Suddenly the Federal Reserve is everybody’s punching bag.
Strip the Fed of its bank regulation powers, some in Congress are demanding. Get probing audits of its behind-the-scenes operations, others say.
Read more about the Federal Reserve...
I was pleased last week when we won a vote in the Financial Services Committee to include language from the Audit the Fed bill HR1207 in the upcoming financial regulatory reform bill. As it stands now, if HR 3996 passes, because of this action, the Federal Reserve’s entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.
Read more about auditing the Federal Reserve...
This is big news in terms of finally getting somewhere on Auditing the Federal Reserve Bills that currently runs in the form of two bills: One of them is the House bill: RS 1207 with now 311 co-sponsors for the bill, and the other is the Senate bill: S604 in the Senate which now has 30 co-sponsors.
Both bills authorizes the Government Accountability Office to conduct a wide-ranging audit of the Fed’s opaque deals with foreign central banks and major U.S. financial institutions. The Fed has never had a real audit in its history and little is known of what it does with the trillions of dollars at its disposal.
Read more about battling the Federal Reserve...
Last week a new bill was introduced in the Senate to audit the Federal Reserve. Some backers of my bill HR1207 and the existing Senate companion bill S.604 were a little miffed at this, but depending on how you think about it, this new legislation poses no great threat to our efforts.
I have been reading my weekend section of the FT this afternoon and came across two unrelated articles that struck a chord with me with respect to the financial markets. Some items that are notable, 1) Treasuries, since the credit crises, have been the only acceptable collateral in the repo market [http://www.ft.com/cms/s/0/aed6f9c8-c035-11de-aed2-00144feab49a.html?nclick_check=1] 2) There are still non financial companies out there that are writing off huge losses in derivative "investments" that are way out of proportion to the revenues they had as functioning companies, making me think more non-financial companies than I originally thought got hood-winked by Wall Street into derivative positions way out of line with the regular functioning of their business.[http://www.ft.com/cms/s/0/95d34212-bfed-11de-aed2-00144feab49a.html]
So what does this mean?
Richard Belzer makes some very important points in this video. He says that President John F. Kennedy revoked the Federal Reserve’s right to print money and returned that right to the U.S. Treasury. Belzer notes that shortly thereafter, Kennedy was assassinated. Any questions?
Watch the video!
As anyone who attended Friday’s Audit the Fed hearing could tell you (or as you could see from watching via the live stream), it was quite the experience.
My first thought upon taking my seat was literally, “Wow. We did this.” Seriously. A thorough and complete audit of the Fed wasn’t on anyone else’s radar before Congressman Paul introduced his bill back in February. Read more about auditing the Federal Reserve...
September 25, 2009 (LPAC)—Hearings in the House Financial Services Committee today underlined, for those who are not stupid, that the Federal Reserve, backed by the White House, totally rejects any and all disclosure of its activities to anyone.
What are they hiding?
The criminality and outright treason of the Federal Reserve in threatening a 1923 Germany-style hyperinflationary wipeout of the United States, with its out-of-control printing of money. The Fed has lent, spent, and guaranteed $11.8 trillion in securities bailouts this year, and according to its own Richmond branch bank, now guarantees just about half of all the liabilities in the entire U.S. financial system. While the Fed has the monetary aggregate of the United States growing at 20-21% annual rate, bank credit to the economy is sharply contracting, particularly in August and September, perhaps at a negative 15-20% rate. This intensifying credit crunch simultaneously with skyrocketing money-printing, is a recipe for an early hyperinflationary explosion of the U.S. economy, as illustrated in Lyndon LaRouche's "Triple Curve" diagram.
Most members of "Bailout Barney" Frank's committee avoided the crucial issue, led by Frank himself. The hearing was held on the subject of Rep. Ron Paul's bill to require the Federal Reserve to be completely audited every year by the Government Accountability Office (GAO). The bill is sponsored by 296 Members of the House and could pass tomorrow; it is dreaded by Ben Bernanke and the Fed. Bailout Barney is trying to contain its impact by a deal to incorporate the Paul bill in some form into "financial regulation reform" legislation which Frank and the White House are working on.
While the Congressmen were sparring politely with the Fed's general counsel today, Bloomberg News (which is suing the Fed to try to force disclosure) reported its latest calculation of the $11.8 trillion ongoing total Fed bailout. Despite apparently offering Congress "more transparency," the Fed: refuses to reveal the recipients of these bailout loans, guarantees, and purchases of securities; refuses to reveal the collateral it is buying or accepting for them; refuses to reveal the interest rate it is paying banks (for the first time in its history) to deposit their "excess reserves" at the Fed. These reserves at the Fed have grown from $2 billion to $900 billion in a year! This is some of the money—much of it borrowed from the Fed in the first place—which the banks will not lend into the real economy.
The Federal Reserve has bought nearly half the Treasury Securities issued this year, making it a bigger holder of Treasuries than China or Japan! It has bought 30% or more of the GSE securities issued; is in process of buying up $1.2 trillion "worth" of collapsing mortgage-backed securities, to cite one example; and may have guaranteed half of all the financial liabilities in the whole system. It is preserving and encouraging the cancer of the "non-bank" securitized debt creation, which built the bubbles which blew up from July 2007 on, and it is doing so with hyperinflationary money printing.
"It's 1923 Germany!", Lyndon LaRouche thundered. "Just say so! This indicates we're in a 1923 Germany situation, but actually, it's on a world scale. "Put this out right now," he said. "The right of the Federal Reserve to conceal any of this stuff is junk! That has to be denounced! The Federal Reserve is a private company, under Federal regulation,— it has no right to conceal anything! Particularly at the time the US is being driven into a hyperinflationary explosion, leading to a total collapse. The Fed policy is insane! The Fed has to be brought under strict control, or the United States is going to go down. To support the Fed in this is tantamount to treason. And anyone in the Congress who does that is acting in a manner which is tantamount to treason; and we do mean Barney Frank!
"That's the only way you're going to get at this!", LaRouche went on. "You're not going to get at this by scandalizing it; you're only going to get at this by making threats. And the threat is a form of saying what the consequences are. This is criminal. It is criminally insane. Barney Frank is criminally insane! And he has to be removed, or shut up, or gagged! We have to get rough on this thing. This is a hyperinflationary destruction of the United States, and we cannot allow courtesies or debates on details to obstruct the point! The Federal Reserve is insane and out of control and crooked! These responsibilities lie with the Federal government and with the Federal Treasury. The idea that the Fed can substitute itself independently of the Treasury, in this kind of business is treasonous, it's stupid, it's criminal, it's crooked. And only crooked members of Congress could allow this to happen!
"And that's what we're going to tell the American people out there," he emphasized. "There's a mass strike in process, and with a mass strike in process, if the people know that this is the issue, they're going to react! You bastards have got to understand that there's a new thing going on in this country, and you guys are all subject to impeachment and all other kinds of problems, by the American people, who will not tolerate this kind of crap! You want to take your regime down like the East German regime? You're on the way to doing it. That's what we have to say! You have to have the facts, but you've got to stick to the issue. The issue is: what do we do if they do this! Well, we say we pull them down!
"Use the power we have," LaRouche concluded. "The power we have is, we can bring some of these guys down! And, we're going to bring them down!"
Despite Ben Bernanke’s protestations, Congress must be given full access to audit the Federal Reserve’s loans expenditure
Rep. Alan Grayson recently quizzed Federal Reserve inspector general Elizabeth Coleman about the trillions of dollars lent or spent by the Federal Reserve and where it went. Bottom line: Coleman doesn’t have a clue.
Follow this link to watch the video.
Very interesting article on the problem / disaster of trying to rescue the national banks. The large, national banks need to be broken into pieces.
http://www.dismountingourtiger.com/economics/bank-bailout-yields-collateral-damage-double-standards-poor-solutions/comment-page-1#comment-91
How can we as consumers help?
http://my.barackobama.com/page/group/AmericansforSmartBanking
The more I think about the bail out of firms like Goldman Sachs I really get fired up. Goldman is / was a gambling firm, nothing more, nothing less. They did business with the biggest gamblers out there, hedge funds, private equity, off balance sheet firms of banks and individual investor / speculators.
We bailed them out. They were not a regulated bank / financial firm. The Treasury had no right to bail them out with taxpayer money, or Morgan Stanley or any other unregulated entity.
The fact that the Treasury and Fed rushed through applications to make these firms "regulated banks" infuriates me. This was a complete hijack of sensible regulations and laws in place to define what firm is a regulated entity that has to conform to routine inspections and a certain legal framework and those that can gamble at will with money from people who wish to be involved in their conduct.
As far as I am concerned, the folks in Washington who orchestrated the bail out of unregulated financial institutions and who are now making over a trillion dollars of taxpayer money available to unregulated industries to buy debt should all be indicted and tried for wrong doing.
I am very firm on this opinion. In addition, I read yesterday in the http://online.wsj.com/article/SB124139573742681835.html WSJ about the way banks are treating business lines of credit. It appears no only have hedge funds and unregulated (now regulated) gambling institutions have figured out how to make a killing on CDS products but now the banks are using the CDS market pricing of institutional debt as a guide on pricing that debt. From article:
Now, lenders are cutting the length of many commitments to less than a year. They are charging higher fees for the lines of credit, known as revolvers. And instead of promising an interest rate determined mainly by the company's credit rating, banks will now charge more if the cost of insuring the company's debt against default is higher.
I feel this is very dangerous. Although the traditional credit rating agencies completely failed to do their job correctly for the last 5+ years with respect to the secondary market for various types of debt and companies who engaged in selling various secondary products, to resort to making credit available and at what price based on what speculators are paying and or charging for credit default products is very dangerous and will lead to very distorted pricing and benefit money lenders and speculators at the cost to real companies that create real products and employ people in industries that ad real economic output to our GDP (unlike the financial products / debt "industry")
Friday, 01 May 2009
According to Rep. Dennis J. Kucinich (D-Ohio) U.S. monetary reform is urgently needed: “It is long past time we look at the implications of . . . the privatization of money created by the 1913 Federal Reserve Act, the bank fractional reserve system and our debt-based economic system. Unless we have dramatic reform of monetary policy, the entire economic system will continue to accelerate wealth upwards. I am currently working on drafting legislation for an ‘American Monetary Act’ to address these and other issues in order to protect the economic well being of America. “The U.S. government has been turned into an engine that accelerates the wealth upwards into the hands of a few. . . . And now, the American people are about to pay the price of the collapse of the $513 trillion Ponzi scheme of derivatives. Yes, that’s half a quadrillion dollars.” AFP covered a special presentation on the... Click http://www.americanfreepress.net/html/monetary_reform_needed__176.html to read the article.
