Today, we take for granted that we can eat apples and oranges and bananas all year round if we choose. It doesn't matter where you live. We can eat strawberries in the dead of winter. In fact, we routinely enjoy goods that come from places very far from our own doorstep.

"Televisions from Taiwan, lettuce from Mexico, shirts from China," William Bernstein writes in A Splendid Exchange, a book on trade. Goods from faraway are so common, "it is easy to forget how recent such miracles of commerce are."

Such miracles of commerce have redrawn the economic map. The emerging markets have "emerged," as you will see. For you and me a big opportunity has also emerged in something called the Great Convergence.

Our story has its roots in the late 20th century, with the gradual spread of the Industrial Revolution to the developing world. According to Power & Plenty, a good reference book on trade, the Western world (ex-Japan) represented 90% of the world's manufacturing output as late as 1953. America's economy alone was nearly half of the world's industrial output.

During this time, the economic gap between, say, China and Western Europe grew very wide when viewed in historic terms. But things changed in the late 20th century. The Great Convergence began. From 1950 on, world economic growth was, according to Power & Plenty, "quite simply astonishing." We enjoyed a rolling wave of "economic miracles" through the decades. Closed economies opened up...and trade expanded.

We can point to the success of postwar Japan...and then to the surging tiger economies of East Asia. Singapore, Hong Kong, Taiwan and South Korea grew in leaps and bounds. Finally, we saw the opening up of China, India, Russia and Brazil. The once-bottled-up energies of these countries poured out.

Today, we see the handiwork of the Great Convergence taking shape. The distinctions between "emerging markets" and "developed markets" are starting to disappear. Indeed, the terms may already be obsolete. Such is exactly the thesis of Everest Capital, which makes the case in a recent white paper called The End of Emerging Markets?

"The belief that companies in the US, Western Europe or Japan are better managed than in emerging markets is also no longer valid," Everest asserts. "Anyone who has sat through the parade of fraud and corporate malfeasance of recent years in the US will find it hard to argue otherwise."

The list of corporate thieves is much longer in the US and Europe than in the emerging markets. Management teams in the West no longer dominate when it comes to standards of best practices. Everest speaks with the authority of a practitioner on this point. "We meet a large number of managements in emerging market countries, and it is impressive to see how quickly they have adopted best practices in terms of disclosure, governance and creating shareholder value."

Everest also makes the case that governments in the West are just as bumbling as those of emerging markets. More and more, it is the Western governments that steal too much. Another distinction blurred.

Emerging markets now make up about half of the global economy. Take a look at the nearby chart, "Let's Call It Even." (Gross domestic product is a flawed statistic, but it serves as a rough guess of economic size. PPP means "purchasing power parity," which aims to take out the distorting effect of different currencies.)

Not surprisingly, therefore, emerging markets now make up 10 of the 20 largest economies in the world. India is now bigger than Germany. Russia is bigger than the UK. Mexico is bigger than Canada. Turkey is bigger than Australia.

In a stock market sense, these places have also grown up. It used to be that emerging markets were not very liquid or very big. It was not that long ago that the IBM shares changing hands in a single day in New York were worth more than all the shares that traded hands in Shanghai or Bombay.

Today's emerging markets are large and liquid. As Everest Capital points out: "In the third quarter of this year, Chinese markets traded more shares than the NYSE; Hong Kong and Korea traded more than Germany; India traded more than France; and Taiwan traded more than Italy, Australia or Canada."

Emerging market companies are also growing faster. In particular, there are wide gaps in the growth rates of sales and profits. The second key distinction worth noting is that of balance sheet strength. Emerging market companies have less debt and cover their debts more comfortably.

All is to say, investors need exposure to emerging markets, or at the very least, they should not shun them for reasons that are no longer valid. One of my favorite ways to get exposure to emerging markets is through the back door, so to speak. Invest in companies, wherever they are, that have what these economies need or want, but don't have - or can't make. This is another reason to invest in the commodities we've honed in on - especially oil, potash, gold and the agricultural commodities.

Regards,

Chris Mayer
for The Daily Reckoning Australia

• Emerging Markets in the New World Disorder
• The Century of the Emerging Markets
• Vietnam: The Next Bubble in the Emerging Markets
• Still Opportunity in Emerging Markets – Especially India
• Globalisation Halt

First, Britain said it would impose a 50% super-tax on their bonuses. Then, Sarkozy said he would do the same thing. Angela Merkel merely said that she found the idea 'charming.'

As for the US, the argument goes on. Goldman has tried to head it off with various gestures. Its top man said the firm wasn't just trying to make money; it was doing "God's work." No kidding. We couldn't make this stuff up.

How Mr. Blankfein knows what God wants him to do, we can't tell you. But it was certainly a bold public relations move to suggest it.

More recently, top executives agreed not to take cash bonuses.

The Financial Times calls it a "war on greed." But it's a bogus war. What is really going on is that both sides are conspiring to share money that doesn't belong to them. The Wall Street Journal, for example, revealed more of the real dealings between AIG and Goldman. AIG had guaranteed billions worth of Goldman's dodgy mortgage deals. If AIG went down, Goldman would lose a lot of money. So, when the feds stepped in to "save western civilization as we know it," they were really saving Goldman. Western civilization would have been better off if they had all taken their losses and gone to wherever willing investors and lenders sent them. Instead, the feds put up the taxpayers' money...and the bankers got their bonuses.

The show must go on. And now, the government pretends to punish the bankers, the bankers pretend to suffer.

In the first place, a 50% tax is not that extraordinary. The top marginal rate is nearly 50% in many places already - including the US. Add the local tax to the federal levy and you barely have half left.

In the second place, if the bankers don't take big cash bonuses they'll take their compensation in some other manner.

According to The Financial Times, rough handling by English tax collectors is causing many bankers to leave the country. But there's more to it than just the taxes. Bankers are leaving the UK because the opportunities for them are better elsewhere.

Here we come to one of the world's big trends - one that will have profound consequences for the entire world. There may be a depression in the US and Britain...but it hasn't slowed the movement of money and power from the mature, developed economies - notably the aforementioned Britain and America - in the direction of the emerging markets. The emerging markets are growing faster; everybody knows that. According to a Goldman study, nearly half the world's economic growth is now occurring in just four countries. And neither the US nor Britain is on the list. Nor is any other developed country. The four are the BRICs...Brazil, Russia, India and China. They were given a big boost by the Fed...which has kept the price of credit in the US artificially low for almost an entire generation. This increased consumer demand in the US for foreign products, indirectly transferring a substantial part of the US GDP to the emerging market exporters.

This year, nearly twice as many IPOs were completed in Hong Kong as in either New York or London. Why? Because there is more new economic activity in Asia than in the mature Anglo-Saxon markets. And because there is more money available in those emerging markets than there is in the West.

This trend could come to an end at any time. But it is unlikely. The industrial revolution favored the West. The next phase of global development seems to favor the new, emerging markets. They don't have the legacy costs and corruptions of mature industrial societies. No giant military establishments. Minimal social security and public health care systems. Smaller welfare, education and health bureaucracies. Fewer lobbyists and entrenched special interests. Fewer retirees. In short, fewer parasites.

Emerging markets are now playing catch up. Sometime in the future, some of them may take the lead - surpassing the US and Europe in military power, national income, growth, even quality of life and income per capita. Then, they too can begin ruining themselves. But that is still far, far in the future. We'll have many a laugh between now and then...

Bill Bonner
for The Daily Reckoning Australia

• Bankers Take Money From the Government and Use it to Speculate
• Everyone is Getting Tough on Bankers
• If the Economy is Not Recovering It Isn’t Getting Enough Stimulus
• Fed Made More Money than Goldman Sachs
• Government Sachs

China is a country of hyperbole. There's scarcely anything you can say about it that doesn't end with 'est.' In some ways, it is the world's oldest society. In other ways, it is its newest. It is the world's richest - with more than $2 trillion in reserves. It is also the world's poorest, with some 200 million people who get by on less than $5 per day. It faces the world's biggest problems too.

Even in its calamities, China is second to none. People inside the Great Wall were about as rich as people outside it, man for man, until the 19th century. Then, China missed the industrial revolution. Nearby Japan missed it too, but quickly corrected its mistake. It kept the barbarians at arms length, but still managed to pick their pockets. The Chinese, on the other hand, played it cool. The barbarians had nothing to offer, they believed. They still think so. Said Xue Chen of the Shanghai Institute of International Studies, just last week: "The US has a lot to ask from China. On the other hand, the US has little to offer China."

In the early 19th century, traders from Britain and America bought porcelain (china), silk and tea. Trouble was, they could find nothing to sell in exchange. The trade balance with China went negative, with China building up substantial monetary reserves (in silver). In 1830, a Chinese merchant, Hao Gua, who enjoyed a near monopoly on trade with the gweilos [foreign devils], was said to be one of the richest men in the world. Then, the English found something the Chinese would buy - opium. The fruit of the poppy was popular in many countries but, as usual, the Chinese over-did it. First, it was a favorite of the leisure classes. Then, it trickled down to ordinary workmen. Soon the coolies were neglecting their labors and China was in crisis. When the authorities tried to stop the drug trade, the English opened fire, humiliating the government and almost bankrupting it. People lost confidence in Manchu rule. By mid-century, nearly half the country was in open revolt. A Christian revolutionary had set up the "Heavenly Kingdom" in Nanjing. He raised armies and challenged the Qing Dynasty to battle. For a time, it looked like he might win.

In the north, meanwhile, infanticide of female babies had become common in Nien territory - a reaction to famine and scarcity. By mid-century, one out of four young men in the region couldn't find a bride; "bare branches," they were called. By 1855, these bare branches were ready to break. They armed themselves and organized. They drove out government forces and controlled a large part of the country before they were finally put down. Between natural calamities and war, some experts put the 19-century death toll at an unimaginable 200 million. And then came the 20th century! The Middle Kingdom staggered forward, from error to accident to catastrophe! From the Taiping insurrection to Mao Tsetung. Then, 30 years ago, Deng Tsaoping announced the new line: "To get rich is glorious," he said. Suddenly, the Chinese began saving every penny. Building factories. Cutting prices. And beating the barbarians at their own game.

Again, they exaggerated. While Americans built too many shopping malls, the Chinese built too many factories. Then, in 2008-2009 came the "greatest collapse in world trade in history," says Nobel-winning economist Paul Krugman. Americans - their biggest customers - rediscovered thrift. You might think China would realize it had too much capacity and back off. Instead, it rolled more steel. It built more factories and offices...entire cities.

If stimulus spending is a measure of stupidity, the Chinese are three times as dumb as Americans. Both governments respond to correction by doing more wrong than they did before. Loans in China are rising by about 40% of GDP annually. The money supply is soaring at nearly 30% a year. "We estimate that [fixed capital formation] accounted for 70% of China's growth in 2008 and close to 90% of China's first half of 2009 growth," says a report from Pivot Capital.

It is just a matter of time until this capital spending bubble blows up. But China is full of bubbles. In another example of its central planning, it made the ancient practice of infanticide state policy. One couple/one child was the rule. Missing girls was the result. Then, when the boys grew up, they discovered that their brides were missing too. The working age population of China is collapsing. There were 7 workers to every old person in 1990. Now, there are barely 4. By 2035, there will be only 2. What happened to the workers? They are the missing children of the missing girls who then became missing mothers. And by 2040, 397 billion old people - more than the total populations of France, Germany, Italy, Japan and the UK combined - will be missing the support of those missing workers.

Where this leads, we don't pretend to know. But bare branches bend...and then they break.

Regards,

Bill Bonner
for The Daily Reckoning Australia

• China and its Perplexing Investment Strategy
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• US Economists Think China Should Raise the Value of Yuan
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We're still working on our short summary of how three-life leases led to a huge generational transfer of wealth and capital in 17th and 18th century England. Landholders who were content with steady, predictable returns in the form of money and livestock from their land holdings didn't think twice about leasing their most productive assets to those who worked the land.

Bill tells us that in France, this arrangement was designed to look out for the interests of farmers so they would not be at the mercy of unscrupulous land holders. It also recognised that farms were long term capital investments, and it was better for everyone to remove them from the volatility of shorter-term leases. Losing the productivity of farmers meant less food, and there was not as much surplus to go around before the advent of fiat money and cheap credit.

But what the English landholders did not anticipate was a large, one in a three-generation inflation in land prices during the term of the leases they had granted. Land prices in Europe surged, partially because the money supply surged with the opening of gold and silver mines in the new world. Meanwhile, the land owners were receiving fixed rental payments, just as the three-life lease holders were fully benefiting from an historic appreciation in land prices.

Getting into an asset class at the right time is the single best thing you can do to increase you investment returns. It's really the most important factor - more important than stock selection or individual security analysis. The lease holders got historically lucky, and their good fortune literally generated much of the capital that would finance the industrial revolution.

We're only belabouring the point because we think a similar opportunity exists today. The world's productive assets are changing hands. Debtors are losing out to creditor. And for investors, avoiding the assets that will lose the most from debt deflation is job one. Finding the assets that will benefit the most from inflation is task number two. More on that tomorrow.

Also, we spent dinner tonight talking with a Graham and Dodd style investor from India. More on what we learned tomorrow. Until then...

Dan Denning
for The Daily Reckoning Australia

• The Dollar Left Behind
• Farmers Feel Consumers Blame Them for High Food Costs
• Aquaculture: Soybeans and Corn Under Water
• Topsoil Crisis: The Race to Secure Fertile Farmland
• Life After the Credit Depression

Here at The Daily Reckoning, we always take the part of the humble...the despised...the oppressed...and the misbegotten.

Today, that means the rich...

Yes, dear reader, the rich are getting beaten up. Maligned. Mistreated.

Their governments all have in it for them...taxes on 'the rich' are rising. The Democrats are talking about financing the entire nation's health care system on the backs of the super-rich.

And prosecutors and politicians are targeting their salaries. No more million-dollar paydays...not with the feds looking over their shoulders. Oh...and their investment earnings are down too. The dividend yield on the stock market is scarcely 3% - try living on that, you rentiers! As for the 10-year T-note, the yield is only 3.5%.

And capital gains? Fugetaboutit. Stocks have been rallying (bouncing) since March 9th. The bounce has helped investors recover about 45% of what they lost. But, overall, there have been no gains in the stock market for more than 10 years. None. Factor in the effect of inflation and the story is worse; investors have lost about 25% to 30% of their money.

But everyone is pointing a finger at the rich - as if they were to blame for the financial debacle of the last few years. Some economists even blame the "growing inequality of incomes" as a cause of the crisis.

This is completely unfair. The rich didn't cause the problem - they merely took advantage of it as best they could. It was a time when 'financialization' was on the rise...when money made money, at least in theory. Speculation and lending paid off. Obviously, you have to have money if you're going to lend or speculate. Some of 'the rich' - those in the financial industry - cleaned up.

But come the revolution of '07-'08 and the rich lost their heads. Who lost $50 trillion in stock and real estate? It wasn't the poor. Whose derivative positions went belly up? Whose stocks went down? Whose mega McMansions got re-priced as cracker shacks?

On this last point, we have new information. The housing crisis may have begun in the subprime trailer part of town. But now it's in the older suburbs - it's the prime and super-prime homeowner whose back is to the garden wall. A third of foreclosures in the 2nd quarter were of houses financed by prime, fixed-rate mortgages. Of prime borrowers, 41% are expected to be underwater by 2011, says a forecast from Deutsche Bank - nearly three times as many as at the beginning of 2009.

And now nearly half of all jumbo mortgages are underwater. Yikes, the rich...and bourgeois classes...are up to their necks.

And now this sad report from The New York Times:

"Last year, the number of Americans with a net worth of at least $30 million dropped 24 percent, according to CapGemini and Merrill Lynch Wealth Management. Monthly income from stock dividends, which is concentrated among the affluent, has fallen more than 20 percent since last summer, the biggest such decline since the government began keeping records in 1959.

"Some of the clearest signs of the reversal of fortunes can be found in data on spending by the wealthy. An index that tracks the price of art, the Mei Moses index, has dropped 32 percent in the last six months. The New York Yankees failed to sell many of the most expensive tickets in their new stadium and had to drop the price . In one ZIP code in Vail, Colo., only five homes sold for more than $2 million in the first half of this year, down from 34 in the first half of 2007, according to MDA Dataquick. In Bronxville, an affluent New York suburb, the decline was to two, from 17, according to Coldwell Banker Residential Brokerage."

And so, we pause to wonder. What does it mean? Where does it lead? Who gives a flying fig?

At a certain level, all of this concern about who earns what...and who has what...is just so much envious claptrap. For most of us - who have enough to eat and a roof over our heads - money is just sport. We aim to win, just as we would try to win a croquet match. But what difference does it make?

We don't know. So we turn back to the game. How can we get more wealth than our neighbors?

And here...a bit of perspective...

When the Great Khans road across the heartland of Eurasia in the 13th and 14th centuries, nothing could stop them...or so it seemed. Their soldiers were practically born in the saddle. From childhood they learned how to ride, and fight...and little else. Europe's population, meanwhile, was more settled...and more soft.

But Europe was hardly the brightest bauble on the tree. The Mongols had their pick. West - to conquer Europe. South - to conquer India. Or East - to conquer China.

They attacked Europe, but only half-heartedly. Instead, they devoted most of their efforts to India and China. Why? India and China were richer! There was more stuff to steal.

It's hard to make comparisons. But, at the time, the East was at least as rich as the West. But then, along came the Industrial Revolution and the East was left behind. People in the West learned to save...and to invest their savings in capital improvements - machines, factories, canals, railroads, mines, ships and all the other things that allow people to be more productive. This extra production made them rich. Not to put too fine a point on it, but they could make more stuff!

Then, with the ability to produce more and better stuff came the ability to produce the kind of stuff that you can kill people with. So, pretty soon, they were making machine guns. And pretty soon, the horse- mounted warrior of the steppes was as archaic and irrelevant as the Roman legions. He could still charge with great élan. He could still raise his saber and his bow...providing a rich subject for artists and poets. And he could die so well! All you had to do was to open up with your new, factory-made 50-caliber machine gun and down he went.

But what goes around comes around. Who's saving now? The Chinese save 25% of their earnings. In America, the rate is rising...from zero to five percent!

Who's building factories? Who's harnessing the industrial revolution? Who's getting rich? Who's innovating? Who's building cities?

Who's the world's biggest creditor? Who's got the biggest pile of money?

Oh, dear reader...you already know the answer...

"West will languish; Asia will lead..." says a headline in Barron's this week.

And what's this?

"China commercial property sales higher than US," says a headline at Bloomberg.

Yes, dear reader...it is the way of the world... Losers become winners. Winners become losers. Day yields to night; summer gives way to winter. Life goes on...always as it always was...but never the same.

And we leave you with that philosophical reflection...and go back to the financial world...

Bill Bonner
for The Daily Reckoning Australia

• India Can Grow for Many Years
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• The Rich are Still Getting Richer
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The current economic crisis, which was instigated by the government's central bank and its boom-and-bust monetary policies, among other interventions, has once again been blamed on "too little regulation" and too much freedom.

Will Americans ever catch on to this biggest of all of government's Big Lies?

When the Pilgrims came to America, they nearly starved to death because they adopted communal agriculture. When William Bradford, leader of the Mayflower expedition, figured this out he reorganized the Massachusetts pilgrims in a regime of private property in land. The incentives created by private property promptly created a dramatic economic turnaround and the rest is history. Most history books ignore this reality, however, and blame the starvation crisis of the Pilgrims on corporate greed on the part of the Mayflower company.

After the American Revolution, it was imperative to build roads and canals so that commerce could expand and the economy thrive. George Washington's Treasury secretary, Alexander Hamilton, declared in his famous Report on Manufactures that private road and canal building would never succeed without government subsidies. President Thomas Jefferson's Treasury secretary, Albert Gallatin, concurred. Meanwhile, private capital markets and the private "turnpike" industry were busy financing thousands of miles of private roads without any governmental assistance. When government did intervene in early-American road building, it was a financial catastrophe almost everywhere, so much so that by 1860 only Missouri and Massachusetts had not amended their state constitutions to prohibit the use of tax dollars for "internal improvements."

Americans have been taught by their government-run schools that the post-1865 Industrial Revolution was bad for the working class, which made government regulation of work and wages, and the creation and prospering of labor unions necessary. In reality, people left the farms for factories because the latter offered far better wages and working conditions. Between 1860 and 1890, real wages increased by 50 percent in America, as myriad new products were invented, and made available to the common working person thanks to low-cost, mass production. It was capital investment that dramatically increased the productivity of labor, allowing hours worked to decline from an average of 61 hours per week in 1870 to 48 hours by 1929.

Higher worker productivity, fueled mostly by capital investment by entrepreneurs and private investors, also made it less necessary for families to force their children to work. Child labor was on the wane for decades before government got around to regulating or outlawing it. And when it did so it was to protect unionized labor from competition, not to protect children from harsh working conditions.

The "robber barons" of the late 19th century robbed no one. Most of them made their money by providing valuable - if not revolutionary - goods and services to the masses at lower and lower prices for decades at a time. John D. Rockefeller, for example, caused the price of refined petroleum to drop from 30 cents per gallon in 1869 to 8 cents in 1885, and continued to drop his prices for many years thereafter. James J. Hill built the most efficient and profitable transcontinental railroad without a dime's worth of government subsidy. In return for their remarkable free-market success the government prosecuted both of these men, kangaroo court style, under the protectionist "antitrust" laws. The real "robbers" were politically connected businessmen like Leland Stanford, a former California governor and senator, who succeeded in getting laws passed that granted his company a monopoly in the California railroad business.

The federal antitrust laws were passed beginning with the Sherman Antitrust Act of 1890 because the government informed Americans that industry was becoming "rampantly cartelized" or monopolized. In reality, prices everywhere were plummeting as new products and services were being invented everywhere. The entire period from 1865 to 1900 was a period of price deflation. As I show in How Capitalism Saved America, all of the industries accused of being monopolies by Congress in 1889- 890 had been dropping their prices for at least a decade thanks to vigorous competition. And it was not a result of the idiotic theory of "predatory pricing." No sane businessperson would intentionally lose money for decades by pricing below cost with the hope that he would somehow frighten away all competition forevermore.

Everyone "knows" that President Herbert Hoover was a staunch advocate of laissez-faire economics, and it was his lack of interventionism that caused the Great Depression. This is the biggest governmental lie in the history of America. Hoover was a "progressive" (as today's socialists, also known as "Democrats," have taken to calling themselves).

Hoover strong-armed corporate executives into raising wages at a time when wages needed to adjust downward in the free market in order to minimize unemployment. He devoted 13% of the federal budget to a failed "stimulus" program of pork-barrel spending and imposed some of the biggest tax increases in history to fund it all. He was a protectionist who signed the notorious Smoot-Hawley Tariff Act, which increased the average tariff rate to nearly 60 percent and spawned a worldwide trade war that shrunk world trade by two-thirds in three years. He cartelized the agricultural industry with "farm boards" that began the insane practice of paying farmers for not growing crops or raising livestock. He pioneered the politicization of capital markets by creating the Reconstruction Finance Corporation. And he ranted and raved against "greedy capitalists" while launching numerous government "investigations" of investors and the stock market. FDR's top domestic advisor, Rexford Tugwell, said that his fellow New Dealers "owed much to Hoover," who began many of the policies that they simply extended.

Every time the price of gasoline goes up significantly, Congress convenes a Nuremburg Trial-style inquisition of oil-company executives. This practice began in the 1970s when the government's own foolish price controls on petroleum products caused massive shortages, and it needed someone to blame. Oil company executives are never praised when gasoline prices fall, as they have in the past year from over $4/gallon to under $2/gallon in many parts of the United States.

Most recently, the current economic crisis is said to be caused by the "excesses" of economic freedom and "too little regulation" of the economy, especially financial markets. This is said by the president and numerous other politicians, with straight faces, despite the facts that there are a dozen executive-branch cabinet departments, over 100 federal agencies, more than 85,000 pages in the Federal Register, and dozens of state and local government agencies that regulate, regiment, tax, and control every aspect of every business in America, and have been doing so for decades.

Laissez-faire run amok in financial markets is said to be a cause of the current crisis. But the Fed alone - a secret government organization that is accountable to no one and which has never been audited - performs hundreds of regulatory functions, in addition to recklessly manipulating the money supply. And it is just one of numerous financial regulatory agencies (the SEC, Comptroller of the Currency, Office of Thrift Supervision, FDIC, and numerous state regulators also exist). In a Fed publication entitled "The Federal Reserve System: Purposes and Functions," it is explained that "The Federal Reserve has supervisory and regulatory authority over a wide range of financial institutions and activities." That's the understatement of the century. Among the Fed's functions are the regulation of

• Bank holding companies
• State-chartered banks
• Foreign branches of member banks
• Edge and agreement corporations
• US state-licensed branches, agencies, and representative offices of
  foreign banks
• Nonbanking activities of foreign banks
• National banks (with the Comptroller of the Currency)
• Savings banks (with the Office of Thrift Supervision)
• Nonbank subsidiaries of bank holding companies
• Thrift holding companies
• Financial reporting
• Accounting policies of banks
• Business "continuity" in case of an economic emergency
• Consumer-protection laws
• Securities dealings of banks
• Information technology used by banks
• Foreign investments of banks
• Foreign lending by banks
• Branch banking
• Bank mergers and acquisitions
• Who may own a bank
• Capital "adequacy standards"
• Extensions of credit for the purchase of securities
• Equal-opportunity lending
• Mortgage disclosure information
• Reserve requirements
• Electronic-funds transfers
• Interbank liabilities
• Community Reinvestment Act subprime lending requirements
• All international banking operations
• Consumer leasing
• Privacy of consumer financial information
• Payments on demand deposits
• "Fair credit" reporting
• Transactions between member banks and their affiliates
• Truth in lending
• Truth in savings

That's a pretty comprehensive list, the result of 96 years of bureaucratic empire building by Fed bureaucrats. It gives the lie to the notion that there has been "too little regulation" of financial markets. Anyone who makes such an argument is either ignorant of the truth or is lying.

Regards,

Thomas DiLorenzo
for The Daily Reckoning Australia

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