the specter of sovereign default lurches towards Spain, it increasingly appears that German taxpayers will be footing most of the bill for the profligacy of their continental cousins, and I suspect that more than a few American central bankers are now basking in that most German of emotions, schadenfreude.
Lest they become too cocky, let’s remind those bankers that America has been getting a free pass due to the dollar’s status as the world’s de facto reserve currency. Frightened money has been emigrating to our shores, and in the process that flow has been holding American borrowing costs down. There are lots of indications that the recovery is gathering steam, and if growth improves inflationary pressures are sure to mount. If the Fed is slow to react to those pressures how long will it be until the global erosion of confidence in the dollar prompts US Treasury officials to serenade our foreign underwriters with that now familiar refrain, “gimme some money”?
Go Nigel, Go.
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