Free Republic

Are the White House, Congress and the Fed on the same page? The White House says the nation is in an unemployment “hole” of epic proportions — and that even though its $787 billion stimulus effort is performing well, the country still needs new jobs programs. Congress agrees, and on Wednesday the House passed a $154 billion jobs bill that included more money for infrastructure projects, states and unemployment programs. But over at the Federal Reserve, the prospect of an improving economy has caused an increasingly cautious central bank to start talking up the process by which it will begin...

The issue of TIME scheduled to hit newsstands Friday is described in a news release today as the "most anticipated issue of the year." Why? Because it features Federal Reserve Chairman Ben Bernanke on the cover as the magazine's "2009 Person of the Year."

Long ago I quit criticizing the Federal Reserve chairman for failing to avert the latest systemic financial disaster, though I still pity him for enduring the endless Socratic essays, polemics, and indignant soliloquies of his detractors. Criticizing the Fed chairman for a lack of prescience is like criticizing a dog for an inability to recite the alphabet. When something is physiologically impossible, why bother? But many people do bother, and they bother by retreading the same opposing laments: insufficient regulation or misguided regulation; too much liquidity or too little liquidity; too-low interest rates or too-high interest rates; excessively political or...

Congressman Ron Paul’s “Free Competition In Currency Act” Won’t Solve The Problem But Still Raises Vital Issues Politics / Fiat Currency Dec 15, 2009 - 11:58 AM By: Richard_C_Cook While Congressman Ron Paul’s Free Competition in Currency Act is not a workable proposal, it points to a deeply serious problem with the Federal Reserve System that must be faced if the U.S. economy is to have a future. Over the last 40 years the Federal Reserve, with the acquiescence of Congress and the executive branch, has become the primary regulator of the economy. The prevailing philosophy is called monetarism, and...

Last week, in the name of protecting the little guy from Wall Street, the House passed HR 4173 to increase the little guy’s false sense of security in the financial system. This mammoth piece of legislation would massively increase government regulation and oversight in the banking industry under the misguided reasoning that more government could have stopped faulty lending practices, when in actuality it caused them. This bill would also greatly increase the powers of the Federal Reserve, which too many in Congress still see as savior rather than perpetrator in this mess. One silver lining is that the amendment...

Maybe it’s the smoke from Mt. Vesuvius that keeps Arianna Huffington and the financial community from seeing that the economic collapse has nothing to do with the Fed "missing" the warning signs leading up to the October meltdown. “Things do not happen. Things are made to happen.” John F. Kennedy The Fed didn’t miss anything; the October meltdown was an inside job. Capitalism never made senseProfessor Ebeling, the Ludwig von Mises professor of Economics at Hillsdale College, understood something was wrong when he wrote: "the perverse development and evolution of historical capitalism, the institutions necessary for a truly free-market economy...

Even if the Federal Reserve gets around to strengthening the dollar--which would do wonders to get the economy really moving again--we still face a mammoth and growing problem: the government's increasing domination and distortion of the capital markets. It's not only the need to finance Uncle Sam's deficits that crowds out other credit seekers in the marketplace. It's also the proliferation of government entities (think Fannie Mae and Freddie Mac), government loan guarantees, tax credits and the government's growing sway over the banking sector. Even if Washington's red ink were back to the levels of a couple of years ago,...

... I don’t think many people grasp just how much job creation we need to climb out of the hole we’re in. You can’t just look at the eight million jobs that America has lost since the recession began, because the nation needs to keep adding jobs — more than 100,000 a month — to keep up with a growing population. And that means that we need really big job gains, month after month, if we want to see America return to anything that feels like full employment. How big? My back of the envelope calculation says that we need...

A group of academic economists — including several Nobel Prize winners, leaders of respected economic journals and former Fed officials — is dialing up its call for lawmakers to drop plans to subject the Federal Reserve to more scrutiny by the Government Accountability Office, an investigative arm of Congress. In a letter to leaders on the Senate Banking Committee and House Financial Services Committee, the economists say a bill proposed by Rep. Ron Paul (R., Tex.) and Alan Grayson (D., Fla.) to let the GAO review Fed monetary policy would do “serious harm to the economy.” They warn increased congressional...

Rep. Ron Paul's attempt to rein in central bank is finally close to passing -- just don't expect him to vote for it. Ron Paul is used to going it alone. During 20 years in Washington, the libertarian Republican congressman from Texas has proposed doing away with personal income taxes, federal antitrust laws and the minimum wage. He's advocated pulling the United States out of the United Nations, NATO and the International Monetary Fund. Those efforts have mostly been legislative non-starters. Many of his bills fail to attract a single co-sponsor. But one of his perennial causes is headed to...

There’s a strange political cocktail brewing in Washington, one that mixes top conservative strategist Grover Norquist and tea party organizers at FreedomWorks with democratic socialist Sen. Bernie Sanders (I-Vt.), progressive activists and public interest advocates. The unlikely coalition’s bid to block Ben Bernanke’s nomination to a second term as chairman of the Federal Reserve until Congress votes on legislation to audit the secretive central bank is tapping into a growing anti-establishment mood — and legislators up for reelection next year are taking notice.

Video interview of Gerald Celente about why Bernanke should not be reconfirmed.

Republican Senator Jim DeMint, a member of the Senate Banking Committee, said on Thursday he would oppose Ben Bernanke's nomination for a second term as Federal Reserve Chairman. "Americans want a new Fed chairman who is willing to provide transparency into the Fed's actions, who is willing to accept responsibility for the Fed's mistakes, and who is willing to support true monetary reform that guarantees the soundness of our money," DeMint said in a statement.

“We must take care that the Federal Reserve remains effective and independent,” Amid tough but generally respectful questioning, most senators appeared ready to support Mr Bernanke’s renomination, but many voiced deep concerns about the Fed as an institution and challenged the chairman’s views as to the roles it should play in the future.

Ben S. Bernanke used a hearing for his reconfirmation as Federal Reserve chairman on Thursday to express concern about legislation that would put the Fed on a tighter leash and let Congress “second-guess” its decisions. Mr. Bernanke’s chief concern was a proposal by Representative Ron Paul, Republican of Texas, to “audit the Fed.” The amendment to the House of Representative’s bill overhauling financial regulation would submit the Fed to audits of its decisions concerning monetary policy. “To be very, very clear, I in no way object to — in fact I welcome — transparency about the Fed’s activities and the...

Sen. Jim Bunning has placed an additional hold on Federal Reserve Chairman Ben Bernanke's nomination to a second term. Bunning's office confirmed that the Kentucky Republican is joining with Sen. Bernie Sanders (I-Vt.), who caucuses with Democrats, to seek to block Bernanke's confirmation to a second term atop the Federal Reserve Board. Bernanke has come under fire from lawmakers on the left and the right, who have expressed varying concerns about his record as Fed chairman, though his course to a second term was eased somewhat on Thursday when a number of members of the Senate Banking Committee, including Chairman...

WASHINGTON (MarketWatch) -- The recent run-up in gold and oil prices is not inflationary, said James Bullard, the president of St. Louis Federal Reserve Bank of St. Louis, in a CNBC television interview Wednesday. Bullard said the Fed generally would not like to start tightening monetary policy until the unemployment rate starts down....

Numerous articles on SA have talked about the “cabal” that has kept gold from rising over the years. If it is a cabal, it is truly the equivalent of The Gang That Couldn’t Shoot Straight, The Italian Marching Band, and the US Post Office and Treasury Department all rolled into one. Why seek conspiracy when simple stupidity will suffice? These guys just couldn't get it right...

Federal Reserve Chairman Ben Bernanke (November 29th Washington Post) does not want us to know any of the details of the Fed's secret operations. This position is not surprising and has been typical of all central bank chairmen. Bernanke's stated goal in his editorial is "To design a system of financial oversight..." that will "provide a robust framework for preventing future crises." During its 96 years of existence, the Federal Reserve has played havoc with our economy and brought great suffering to millions through unemployment and price escalation. In addition, it has achieved what only a central bank can: a...

Monetary Policy and Structural Reform of the Japanese Economy --Speech given by Eiko Shinotsuka, Member of the Policy Board of the Bank of Japan, at the Meeting on Economic and Financial Matters in Nagano on February 4, 2000 April 25, 2000 Bank of Japan [Contents] I. Introduction II. The Zero Interest Rate Policy A. What Is a Zero Interest Rate Policy? B. What Does the Phrase "Until Deflationary Concern Has Been Dispelled" Mean? C. Personal View on the Zero Interest Rate Policy III. Structural Reform of the Japanese Economy A. Information Technology Revolution B. Employment Problems I. Introduction1 It is...

Fed Chairman Ben Bernanke's warning that further regulation would "impair" the economy is a "hoax," according to Rep. Ron Paul (R-Texas). Responding to Bernanke's op-ed in The Washington Post this past weekend, in which the Federal Reserve chairman said that Paul's bill to audit the Fed would harm the U.S. economy, the Texas congressman accused Bernanke of dodging responsibility for his role in causing the recession. "He claims that they're rescuing, and making things better. But he takes no responsibility for causing all the problems," Paul said during an appearance on the Fox Business Network. "So I think it's a...

Link only, per FR copyright rules

For many Americans, the financial crisis, and the recession it spawned, have been devastating -- jobs, homes, savings lost. Understandably, many people are calling for change. Yet change needs to be about creating a system that works better, not just differently. As a nation, our challenge is to design a system of financial oversight that will embody the lessons of the past two years and provide a robust framework for preventing future crises and the economic damage they cause. These matters are complex, and Congress is still in the midst of considering how best to reform financial regulation. I am...

(snip) I am concerned, however, that a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions. Notably, some leading proposals in the Senate would strip the Fed of all its bank regulatory powers. And a House committee recently voted to repeal a 1978 provision that was intended to protect monetary policy from short-term political influence. These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the...

On what basis do you come before The Senate with this request? We continue to see the alleged goal of "sustainable economic growth in an environment of price stability" in your Fedspeak, but the fact is that The Fed has never met that metric - not now, not ever. Specifically: "All money is debt" in modern monetary systems. That is, it is borrowed into existence. Since 1953 outstanding debt in the system has grown at a 8.78% compound annual rate, a 7.91% rate since 1990 and at an 8.50% rate since 2000. Since you took office the rate has been...

Spots urging shoppers to use their credit cards wisely will be shown on big screens in 12 U.S. cities. The central bank has long been accused of neglecting its consumer protection duties. BY JIM PUZZANGHERA Washington - The Federal Reserve isn't too popular these days, what with its failure to predict or prevent the financial crisis and recession, not to mention its involvement in last year's bailouts. Rep. Ron Paul (R-Texas) has a bestselling book out called "End the Fed," and some lawmakers are looking to cut back the central bank's power. It sounds like a perfect time for an...

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. Finally, the blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed. All...

A picture is worth a thousand Krugman essays, which is why we present a chart comparing the US Monetary Base (and by subtracting Reserve Balances with Fed Reserve Banks, Currency in Circulation), and the Fed's holdings of MBS and Agency paper (worthless GSE/FHA garbage). In summary: Currency in Circulation: $920 billion; MBS/Agency Holdings: $997 billion. The dollar in your pocket is now entirely backed only by worthless, rapidly devaluing and subsidized housing.

The independence of the Federal Reserve is essential for credible monetary policy and doubts about the U.S. central bank's ability to do its job without political interference could hurt the nascent economic recovery, a senior Federal Reserve official said on Sunday. "Talk of eroding the Fed's independence can be counterproductive for economic recovery," St. Louis Federal Reserve Bank President James Bullard said in slides to accompany a presentation prepared for a panel discussion in New York. Bullard said that non-independent central banks have historically been forced to finance large government budget deficits. "This can be very inflationary," he added. Last...

Once considered a shoo-in for reconfirmation, Ben Bernanke may not want to get too comfortable in his seat as Federal Reserve chairman. Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, yesterday told a small group of reporters that Bernanke's Senate confirmation for a second term isn't guaranteed. "Not necessarily, not necessarily," he said in response to a question about whether Bernanke getting a second term was a foregone conclusion. "We'll see how members react." He went on to say, "I'm inclined to be supportive. I think he's done a far better job over the last couple of years...

It's an issue that libertarian Rep. Ron Paul, R-Texas, and Sen. Bernie Sanders (I-Vt.), a self-proclaimed socialist agree on: Congress should have the authority to call for the Federal Reserve to be audited. But it is also something that some in the financial media are reluctant to support, especially judging from the tone of CNBC "The Call" co-host Trish Regan and comments CNBC senior economics reporter Steve Liesman. On the Nov. 20 broadcast of "The Call," CME Group reporter Rick Santelli made the case that Federal Reserve should be audited. He cited opposition to the Fed audit proposal from Sen....

It's about damn time. Yes, it's a first step - but an important first step, and it happened yesterday. Here's what Representative Grayson said at the time of debate: Bloomberg wasted no time giving the "loyal opposition" to transparency all the digital ink they desired: “It’s going to be seen as weakening the independence of monetary policy with consequent negative implications,” Frank told reporters after the vote. “People are going to be worried about the impact on the dollar, on the interest rate.” Go listen to Mr. Grayson's statement again. Now tell me how The Fed's move to dilute our...

Thanks to your quick action in contacting Congress, the House Financial Services Committee earlier today rejected Representative Mel Watt's attempt to hijack Audit the Fed by voting 43-26 to pass Ron Paul's amendment to the financial regulatory reform bill. Dr. Paul called me right after the vote to personally express his thanks to C4L members for all of your efforts! It is an incredible testament to the growing power of the liberty movement that we were able to get such an audit passed by a major House committee, but this is by no means the end of our fight. Financial...

Former Federal Reserve chairman Alan Greenspan and Paul Volcker wrote the House Financial Services Committee earliy this month that they opposed a provision, backed by Rep. Ron Paul (R., Texas) that would expand the congressional Government Accountability Office’s audits of the Fed. The committee, ignoring the pleas from the two, endorsed the provision Thursday. Greenspan and Volcker, in a letter sent to the committee’s chairman and ranking Republicans, warned that the provision threatened the ability of the Fed to foster price stability independent of political interference.

The House Financial Services Committee has approved Rep. Ron Paul’s measure to drastically expand the government’s power to audit the Federal Reserve. The measure, based on a Paul proposal that has attracted more than 300 co-sponsors, passed, 43-26, as an amendment to a financial reform bill. Florida Democrat and fellow Fed critic Alan Grayson co-sponsored the amendment with Paul and played a leading role drumming up support for it among committee members. The adoption of this amendment is an extraordinary victory for Paul, whose libertarian, anti-Fed leanings have often been dismissed by the political establishment.

For nearly a century the Federal Reserve has operated in the shadows, away from the prying eyes of Congress, journalists and the American people. Created in 1913, the Fed was given enormous responsibility to protect the value of our currency. Yet in the last 96 years the U.S. dollar has lost more than 95% of its purchasing power. The Fed's unprecedented actions over the past year in attempting to stabilize the financial system have now forced it into the spotlight, and caused millions of people around the country to question the opacity of the Fed's financial transactions. While the Fed...

She sounds off on Ron Paul, health care, and, of course, liberty. BY MATT SNYDERS Michele Bachmann is a regular fixture on the cable news circuit. When it comes to print, however, she takes a more measured approach; she declined a phone interview with the New York Times last month, insisting on a Q&A via email. She gave City Pages the same deal. Here's what she had to say: City Pages: Your appearance with Rep. Ron Paul surprised some folks. At first blush, it would seem the two of you might come down on very different sides on a lot...

No, this has nothing to do with liberals or conservatives or socialism or any of the other crap that we are used to hearing. I present to you a video of one, Dr. Edwin Vieria Jr, a Harvard educated expert in the matters of money and how money works in America. It is becoming apparent to me as I explore in more detail some of the profound historical changes that have taken place in America and their root causes. Somehow, it all tends to lead to the exact same source. While we can certainly discuss until the cows home the...

One of the best economic minds of our generation is Dr. Arthur Laffer of Laffer Curve fame. So when he talks, I listen. You should, too. In a report published yesterday entitled, Market Expectations and Causative Reasons For Inflation he argues that conditions are ripe for the CPI to move rapidly from deflation to "the 2.5% to 3% range" over the next three months. And higher from there. His argument is two-fold but is driven largely by the Federal Reserve's decision to increase the monetary base. "The current increase in the monetary base (Sept-08 to the present) is more than...

Good video talks about government regulations, the welfare state, etc.

Two Fed apologists, Alin Kashyap and former Fed governor Frederic Mishkin, are out with an Op-Ed in WSJ that claims the Fed is transparent enough, and that Ron Paul's Audit the Fed Bill is useless. "It is completely appropriate to hold the Fed accountable for its decisions. But the [Ron] Paul bill, H.R. 1207, will only produce redundancies: Congress already has multiple ways of finding out what the Fed is doing and why," write the dynamic duo. They also set up something of a strawman: Under the banner of increasing Federal Reserve transparency, Congressman Ron Paul has sponsored a bill...

FedSpeak Translation - There Is No RecoveryTuesday, November 10. 2009 Posted by Karl Denninger in Federal Reserve at 15:04 Yet more BS Fedspeak, this time in the mainstream media: In separate speeches, Janet Yellen, president of the Federal Reserve Bank of San Francisco, and Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that rising unemployment could crimp consumers, restraining the recovery. Consumer spending accounts for about 70 percent of economic activity. That's because there is no real economic recovery at all. So why is the stock market up so much? More than happy to show 'ya. Two...

A University of Texas at Austin LBJ School of Public Affairs professor called for an unprecedented audit of the Federal Reserve Bank balance sheet expansion of $2trillion during the 2007-09 financial industry crisis. During a San Antonio appearance Friday, Robert Auerbach, author of the 2008 book “Deception and Abuse at the Fed,” argued for an audit by the U.S. Government Accountability Office as he spoke at an event sponsored by the Henry B. Gonzalez Foundation for Inspiring Public Service in San Antonio. Auerbach, who served on the U.S. Housing Banking Committee staff when Gonzalez was chairman in the 1990s, said...

The central bank doesn't need more political interference as it decides when to move against inflation. BY ANIL K. KASHYAP and FREDERIC S. MISHKIN Under the banner of increasing Federal Reserve transparency, Congressman Ron Paul has sponsored a bill that would subject the Fed's monetary policies to an audit by the Government Accountability Office (GAO). The bill is a veiled attempt to undermine the Fed's independence. If it passes, it will cripple policy making—particularly when it comes to inflation. It is completely appropriate to hold the Fed accountable for its decisions. But the Paul bill, H.R. 1207, will only produce...

MANHATTAN, Kan. (AP) — The head of the Federal Deposit Insurance Corp. on Monday said Congress needs to provide regulators greater tools to control the risky financial behavior that helped trigger the recession and to unwind major firms on the verge of collapse. FDIC Chairman Sheila Bair said she supports such a winding-down process for financial institutions other than banks. But she does have reservations with a proposal now before the House, which would cover the costs for the government of dissolving troubled companies with fees charged to businesses after the firms' meltdown occurred. Bair says that fund should be...

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he melt up in stocks on no volume was fully expected after the worst possible employment news to come in over 20 years: the market-economy disconnect is now complete, and all stocks are freeriding purely on Bernanke's printing press. At least gold vigilantes are beginning to whisper in Bernanke's ear he can go fornicate himself and his dollar destruction deathwish: let's see what happens when gold melts up ala the S&P to 1,200, 1,300 and maybe 1,500 in a few weeks. Look for some old-fashioned massive panic at the Federal Reserve. The melt up in stocks on no volume was...

Video Jim Rogers, chairman, Rogers Holdings, says that the US is the biggest debtor nation in the world

This morning, Treasury released the quarterly Minutes of the Meeting of the Treasury Borrowing Advisory Committee Of the Securities Industry and Financial Markets Association, which is [A]n advisory committee governed by federal statute that meets quarterly with the Treasury Department. The Borrowing Committee’s membership is comprised of senior representatives from investment funds and banks. The Borrowing Committee presents their observations to the Treasury Department on the overall strength of the U.S. economy as well as providing recommendations on a variety of technical debt management issues. The Securities Industry and Financial Markets Association does not participate in the deliberations of the...

From The Wall Street Examiner comes this: Another anomaly of note is the fact that 10 year Fannie paper is now yielding less than 10 year Treasuries. This is another sign of mass psychosis. Unfortunately, the source of the infection has been Bernanke’s insane policy of piling up risky MBS paper on the Fed’s balance sheet. Wave after weekly wave of Fed buying has created one of the most ridiculous market distortions in history. Unfortunately, the problem it was designed to solve, the housing market collapse, isn’t responding. This is more than ridiculous. It is in fact outrageous. The GSEs...