Posted on 09/03/2009 4:39:19 PM PDT by all the best
Since H.R. 1207 was introduced by Dr. Ron Paul in Congress this February, there has been a growing movement questions whether the Fed should continue to operate without more oversight and some question whether or not the Federal Reserve should continue to operate at all.
Currenty, Paul’s “Audit the Fed” legislation has 282 co-sponsors and there are two similar pieces of legislation in the senate. If the legislation is passed, it will allow the Government Accountability Office (GAO) to review the Federal Reserve’s balance sheets and their policy deliberations and monetary transactions. Currently Federal Reserve Chairman, Ben Bernanke, opposes the plan, saying it would undermine the Fed’s independence.
The “Audit the Fed” act has a real chance in passing, but some supporters of the legislation, including Ron Paul, want to take it further than that by ending the Federal Reserve all together. Paul introduced a piece of follow-up legislation, entitled H.R. 833: The Federal Reserve Board Abolition Act which would wind down and eliminate the Federal Reserve over the course of the year. Currently, the act has no co-sponsors, but is gaining a lot of grass-roots support. Paul hopes that members of Congress will join his movement to end the Federal Reserve after they see the results of a full audit of the Federal Reserve. Paul also authored a book about his proposal to end the Federal Reserve, entitled “End the Fed.”
Although the movement is in its infancy and still gaining momentum, it’s not too crazy to think that the United States wouldn’t be better off without the Federal Reserve. Since the Federal Reserve System was brought into force into 1914, the United States economy has grown at a slower pace than it did before 1914, despite significantly improved productivity. The rate of inflation has been substantially worse since...
(Excerpt) Read more at americanbankingnews.com ...
As to what type of system we could use to replace it, certainly the op/ed piece's suggestion of the old Canadian system is one worth considering. We did get by without a central bank for a long time, and we can certainly do so again.
What's scariest to me is they have no clue about capitalism except destroying it with credit bubbles. But it is also scary that they can and do secretly conspire with other world banks to manipulate the credit markets. My evidence is simple: does it make the slightest bit of sense to loan money to the US Government for 30 years at 4.5% considering our looming 50T plus shortfall? No, the treasury market is in a multi-decade bubble propped up by machinations with or against foreigners. This market distortion will inevitable collapse with the probable loss of the dollar or even our country's existence.
Ron Paul is a flake but his is right about the Federal Reserve and the Constitution.
The foundation upon which this country was built is really so simple. The simplicity of it is what made it such a success. But that wasn’t good enough, a little tweak here and a little tweak there, let’s try this, let’s try that, all this manipulation is what is killing us.
panthermom speaks the truth!
This is undoubtedly true. I wish there were more people that held our Constitution sacred. It is unfortunate, however, that he (i) addresses the issue in a cursory way, and (ii) shows poor statesmanship by focusing on it at this time.
Yes, it does. And I noted their open-mindedness.
But then Buffet is an unreformed Leftist, too.
As for complexity, you describe some kind of a world that is both Utopian and static. It is Utopian because your picture assumes that society is uniform. It is not. A day-trader with high-school education may find certain things complex while a math wiz at an investment bank may find that same thing elementary. In addition, what is complex today often becomes simple tomorrow (think of the flat Earth, for instance).
The present-day crises has little to do with complexity. It is a result of social engineering by Congress (mortgages), aggravated by stupid regulatory restrictions (mark-to-market and lax leverage).
Please explain the significance of “at this time”. If not now, when? As it stands now my kids and future grandkids and probably great grandchildren will be paying this debt. Unless of course it all collapses.
And where on earth have you drawn that conclusion from? We were discussing the existence of Fed. If you think that this issue can be addressed by common sense, I feel sorry for you.
"Undoubtedly you have never met Joe the plumber and are dismayed that he makes as much or more than you."
You are putting now the second foot into your mouth, and only because you choose to talk about something you have no idea about. And you cannot imagine how silly you look: I had worked in construction, on farms, and at a factory.
Looks to me that you have an anti-education bias: mere mention of a degree irritates you. Sad.
Yes and no.
Or better, “yes, but...”
Yes, but the federal reserve by working in cahoots with Goldman Sachs, the treasury, Paulson and Warren Buffet, the system is rigged for insider banks and financials.
Getting the Federal Reserve out of it would at least break one link in the chain.
I understand that the graduates of Harvard, Yale, Columbia and the likes understand many things that I do not.
But I will also point out to you that the graduates of those universities are the people who have totally screwed up this country.
When I got my degree, which I very rarely mention except when seriously pressed, I noticed that there was not a companion degree in common sense.
We need some good “ol’ country boy” common sense introduced into the Washington scene and on a scale that will make a difference. One or two guys won't help.
So would Larry, Curly, Moe and /or Shemp. Your point?
Absolutely nothing. We've lived without it for a long time, which constitutes a simple proof.
As I said earlier, the question is, what is better? As Nietzsche said, to wit, "Free from what? I do not want to hear that. Free for what? Tell me that."
"And what is the particular problem about "THIS" time?"
In my humble opinion, the essence of the present time is that we witness a coup: a fundamental change being imposed on the country under the guise of economic crisis (FDR did exactly the same). The opposition, both Republicans and Libertarians, have bought into Obama's framework. They argue, for instance, against his stimulus bill.
But there is and has never been a stimulus bill. Of those $700B, only a timy fraction has any potential to stimulate economy. The same is with healthcare: Obamites claim that it will help to recover the economy. That this is garbage is easy to show: we had the same healthcare system but a booming economy in 1990s.
The opposition should vigorously do is oppose these immediate dangers. If health-care reform is needed, fine: let's talk about it when the economy fully recovers (and we can possibly afford it).
People like ROn Paul focus instead on the issue of not even secondary but terciary importance (no, it was not Bernanke that bought GM; it was Bush and Obama administrations; he has no power to do such things without presidents and Congress).
This is much like Bush chose to focus, after his re-election, on reforming social security. Of much greater immediate importance was shutting our borders and scrapping the idiotic tax code.
No. You asked an honest question, I gave an honest answer.
"IMHO, education from the so called best universities in this country doesn't carry all that much weight anymore."
It is for you to decide what weight you give to education, but your statement is patently false. There is plenty of evidence that good education not only matters but commands an increasing premium in salaries.
To be sure, it is indeed difficult to get proper education in liberal arts and social sciences because it is now dominated by the Left. But education in sciences, statistics and other substantive fields --- finance and business administration included --- is the envy of the world.
You also appear to overlook that overall education stops roughly at the college level; after that people are supposed to become specialists in their fields. "Churning out elitists who think we are all stupid,"
See, that's only in your head. I never said, to you or anybody else, that I have such views. You are being unfair and insulting. And illogical: just because I happen to have received a degree I happen to be elitist? What do you know about me to make that conclusion.
Re-read Commandments, Mr. Conservative, especially the one about bearing false witness.
"putting their theory ahead of any sort of common sense has only accelerated our downfall."
These words are unfounded and make little sense.
"Harvard? Ha, look at Obama!!! "
How many people from Harvard do you actually know? Why don't you get acquainted with physicists, mathematicians and MBA holders from Harvard. See how many of them are frauds.
The scientific method requires us to suspend judgment in the absence of knowledge. You'd do yourself a favor if you followed that rule.
I completely agree with you. And I am alarmed more than I can tell.
All I am saying that Bernanke and the Fed have little to do with what is happening now. We are witnessing a coup perpetrated by the executive branch of the government. It is they who buy GM; it is they, with the approval of Congress, who create enormous deficits; it is they who are about to destroy out health =care system, 1/6 of our economy; it is they who will place on us enormous burdens with cap-and-trade. They should be fought at this time, not the Fed.
"Please explain the significance of “at this time”.
Kindly look at the previous post, where I tried to answer this question in more detail.
You certainly lack any evidence for that. Businesses do not regulate themselves; they do not pass laws. You also appear to misunderstand the difference between society's lack of knowledge and individuals' ignorance.
Specifically, it was the Community Reinvestment Act that created faulty loans. To be sure, free markets efficiently satisfy demand, whatever the demand may be. It was the idiotic demand for bad loans that was accommodated by investment banks and lenders. But it was social engineering that overturned the boat (look at the chart showing overall inflation vs. housing prices; housing price track inflation up until 1997-8 and then take off like crazy --- right after the passage of a reformed Act).
Once the boat overturned, the problem was deepened by two additional pieces. One is mark-to-market requirement, which brought down Lehman for no reason. The second is lax leverage requirements on the banks. You and I are allowed 2:1 margin in trading stocks; this was instituted, incidentally, after the Great Depression crash. But banks, which have infinitely greater impact on the economy, are (were) allowed 33:1.
The latter was largely due to limitations of our knowledge. Securitization, for instance, is with us for only 20-25 years. We continue to learn. And, yes, it is easy (and stupid) to declare securitization bad: it has contributed greatly to our growth over the last 20 years. Were it not for leverage and fraudulent loans, securitization by itself would have no negative effect.
You do what many people did after the 1929 crash: blame Wall Street and its individual players. It was incorrect (and wrong) then and it is incorrect now.
At least you are clear now. Unfortunately the same Goldmans and Saches who helped elect Obama (had money on McCain as well) are in the way. They aren't lifting a finger to stop the nationalization, they took his TARP money as willingly as Bush's although some are giving it back. Socialism doesn't bother them at all as long as someone else, preferably the competition, takes the hit.
Also you don't seem to realize that the Fed is financing the deficit. Rates on US obligations should be in low teens for 10 year, high teens for 30 year to make the least bit of sense. They are not just enabling all the stuff you don't like, they are creating the next bubble so when that crashes the socialists can grab even more power.
I feel bad about piling on here, but I do have to challenge you on this point.
Ron Paul and many others including myself, believe that there is no greater issue than this. Everything else is secondary. Here's why.
If you believe that the federal government has amassed too much power, and if you understand how the Federal Reserve and fractional reserve banking works, then you understand that the federal government gets it's power from the money it it able to borrow, which it could not do were it not for the Federal Reserve.
If the federal government had to live within it's means, in other words live on the taxes they could collect from us and the money they were able to borrow WITHOUT the implicit backing of an entity capable of creating money out of thin air, then they would surely not be able to spend what they spend.
I would wager that we wouldn't even be having this health care debate period... because they couldn't afford it and everyone would know that they couldn't.
It's the existence of the Federal Reserve that enables the oppressive federal government we "enjoy" today.
Ergo, there IS no greater issue than ending the Fed.
I think we would be alot less in debt and our government would be much smaller since it would not be able to spend beyond it’s means.
Chickens and eggs. The CRA created some demand which was satisfied with higher rate loans. The bulk of the real estate bubble however, came from moronic flippers or flipper wannabees far removed from the CRA. Loans for tract mansions were/are the bulk of the bubble. OTOH you are right that the foundation for the RE market was undermined as completely unqualified morons bought up the low end. When the low end demand dried up, that collapsed the high end, but the high end was overextended and due to collapse anyway.
Or you can incorrectly argue that the CRA had something to do with the properties I posted here in 2005 worth 250k at best, selling the 800's (e.g. Loudoun county VA). The overwhelming amounts of moneys in MBS that failed were in those types of properties.
Worth repeating.
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