Tuesday, August 25, 2009

The Fed is the Black Hole of our Democracy






Guess what? The Federal Reserve has not only stopped depositing copious amounts of liquidity into the economy -- it now appears to be in the process of making a sizable withdrawal.

A close look at quantitative measures of monetary policy reveals a sudden change in trend. After growing at unprecedented rates for well over a year, these aggregates stopped rising several months ago and have since declined, according to data provided by the Federal Reserve Bank of St. Louis.

What could this mean for YOU?

Get Ready for Interest Rate Shocks


One of the important messages coming out of the central banker’s annual retreat in Jackson Hole, Wyoming is that once the crisis is over the Federal Reserve’s (Fed) tightening of monetary policy may be abrupt. If so, increases in short term interest rates will not be gradual but jarring. The reasoning behind this approach, as I understand it, is that (1) since there could be political pressures to monetize the government debt and (2) given the large amount of existing liquidity that needs to be drained the Fed’s exit strategy needs to be unmistakably clear in communicating that it will not tolerate the unanchoring of inflationary expectations. Here is the New York Times:

And here is the Wall Street Journal on the talk Carl Walsh gave at the retreat:

[O]nce the Fed does start raising the federal-funds rate out of its current record-low range near zero, “it should be increased quickly,” Mr. Walsh argued. “There is no support for raising rates at a gradual pace once the zero rate policy is ended.”

In Addition...

More Stimulus Spending than Originally Projected



Just think what will happen to interest on the federal debt! And the MUST READ Finale!!!!

As Robert Wenzel points out..When reading it, keep in mind that Farrell and Greider, while understanding what the Fed is up to, don't really want to abolish the concept of a central bank. They want to "democratise" the Fed or create a new type of central bank that is more responsive "to the people." They don't seem to get that it is any central fiat money creating force that will always be the focus of evildoers who want to control it. The only real solution is to end the Fed and return to a 100% gold backed currency, since gold can't be printed at will. Also remember we are a Republic and Democracy is Not Liberty!

At last week's annual Jackson Hole meeting of Fed execs, Boss Ben Bernanke's braggadocio about saving the world from another Great Depression had the feel of an egomaniacal dictator trying to cement his legacy in history.

Any good behaviorist would tell you Bernanke's got some dangerous biases isolating him from reality (remember two years ago when he was denying the meltdown). His brash claims and radical, secretive policies present a grave danger to American capitalism and democracy.

In fact, Bernanke now appears to be America's (and the world's) most dangerous man, far more dangerous than Hank Paulson and the "Goldman Conspiracy" ever was. He's now acting like the supreme dictator of that larger conspiracy Jack Bogle called the "Happy Conspiracy" in "The Battle for the Soul of Capitalism: How the Financial System Undermined Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions -- And What to Do About It."

This indictment of Bernanke as a dictator leading Wall Street's "Happy Conspiracy" became clear after reading "Dismantling the Temple," William Greider's brilliant essay in The Nation magazine. Greider is the author of "Secrets of the Temple: How the Federal Reserve Runs the Country." Greider's essay is an absolute must-read for anyone interested in the future of capitalism, the decline of democracy, the next mega-meltdown, and the real "Great Depression 2" ... from which Bernanke cannot save us.

Why worry? Because the danger really is imminent. The same clueless Congress that did nothing when Paulson and the Goldman Conspiracy nearly bankrupted America is now about to give Bernanke's out-of-control "Happy Conspiracy" even more power, and another bigger chance to destroy our capitalism.

Here is a summary of Greider's history about how the Fed is sabotaging America:

  • The Fed was created by Congress in 1913, "independent" from "the rest of government, aloof from regular politics and with one powerful exception: the bankers." However, the destructive ideologies of Greenspan and Reaganomics prove how the Fed is manipulated by and dangerously dependent on politicians.

  • The Fed is "the black hole of our democracy -- the crucial contradiction." And the recent credit crisis blew "the Fed's cover." Voters and taxpayers have no "voice in these most important public policies" because the Fed "operated in secrecy."

  • "The past year, the Fed has flooded the streets with money, distributing trillions of dollars to banks, financial markets and commercial interests. ... People and politicians are shocked ... confused ... angered."

  • Where did the Fed get those trillions? They "printed it, out of thin air. That is what central banks do. Who told the Fed governors they could do this? Nobody, really -- not Congress or the president." The Fed "does not submit its budgets to Congress for authorization and appropriation. It raises its own money, sets its own priorities," keeps Congress and the American people in the dark.

  • Wall Street bankers own the Fed, it's their private club. They "collaborate closely on Fed policy. Banks are the 'shareholders' who ostensibly own the 12 regional Federal Reserve banks. Bankers sit on the boards of directors, proposing interest-rate changes for Fed governors," serve on a "special advisory council that meets privately with governors to critique monetary policy and management of the economy." The Fed's a legal conspiracy making bankers very, very "happy."

  • Congress is now "demanding greater transparency." Bernanke says "no," an audit would amount to "a takeover of monetary policy by the Congress." What a dictator. Greider quotes the Constitution: "The Congress shall have the power to coin money [and] regulate the value thereof." He adds that the Constitution "does not grant the president or the Treasury secretary this power. Nor does it envision a secretive central bank" acting as a megaphone for a president's political ideology.

  • Bernanke's powers go far beyond anything Paulson demanded last year. And he's now fighting a turf war because the "Happy Conspiracy" needs secrecy: no audits, no supervision, no transparency, no oversight, and zero accountability to taxpayers. Why? That way they can steal from the American people at will.

  • Greider's big warning: Recently Obama made a monumental mistake when he "proposed to make the central bank the supercop to guard against 'systemic risk' and set its own regulations. Obama's proposal gives the central bank even greater power" but does "not propose any changes in the Fed's privileged status."

Giving the Fed more power to self-regulate in secrecy is a guaranteed set-up for a bigger mega-meltdown around 2013, the Fed's centennial anniversary. Now is "a good time to dismantle the temple" warns Greider. "Democratize the Fed. Or tear it down. Create something new in its place that's accountable to the public."

Here are his "six reasons why granting the Fed even more power is a really bad idea:" Till then, you're on notice that the man most likely to destroy American capitalism is Ben Bernanke and his "Happy Conspiracy" of Wall Street bankers that own our Federal Reserve Banks.

Get Ready for the Obama DEPRESSION!

What Would Be Involved in an Audit of the Federal Reserve? Part Four

Sources

http://commoditytradealert.com/blog/?p=2493

http://www.marketwatch.com/story/the-fed-makes-an-early-withdrawal-2009-08-25

http://www.propublica.org/ion/stimulus/item/stimulus-transparency-watchdogs-keep-contract-details-a-secret-813

http://blogs.reuters.com/james-pethokoukis/2009/08/25/the-us-budget-deficit-is-even-worse-than-you-think/

http://wallstreetpit.com/9773-get-ready-for-interest-rate-shocks

http://www.economicpolicyjournal.com/2009/08/union-official-becomes-ny-fed-chairman.html

http://money.cnn.com/2009/08/25/news/economy/recovery_unemployment_jobs.fortune/index.htm?postversion=2009082512

http://www.nytimes.com/2009/08/22/business/economy/22fed.html

http://www.nlpc.org/stories/2009/08/23/obamas-unseemly-vacation

http://online.wsj.com/article/SB125094803869551469.html

http://market-ticker.denninger.net/archives/1368-Legalized-Accounting-Fraud-Boosted.html

http://wallstreetpit.com/9797-stimulus-spending-higher-than-expected

http://www.marketwatch.com/story/dismantle-bernankes-happy-conspiracy-now-2009-08-25

http://www.marketwatch.com/story/dismantle-bernankes-happy-conspiracy-now-2009-08-25?pagenumber=2

http://bluelori.blogspot.com/2009/08/oh-son-of.html

http://www.forbes.com/2009/08/24/federal-reserve-obama-business-washington-bernanke.html

http://www.zerohedge.com/article/fed-proposed-become-next-aig

http://www.americanbankingnews.com/2009/08/24/what-would-be-involved-in-an-audit-of-the-federal-reserve-part-four/

http://bluelori.blogspot.com/2009/08/art-imitating-life-goldfellas.html

http://www.economicpolicyjournal.com/2009/08/ben-bernanke-man-most-likely-to-destroy.html

http://www.nothirdsolution.com/2009/08/24/democracy-is-not-liberty/

Suggested Reading...

http://www.thestreet.com/story/10589081/1/banking-crisis-dwarfs-depression.html

http://market-ticker.denninger.net/archives/1370-August-Confidence-and-Richmond-Fed.html

http://www.goldmansachs666.com/2009/08/cftc-chair-takes-down-deutsche-bank.html

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/23/AR2009082302381_pf.html

http://seekingalpha.com/article/157732-colonial-bank-failure-highlights-the-problem


No comments: