Glenn Beck Tackles the Fed and FDIC Readies Socialism-Lite

Here is the link to Glenn Beck's show on if we need the Fed.  I have yet to watch it, but I doubt I will learn very much.  It's still nice to see it being criticized in the mainstream.  Gary North has a great article out today on the coming market correction for what he calls the "Keynesian Tiger."  Some highlights:

First they inflate. Then there is a boom. Then there is price inflation. Then they stop inflating. Then there is a recession. To keep it from becoming a depression, they inflate. Year after year, decade after decade, generation after generation, this is what central bankers do.
This time, the tiger is really, truly dangerous. The central bankers have lured the world's highly leveraged speculators and their multinational bankers into wildly speculative ventures that can keep them growing richer only by threatening them with bankruptcy if the central bankers ever attempt to climb off the tiger's back.

There is no question that the People's Bank of China has inflated in the range of 20% per annum for years. The Chinese central bank is the world's leader in monetary inflation. It has financed the boom in China by a policy of goosing the economy with low interest rates.
If we believe the Austrian theory of the business cycle, we should expect an economic crash in China when the central bank finally ceases to inflate because prices are rising. The central bank says that it has been raising interest rates by fractional percentages over the last 12 months, but the yuan's exchange rate with the dollar has not changed much. China's central bankers have climbed on the back of the tiger, and they have persuaded the businessmen of the nation to join them. They cannot get off without a crash. The only question is when it will occur.

Let me review. Big, nice Japan is the Japan of the carry trade, the friend of Western currency speculators and the large banks that lend them money to engage in the carry trade. Big, nice Japan has made Western speculators rich. But they started to get less rich as a result of a steadily rising yen. The earthquake and repatriation caused them to start getting poorer, fast.
In contrast is big, bad China. China's yuan in not an openly traded currency. So, it could not become a part of the carry trade. Western speculators could not borrow money at near zero percent from the People's Bank of China to buy Western bonds. The PBOC lent its money directly to Western governments, not Western private speculators. It cut out the middlemen.

A perfect storm seems to be brewing as a devastated Japan will continue to attempt to drive down the price of the yen as strife in the MENA region rages on and Bernanke keeps the printing press running high.  Remember this?:

North was kind of enough to provide the link to the Fed's balance sheet at the time of the financial crisis (when the Fed doubled the monetary base).  It's definitely worth taking a look.  And now according to Lauren Tara LaCapra's Twitter account, Tom Hoening, practically the only Fed president who votes against further inflation, is resigning.  Lucky us, his replacement search committee will be headed by Terry Moore, President of the Omaha Federation of Labor AFL-CIO.  Chances are, the Kansas City Fed will no longer be headed by an inflation hawk.

Since I mentioned the MENA region, I should point this Bloomberg article out:
  
Assad's Promise Fails to Halt Syria Unrest as Scores Die During Protests

Syrian President Bashar Al-Assad’s security forces clashed with protesters in several cities after his promises of freedoms and pay increases failed to prevent dissent from spreading across the country.
The protests that started earlier this month in the southern province of Daraa may have resulted in the deaths of 55 people, London-based Amnesty International said in a statement on its website yesterday. Security forces opened fire on protesters in the town of al-Sanamein in Daraa and carried out arrests in the capital, Damascus, it said.

We are in Libya just to stop the government from killing its own people huh?  What about Syria, Bahrain, and Yemen?  Oh that's right, not enough oil there...

I will end with another great example of creeping socialism.  From the Financial Times

US Banks in 'Cash for Keys' Foreclosure Talks

The five biggest US mortgage servicers were told this week at a private meeting with regulators to consider paying delinquent borrowers up to $21,000 each as part of a broader settlement of the foreclosure crisis.

People who attended the meeting, chaired by the Federal Deposit Insurance Corporation on Monday, said the industry-wide “cash for keys” program would involve the biggest servicers, led by Bank of America, paying borrowers as an incentive to leave their homes.

Banks would pay borrowers who are more than 90 days behind on mortgage payments up to $1,000 to seek independent financial advice and up to $20,000 in cash as a “fresh start” payment towards living costs in a new home. They would have to vacate their properties quickly and leave them in good condition.

How the hell did they come up with the arbitrary number of $20,000?  And where do regulators get the authority to employ such a tactic? Though the foreclosure process needs to be sped up to clear the market, it can't be done without checking for fraud which can take a long time.  It is a tough situation, but I doubt giving people $20,000 is going to help in a significant way.  Then again, according to the Fed none of the big banks did anything wrong when processing foreclosures with robo-signing...