http://finance.yahoo.com/…

The incoming Obama administration is considering setting up a government-run bank to acquire bad assets clogging the financial system, a person familiar with the Obama team’s thinking said on Saturday.

The U.S. Federal Reserve, Treasury and Federal Deposit Insurance Corp have been in talks about ways to ease a banking crisis that is once again deepening — and a government-run “aggregator bank” is among the options.

Outgoing Treasury Secretary Henry Paulson and FDIC Chairman Sheila Bair both said on Friday a government bank was one of a number of ideas U.S. regulators had been discussing.

The source said advisers to President-elect Barack Obama, who takes office on Tuesday, were also considering the idea of an aggregator bank among a range of options that could be pursued.

David Axelrod, a top adviser to Obama, told Reuters the new administration would have something to say about a fresh approach to the financial crisis in “the next few days.”

Yes… because the first two worked out so well.

The story is a few days old but I’ve not seen much coverage. It seems doubtful to me something like this would occur. Those in power and coming to power seem to prefer fascism to socialism.

Sounds nervous.

Fires? Ben… you helped start the fire after creating a house of straw and twigs. Now you’re building up the house again with more straw and twigs and still playing with matches in the corner.

http://www.telegraph.co.uk/…

The Bank of England will be able to print extra money without having legally to declare it under new plans which will heighten fears that the Government will secretly pump extra cash into the economy.

The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet – a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel’s Government in 1844 which originally granted the Bank the sole right to print UK money.

The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority.

However, some have warned that it means: “there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses.”

It comes after the Bank’s Monetary Policy Committee cut interest rates by half a percentage point, leaving them at the lowest level since the bank’s foundation in 1694.

The Keynesians amaze me. The public amazes me more. If it were true that spending was THE way to get things moving and to keep things moving… why exactly wouldn’t they advocate unlimited spending? Why care about debt? Print to cover it. If Obama’s plan won’t reduce unemployment to zero why don’t they just spend more? They only talk of what good the spending will do and try to ignore any talk of side effects. The public takes all this with blind faith. No questions what so ever. Are the Keynesians actually drinking their own flavor aid? Do they even know they are?

It’s interesting how often Neal Cavuto has Paul on. I wonder when Glenn Beck gets his new Fox show I wonder if Paul will be appearing regularly too.

The paper they refer to can be found here: modern_money_mechanics.pdf or here as HTML.