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On January 30, when former Federal Reserve board member Kevin Warsh was nominated by President Trump as the central bank’s next chair, markets sold off and gold and silver plunged. Investors were positioned for a “dove,” someone inclined to cut rates aggressively and keep money loose; and Warsh has a long-standing reputation as a “hawk.”
So wrote Michael Nicoletos in an article titled “Everyone Is Focusing on the Wrong Thing.” But Nicoletos and some other commentators are seeing something else on the horizon – a rebalancing of the banking system through an overhaul of the Federal Reserve itself. In recent months, noted Nicoletos, Warsh has argued that the central bank’s “bloated balance sheet” has made borrowing “too easy” for Wall Street, while leaving “credit on Main Street too tight.” That contrast — abundant liquidity for the largest financial institutions, scarcity for the communities that actually generate economic activity — is a structural flaw that has unbalanced the American economy.
Continue readingFiled under: Ellen Brown Articles/Commentary | Tagged: Bank of North Dakota, community banks, economics, economy, Federal Reserve, FINANCE, Financial Regulation, Kevin Warsh, money, NATIONAL INFRASTRUCTURE BANK, politics, Public Banking, quantitative easing, Scott Bessent | 3 Comments »
Heads or Tails, Wall Street Wins: Saving Our Pensions From The Casino
“Most billionaires don’t park their money in making more businesses. They park their money in the stock market. That is not meaningfully investing in opportunity, it’s just investing in other billionaires.” So said Abdul El-Sayed, U.S. Senator-elect from Michigan. He said that he would rather “have an economy that makes a thousand millionaires than one billionaire,” and that money that would otherwise go into the S&P 500 should go instead to “good schools, good infrastructure, health care, child care.”
It’s a laudable sentiment, but those thousand millionaires would probably still be parking their money in investments designed to make more money without producing anything. When an investor buys Nvidia shares on the stock market, the money goes to whoever sold the shares, not to Nvidia. A company gets new capital only when it issues new stock. The profits from stock market trades go either to the buyer or the seller, depending on which way the penny falls. And it’s not just the billionaires and millionaires playing those financial markets. Our household savings, corporate funds and pension funds are gambling there as well.
State and local pension funds hold $6.2 trillion, more than a fifth of the GDP of the U.S. economy. That massive pool of money is not building housing, infrastructure or local businesses. It is parked in Wall Street’s casino, bidding up the price of existing assets, while asset managers collect their fees whether the pension funds win or lose. And many pundits are predicting an imminent market crash, in which the funds will lose big.
Worse, the returns to the pension funds are no better than they could get from a simple index fund without incurring outside management fees, and sometimes they are worse. Meanwhile, the nation’s only state-owned bank, the Bank of North Dakota, earned a 17.2% return on its capital in 2025 while lending into its state’s own economy, and paid $258 million of its profits back to the state. North Dakota’s money is safe, earning, and invested in local productivity.
Continue reading →Filed under: Ellen Brown Articles/Commentary | Tagged: Bank of North Dakota, economy, FINANCE, investing, NATIONAL INFRASTRUCTURE BANK, pension funds, personal-finance, politics, private equity, public banking, Public Banking Institute | Leave a comment »