By the LendingLies Team
A top advisor to GOP presidential nominee Donald Trump stated on Monday that the party wants to reimplement Glass-Steagall. Glass-Steagall was depression-era legislation that was designed to prevent big banking monopolies but was repealed in 1999.
It is rumored that Wall Street sources fear Trump would reverse course on policies that are now 20 years old and are taken for granted by the mega banks that have engineered the largest financial heist in history due to this deregulation. Although the general public might be happy to hear that Trump proposes that the banks be reined in, Wall Street and the powers-that-be are going to come out in full force against Trump.
Glass-Steagall legislation was imposed in the wake of the 1929 market crash. Its objective was to limit relationships between securities firms and commercial banks, and therefore decrease the systemic risk to the markets and economy. Donald Trump is attempting to rally the GOP to break up the mega-banks.
“We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment,” according to the 2016 Republican Party platform statement. However, the platform statement is also contradictory and states that the Dodd-Frank regulatory requirements on banks are too restrictive.
The GOP platform outlines the decline in the number of community banks in the U.S. since Glass-Steagall was repealed and says Dodd-Frank is “regulatory harassment of local and regional banks,” arguing that it and the Consumer Financial Protection Bureau “would leave us with just a few enormous institutions, as in many European countries.”
However, the Gramm-Leach-Bliley legislation that removed Glass-Steagall from the books, is politically expedient on a number of levels for Trump.
First, the legislation was signed into law by President Bill Clinton and provides a platform to attack Hillary Clinton who Wall Street has rallied behind. The Democratic nominee has come under fire for her donations from Wall Street, and the secretive speeches she gave at Goldman Sachs- the contents of which has not been fully disclosed. Clinton has made no mention of reinstating Glass-Steagall.
Next, Trump’s willingness to confront Wall Street could possibly resonate with disenfranchised Bernie Sanders supporters who tend to not support either candidate. Trump has not outlined his proposed policies but if he speaks out too soon he could seriously hinder his fundraising efforts that would be diverted to Clinton. Wall Street is going to fight the re-implementation of Glass-Steagall and will likely succeed, meanwhile Rome is burning.
Since 2007 the four biggest banks are now over 30% larger than they were and the five largest banks hold more than HALF of the total banking assets in the United States. If one bank fails, they will all come down.
During the same time period, the federal government has racked up over $18 TRILLION dollars in debt…….in fact, this amount is double the amount that was owed before the 2008 bubble imploded.
Derivatives are now worth more than $700 trillion (that’s ten times bigger than the ENTIRE world economy!). In 2008 $60 trillion in wealth was destroyed and the Federal Reserve madly printed Federal Reserve Notes to bail out the banks who we now know sustained few losses between foreclosing on homes they don’t own and rigging the currency markets. The privately-owned Federal Reserve increased the money supply by over 300% causing households to pay artificially high prices on energy, consumer goods, food and medical costs.
What is the answer to the upcoming financial collapse? Now that there is more debt, more derivatives, more leverage and less earning capacity among the lower and middle class, by the time the financial crisis occurs- the Federal Reserve will need a bailout!
We are beyond the time with the reinstatement of Glass-Steagall is going to do any good- but it is a start. When the markets crash, prepare for something like you have never seen before. Retirements and pensions will collapse, investments will be worthless and the US Dollar will continue to lose its value as the world abandons the US Dollar as the world’s reserve currency. It is already happening.
Remember, there have been three major market crashes in 1914, 1939 and 1971. The 2008 debacle was a pre-show for the real deal. That is three collapses in 100 years, thus, crashes occur every 40 years or so. Fasten your seat-belts.