Congressman Ron Paul (R-Texas) says that U.S. taxpayers could well wind up bailing out Greece if Goldman Sachs gets slammed.
The fact is that current laws exempt agreements between the Federal Reserve and foreign central banks from disclosure or audit, Paul writes in his blog. Greece is but one European country with strong ties to Goldman Sachs.
“The case could easily be made that default could have serious implications for big U.S. banking cartels,” Paul says.
“Considering the ties between the Fed and these big banks, it is not outlandish to wonder if the U.S. taxpayer is secretly bailing out the entire world, country by country, even as our real unemployment tops 20 percent.”
“Unless laws are changed to allow a complete and meaningful audit of the Federal Reserve, including its agreements with foreign central banks, we might never know if this is occurring or not.”
Greece will ultimately be bailed out by a consortium of European countries or the IMF, says Gartman Letter editor Dennis Gartman, but he hopes the IMF will stay out of the fray.
For one thing, such an action would cause trade imbalance to worsen, which is bad news considering how involved Greece is with the shipping industry.
Also, the IMF has a history of prescribing the same remedy to member states; raise taxes, cut spending, and devalue the currency.
Finally, Gartman says, “societal upheaval" would occur as residents became even angrier about their devalued currency and retooled pension plans.
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