How did it "politicize" itself by doing exactly what's in its charter and with the blessing of Congress trying to inject temporary liquidity into the banking system solvent and prevent collapse of make the U.S. financial system and save millions of Americans and businesses from financial ruin as the result (401k's, MMFs / MM accounts etc.)?
That's the same kind of twisted "pretzel logic" that blames Bernanke himself for Bernanke/Fed-bashing by politicians because this Fed-bashing makes us "lose focus" on politicians who created the crisis with their "ownership society" loose lending policies and regulations and Fannie-Freddie-FHA-HUD underwriting and securitizing them...
Monetary policy actually would be politicized if the Fed was "abolished" and its functions were to be transferred to an agency of Treasury and/or Congressional committee, as some suggest doing.
lol the Fed hasn’t had a REAL physical audit in years.
"REAL physical audit" like what? What would Ron Paul expect to find with "REAL physical audit" that he couldn't ask to be produced on all the semi-annual testimony by Fed Chairmen he's been sitting on? $100,000 stashed in the Fed's freezer or $80,000 stuffed in employee's wife's bra? On the other hand, I would love to see the REAL audit of various agencies of Federal government, like the one GSA underwent few years ago - it would be much more educational for people to see the REAL waste, fraud and abuse and the bureaucracy they actually spend the money on.
Makes no mention of how the Fed is devaluing the dollar and how that affects us all!
Reread these posts from Weaker Dollar Seen as Unlikely to Cure Joblessness - FR, 2010 November 16
Dollar has been deliberately devalued all during Bush administration and Republican Congress, from 2001 to 2007-2008, well before TARP, Obama's stimulus, QE1 or QE2... As a matter of fact, USD$ is now slightly higher than it was before financial meltdown. If QE2 was so destructive, this wouldn't be the case.
All that without the "benefit" of TARP, QE, or QE2... The U.S. dollar has been "competitively devalued" starting with Bush administration (despite all his Treasury secretaries having to assure with a more-or-less straight face that they had a "policy of strong dollar") and this devaluation was well before and had nothing to do with TARP, QE1 or QE2... So, why all this hand-wringing about U.S. dollar "devalued due to QE2" now? Because the politicians found they can have a convenient boogieman and scapegoat - the Fed and QE2 - rather than having to explain their reckless fiscal policy of higher spending, deficits, and onerous regulations which make it very difficult for companies to expand, hire or start business in the U.S. when it's so much easier and more profitable to deploy capital where it's welcome and, for now, is well treated. < snip > ..... The USD$ Cash Index is slightly higher now (~ 78) than it was at the end of 2007 (~ 76), and has been higher ever since the multi-decade bottom in March-July of 2008 (~ 72), and the peak was in June 2001-February 2001 (~ 120) ...
Crude Oil was about US$27 in January 2001, $20 in January 2002 (post-9/11) and peaked at US$145 in July 2008 (pre-crash).
Gold was around US$260 in early 2001, US$1030 in March 2008, and broke US$1400 in Novemebr 2010.
Silver was about US$4.50 in early 2001, US$21 in March 2008, and broke US$29 in November 2010.
The interview with Bill Dudley Fed Easing Is Not Aimed at Weakening US Dollar: Dudley explains why QE2 is not inflationary (there are already enough reserves in the system, and new money is not "printed" if banks don't lend them) and what the positives of QE2 are and what negatives the Fed is watching for so they can take action at the appropriate time.
Good comlementary pieces are Bernanke Takes Off the Gloves After Becoming Global Target - CNBC, by Albert Bozzo, 2010 November 19, and particularly interview with [Judd] Gregg: The Case Against Monetary Populism - CNBC, by Lori Ann LaRocco, 2010 November 17
JG: There is a variety of grades. The TARP did what it was suppose to do. It did well and the taxpayers are going to get their money back. The financial system was made solvent and stabilized. The failure to pick up Fannie and Freddie and address that, and real estate underwriting has been a huge mistake I think and will harm us again undoubtedly. The recent regulatory reform bill I believe will end up contracting credit on main street significantly for a lot of reasons, and making it much more difficult for the people who are the job creators in our society to get credit. ..... < snip > < snip > .....LL: Looking back at the regulations that been passed on financial reform, how would you grade the bill since Fannie and Freddie were never a part of it?
Sen. Gregg also addresses the dangers of establishing an unaccountable "consumer czar" (Elizabeth Warren) office inside the Fed as part of FinReg / Dodd-Frank "reform" and other harmful legislations and regulations, none of which have to do with the Fed. Well worth reading in full.
The result is hyper inflation. ... But inflation will hurt all of us. Because of the coming dollar devaluation...
As I have already shown above, the devaluation of USD$ has been happening in the 2000's well before TARP, QE1 and QE2 (USD$ Cash Index went from 120 in 2001 to 72-76 in 2007-2008, losing more than one third of its value), and QE2 in and of otself doesn't do one iota to devalue the dollar (again, see the links above).
So the USD$ (now at 78) didn't weaken and the consumer inflation has not risen because of QE2, in fact it's one of the mildest on record, which makes Inflation in Real Time - B, by Robin Goldwyn Blumenthal, 2010 November 13 - FR, 2010 November 17:
< snip > ..... Interestingly, the MIT Sloan index has been "very close" to the oft-maligned government indicator [BLS' CPI], Rigobon says. As for Palin's and others' contention that food prices have risen "significantly" over the past year, Rigobon begs to differ. After a fast start, they've been flat since July, up for the year about 1%. Says he: "I'm a Republican, but I think Bernanke is doing the right thing."
The idea that, if the Fed doesn't "monetize" the deficits, then Congress and Presidents can keep spending Other People's Money stands the relationship of fiscal and monetary policies on its head, kind of like blaming Bernanke because the people are so busy bashing the Fed and Bernanke that they are "losing focus" on politicians. Just like blaming the "fat cat" bankers for making "unaffordable" loans to the people that government forced them to make, as long as the loans can be repurchased by / "dumped on" the GSEs (Government Sponsored Enterprises) or government agencies.
s/b:
How did it “politicize” itself by doing exactly what’s in its charter and with the blessing of Congress trying to inject temporary liquidity into the banking system and make it solvent and prevent the collapse of the U.S. financial system, and save millions of Americans and businesses from financial ruin as the result (401k’s, MMFs / MM accounts etc.)?