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October 9, 2008
More Chinese-Style Financial Steps Planned for American Banking System?
The Fed has discussed a plan to take ownership stakes in American banks, even healthy ones
"It is the policy of the federal government to use all resources at its disposal to make our financial system stronger,'' Paulson said. ``We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.''
Direct infusions of capital into specific banks, taking equity stakes in return. If this doesn't hint of the Chinese system, I don't know what does
"No such moves are imminent, but the fact that the department is engaging in such discussions is an indication of how the crisis is constantly morphing. Such a move was not under consideration just a few days ago but has become more of a possibility in recent days as the stock market has plunged and the credit crunch shows no signs of easing."
Where are these ideas coming from? Apparently from a Republican administration. I must confess to be frightened at the mere contemplation of such ideas at the highest level of American governmental authority. If such invasive activitiy is to be practiced now, what next?
[UPDATE: This article asks: "The End of American Capitalism?"]
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