Posted by Karl Denninger
So Bwarney “I never met a banker I wouldn’t blow” Frank said:
Oh, so Bwarney doesn’t like the bank reform eh?
He got suitably “informed” (are they down to rank bribes with $100 bills – out of sequence – in envelopes yet?) I’m sure by the banksters lobby about 30 seconds after President Obama showed up on TV this morning.
Well I have an answer for that problem if Bwarney doesn’t want to play ball.
See, President Obama doesn’t need him to.
He can fire Turbo “I cheated on my taxes” Timmy – after all, the recently-announced rules should prohibit him from receiving his paycheck anyway – and replace him with Paul Volcker.
Mr. Volcker can then do what Congress won’t through the back door.
You want to be a Primary Dealer and bid on Treasury Auctions? Cool – divest first, then come talk with us. Until then we’ll run our auctions directly and you won’t make the FICC revenues off your arbitrage (which is a huge, captive, and virtually guaranteed “free money” source.)
If the banks still don’t like the rules that President Obama wants then how about if our new Central Banker is PAUL VOLCKER of Treasury who then issues non-debt-based currency directly?
And don’t tell me he can’t. He most certainly CAN without passing one new law:
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts. (31 USC Sub IV Ch 51 Sub 1 Sec 5103)
Unfortunately for The Fed they screwed up when they passed The Federal Reserve Act and failed to void the ability of Treasury to issue its own non-debt-bearing currency which is also legal tender. It requires only an executive order to implement this and there is nothing Bwarney Frank can do about it.
Doing that would effectively emasculate both The Federal Reserve and the big banks that have all sorts of credit outstanding through The Fed, as it would destroy the backstop that The Fed enjoys. Suddenly The Fed would be “just another bank” with a metric crapload of used dogfood on its balance sheet in the form of Freddie and Fannie MBS that also don’t have a full faith and credit guarantee!
IF President Obama is serious about fixing these problems, this is how he addresses it. Either play ball – right here and now – “OR ELSE.”
Oh, and start using the words “indictment”, “prosecution” and “prison” too – or just perp-walk a few of those banking executives on Wall Street.
THAT will convince me that our President is serious.