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Author Topic: The Federal Reserve - It's time for revamping  (Read 1801 times)
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WhiskeyGirl
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« on: July 24, 2009, 01:03:10 PM »

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t would appear that at last the US Congress has started to appreciate the extensive damage inflicted on the US economy by the Federal Reserve. This in large part because the Fed has a conflicting dual mandate of full employment and price stability and a structure that makes it vulnerable to the dictates of its chairman.

...

The Fed’s reckless monetary policy has cost the US government trillions of dollars in bailouts for banks, the automobile industry, and homeowners. More precisely, on July 21, Neil Barofsky, the overseer of the Troubled Asset Relief Program (TARP), estimated in a prepared statement to a committee of the US House of Representatives that the total exposure of the US government to the financial crisis at US$23 trillion to $27 trillion. Fed policies set off commodity price inflation, most notably in oil prices, and exchange rates instability; it aggravated external current account deficits; and it has already pushed unemployment to 9.5% in June 2009, with the expectation that it may reach around 11% before it is all done.

...There are in fact clear dangers that this unparalleled monetary expansion could be paving the ground for even bigger bubbles, more intense financial instability and larger bankruptcies in the future.

...

First, the Fed is dominated by one-man rule and its policy is largely influenced by the views of its chairman. In this respect, Alan Greenspan believed in financial deregulation, lax supervision, bailing out hedge funds, and rejecting calls to stave off housing bubbles or reinforcing bank regulations. His successor and present chairman Ben Bernanke believes in unorthodox monetary policy and that zero-interest rates and unlimited money were panacea for all problems, and he has ignored sound rules for sound central and commercial banking.


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Such unrestrained money policy can only worsen financial instability in the future. The Fed's monetary policy has made fiscal management very costly and difficult. The government has had to put in place bailout facilities, a toxic-asset purchase program, a housing bailout program, stimulus packages to revive economic activity. It has also had to run dangerously large deficits. The consequences could be compounding inflation, rising public debt and external deficits, and more financial instability. New liquidity injections could in part translate into toxic assets on the Fed’s balance sheet and fuel inflation.


read more here - http://www.atimes.com/atimes/Global_Economy/KG26Dj02.html
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WhiskeyGirl
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« Reply #1 on: July 24, 2009, 01:09:07 PM »

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WASHINGTON, July 22 (Reuters) - Only the Federal Reserve is fit to perform exams of the largest, most systemically important financial institutions, a senior U.S. Treasury Department official said on Wednesday.

"With respect to the regulation of what we have called Tier 1 Financial Holding Companies, the Federal Reserve is the only regulatory body with the experience and with the deep and broad understanding of the capital markets," Deputy Treasury Secretary Neal Wolin told a banking trade group.

http://www.reuters.com/article/marketsNews/idUSN2229761520090722

The Federal Reserve needs to open the books, end the job rotation with the Treasury and other government employees, Wall Street, and political appointees.

Need some new blood, leave the old conflicting interests behind.

Let the sun shine in and bring forth a better day for All Americans!

jmho
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It doesn't do any good to hate anyone,
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WhiskeyGirl
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« Reply #2 on: July 30, 2009, 10:00:17 PM »

What happened to the idea that government serves the people?  It seem like our government and the Federal Reserve serve big business and global corporations and investment groups.

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New York Fed announces investor advisory group
(AP) – 6 days ago

...

The 13-member Investor Advisory Committee on Financial Markets won't have any formal policymaking responsibilities, but will "serve as a forum for informal discussions on financial, economic and public policy issues," the New York Fed said.

The panel includes executives from Soros Fund Management, Credit Suisse Group, bond manager Pacific Investment Management Co., Apollo Advisors and more.

...

read more here - http://www.google.com/hostednews/ap/article/ALeqM5hhKb8azgDEIuMqpQKCDLPYVagU3wD99L1E5O1
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
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WhiskeyGirl
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« Reply #3 on: July 30, 2009, 10:08:33 PM »

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Let’s Break Up the Fed

The Obama administration’s plan to increase the powers of the Federal Reserve, says one critic, is like giving a teenager “a bigger, faster car right after he crashed the family station wagon.” Treasury Secretary Timothy Geithner disagrees. He argues that the Fed is “best positioned” to oversee key financial companies, and that the Obama plan would give the Fed only “modest additional authority.”

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At the very least we should split the monetary policy and regulatory functions of the Fed, as was done through the Maastricht Treaty that established the European Central Bank. What we need now is a debate about how to break up the Fed—and some of the sprawling financial institutions it supervises—in order to make both the regulator and the regulated more manageable and accountable.

read more here - http://online.wsj.com/article/SB20001424052970203946904574300263148640896.html

Maybe a good forensic audit and open books would be a good place to start?
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
WhiskeyGirl
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« Reply #4 on: July 30, 2009, 10:16:38 PM »

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UPDATE 1-U.S. judge rules for Fed in Fox News Network request

NEW YORK, July 30 (Reuters) - A U.S. judge on Thursday denied a bid by Fox News Network LLC seeking details from the Board of Governors of the Federal Reserve about the central bank's loans to companies affected by the financial crisis.

The owner of the Fox Business cable network made an initial request for documents in November last year under the Freedom of Information Act (FOIA) about the companies and funds they received between August 2007 and November 2008.

read more here - http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN3037958120090730

Open the books. 
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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