Don’t forget the Fed

Is the Fed doing a good job? On balance I think the Fed has done a great job causing market chaos and destroying the economy.

The Fed’s operations have been completely hidden for too long. Support HR1207 to audit the Fed. It is your money and future; account for it to the penny.

The sky is not falling; it just seems that way if you watch Fox too much.

The Fed has done most things right: keeping inflation from taking off while avoiding deflation (okay, mostly). They have limitations: they can’t force people to borrow (or to repay what they’ve already borrowed). And their monetary policy tools are only indirectly capable of influencing the economy.

I would only fault them for saving some institutions that were beyond saving. It would have been better for all of us to have taken over failing financials (more like FNM and FRE than propping up Bear or just watching Lehman collapse), breaking them into smaller pieces, and selling off the pieces for whatever they’re really worth.

We are in a loan loss cycle (borrowers can’t or won’t pay back all debts), so there still needs to be completion of this process. The Fed can best help this process by facilitating organized restructurings, including liquidation bankruptcies, so that the lenders take the necessary writedowns and the borrowers are allowed to start rebuilding.

Americans are good people, and we’ll get things going again, soon.

It appears they have done a good job in that so far they have prevented any serious deflation. The last two times there was this much stress in the credit markets unemployment shot up to 25% and then from 10 back up to 20%. The people who don’t think the Fed is doing a good job are spoiled, like the rest of us, and don’t know what a real deflation is like.

The Fed did a great job creating the crisis. Dealing with it – the bankers haven’t gotten their bonuses yet. Who expects the people who created the crisis to really clean up the mess?

The Fed was the primary architect of our financial crises (that’s plural). We are feeling the fallout of 20 plus years of reckless mismanagement by the Fed, primarily under Gressnpan, but continued under Bernanke. The Fed has been bailing out every real and imagined financial crisis since Greenspan took office, beginning with LTCM, and continuing with the S&L crisis, the Mexican peso crisis, the Asian Flu (that’s and economic crisis initiated by the Thai bhat failure), the Russina rbule crisis, Y2K, the dot com bubble bursting, 911 crisis, and the housing bubble bursting. The net result of all of this intervention has been the proliferation of ever larger economic bubbles. Each successive bubble required ever more liquidity and cfostered ever more outragous speculation. We have reached a point where the cost is now threatening to destroy the creditworthiness of the US, and yet the solution is always the same: Add more liquidity to reflate the bubbles and in the process build inordinate amounts of debt. It is unsustainable and the Fed does not seem to understand it.

Since the Federal Reserve has played such a large part in this fiasco; this is a silly question. Here is a quote from a 20th century wise man. This was written ~100 years ago. Incredible.

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“Little by little, business is enlarged with easy money. With the exhaustless reservoir of the Government of the United States furnishing easy money, the sales increase, the businesses enlarge, more new enterprises are started, the spirit of optimism pervades the community.

“Bankers are not free from it, they are human. The members of the Federal Reserve board will not be free of it. They are human….Everyone is making money. Everyone is growing rich. It goes up and up, the margin between costs and sales continually growing smaller as a result of the operation of inevitable laws, until finally someone whose judgment was bad, someone whose capacity for business was small, breaks; and as he falls he hits the next brick in the row, and then another, and then another, and down comes the whole structure.

“That, sir, is no dream. That is the history of every movement of inflation since the world’s business began, and it is the history of many a period in our own country. That is what happened to greater or less degree before the panic of 1837, of 1857, of 1873, of 1893 and of 1907. The precise formula which the students of economic movements have evolved to describe the reason for the crash following the universal process is that when credit exceeds the legitimate demands of the country the currency becomes suspected and gold leaves the country.”

-Elihu Root
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The men (“someone whose judgment was bad”) were/are Al Greenspan and Bernanke.

Considering the Fed is responsible for this crisis, I’d have to say this is a ridiculous question designed to confuse people.

@Bill, Leawood, KS: and Cory, Cape Coral Florida:
Well said, kudos, and let me be the first to welcome you to the Libertarian party.

Support HR 1207! Audit the fed find out who they owe, and how much, and see how much money they have printed out of thin air since 1913. Your dollar is worth less than a five cents today, because of this unconstitutional bank.

NO.

The Fed is a publiclty funded private bank – the Bankers’ Protective Association. Bankers, and that includes the Fed have a different world view from those other, inferior, people who work for a living. The people who work for a living expect to create value if they get value; bankers think that everyone else owes them an extravagant living for pushing worthless paper and cratering the economy. Why do you think they call them “Bankers’ hours”? Heaven forbid with we should interfere or not pay for their golf games or private jets. Of course the Fed acts like a private bank; wish it was a bad dream we could forget but unfortunately it is not. Did the bankers ever pay for causing the Depression? The probably took home bonuses. Congress and the Treasury are their bought and paid for accomplices.

The question cannot be answered because we have not seen the end results of the actions taken. One thing is certain, one day they will have to take out all of the money that they have put into the system. Will they have the will to take the neccessary steps to tame the inevitable inflation beast? My belief is no. Because they have sacrificed forever their ability to act as a seperate entity free from political persuation. Consequently the good of our country has been sacrificed along with it. Look at what is happening to us. GM has been taken over today by the Federal government and the UAW. The large banks and financial institutions that are not directly owned by the government will soon follow after the economy worsens and negates any results from the so called outdated stress tests. We are just delaying the inevitable.

The Feds job as written on their website (mission statement) is to prevent recessions and depressions! And let me say they are doing fabulous! Only 12 recessions and 1 depression so far since they have been on the job! Here is a fitting quote from a pretty smart guy from our country’s past.

“If the American people ever allow private banks to
control the issuance of their currencies, first by
inflation and then by deflation, the banks and
corporations that will grow up around them will
deprive the people of all their prosperity until their
children will wake up homeless on the continent
their fathers conquered.”

Thomas Jefferson on National Banking System (Federal Reserve System)

Wish I could forget the Fed but when inflation hits because of all the borrowing and money-printing it has been doing in an unaccountable and unsupervised fashion, the Fed won’t have to pay and pay and pay. Helicopter Ben has earned his sobriquet. The Fed is a good way for bankers too get funds bypassing Congressional oversight, such as it is. Of course, Treasury ignores the overight so most likely it does not make a difference. Sigh.

It’s much too early to tell.

If the actions taken by the Fed up to this point are deemed to have mitigated a wholesale collapse of the financial system and averted a DEPRESSION, then its actions may well be judged a success by economic historians. Main Street is another matter…

On the other hand, if its efforts prove unable to “stimulate” the economy, prevent the collapse of the major banks, and result in a vicious round of hyperinflation that destroys the US economy, then it will be judged a failure.

In the short term, as a net saver with no mortgage, no car payment, and no credit card debt, the policies of the Fed have seemingly “punished” me and others like me in the short-term. But if that’s all that happens to me I can live with it. There are way too many Americans worse off than me right now and, as I’ve said before, rescinding the Bush tax cuts to offset some of the deficit spending wouldn’t bother me a bit. I know it’s something that flies in the face of conventional economic theory, but maybe it’s time to think a bit outside the box.

In a bit longer view, , however, if the Fed’s policies result in the kind of runaway hyperinflation that turns my life savings into wallpaper then it won’t matter because I doubt if our constitutional republic will survive the creeping authoritarianism in our midst. Then we’ll all be much worse off – under the iron heel – with neither political nor economic liberty.

545 PEOPLE
By Charlie Reese

Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?

Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?

You and I don’t propose a federal budget. The President does.
You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don’t write the tax code, Congress does.
You and I don’t set fiscal policy, Congress does.
You and I don’t control monetary policy, the Federal Reserve Bank does.

One hundred Senators, 435 Congressmen, one President, and nine Supreme Court justices , 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress.. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do anything. I don’t care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.

Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.

The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes.

Who is the speaker of the House? Nancy Pelosi. She is the leader of the majority party. She and fellow House members, not the President, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.

It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted — by present facts — of incompetence and irresponsibility. I can’t think of a single domestic problem that is not traceable directly to those 545 people.

When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it’s because they want it unfair.
If the budget is in the red, it’s because they want it in the red.
If the Army & Marines are in IRAQ , it’s because they want them in IRAQ .
If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way.

There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like “the economy,” “inflation,” or “politics” that prevent them from doing what they take an oath to do.

Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses.

Provided the voters have the gumption to manage their own employees.
We should vote all of them out of office and clean up their mess!

Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.

What you do with this article now that you have read it is up to you, though you have several choices:

1. You can send this to everyone in your address book and hope “they” do something about it.
2. You can agree to “vote against” everyone that is currently in office, knowing that the process will take several years and ask your representative to vote in TERM LIMITS..
3. You can decide to “run for office” yourself and agree to do the job properly.
4. Lastly, you can sit back and do nothing or re-elect the current bunch.

You may not agree with everything Ron Paul says, but I’m sure by now if you’ve done your own research about the Federal Reserve, it’s hard not to agree that central banking causes these boom bust cycles (which we can thank for the recent increase in crime/home invasions, the loss of our life savings and home values & the theft of our tax dollars into the pockets of the banks) & encourages the growth of government no matter if a Democrat or Republican is in office.

Campaign for Liberty stands to reduce the size of government by promoting and defending the great American principles of individual liberty, constitutional government, sound money, free markets, and a noninterventionist foreign policy, by means of educational and political activity.

The first Campaign for Liberty meeting for Vern Buchanon’s 13th District of 2009 will be held in Sarasota on Monday April 27th from 7:00 – 9:00 p.m. at “THE OPEN” located next to Haverty’s (there’s also a Publix and a Target in that shopping center) in the South Palmer Ranch shopping center on Central Sarasota Prkwy. and US 41.

Once we finally reach bottom (within the next 2 years or possibly longer), the responsible homeowners & middle class families who are living within their means & fortunate enough to still have a job and income to pay their mortgage will begin to make difficult choices after finally seeing the reality that they have been robbed blind, effectively having the fruits of the last 10 years or better of their working lives literally erased from ever taking place.

I’m sure we all have been trimming here, cutting back there & reducing expenses & spending wherever we can. It’s almost like saving some money makes us feel somewhat smarter. Maybe that efficiency is only achievable & occurs because we are held to a much higher standard of accountability. We are granted the privilege to enjoy the consequences of taking risk. If you are not able to make your car or house payment (through no fault of your own or not) your credit worthiness is blemished, your car/house is repossessed/foreclosed & you are still liable for any and all amounts the bank finds still outstanding after they sell the car/house. Obtaining a new car or home loan will also be that much more difficult down the road, not impossible but you can be sure that the interest rate the banks offer you will be a lot higher, as you are seen to hold more risk to lend to.

I wonder if there will be any similar lasting residual consequence felt by any of the failing institutions who have already or will soon receive multiple billions in bailout money or if our elected representatives will consider holding them to a higher standard of accountability or consequence to improve their efficiency?

The potential consequence that our society & political system face is when the majority of responsible homeowners realize that the rate of recovery in home values will take years if not decades to get right side up again, more & more will weigh the consequences with the same immoral philosophy that our elected government employs by propping up failed institutions with our tax dollars which in any court of law would be viewed as criminal.

Paul all I can say is we need HR1207 to pass and pass quickly. Americans need to know what the Fed has spent and where, a complete auit of this priviate bank is long over due.