Free Republic

Ben S. Bernanke ascended to the chairmanship of the Federal Reserve eight years ago as a little-known — albeit distinguished — Princeton economics professor who had notched just three years of federal public service. When he takes his leave this week, having presided over his final meeting of the Fed’s policy-making committee, he will depart as one of the finest chairmen in the institution’s hundred year history, having played a central role in averting a financial meltdown and lifting the nation out of recession.

WASHINGTON — The Federal Reserve announced Wednesday another $10 billion cut in its monthly bond purchases in a statement that attributed the decision to “growing underlying strength in the broader economy.” The statement, published after a two-day meeting of the Fed’s policy-making committee, reflected the optimism of Fed officials that the economy is finally poised for faster growth after years of false starts and setbacks. It was the committee’s first unanimous decision since 2011. The Fed said it would expand its holdings of Treasury and mortgage-backed securities by $65 billion in February, down from $75 billion in January and $85...

The United States has become more and more defensive against China because of its rapid development and the change of the comparison of strength between the two countries. "China Threat" theory increasingly attracts much more attention from the US media. Chinese political and economics author Lei Sihai believes that the United States is actively pursuing a "currency war" against China through a puppetry of elaborate political, military and media maneuvering. Using financial instruments as "direct weapons," Lei claims that the United States is gearing up to engage China in a currency battle come 2015 in his new book The Decisive...

People often ask today: if the Fed has created so much new money, why hasn’t it produced more inflation? When the Fed creates masses of new money, it initially flows to Wall Street, which profits from it in a variety of imaginative ways, but from there its path is unpredictable. The Fed inserted into the TARP bill in 2008 the authority to pay interest on bank reserves. Of course this interest is paid by creating even more new money, but it provides an incentive for banks to leave reserves idle. On the other hand, the reserves are not as idle...

The Federal Reserve did something completely unpredicted on Wednesday; nothing. So called “tapering” of QE was indefinitely placed in deep freeze………until such time as the U.S. economy is more robust. Most asset classes shot up energetically. Both the S&P and the Dow closed at all-time highs. SNIP The question to be asked is did these asset classes all react rationally. Continuing to effectively print $85 billion per month of new money after months of telegraphing at least a modicum of reduction can only translate that our economy is frail and infirm, languid if you will. SNIP Up until ten years...

Some may have forgotten, or not be aware, that the Federal Reserve system has its own police force. Well, it does: "The U.S. Federal Reserve Police is the law enforcement arm of the Federal Reserve System, the central banking system of the United States.... Officers are certified to carry a variety of weapons systems (depending on assignment) including semi-automatic pistols, assault rifles, submachine guns, shotguns, less-lethal weapons, pepper spray, batons and other standard police equipment. Officers also wear bullet resistant vests/body armor. On October 12, 2010 President Barack Obama signed into law S.B. 1132 the "Law Enforcement Officers' Safety Act...

"Measures that arbitrarily, or by assumption, assign the bulk of fluctuation in GDP to purely temporary factors may provide poor policy guidance when shocks are more permanent in nature," he said in prepared remarks to the Korea-America Economic Association. ... While gross domestic product growth rose above 4 percent in the third quarter, it has generally stayed closer to 2 percent since the recession ended in 2009, causing some to think that longer-term potential GDP growth is no longer the 3-percent rate to which Americans are accustomed. If that is the case, the Fed's ultra easy policy stance - including...

Arthur Laffer is a legend in Washington, having been the leading voice on President Ronald Reagan's hawkish Economic Policy Advisory Board.  His "Laffer Curve," which argued that there are diminishing returns after a certain point of taxation, was taken as gospel.If his views are not quite as frequent a presence in public debate, it's largely because Laffer's pet issues, regulation and taxes, took a back seat during the George W. Bush and Barack Obama administrations.  But Laffer himself still occasionally makes appearances on the public scene.And in June of 2009, he penned an op-ed warning excessive quantitative easing would inevitably lead...

The Democratic Party gained prominence in the first half of the nineteenth century as being the party that opposed the Second Bank of the United States. In the process, it tapped into an anti-state sentiment that proved so strong that we wouldn't see another like it until the next century. Its adversaries were Whig politicians who defended the bank and its ability to grow the government and their own personal fortunes at the same time. They were, in fact, quite open about these arrangements. It was considered standard-operating procedure for Whig representatives to receive monetary compensation for their support of...

It is little wonder that early Democrats garnered such popular support and would demand Andrew Jackson end America’s experiment with central banking. Jackson called it “dangerous to the liberty of the American people because it represented a fantastic centralization of economic and political power under private control.” It’s hard to believe that guy who said that is now on the $20 bill. Jackson also warned that the Bank of the United States was “a vast electioneering engine” that could “control the Government and change its character.” These sentiments were echoed by Roger Taney, Jackson’s Treasury Secretary, who talked of the...

So who really controls the world? The Illuminati? Freemasons? The Bilderberg Group? Or are these all red herrings to distract your prying eyes from the real global elite? The answer, like most topics worth exploring, is not quite so simple. Have no doubt, there are secretive global powers whose only goal is to keep and grow that power. But it really may not be as secretive as you would think. And that is what makes it even more nefarious. But don't take my word for it, we have both science and insider testimony to back it up. We are going...

"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland; a private bank owned and controlled by the world's central banks which were...

(Reuters) - The possibility that the Federal Reserve could finally start to trim its extraordinary stimulus for the economy could make this week an explosive one for financial markets. Though the odds still point to no major policy change when U.S. central bankers meet December 17-18, most of the recent domestic economic data suggest the beginning of the end of their massive bond-buying program is coming sooner than later. If it acts it may reflect as much a growth in confidence in the global economy, for whom the withdrawal of the flow of cheap dollars will be a shock, as...

A federal judge said Monday that he believes the government’s once-secret collection of domestic phone records is unconstitutional, setting up likely appeals and further challenges to the data mining revealed by classified leaker Edward Snowden. U.S. District Judge Richard Leon said the National Security Agency’s bulk collection of metadata — phone records of the time and numbers called without any disclosure of content — apparently violates privacy rights.

A week from now, the Federal Reserve System will celebrate the 100th anniversary of its founding. Resulting from secret negotiations between bankers and politicians at Jekyll Island, the Fed's creation established a banking cartel and a board of government overseers that has grown ever stronger through the years. One would think this anniversary would elicit some sort of public recognition of the Fed's growth from a quasi-agent of the Treasury Department intended to provide an elastic currency, to a de facto independent institution that has taken complete control of the economy through its central monetary planning. But just like the...

The Federal Reserve Open Market Committee meets on Tuesday and Wednesday of this week. To taper or not to taper, that is the question. Hamlet-to-be-or-not-to-be3 Let’s take a look at inflation thus far. Since 1947, there have been only three periods of deflation where the consumer price index (CPI) has fallen for consecutive months: 1949-1950, 1954-1955 and most recently, 2009. inflationcpi121413 Notice that inflation (as defined by year–over-year changes in the consumer price index) has been declining since September 1981 when inflation hit 11%. The latest measure of inflation is 0.9% YoY for October 2013. At the same time, house...

The Federal Reserve currently purchases $40 billion per month in an effort to keep mortgage rates low and stimulate the housing market recovery (or bubble?). Over the past year, the RMBS index has earned -0.55% in spite of (or because of) The Fed’s $40 billion per month in agency RMBS purchases. And if we compare the BRMBS index to PIMCO’s vaunted total return fund, you will see similar performance until September 2013 when RMBS rallied in terms of price compared to PIMCO’s Total Return Fund. So, despite The Fed’s $40 billion of agency MBS per month, the Bloomberg MBS index...

There are cheers from the media about the latest jobs report. While some speculated that it was so good that The Fed would begin tapering their assets purchases, few noticed that the 10 year Treasury yield actually fell on the jobs report. But let’s look at the longer term picture. House prices are rising rapidly despite declining real median household income. Problem 1: Labor’s share of nonfarm business have been falling for decades, but it’s decline has been accelerating since 2000. laborsharelt No problem, many economists say. The U.S. has been moving towards a service economy for decades. But, …...

The S&P 500 stock market index rose a blistering +1.12% today on positive economic news, albeit much of it seasonal. The run up in stock prices following the collapse in 2008 (both stock market and house prices) has fueled speculation of another Hindenburg Omen event. That is, another stock market correction. But with Ben Bernanke and The Fed supporting asset bubbles with the expansion of The Fed’s Balance Sheet (green dotted line), investors continue to roll the dice on the stock market rising. Likewise, the Elliott Wave is being sustained by The Fed’s Balance Sheet. Let’s see what happens when...

... Quantitative easing has had the intended effect of holding down interest rates, which has in turn encouraged borrowing by businesses and individuals with good credit and stabilized the housing market. But persistent economic uncertainty has dulled the positive impact of the Fed's program. U.S. gross domestic product has broken above a 3 percent annual rate of growth in only six quarters since 2009. Some of the money has instead inflated asset bubbles, to the benefit of mostly wealthy investors seeking high yields. The Fed's "real intention was capital investment would be stimulated, jobs would be created, incomes of the...