What a topsy-turvy world we live in thanks to Fed nonsense. Consider the outgoing NY Fed president's latest brainchild.
Outgoing New York Fed President William Dudley has a new proposal to mock.
Dudley proposes paying bankers with long-term debt.
Wall Street should force banks to share the pain of regulatory penalties by docking executives' pay, a move that would help discourage bad behavior, Federal Reserve Bank of New York President William Dudley said Monday.
If bankers were paid more with long-term debt, it could "better align senior managers' interests with the long-term safety and soundness of the firm," he said. Such a change might need to be pushed by regulators, he said, because the banks "may be reluctant to adopt such pay structures on their own for competitive reasons."
Brief Payment History
Millennials may be shocked to discover that people used to be paid with gold.
Roosevelt ended the gold payment system during the Great Depression, illegally confiscating everyone's gold. He should have gone to prison.
Following personal confiscation, international trade deficits were settled in gold until Nixon put an end to that in 1971.
After Nixon closed the gold window, people at least got paid in cash.
People collected interest on debt in US dollars and other currencies.
Lately, covenant-lite and toggle bond issuance has soared. Toggle bonds "pay" interest with more debt.
Now, Dudley proposes paying people with debt.
What's the difference anyway?
The dollar is in reality nothing but debt.
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