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Federal Reserve

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The Star

20 finance leaders have agreed to coordinate a removal of emergency economic packages when recovery takes firm hold, but they struggled on the detail of measures to rein in bank pay and lending rules at the root of the recent crisis.With the global economy looking brighter than it had in April when Group of 20 finance ministers and central bankers last met, the focus shifted from crisis-fighting to figuring out how to establish a safer financial system for the future. The G20 statement Saturday showed agreement that emerging nations such as India and China should have a greater say in the running of the International Monetary Fund and World Bank but did not offer up any formula of how this should be achieved.

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Bloomberg

Gold, little changed near a six- month high in London today, may rise toward $1,000 an ounce as a weakening dollar increases the metal’s appeal as an alternative investment. Silver climbed to a 13-month high.

The dollar slipped as much as 0.4 percent against the euro as a report showed European investor confidence increased for a second month in September. Gold tends to rise when the greenback weakens. Bullion last surpassed $1,000 on Feb. 20.

 

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American Banking News

The Federal Reserve took control over the United States money supply in 1913. Since then, the buying power of a dollar has decreased by 95% according to data from the Consumer Price Index (CPI). The Federal Reserve’s laissez faire attitude toward inflation has made the US dollar all but worthless. In the early 1900’s prices looked a lot different than what they did today. Consider a typical restaurant. A drink of coffee, tea or milk at a restaurant could be had for just five cents. A main course meal of pork tenderloins, roast beef, pork and beans or chicken fricassee could be had for just twenty cents. For desert, a rhubarb apple pie, lemon layer cake or green apple pie could be had for just five cents. A family of four could eat a restaurant for just $1.50—and groceries were even cheaper.

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American Banking News

Over the last few months, there has been a growing movement to bring transparency and new levels of accountability to the US Federal Reserve. Congressman Ron Paul has been leading the fight in the House of Representatives. There’s no champion fighting in the US Senate to bring accountability to the Federal Reserve, but that might change if one Kentucky senatorial candidate gets elected. Currently in the U.S. Senate, there’s a piece of legislation similar to Ron Paul’s H.R. 1207 which would bring new levels of accountability to the Federal Reserve by allowing the GAO to audit the Fed. The legislation, S.604: The Federal Reserve Sunshine Act of 2009, introduced by Bernie Sanders of Vermont, currently has 23 cosponsors. Unfortunately, the legislation is currently sitting in committee and hasn’t gained much momentum. This could all change if Randal (Rand) Paul an American eye-surgeon, political activist and son of Ron Paul, gets elected in his bid for one of Kentucky’s two slots fo

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Wall St. Pit

As the Lehman anniversary approaches, defenders of the financial sector struggle into position – partly in response to your comments (also here). They offer three main points: 1. We need finance to make the economy work. 2. Financial innovation delivers value, although it’s not perfect (but what is?) 3. Don’t kill the goose that laid the golden egg. Private sector capture of the state is bad enough, wherever it happens in the world. But when the capturers have an unparalleled ability and willingness to “tax” the rest of us, we should really be afraid.

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Daily Paul

Comment look who is sticking their nose in the usual suspect the CFR! Summary - As the financial crisis continues, the U.S. Congress is considering a bill that would jeopardize the independence of the Federal Reserve. This is a shame. Monetary policy should be protected from congressional politics. In the midst of the ongoing financial crisis, Congress is now considering a bill that would subject the Federal Reserve to congressional audits. It would be a shame to let that happen.

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American Banking News

Now that most of the big banks took bailout money in America, that assertion has been making the rounds in an attempt to take the focus off the real causes behind the failure of the American banking system. Of course I don’t feel sorry for the bankers in any way, as they knew this was coming when they went running to the government and Federal Reserve begging for handouts. So there’s no sympathy there from me in any way. The moment business runs to the government to access taxpayer money, they have essentially left the free market and are moving toward fascism and socialism, which has been proven over the long term to not work. So with many writers with socialists leanings and sympathies write about the pay of bank CEOs being the thing that led to the failure of the banking system, they’re either completely ignorant of the business of banking in general, or are being totally dishonest in their assertions. Does this mean the any business CEO should be rewarded for terrible p

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Wall St. Pit

There are three fundamental problems with these stories. The first is that it raises a question about the function of the Fed: should a branch of government seek profits at the expense of the private sector? It is ironic that Euroland’s regulators are calling for much more radical steps than Washington is willing to take. German Chancellor Angela Merkel and French President Nicolas Sarkozy are calling for more regulation and for limits on executive compensation even as the Obama administration continues to argue that such limits would constrain the financial sector’s ability to retain the “best and the brightest”. If the bozos that created this crisis are the best that Wall Street can find, it would be better to shut down the US financial system than to keep them in charge. It is doubly ironic that Nigeria (a country that normally would not come immediately to mind as a role model) has actually charged the leadership of five of its major banks with crimes. Each of these banks had recei

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Economic Policy Journal

Comment I agree with this authors conclusion. NO! END THE FED.. Lew Rockwell answers the question in a very provocative comment. I repeat it here in its entirety: But the fact that this discussion is even occurring between two not very good options, means that we need to find a way to, if not abolish the Fed, then at least return to some sort of gold standard. In the realm of realeconomik, agitating for a return to the gold standard, is a much better alternative than counting on a non-inflationary Congress. "Be Bold and Let's Return to Gold" should be the rallying cry, not "Give the Press to Congress."

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 This is something you should watch from Peter Schiff who is running against Dirty Dodd. Do you recall the report on the Chinese Government encouraging their citizens to buy Gold and Silver? "They want their citizens to buy gold and silver, they want their citizens to own REAL money. They know gold and silver are going higher, they know it's a sure-thing because they are planning on dumping the dollar. The U.S. Government is telling its citizens to put faith and trust in little bits of paper that we're printing". And then read these- http://thecomingdepression.blogspot.com/2009/09/federal-reserve-makes-1-million-dollars.html http://www.lewrockwell.com/rozeff/rozeff146.html http://www.gold-speculator.com/ed-steer/8981-gold-silver-daily-china-tell-its-citizens-buy-silver-now-august-15-2009-a.html http://blogs.moneycentral.msn.com/topstocks/archive/2009/09/02/bank-analysts-see-implosion-dead-ahead.aspx

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Reuters

After decades of pushing long-shot causes like abolishing the income tax and reinstating the gold standard, Republican Representative Ron Paul finds himself in an unaccustomed spot: on the cusp of legislative victory. A majority of the libertarian-leaning Texan's colleagues in the House of Representatives support his proposal to increase congressional scrutiny of the Federal Reserve, and the measure could be included in a broader banking overhaul this fall. But don't expect the House to take up Paul's other pet causes, such as pulling out of the United Nations. Experts say the success of his Federal Reserve Scrutiny Act reflects rising unease with the central bank's dramatic actions over the past year, rather than any increased influence stemming from Paul's quixotic 2008 presidential bid. "He's finally found the right moment," said Sarah Binder of the liberal-leaning Brookings Institution. Paul's spokeswoman Rachel Mills agrees: "His bil

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Yahoo

After decades of pushing long-shot causes like abolishing the income tax and reinstating the gold standard, Republican Representative Ron Paul finds himself in an unaccustomed spot: on the cusp of legislative victory. A majority of the libertarian-leaning Texan's colleagues in the House of Representatives support his proposal to increase congressional scrutiny of the Federal Reserve, and the measure could be included in a broader banking overhaul this fall. But don't expect the House to take up Paul's other pet causes, such as pulling out of the United Nations. Experts say the success of his Federal Reserve Scrutiny Act reflects rising unease with the central bank's dramatic actions over the past year, rather than any increased influence stemming from Paul's quixotic 2008 presidential bid. "He's finally found the right moment," said Sarah Binder of the liberal-leaning Brookings Institution. Paul's spokeswoman Rachel Mills agrees: "His bi

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American Banking News

I was reading the other day that the idea of getting rid of the Federal Reserve was based on faulty assertions that the booms and busts we’ve experienced since its inception in 1914, also happened during the 1800s, largely undermining that argument in the eyes of that particular writer. The reason that writer was wrong was he didn’t take into account one of the other main culprits of the boom and bust cycles: fractional reserve banking, which was the cause behind the problems experienced in boom and bust periods during that time period, and still is today. Basically what the Federal Reserve has done in the past, and does today, is protect the fractional reserve banking system from completely failing and its faults being exposed by printing money and bailing them out, which was the original reason it was created by big bankers – for big banks. Just look at who is being bailed out in our current economic environment, and you can see that the smaller banks will be allowed to fail

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Economic Policy Journal

The plotting continues. Geithner will also attend a meeting of the BRIC Finance Ministers. Of these meetings, Russia, China and the BRIC nations have called for a move away from the dollar as the international reserve currency. The UK is, of course, a U.S, lap dog, And Mario Daghi is head of the powerful Financial Stability Board. He was Managing Director of Goldman Sachs and Vice Chairman of Goldman Sachs International, and a member of the Goldman's "Commitments Committee." He is also a trustee of the Brookings Institute where former Treasury Secretary and former Goldman CEO Henry Paulson uses office space while he writes his memoirs. Nuff said. On the Chinese front, do you think it was just coincidence that China announced plans to buy $50 billion in IMF SDR denominated notes, and that China also just announced that it will allow derivative defaults by state owned enterprises, the same week as the G-20 meeting? This is high stakes poker. I can't believe Gei

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Washington Post Writers Group, Kenneth R. Harney

Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.

Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.

Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, "It's something we can get done."

Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.
 

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BlueLoriBlogSpot

The Financial Flogging Continues Video - Authors description... People who are subscribers take this viral. We need to get people involved with protests. People must understand this is not a democratic or republican issue this is an American issue. Karl at The Market Ticker pleads To The Regulators Stop This! 1 billion shares on the tape as of 9:00 Central on the NYSE and who's responsible for over 1/4 of it? This is outrageous folks. Three zombies, one of which has no equity value and two more that exist only because the government has guaranteed, collectively, half a trillion dollars of what may be worthless assets. Not to mention all the ENRON-STYLE off balance sheet exposure that we have no means to value or come up with a reasonable understanding of. This sort of garbage "support" for market volume, put forth for the explicit purpose of propping up stock market prices and generating fees for the trade of each share at the NYSE, is an outrage. If this

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Business Week

LMAO sure does not look that way! With the economy on the mend, Federal Reserve policymakers last month felt comfortable slowing the pace of one of its economic revival programs and not changing any others, according to documents released Wednesday. Minutes of the central bank's closed door deliberations, held Aug. 11-12, also showed Fed Chairman Ben Bernanke and his colleagues striking a much more hopeful note about the economy's prospects compared with an assessment made in late June. Many Fed officials saw "smaller downside risks," the documents stated. Fed officials expected the pace of the recovery to "pick up" in 2010, but there was a range of views -- and considerable uncertainty -- about the likely strength of the upturn because of concerns about how consumers will behave. After being pounded by the recession, consumer spending finally appeared to be leveling out, the housing market was firming and manufacturing was stabilizing, the Fed

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BlueLoriBlogSpot

Federal Reserve Audit News! I see it as a good sign that more and more people are writing about the the problem. I came across so many good ones I wanted to share them. Here are the latest articles. From Right Wing News... Why Not Audit The Fed? From the Examiner... Ron Paul takes on the Federal Reserve with HR 1207 From Citizens for Responsibility and Ethics in Washington... CREW FILES SECOND FOIA REQUEST WITH FEDERAL RESERVE BOARD OVER REFUSAL TO NAME RECIPIENTS OF $2.2 TRILLION IN AID From Organized Exploitation... Refuting "Economic Suicide" From ProPublica... Obama Administration Redacts Contract Details for Recovery.gov From Zero Hedge... Fed Will Now Monetize The Most Recently Issued Agencies And last but not least a little educational material from American Banking News... Learn about the Nation’s Central Bank: Federal Reserve Books BONUS READ- What Would the United States Look Like Without the Federal Reserve? We a

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Zero Hedge

In a phenomenal demonstration of frankness and true economic assessment, the head of the China Investment Council, Lou Jiwei, who controls China's $298 billion sovereign wealth fund, admits the ponzi nature of today's markets: Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that. So we can't lose. Indeed, they can't lose thanks to the criminal silence on behalf of Mr. Jiwei's US financial counterparties. It doesn't get any simpler than that folks. Keep in mind Madoff was thrown in jail for a few hundred years for much less: what's $55 billion when you are dealing with a $20 trillion+ global equity market Ponzi scheme. And yet both China and the US continue their struggle to perpetuate a Ponzi, with the full implicit backing of all financial, regulatory and legal authorities. The system is now officially broken, even ignoring the conspiratorial ramblings of fringe bloggers. And as for who, a

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Zero Hedge

The Federal Reserve announced earlier a shift in its strategy in purchasing Agency debt, whereby it would purchase almost exclusively the most recently issued Agency paper: Prior to August 31, 2009, purchases were focused on off-the-run securities in that category. Going forward, purchases will include on-the-run securities in that category. This change represents a technical adjustment designed to mitigate market dislocations and to promote overall market functioning. Over the course of the program, the Federal Reserve may change the scope of purchasable securities. "Overall market function" is a wonderful euphemism for attaining a sufficiently high stock price for commercial banks so that when the FASB requires off-balance sheet items to be reincorporated on their respective balance sheets at the end of the year, we don't have another massive bank raid once every single emperor's clothes are proven to be non existent as Tier 1 Capital Ratios start collapsing l

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Mises Institute

Like Ben Bernanke today, Nicholas Biddle cultivated the veneer of a benign civil servant calculating serenely far above the political fray. In reality he, like Bernanke, was up to his neck in the backroom game of power. When Biddle's bureaucratic cradle was rocked, he quickly morphed into a Machiavellian monster. Keep that in mind as Ben Bernanke gets progressively cornered by Ron Paul and the bourgeoning anti-Fed movement. (Already the Fed is less popular than the IRS.) When you hear about the Federal Reserve Transparency Act getting stalled in committee, think of Daniel Webster, bought and paid for with central bank money. When you read Fed apologia in the New York Times, The Economist, and the Wall Street Journal denouncing the "reckless populism" of the Act, think of the newspaper editors in Biddle's pocket

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The Mess That Greenspan Made

Boy, they really know how to stay "on message" over there at Pimco, their efforts to lower expectations for one of the most powerful stock market rallies in history perhaps beginning to bear fruit today as equities are not off to a very good start in September. He goes on to talk about how the New Normal relates to a new climate for investors recommending that we should all "shake hands with government policies", something Pimco has been quite proficient at over the last couple years. Related http://www.allianzinvestors.com/commentary/mgr_billGross09012009.jsp

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Seeking Alpha

“No bank must grow to a size that puts it in a position in which it can blackmail governments.” - German Chancellor Angela Merkel (August 31st, Bloomberg) “These excesses cannot be allowed to be repeated as if nothing has happened.” - French President Nicolas Sarkozy (August 31st, Reuters) It didn't qualify as a news story when I repeatedly characterized the $10 trillion in hand-outs, loans and guarantees which the U.S. financial crime syndicate squeezed out of the U.S. government as “blackmail”. However, when the chancellor of Germany makes that same observation, it suddenly becomes newsworthy. With the G-20 poised to meet in Pittsburgh next month, notice has been served on the U.S. government (and to a lesser extent, the U.K. government as well): either take control of your government back from the bankers, or expect to become an economic pariah in the global economy.

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Economic Policy Journal

The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot, according to Bloomberg. The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case. Plus, it might take them a long time to find the records anyway: Fed lawyer Kit Wheatley told Preska in a conference call today that she did not know how long it would take for the Fed board to search the New York Fed for records. “We really don’t know what’s in New York,” Wheatley said. “We don’t control the system of record-keeping in New York. Oh yeah, I can see the problem. Billions to banks, why that must be m

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The Market Ticker

The Journal calls this "relaxed accounting standards." That's a polite way of saying that the government has made legal accounting fraud and willful disregard of the impairments that are embedded in these loans - impairments that with any proper regulatory system would have been forced to be recognized as they occurred. Still, most of the $6.7 trillion in commercial real estate is privately owned. Also, it is unlikely commercial real estate will benefit much from an early stage of an economic recovery. What landlords need is occupancy and rents to rise, and that means employers have to start hiring and consumers need to shop more. So far, there are few signs this is happening. Got it? $7 trillion of exposure that had its "value" set during the era of fraudulent lending and accounting, where rents and occupancies rise to the sky, growing literally all the way to the sun. Such magical thinking - the belief that compound (exponential) earnings growth can b

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Bernanke seems to be popular with the administration and with Wall Street, and with good reason.  His lending policies have left big banks flush with newly created cash that covers up old mistakes and allows for new ones.  By buying up mountains of Treasury debt he has also enabled spending to soar to ridiculous levels that should startle any responsible economist, and scare any American concerned about the value of the dollar.  However, these highly sensitive decisions about our money are not made by economists, they are made by politicians.  Bernanke, like most of his predecessors, is the politician’s best friend.

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WSJ

What is excluded from GAO oversight? The GAO can’t review most of the Fed’s monetary policy actions or decisions, including discount window lending (direct loans to financial institutions), open-market operations and any other transactions made under the direction of the Federal Open Market Committee. It also can’t look into the Fed’s transactions with foreign governments, foreign central banks and other international financing organizations. (The GAO in 1993 produced this report on its limitations. The Federal Banking Agency Audit Act of 1978 put other parts of the central bank’s operations under GAO purview, as they had been for a decade until 1933.)

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