FT.com – Fed warns on Congressional scrutiny — Now ask yourself who is really in charge. This is going to blow up into a scandal. If they didn’t want the audit, the could have stonewalled. This is a bad idea.
The Federal Reserve warned on Thursday that a growing congressional threat to curtail its independence would destabilise markets and raise the cost of servicing US debt for “current and future generations”.
Ron Paul, the Texas Republican, has gathered the support of a majority of the House of Representatives for a bill that would audit the Fed’s monetary policy decisions. He told a Congressional hearing he wanted the power to prevent the Fed being “secret and clandestine and serving special interests”.
Found by Aric Mackey.
I am always laugh when some ijit quotes Jefferson or Jackson as some financial expert for 21 century America.
Both Jefferson and Jackson were farmers. While both were intelligent enough, they were very short sighted when it came to matters of money and both teetered on the verge of bankruptcy much of their lives. (Because he couldn’t afford to keep them and to keep them out of the hands of creditors, Jefferson “donated” his extensive library to the US which formed the basis of the Library of Congress)
During both men’s lifetimes there was a constant battle between large farmers (mostly southerners) and manufacturers (mostly northerners). The Northerners wanted (needed) expansion of capitol and closed markets while the Southerners were free traders and open markets. It wasn’t until the events of the Civil War created enough capitol that Northern businesses could finally expand to the degree they did. Even building railways required money.
That both Jefferson and Jackson derided money men and capitol is not surprising. That people continue to quote them as experts 200 years later shows how weak their arguments are. These are different times and circumstances than two centuries ago.
If you want to know more about the Fed, here you go.
http://tinyurl.com/d7rcjt
#33, AP,
If you have an opinion to share, please do. Directing us to read someone elses opinion is a waste of time and demonstrates that you are incapable of thinking for yourself.
Mr. Fusion, I’m sorry you cannot ascertain the relevance of Jackson’s misgivings about the 2nd U.S. bank and how they may apply to the current Federal Reserve. When there is no transparency, an oft used construct of Obama BTW, in an institution one has to question why. It would seem by your response that you could care less about the details of what the Federal Reserve is doing and why. Instead you choose to call Jefferson and Jackson dumb ‘ol farmers who like other Southerners long for free trade, which is ironic since Clinton, Bush and Obama have no problems with free trade. As far as teetering on the verge of bankruptcy, I hear tell Ex-New York Fed President now US Treasury Secretary Geithner couldn’t figure out his own taxes and was desperate to sell his own house.
#34 — You force us to read your opinions parroting like a sheeple so I didn’t think you would mind a second opinion.
But since you asked. Echo Tango Foxtrot!
so #32…it appears you may also feel the Constitution is out dated as well…its more than 200 yrs old… Wise words written will always be wise words written and to judge a man by how much money he has is probably not a good way to judge a man?..
Normally I read your posts and agree with them, but not this time. 🙂
#29 Steve… Typing in all Caps is considered Shouting…So Please dont Shout,,here unless you mean to?… THANKS !!! 🙁
And you might want to read the Constitution… Congress is supposed to oversee a few more things than their own personal gains…
I agree wholeheartedly with Mr. Fusion’s worship of our banking cartel overlords and wish that the government would hand over the entire printing of currency to them. We should all enter the world with several million dollars in debt to repay to the cartel.
Guys, don’t jump on conFusion. He hasn’t read the U.S. Constitution, he wasn’t born, raised or educated in the U.S. and, hasn’t a clue about U.S. history.
This is a total non story. It relies on not understanding what the Fed does. The Fed is not a bank. What Jackson said is totally irrelavent. It’s a Federal Reserve system, it relies on private banks.
Nut case Ron Paul wants to go through the books of the Fed and see where and how much they put money into banks. The problem with that is the banks are publicly traded. If investors see that the Fed sent tons of money to Citibank for example, investors might get nervous that if a bank needed that kind of money it may be insolvent and there could be a run on the bank, therefore negating the Fed’s injection of money to that bank in the first place. It’s why the Fed required all banks to take money from the start. It could destroy the very banks the Fed relies on to exercise monetary policy. Smart move Ron.
Ron Paul fundamentally doesn’t understand the international banking system (in fact mis-represents it in order to sell his conspiracy garbage) and would like the US to go back on the gold standard. That’s like me wanting NASA to go back to it’s Apollo era computers.
But if banks are insolvent, and only the massive use of public funds is keeping them afloat, then why is it bad for people to know this? If they are insolvent, they should go out of business, and stop indebting my great grandchildren because they can’t balance their frikin books!
We could have capitalized 50 new banks with no negative equity on their books for a tenth of what we have thrown at Citibank, just for the benefit of a few.
#41, Why should Congress be concerned where the money is going?
Where do you think the Fed gets the money to do it’s business? It’s buys Treasury Bonds among other things (which is what the audit will show us).
So, I ask again. Why should Congress be concerned where the money is going?
Because it’s our money!
We are taxed to the hilt, they devalue what we have left, and then expect us to be happy while they bail out their partners in the scheme.
This is pure and utter BULLSHIT and needs to be stopped.
#42, Agreed.
#41 Your argument suggests that any sort of fraud that might have a negative stock market impact should be covered up and secretly fixed with taxpayer funds. We might have kept the Enron, Worldcom, etc. charades going.
The Fed is a bank with capital requirements just like any other. Read up on it.
42, 43, 44, 45
The Federal Reserve is NOT a bank. Why don’t you try to open a checking account with the US Federal Reserve? It’s sad with the amount of media we have available that people don’t have an understanding of the banking system. Enron and Worldcom are not part of the Federal Reserve system, the Federal Reserve is not a bank, why is that hard to understand?
We know how much and where the money is going. It’s going to the banks within the Federal Reserve system, and it was 730 billion give or take. As to how much in each particular bank and when, that we don’t know, because it could cause a run on the banks within the Federal Reserve system. And when you have widespread bank runs they destroy GDP for years afterwards in trying to rebuild credit worthiness. We learned this with the Depression. Google bank run.
Second, your grandkids are not being indebted by the Fed. They are indebted by the massive stimulus garbage; yes, by the bailout of GM; yes, but not the banks. The reason the 1 year US Treasury is so low (0.51%) is precisely because the US backed its currency. Let all the banks fail and see where that number goes.
The banks will eventually pay back all of the money that was guaranteed to them. Those are the terms from the Fed. Banks are already doing that. The only way that doesn’t happen is if Congress decides they want to actually own parts of the banks (like GM) and have influence on their boards (again like GM). The Fed would rightly fight that as well.
Every bank is insolvent if all depositors demand their money back immediately. It’s called a bank run. It’s the entire reason for FDIC. Again read up on the depression and bank runs. Read thestreet.com’s article about Chuck Schumer and IndyMac bank if you want to know what happens with Congress leaking sensitive bank information.
http://www.thestreet.com/s/financial-winners-losers-indymac/newsanalysis/winnersfinancial/10425144.html
If every bank in the US goes bankrupt and the US government does nothing to stand behind the dollar, then your currency no longer holds any value. The US government gets its ability to borrow based on the perception and past history of being able to pay it back. If you allow all the current banks in the Federal Reserve system to go bankrupt then you no longer have a banking system. You can’t just start from scratch and think everything will go back to normal.
How are you going to build 50 new startups with money that every investor knows the US government ultimately won’t stand behind? There’s no way to do that. Then everyone holding US debt (of which there’s a lot out there) would immediately attempt to sell this debt and you would have a collapse of the entire global banking system, not to mention all the second world countries whose currencies are tied to the dollar.
If you don’t back your OWN currency you may as well not be a country. It’s why third world countries go to the IMF. If they don’t they end up like Zimbabwe. Should the US have gone to the IMF and then allowed the IMF (which the US funds to a large degree anyway) to determine what should happen to the US banking system? That’s what Ron Paul would have us do, and then complain about the “IMF conspiracy”. Absurd.
#46, Man, you’ve really dunked your head in the kool-aide pitcher, haven’t you?
# 46 smittybc said, “If every bank in the US goes bankrupt and the US government does nothing to stand behind the dollar, then your currency no longer holds any value.”
Only if the dollar has no inherent value due to it being fraudulent in the 1st place…
I could go on but it is clear that you don’t understand the basic principles of money…
That’s right the dollar is fraudulent in the first place, it holds no inherent value, everyone in the world has been duped. You can’t buy a barrel of oil on the open market, I don’t hold a mortgage on my house, there are no such things as credit cards, international banking, and the whole system was invented as a conspiracy in Davos.
My head is in a pitcher of Kool Aid, while you guys go out every day and use dollars, buy things on credit, and put your money in the very system you claim to be fraudulent and a complete farce. Or do you have bricks of gold buried in your backyard and trade those when you want to put fuel in your car?
Yeah It’s obvious I don’t know anything about global finance. OK fine. How about read Milton Friedman and Anna J. Schwartz’ A Monetary History of the United States, 1867-1960 and then get back to me.
I’ve read Friedman. He wasn’t a fan of the Fed System either due to the unchecked excesses they exhibit.
People may think he supports the Fed but he doesn’t. If anything, he blames the Great Depression on the Fed for not doing what it was supposed to do — injecting the reserve cash on hand to banks who were failing. He thinks they depression could have been avoided if the Fed wasn’t in existence because the problem would have resolved itself the same way it did in 1907.
My pet CT is that the Fed let the small non-Fed banks fail, thus leaving only themselves in control of the money.
What the Fed does now is not injecting reserve cash, but printing it and injecting it (thus inflating the supply). Very Bad.
A little something extra for you:
Given the power of the N.Y. Fed, it is time to ask some very hard questions about its recent performance. The first question to ask is: Who is the New York Fed? Who exactly has been running the show? Yes, we all know that Tim Geithner was the president and CEO of the N.Y. Fed from 2003 until his ascension as treasury secretary. But who chose him for that position, and to whom did he report? The N.Y. Fed president reports to, and is chosen by, the Fed board of directors.
So who selected Geithner back in 2003? Well, the Fed board created a select committee to pick the CEO. This committee included none other than Hank Greenberg, then the chairman of AIG; John Whitehead, a former chairman of Goldman Sachs; Walter Shipley, a former chairman of Chase Manhattan Bank, now JPMorgan Chase; and Pete Peterson, a former chairman of Lehman Bros. It was not a group of typical depositors worried about the security of their savings accounts but rather one whose interest was in preserving a capital structure and way of doing business that cried out for – but did not receive – harsh examination from the N.Y. Fed.
http://tinyurl.com/raqwfz
No, we don’t need transparency . . .
#35, GF,
I’m sorry you cannot ascertain the relevance of Jackson’s misgivings about the 2nd U.S. bank and how they may apply to the current Federal Reserve.
I’m sorry you insist upon using the doings of 160 years ago over a different institution to what is happening today. Have you ever heard the expression “apples and oranges”?
When there is no transparency, an oft used construct of Obama BTW, in an institution one has to question why.
WOW, a twofer! You managed to slam your favorite whipping boy and get in a point. If you had bothered to read my previous posts then you would know I am very much in favor of auditing the Fed.
It would seem by your response that you could care less about the details of what the Federal Reserve is doing and why.
Where did I write anything even remotely suggesting that?
Instead you choose to call Jefferson and Jackson dumb ‘ol farmers who like other Southerners long for free trade, …
No, I didn’t call them “dumb ol farmers”. I pointed out 200 years ago agrarian statesmen had a different agenda. It would appear that your knowledge of history is extremely limited if you suggest either Jefferson or Jackson were economic experts or ever worked for the expansion of America’s industrial base. Their policies were more in tune with expanding agriculture and contrasted with the Northern States push for more money.
… which is ironic since Clinton, Bush and Obama have no problems with free trade.
Which is to be expected among those who view is larger than either Jefferson or Jackson. It has been America’s industrial base which made her strong. Since Presidents Grant, all American Presidents have worked to expand the economy. Some more so and some better than the others.
All one need do is look at the number of people employed in each sector to get an indication of the strength and importance of each.
As far as teetering on the verge of bankruptcy, …
Another ad hominem which has nothing to do with the issue.
# 52 Mr. Fusion said, “I pointed out 200 years ago agrarian statesmen had a different agenda. ”
But, money & the basics of economics is the same. So, you have no point…
The Federal Reserve is not a government “agency”. It is a privately held corporation of privately owned banks that has been given the power to create and regulate the country’s money supply. Congress only has limited powers over it as stipulated in the Federal Reserve Act of 1913. The Congress only has oversight powers and ZERO ability to dictate policy.
Ron Paul is right. The Federal Reserve needs to go away and the power to create and regulate the country’s money supply needs to return to its rightful place – Congress, as the Constitution mandates.
Shining a little light on the Fed will make the cockroaches scurry for the exits. This is long overdue and just the first step in America taking back its monetary system from the banker created monopoly that is the Federal Reserve Bank.
#53, Cow-Patty,
Obviously you have no idea how stupid you really are. You have no idea what you are writing about and yet you want us to think you are an expert. Shit, with all due respect to ‘JimR’, your English comprehension is better than your economics comprehension.
The answer is NO, money is NOT the same today as it was 200 years ago. Economics, besides not even being a discipline then, is much different for the same reason.
#42, 46, & 49, smittybc,
Good posts. I disagree with your statement that the FED is not a bank. True, it isn’t in the classical sense that I could open an account. Instead, it is a Central Bank.
Every country (except a few floundering dictatorships) has a Central Bank. To the best of my knowledge, all other Central Banks are much closer controlled by their governments than is the FED, yet they also have a greater degree of independence than does a private bank.
The FED is created by Congress and may be dissolved, altered, or whatever else by Congress too. It reports to Congress. Yet, we want the FED to retain its independence so it is not influenced by politics or the whims of Congress. Congress already controls fiscal policy, they shouldn’t also have the monetary policy control too.
(oops, I used fiscal and monetary policy. That will really confuse the hell out of the Liebertarians)
But your comments are smack on. It is really too bad that the ijits have no idea what the hell they are whining about.
#51, Liberty Loser,
Did you have something for us or did you really want us to read some other Liebertarian’s opinion?
If the Federal Reserve is threatening Congress, I hope this means they’re starting to get a little worried. It would be nice to end the banks stranglehold over the U.S. without having to use force.
#57, Yes, I forgot to mention the quote was by Eliot Spitzer, a DEMOCRAT. You moran.
#38, QUIET MAN:
I MEANT TO, BRIGHT BOY.
I prefer the government controlling its own money, because every election cycle they have to worry if they did a good job or not.
Right now the Federal Reserve is above scrutiny, criticism or penalty. Its a kingdom of banking, trust us or else.
Thats all you need to know.