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Larson explains that when rates rise sharply, bond prices (valuations) crash, and that's what he sees ahead, the result of profligate Fed/Treasury policies making America like Greece and other troubled EU nations.
"Financial Ebola Sweeps Through Global Bond Markets," he shows in a frightening graph on Greece, its two year note rates exploding from 2.1% in October 2009 to 18.9% in late April. Over the same period, the country's 10 year notes (due July 19, 2019) crashed 39%. "That is bond market Armageddon," he said. It's happening in real time, spreading to all troubled countries, and it augurs the next stage in the financial crisis, worst than the first, because governments let banking fraud persist instead of curbing it to save disaster.
What better reason for change, what's not considered by Congress. With out-of-control public debt, fraud a way of life on Wall Street, and politicians blessing it like always, the eventual lid blowing will reverberate globally, crushing people, not bankers, who'll keep gaming the system to get richer, larger, and more powerful at the public's expense.
The Case for State-Owned Banks
The clear lesson - The private sector failed. A new way is essential. Public utility banking at state and local levels is an attractive alternative based on North Dakota's experience. The time is now, and the name of the game is change, fairness, workability, and freedom from predatory too big to fail banks that are too big to exist, so shouldn't. Shut them down. Break them up. Nationalize them. Replace them with publicly owned ones that work.
North Dakota's experience is instructive. What does it have that others don't? It has the nation's only state-owned bank, the Bank of North Dakota (BND). Established in 1919, it's financed industrial, commercial, and agricultural growth soundly, something no other state can match because they're not run like North Dakota.
BND also provides residential and student loans, and operates as a banker's bank, financing private sector lenders with accounts, backed by the full faith and credit of the state, not the FDIC (now bankrupt), and for over 90 years it's worked.
Well enough to encourage other states to check it out, including Illinois, Massachusetts, Virginia, Washington and others in touch with the bank to learn more at a time they're struggling to balance budgets by cutting expenses, laying off staff, reducing services, and raising taxes - counterproductive measures when stimulus is needed.
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