May 11, 2012
By Frank Knapp Jr. | Lexington County Chronicle
In another bad Federal Reserve decision, Chinese government-owned banks have been approved to do business in the U.S.
China already owns much of our nation’s debt and its businesses are bidding successfully for public project works here.
Add to that China holding the loans and lines of credit to our country’s small businesses because our domestic banks won’t lend is a recipe for a perilous future for America.
So why did the Fed open the doors to China’s banks? Because our big banks want China to give them more access to investing in Chinese banks to gain access to China’s consumers. It was a tradeoff that Scott Talbott, head lobbyist for the Financial Services Roundtable, said would “benefit the U.S.”
This isn’t about benefitting our country. It is about benefitting the profit greed of the big banks like JPMorgan, their CEOs and shareholders. There doesn’t appear to have been any calculation by the Fed about the other potential impacts on our economy by having the Chinese government being able to undercut our local community banks and call loans and credit lines of our small businesses whenever they want for whatever reason. And with China now ready to become a player in U.S. banking, how soon will they be influencing other Federal Reserve decisions?
The long-term consequence of the Fed’s decision to allow China to put its nose under our private financial institutions’ tent has enormous risks for our country. But what the hell, at least JPMorgan and its ilk can make some good short-term profits and bonuses.