Federal Reserve...Secrecy or Independence?

[WhiskeyGirl]

Ron Paul: Fed independence or Fed secrecy?

By U.S. Rep. Ron Paul
Monday, July 13, 2009

http://www.house.gov/htbin/blog_inc?BLOG,tx14_paul,blog,999,All,Item%20not%

Last week I was very pleased that hearings were held on the independence of the Federal Reserve system. My bill, HR 1207, known as the Federal Reserve Transparency Act, was discussed at length, as well as the general question of whether the Federal Reserve should continue to operate independently.

The public is demanding transparency in government like never before. A majority of the House has cosponsored HR 1207. Yet, Sen. Jim DeMint's heroic efforts to attach it to another piece of legislation elicited intense opposition by the Senate leadership.

The hearings on Capitol Hill provided us with a great deal of information about the types of arguments that will be levied against meaningful transparency and how the secretive central bankers will defend the status quo that is so beneficial to them.

Claims are made that auditing the Fed would compromise its independence. However, by independence, they really mean secrecy. The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves. I am happy to challenge this type of "independence."

They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs. We should just trust them. This is patently ridiculous. The market is a complex and intricate thing. No one knows what the market needs other than the market itself. It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled. Bankers are not all-knowing and cannot ignore the rules of supply and demand. They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.

They claim the Fed must remain apolitical. No organization is apolitical that relies on the president to appoint the chairman. In fact, it is subject to the worst sort of politics -- power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight. The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long term considerations. They do this partly because of the political appointee process for the chairmanship.

The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress' constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long. This was the issue that got me involved in politics 35 years ago. It is very encouraging to finally see the issue getting some needed exposure and traction. It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue.

read more here - http://www.gata.org/node/7589

Is all that money destroying the economy and nation for generations?

[WhiskeyGirl]

What is the U.S. Government Hiding?

By Patrick A. Heller, Market Update
July 13, 2009

The legislative effort to audit the Federal Reserve took an interesting, though ugly, turn last week...

When this happened, Sen. Ben Nelson, D-Neb., objected that this violated Senate Rule 16, which prohibits legislative amendments to appropriations bills. The Senate president immediately agreed and struck this particular amendment from the appropriations bill.

When this occurred, DeMint kept fighting. He mentioned that the "audit the Fed" bill had widespread bipartisan legislative support. He pointed out that Senate rules were frequently violated, which they are. He then specifically named each other GAO audit legislation amended onto this appropriations bill. The Senate president acknowledged each time that these amendments violated Senate rules, but he let them remain as part of the appropriations bill.

The implication of this development is that the Democratic leadership in Congress and in the White House does not want the public to know what an audit of the Federal Reserve would reveal. One likely revelation would be just how much gold the U.S. government really owns versus what it tries to claim it owns.

Last Thursday, in testimony to Congress, Federal Reserve Vice Chair Donald Kohn stated that if the public became more aware of the Fed's actions, should this bill became law, that it could result in higher consumer prices, higher interest rates and a decline in the credit rating of the United States government. The question not asked of him is why is the Fed taking actions that could cause such a result - but only if the public found out what the Fed did.

Also last week, Goldman Sachs reported a theft of one of the company's proprietary trading programs, allegedly taken by one of the employees who helped create it. In reporting the theft, Goldman Sachs said that usage of this program could make it possible for the user to manipulate markets unfairly.

...

...Last Wednesday, one publication stated that the software enables Goldman Sachs to assist the President's Working Group on Financial Markets (popularly called the Plunge Protection Team). Supposedly, this software reviews trading orders on the exchanges before they were committed. In the split-second before the orders are committed, Goldman Sachs' program can enter trades to take advantage of the change in the market before other traders learn of these developments.

Other theories speculate that the derivatives markets may soon expose major losses with Goldman Sachs wanting to pre-emptively deflect future blame that they might receive when this occurs.

Last Thursday, Rep. Carolyn Maloney, D-NY, who is the chair of the Joint Economic Committee, revealed to this committee that the $3.5 trillion of commercial real estate debt is a ticking "time bomb" and a "looming crisis" as $700 billion of this debt must be refinanced by the end of 2009. She said that there could be a second wave of huge losses at large U.S. banks.

There are significant stories flying around London and Washington that extremely bad news is going to be forced into the public eye at the end of August or in September. Among the kinds of news expected to be revealed are further major losses in the residential real estate mortgages, credit card debt and the commercial real estate market. Multiple sources are indicating that if you want to be able to purchase physical gold and silver, you probably should plan to take delivery by Aug. 20 or so at the latest (actually there is apparently some specific significant financial news that will be publicly disclosed on July 22 that would have an impact on precious metals markets, but I have no details what this involves).

Adrian Douglas, a professional commodity analyst and member of the Board of Directors of the Gold Anti-Trust Action Committee (GATA), published an analysis Saturday revealing his discovery why the COMEX gold market reports on trading activity and the movement of metals were not making sense. In addition to being able to settle COMEX contracts by either delivering physical metal or paying cash, a gold contract can be settled by "substantially the economic equivalent" of gold. What has happened is that many COMEX gold contracts are being settled with shares of gold exchange-traded funds (ETFs). In theory, these ETFs own physical gold covering all of the outstanding shares, typically 1/10th ounce of gold per share. However, there are so many loopholes in the ETF contracts that allow the managers of the fund to effectively hold paper contracts rather than physical metal that there is significant doubt that the ETF could deliver gold to redeem outstanding shares. The rules of the COMEX silver market do not (yet) allow contracts to be settled with ETF shares.

...The G-8 Group of the world's largest economies plus Russia met in Rome last Wednesday through Friday. One of the subjects certain to be under discussion was the deteriorating position of the U.S. dollar as the de facto world reserve currency. The U.S. government has a strong interest in preventing any discussion of alternatives to the U.S. dollar. One way to "show" that the dollar is still strong and doesn't need any replacement is to knock down gold and silver prices significantly just before the meeting started. Funny - that is exactly what happened.

It is difficult to see developments such as these and still have any justification for the U.S. government's claim that there is no manipulation of the gold and silver markets.

read more here -
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=7004

Audit the Federal Reserve...

[WhiskeyGirl]

I've never seen any analysis of the 'toxic debt' at any of the banks, including Goldman.  If Goldman had little consumer exposure, what could have caused their problems?  Still no answer.

Maybe some of those big banks/traders had a computer glitch and got caught on the wrong side of their HFT?  Some had better software and infrastructure?

Maybe the debt was so toxic, as someone got stuck with it?  Paper debt?  Had to be offloaded somewhere and the bubble burst?  On taxpayers?  Had no money in reserve to pay their debt?  It would be interesting to know details.  Who was favored as the winner?  Who as the loser?  Was this practice for Chrysler and GM?  Where are the open books?

Barack to the rescue!!!  Taxpayers will fund a state of the art infrastructure improvement so the big banks and traders don't have to worry about being outfoxed again!!!  We'll continually improve internet safety to ensure that overseas attacks from other traders don't destroy our financial system again.  Taxpayers dig deep for generations.

Where are the open books for the Treasury, Federal Reserve, Czars, Congress, and the big banks that were bailed out?

jmho

[WhiskeyGirl]

Monopoly money and oil -

This helped pressure leaders to seek more gold by conquering other nations. The people became accustomed to living beyond their means, and enjoyed the circuses and bread. Financing extravagances by conquering foreign lands seemed a logical alternative to working harder and producing more. Besides, conquering nations not only brought home gold, they brought home slaves as well. Taxing the people in conquered territories also provided an incentive to build empires. This system of government worked well for a while, but the moral decline of the people led to an unwillingness to produce for themselves. There was a limit to the number of countries that could be sacked for their wealth, and this always brought empires to an end. When gold no longer could be obtained, their military might crumbled. In those days those who held the gold truly wrote the rules and lived well.

Who has conquered the U.S.?  Who enslaves future generations with debt?

Why isn't hard work and saving rewarded in the U.S.?  There is a "Dark Pool" of trading, hidden transactions, hidden players, all cemented with a day time trading that millions have invested their 401ks, IRAs and money in.  The bubble burst.  Was it due to losses in the "Dark Pool"? 

Anyone ever audit those TARP recipients to find out EXACTLY how the money disappeared?  Who was responsible?

When will there be a meaningful audit and accounting of the Federal Reserve?

How much of Dark Pool money made goes to offshore financial institutions? 

That general rule has held fast throughout the ages. When gold was used, and the rules protected honest commerce, productive nations thrived. Whenever wealthy nations-- those with powerful armies and gold-- strived only for empire and easy fortunes to support welfare at home, those nations failed.

Wise words today.  What happened to honest commerce?  It seems like the Federal Reserve, Treasury, and Congress are a job rotation.  The biggest banks and investment companies have no consumer exposure, yet receive billions in bailouts.  Why did they lose their money? 

They trade in secret "Dark Pools" that aren't open to everyone and never see the light of day.  What about the millions that put their retirement money in the market?  Why can't they just sell it off and invest in something else? 

What goes on in Federal Reserve?  When will their books be open to robust inspection?

Once again the effort between 1980 and 2000 to fool the market as to the true value of the dollar proved unsuccessful. In the past 5 years the dollar has been devalued in terms of gold by more than 50%. You just can’t fool all the people all the time, even with the power of the mighty printing press and money creating system of the Federal Reserve.

read the rest here - http://europenews.dk/en/node/24913

Why isn't the government backing long term investment in the stock market?

It seems like it's all about government welfare for Wall Street.

jmho