Wednesday, November 9, 2011

Federal Reserve : Banks : Citizenry : Volcker Rule :: Fox : Sharp Teeth : Hens : Hen House Door.

November 3rd, 2011

It is interesting that at this point in time the Federal Reserve, SEC, Comptroller of the Treasury, and the FDIC have all reportedly supported an effort to curtail the investment activities of the nation’s banks. The Volcker Rule reportedly aims to prevent the banks from investing for their own benefit (proprietary trades) and the Rule is to allow the banks only to invest funds in the markets on behalf of clients – with some exceptions, of course. The Rule is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act; with the Act totaling 848 pages, - see page 245 for the Volcker Rule. Whether such a plan as the Volcker Rule (and maybe the banking act in general) has any worthwhile effects to benefit the American nation and its people is anyone’s guess and only time will tell.

One can surmise that the aforementioned government-type* entities have supported such an effort as the Volcker Rule to force the banks into lending money to consumers and businesses again – just like the banks of yesteryear. The Dodd-Frank Act, with its Volcker Act, also claims to be an attempt to head off future credit crises, should a recovery ever materialize from the current crisis. However, one must wonder why the SEC, the FDIC, the Comptroller, and the nation’s favored private banking cartel (the national bank we call the Fed*) did not assert such a plan when the banks were given trillions of tax dollars over the last several years.

We are all well aware of the potential of our often inept governments across the land – when taking any action – to make any given situation worse. As such, one can only wonder what may result from the current initiatives. For example, it would seem that to quash the profits of the nation’s banks via the Volcker Rule (or whatever) would only incite the banks to squeeze the consumer for more banking related fees – or any other fees the banks can dream up to increase their profits. Such a goal of squeezing customers for more money may well have been the impetus behind the recently proposed fee increases and charges for purchases made with bank issued debit cards (which the banks appeared to have abandoned as a result of public outcry concerning the topic), and such abandoned efforts may have been a result of the upcoming banking regulations.

Hypothetically, maybe the outlook from this legislation is not entirely bleak. Though not very likely, the Volcker Rule effort could cause the wealthy banks to gather the required gumption to legally challenge the constitutionality of the Federal Reserve System. If so, in the end, the Volcker Rule could lead to an actual win-win situation for the American consumer. Though given our government’s apparent favoritism with respect to the nation’s banks, it would seem not wise to anticipate any significant benefits to the consumer from our government or any other entity which has been sleeping with the banks throughout our nation’s history.

At best, maybe the apropos cliché is: ‘better late than never.’ Either way, this latest effort of the government entities and the Fed seems to conjure up another cliché, something like: ‘the fox closing the door to the hen house after all the chickens have been eaten.’

Adam Trotter / AVT

* Of course, we are all aware that the Federal Reserve, the banking cartel which runs the U.S. economy, is not a government agency. For those interested, see:

Volcker Rule

Volcker Rule

Volcker Rule, Once Simple, Now Boggles

Volcker Rule Is Out, How Much Will It Hurt?

MF Global’s Collapse Exposes Prop-Trading Risk That Volcker Wants to Curb

Regulators release plan for Volcker Rule limits on bank trading

Selected Sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act

Thomas Jefferson and the Federal Reserve System.

Concerning the Federal Reserve System and Fiduciary Responsibility….