he puts a total ban on reserve banks lending to banks in their community for speculation. at that point, glass was probably ready to go home. he hoped to get it through congress. but two other things, come along. one is deposit insurance. in the late 1920's and early 1930's, banks around the country -- 5000 banks failed, mostly in farming and rural states. the bank of wichita lens on wheat. the price of wheat plummets. caught in the south, same story. cotton in the south, same story. 5000 small banks fail. everybody in the country who has more than a high school education thanks deposit insurance is the stupidest idea ever. hoover, roosevelt, the federal reserve board, citibank, everybody thinks it's awful because you will be making good banks that are run well pay premiums to shore up bad banks. everybody said it's just awful. i found a quote in a book the other day that i really liked. i am not going to find it. here. just before the inauguration, roosevelt comes in. so glass has to put deposit insurance in his bill to get the reforms he wants on restricting bank lending

he's going to have series of regional reserve banks in 12 or 20 cities around the country because he does not want all finance centered in new york. he wants it scattered around the country. he wants a central bank in the richmond area in virginia to help farmers and merchants. he wants a bank in sacramento or san francisco to help california farmers, merchants, and bankers, so he comes up with this regional reserve banking system of x number of reserve banks. he realizes he has to have somebody on top of this to coordinate these dozen or 20 reserve banks, so he says i will use the control of the currency. he named the top federal banking official whose main job it is to authorize national banks. if you want to get a bank charter at that time you went to the state or you went federally. if you went federally, this was the guy who oversaw the license. one author had a very good characterization. the aldrich plan was called the national reserve association. glass called his the federal reserve association. it was federal in nature. when glass comes up with this scheme, we do not know wh

of x number of reserve banks. he realizes he has to have somebody on top of this to at least coordinate these dozen or 20 reserve banks so he says i'll use control of currency. he's the top federal banking official whose main job it is to create, to authorize banks. if you want to get a bank charter at that time, you go to the state or federally and if you went federally, the control of the currency was the guy who gave you your license and oversaw you, so glass picks the control of the currency to sit on top of this regional ver aal banking system. one author had a very goodizati goodization. the aldrich plan was called a national association. glass called his the federal reserve association because it was federal in nature. now when glass comes up with this scheme, we don't know who the next president is going to be because it's early 1912 and we're headed toward the most famous election probably in american history, the 1912 presidential election. because we have three major candidates. the republican president

this is what we call the bank reserves or the fed funds. was so wet so the sad can like for example by the. treasury from a bank and in exchange they will credit these reserves for a back and these reserves the banks can use to do fractional reserve banking and land to the economy. one thing that has changed significantly this mike look like a technicality but i think it's a very very important point is that. in the past the banks usually didn't have a lot of these access reserves or at the federal reserve basically because they didn't pay any interest they paid 0 interest one thing that has changed after the global financial crisis is that in order for the sads to be able to do a limited amount of t. re they they they started being interests on these research so actually if we look at if we plotted chart how these accessories serves that are are is that the sad are looking like you're looming and and they're growing a lot and that's basically one of the big reasons why this money is not slowing the economy and why we're not seeing a lot of

it seems like the appropriate decision for the reserve bank to have made. ves us even further for the economy to solidify and the is important -- shery: you don't see that being extended? grant: that would be for the bank to decide. i see no indication they are planning to do that. thei: are you worried about optics should negative rates happen next year? what does it signal to the international investor about the strength of the kiwi economy and is it a concern that it signals a point where we have run out of ammo? new zealand is not alone in the challenges on the fiscal and monetary side of things. those will be issues the central bank bears in mind as they work their way through. robust economy and our exports are up. we see good levels of investment from both overseas and here domestically, so there is an awful lot that changes in a short time and i think by the time we get to the be getting of next year, people will see how the new zealand economy has gone. the ratings agencies continue to u.s. favorably and know we have a strong balance sheet and this

are monetary policy is -- independently by the reserve bank.ve provided certainty saying they will not move the official rate, at least not until march of next year. we have to see the economy stabilize. rebound strongly through the next couple of quarters. and no doubt take that into account as they go forward. what we used to call unconventional monetary policy is front and center. there has been a fair degree of quantitative easing. the markets are liquid. things are going reasonably well and financial markets. they will bear all that in mind. when they think about decisions post next year. >> could it compromise some of the things you are doing given negative rates? banks would be less willing to lend during this downturn. stable bankingry system in new zealand and banks have found their way through this time well. reasonablynding large amounts into the economy. of oured by the role reserve bank. at the moment, they are doing well. as long as the economy continues to do that, new zealand will be in a strong position. monetary policy worked

he's a very outspoken federal reserve bank president.is bloomberg. ♪ look here, it's your very own all-in-one entertainment experience: xfinity x1. it's the easiest way to watch live tv and all your favorite streaming apps. plus, x1 also includes peacock premium at no extra cost. this baby is the total package. it streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. yup, the best really did get better. magnificent. xfinity x1 just got even better, with peacock premium included at no additional cost. no strings attached. kathleen: i want to welcome our bloomberg television viewers and radio listeners all over the world for an exclusive interview. st. louis fed president james bullard joins us live now, hot on the heels of last week's federal reserve meeting and ahead of fed chair's jay powell testimony before congress later on tuesday. well computed a lot going on now, is in there? mr. bullard: great to be here. kathleen: great to talk to you. let's get right to looking back a cou

excuse me about 440 i'm sorry and about 330000000 for us well if you look at it on the reserves our reserve bank has put out 7.2 trillion they've their whole reserve on their balance sheet and the e.u. is now 7.6 trillion so the united states has put out more per capita japan is out there at about $6.00 trillion add up all those trillions bread it's a lot of trillions is about $22.00 trillion and then we haven't talked about the physical so we have to separate monetary from physical but right now what really doesn't matter what that debt is in the united states we have so much savings so much cash out there the banks have bought about 2 trillion dollars of that debt so we're actually financing it in our system so i know you have some guests on here that worry that we're going to you know the dark ages but we have a system that can take this we can't take is another delay because then people sort of give up hope and at the margin they roll over and when they roll over now we get into election everybody is frozen we've got to act now and it's interesting that you make these points that you know th

when it comes to inflation pressure, on that front, my view is south of the reserve bank.am concerned they are optimistic on the inflation front. that is why i think the negative ocr will be implemented even though the economy is evolving more in line with the more moderate forecast. we have the october general election. anything we should be watching out for? dominick: not really. it is quiet. there's not big differences in the parties policies. from a macro economic point of view, minor differences between the parties. no major market implications for the short run. it is more who is in power in five or six years. that is when the government will have to choose between taxing more and spending less. as we get into the election, what will the priorities be? worldeconomies around the are you throw everything and whatever you have left at the problem. how do they deal with the aftermath? especially if the growth drivers like tourism will not be reopened for some time? dominick: what you do is you start moving from emergency first aid and rescue onto redeployment. you start

the reserve bank's central scenario is unemployment reaching 10% by the end of the year.e key things to watch will be the participation rate for people either in or looking for unemployment. byis still very weak historical standards, about 64.6%. in the course of the true employment picture, it's skewed by job keep repayments. about a quarter of the workforce is receiving government wage subsidies through employers right now. that program has been extended once. have an extended lockdown in victoria of gorsuch might be pushing at that again. we will learn more about that on october 6, when the budget gets handed down, and that's coming five months later than usual. numbers are expected to reinforce this trend of a growing jobless queue in australia, another 35,000 jobs in the month of august. >> the rba releases its quarterly bulletin today. can you expect any more clues on future policy settings here? paul: it's possible it's worth a look. it's a little unlikely, but the bulletin tends to be more of a collection of thoughts on broader domestic macro themes. the last one

the director office of minority of women inclusion of the federal reserve bank of new yor york. and from the fdic and the director office of minority and women inclusion of the national credit union administration. the oral testimony is limited to five minutes. please respect the members and other witnesses time by wrapping up oral testimony. you are now recognized for five minutes to give an oral presentation of your testimony. >> chairwoman and members of the subcommittee i serve as executive director of the office of minority of women inclusion from the comptroller. and with that commitment to diversity and inclusion established in 2010 and those to share ate commitment with diversity and inclusion with the acting comptroller the occ is dedicated to maintain a diverse workforce with the commitment in the proven strategy for diverse workplace with that competency pipeline in the strategy and to employ differences and the culture thatre respects value acting comptroller and with this mmcommitment with that diversity program and how additionally with that initiative launch proje

way to cure these problems but what do they do in the vietnam war or the doing of the federal reserve bank they're going to do double down yes on that more troops more troops more money printing more money printing and they chorused of vietnam they wiped out another $30000.00 soldiers knowing. without any equivocation that it was a suicide mission going from 65 forward it was all going to be suicide mission from america the fed is saying we know these policies don't work we're going to triple down to quadruple down because we think conceptually they should and we're not going to believe the evidence before us that they're not that's really important to look into because mcnamara was very clear in his private memos to the president that this war in vietnam was unwinnable and the same thing i bet you anything you're going to find the same thing in 20 years later is when we found out about robert mcnamara really what he thought well as he sent off tens and tens of thousands of people in america to death lord knows how many and and vietnam but you know the same thing i think we'll find out in

you are the former deputy governor there at the reserve bank. outside of india when you gave that speech a couple years ago about central bank independence, about the stresses in the banking sector. when you look at the state of india's banking sector right now , when you look at the stresses in the corporate sector there, and you look at the contraction we have seen in the economy, what steps do you think the government can take at this stage to dig itself out of that hole? >> that's a great question. in the previous chapter of my book, i gave an explicit blueprint. let me focus on two or three key ideas. one idea is that india's financial stability can no longer be separated from the stability of the fiscal situation. the fiscal deficit has been rising, growth has been slowing down. even in the pre-covid phase. what that means is that india needs to actually create a medium-term path of credible fiscal outcomes. this cannot just mean that you spend your way out of the current problem. if growth doesn't recover as well, gdp ratios could start ge

those will be the issues that the reserve bank bears in mind. but the economy is a robust economy. we have seen good levels of investment enter new zealand from both overseas and domestically. so i think there is an awful lot that changes in a short period of time in the era of covid, but i think by the time we get to the beginning of next year people will see how the new zealand economy is going. rating agencies continue to of u.s. favorably, they know that we have a strong balance sheet and a disciplined approach from a fiscal point of view. i think there is an awful lot of water to go under the bridge before that decision from the reserve bank next year. shery: that was the new zealand finance minister, grant robertson. let's turn to karina mitchell for the first word headlines. karina: more details are emerging about the plan to keep u.s.. operating in the bytedance and oracle are proving in new york ipo next year if the deal is approved. the treasury, bytedance and oracle have reached terms, but the deal still needs a blessing of president trump, and china which has described

i work closely throughout the board and the system with the other omwi directors at the 12 reserve banks, recognizing the commitment of the board on these important issues is shared by the banks and their leadership. has equal opportunity compliance programs and includes the office of minority and women inclusion. omwi pursuant to the dodd frank act, developed initiatives to ensure fair inclusion of minorities, women, and minority owned and women owned businesses, and all activities of the board. as well as developing standards for assessing diversity policies and practices of regulated entities. the board's omwi outline its activities, successes and challenges. i will highlight two areas of this report. the board shows progress in increasing the level of diversity in senior leadership. in 2019, there were 19 appointments, in which five were minorities and six were women. there are six female directors, which one is african-american. eight division directors are male, of which one is hispanic. in addition, there are three african-americans, one hispanic and three females who serve as dep

lacey dingman is the director, office of minority and women inclusion of the federal reserve bank of new york. nikita pearson is the acting director, office of minority women inclusion of the federal deposit insurance corporation. and monica davy is a director, office of minority and women inclusion of the national credit union administration witnesses are reminded that their oral testimony would be limited to five minutes. i chime will go off at the end of your time and ask that you respect the members and other witnesses time by wrapping up your oral testimony. without objection your written statement he made part of the record. ms. cofield, you are now recognized for five minutes to give an oral presentation of your testimony. >> chairwoman beatty, ranking member wagner, and members of the subcommittee, i am joyce cofield and i serve as the executive director of the office of minority and women inclusion at the office of the comptroller of the currency. i am pleased to discuss our commitment to diversity and inclusion within a workplace as suppliers in the federal banking system.

there's plenty of vomit fraud in the united states economy and it's perpetrated by the federal reserve bank and you're right in that we are being charged for the vomit front so when they make a bad policy decision by like for infinity and this causes huge mal investment in the economy and let's say the the bailout insolvent banks right and the savior of warren buffett and berkshire hathaway even though they were technically insolvent back in 2008 that is the vomit fraud that we have to pay for and then warren buffett will go on t.v. it goes to plays ukulele and i say thank you for paying the vomit fraud and i had to ice skate insolvency then you have companies like goldman sachs j.p. morgan h.s.b.c. it's a global vomit fraud phenomenon every major bank in the world commits vomit fraud and every major population in the world has to pay for the vomit fraud you know it's like money as vomit. good yeah and they sell it like hey this is an amazing like let's you find haleigh ride wherever you are and blah blah blah and you don't need to speak the language and it's a cheaper it's easier in and yo

said the federal reserve is changing the way it calculates inflation now is that contributing to the sort of disconnect between what's really happening with consumers and what central banks are and are now claiming well there's definitely a disconnect there and one of the biggest reasons for that disconnect is because the federal reserve does not actually survey consumers i don't know if you know this or not and then for a lot of our viewers this is probably a surprising thing it's not a question of will the federal reserve is going out now asking questions of consumers and they're basing their data on this they're actually not doing that in fact the federal reserve bank and central banks in general don't talk to consumers there have been a number of studies done though by groups that do actually go out and poll consumers i was referring to one just a minute ago and what they're finding is that if you ask. consumers is your life vastly different now in terms of your spending in terms the amount of money that you have right now in terms of what it's costing you to be able to provide for your family by a vast majority of consumers are saying it's more expensive than it was

the reserve bank of india is setting new rules for lenders looking to restructure loans that have turned of the coronavirus. we have to consider financial parameters before advancing health. the central bank has identified 26 centers at risk with our makers, aviation and tourism at the top of the list. let's check in on the market street investors brushing off those decoupling threats from president trump it is mixed on the mainland. catalyst in terms of what we are seeing. the shanghai composite is below that level. that is this word level we have seen in place since august. it is currently below that. better kong, slightly picture, slightly more positive. did have a debut that is down as well. you can see it is up more than 60%, . be the chinese leading chipmaker of 3%. tencent is down 2/10 of 1%. alibaba is gaining close to three points. we can move on to the final board we are looking at. i should mention the japanese economy in focus, we have that revised contraction for the second quarter. now in the currency space, the pound, brexit negotiations, those torturous talks continued. u

major transition buffett is attracted to enormous cash flow and dividend potential barack then reserve bank of india signals higher allocation and now ohio police and fire pension approves the. percent allocation so as we've been saying as we said at the 1st of our summer solution series that there's a sea change in the psychology of the global investment community everybody senses you know if the elephant runs away from this the now me you know warren buffett is one of the elephants of the investment world and he's if he's running away from the inflation tsunami coming and ray dally you know the largest investment fund in the world if they're running towards you know away from the tsunami then you know the ordinary person should not fight the elephant running their instinct is perhaps better than there is great. who runs the russian social bank was ahead of everybody by hundreds of hundreds of tons for years now and now everyone's singing her song and again you know this tsunami of inflation coming and by the way also like a tsunami of of deflation of a collapse and all the so-called value

with a high degree of confidence that jay powell at the federal reserve bank is understating inflation by 8 and a half percent at least and that's the reality today and if people understood that they would understand a lot more about why these markets are doing what they're doing now you're not the only guy who sees this inflation risk paul tudor jones went long bit calling famously a few months ago re dahlia was piled into gold warren buffett dumped his long held bank shares and went long some gold miners and also japanese stocks kind of get out the dollar stand talking miller is warning about 10 percent in place and of course he was a partner over there with soros and renowned money manager so you have people in your camp and again i get back to the sea change in markets and we've had and you mention the bond market there as being priced in a way that doesn't reflect the real economic environment out there but it has been an almost 40 year bull market going back to 1980 so is this an inflection point or you know can we say based on wally's smart people and what you're doing that mayb

talk about this term credit exhaustion and in the context of what you just said there the federal reserve bank and the u.s.'s all the major central banks in the world have this problem of maturing debt that they have to either let expire and nick. variance say contraction or they have to print some more money up and by keep buying it for themselves to avoid the contraction but this sense of being a giant ponzi scheme if they've talked about on kaiser report for many years as you've talked about it we've said he can't taper a ponzi scheme so he now that the decision of these bankers will be to print more and keep monetizing their own debt quantitative easing is the wrong term because that suggests that it's a temporary measure but we know now that it's a permanent measure and that it's debt monetization which again is something characteristic of a quote banana republic this is what america used to criticize south american countries for doing oh you're buying back your own debt that's up and our republic and i here's america and all these other central banks doing the exact same thing now the fe