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Free Market In Jeopardy


More government power, intervention could spell disaster.

For those of you that laughed when I have remarked about the markets moving to socialization where government bureaucrats control pricing of risk and the allocation of capital, please read this news story. It's being floated and vented in Europe first to garner support from a more socialistic society.

Do not underestimate the dark power of this legislation and do not listen to the innocuous presentation by government officials. It's certainly a ways from this proposal to controlling markets, but the ability is there and when there is ability, when has the government failed to use it? The slippery slope is steep indeed. The proposal essentially would grant vast authority to the Federal Reserve and the government to virtually control markets. It will give them the ability to gather private market information and unilaterally decide if positions taken with that private money for private investment is somehow negative for the financial system. It could then force the unwinding of those positions. Initially the powers will be used to supposedly prevent over leverage in the system (that the Fed created itself). But it doesn't exclude the situation where a hedge fund that is long puts can be forced to unwind those puts at the government's discretion.

The Federal Reserve and the treasury are very clever in blaming free markets for the mess we're in to garner more power. Ironically it's government intervention in markets that has caused the problem in the first place. Through their policies creating negative real interest rates for years, speculative forces in the economy have been able to create vast amounts of debt.

If we continue to bend to government, we will eventually get what we deserve, fascism. Not the Hitler kind of fascism, but simply the government existing and growing for the sake of the government and not the people. This will result in even more massive mis-allocation of capital and stagnation. It will result in slower technological development and a much lower standard of living for our children.

-A Disgusted Mr. P
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No positions in stocks mentioned.
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