The truth is that the major banks are insolvent. Banks won't lend to other banks and they don't trust the banking system because they know that the banks are bad risks.
We can continue to throw money at the problem but the problem is a bottomless pit. There will never be enough money available to fix the banking system in the long term. In the short term, Geithner and the Fed can play games and charades with the American people to keep the banking corpse looking alive. However, eventually the rot and the stink of the corpse will become obvious.
The Obama Administration shouldn't have appointed Timothy Geithner as Treasury Secretary. Not only is he a tax cheat but as the head of the Federal Reserve Bank of New York he is one of the many responsible for the banking mess. Geithner, I am sure, was appointed to make sure that Obama acts in a way that is acceptable to the Federal Reserve System. But what is good for the Federal Reserve and the banksters is not good for America, or even the world.
That however is only a good first step. The other part of the solution is for the government to end the Federal Reserve. Most informed people know that the Fed is not a government agency but is a private corporation. Not only is the Fed unconstitutional, since the constitution calls for Congress to print the money, but it is directly and indirectly responsible for the present banking collapse we see today. By assisting in the bubble economies of the last several decades through interest rate policies, by excess liquidity, and by promoting an environment of deregulation, the Federal Reserve needs to take responsibility for the collapse of a money system that it controls.
The federal government needs to take drastic measures to offset the present economic collapse. Trying to create an inflationary spiral in the form of the Obama stimulus package to offset depressionary deflation is not the solution. Rather the government needs to correct banking abuses, excesses, and fraud by taking control of a bankrupt banking system and by removing the economic players that brought about the collapse.
