http://www.youtube.com/watch?v=OTSQozWP-rM&feature=player_embedded
All to true except for one point, The FED now holds more of the United States debt than China as of last week according to Zerohedge.
Ben is buying up Timmy's treasures and Timmy's treasures are the government's waste.
And why isn't MSM screaming from the top of their lungs about this crap?
Because they're bought off.
Showing posts with label Fed reserve. Show all posts
Showing posts with label Fed reserve. Show all posts
Sunday, November 7, 2010
Wednesday, October 27, 2010
A Paralyzed Fed Defers Decision On Monetary Policy To Primary Dealers In An Act That Can Only Be Classified As Treason
http://www.zerohedge.com/article/paralyzed-fed-defers-decision-monetary-policy-primary-dealers
I think it's safe to say the FED has no idea of what it's doing.
The reason being, that it has to ask the investment banks how big QE2 should be and how often they think it should be monitored.
Or maybe they're just taking an order for the next catered event in the "to big to fail" investment banking series.
I seriously guess they are to big, since it looks as though they're are running the show.
Hell they don't even bother to hide it any more.
the New York Fed has issued a survey to Primary Dealers, which asks for suggestions on the size of QE2 as well as the time over which it would be completed. It also asks firms how often they anticipate the Fed will re-evaluate the program, and to estimate its ultimate size. This is nothing short of a stunning indication of three things: i) that the Fed is most likely completely paralyzed due to the escalating confrontation between the Hawks and the Doves, and that not even Bernanke believes has has sufficient clout to prevent what Time magazine has dubbed a potential opening salvo into a chain of events that could lead to civil war: in effect Bernanke will use the PD's decision as a trump card to the Hawks and say the market will plunge unless at least this much money is printed, ii) that the Fed is effectively asking the Primary Dealers to act as underwriters on whatever announcement the Fed will come up with, and thus prop the market, and, most importantly, iii) that the PDs will most likely demand the highest possible amount, using Goldman's $2-4 trillion as a benchmark, and not only frontrun the ultimate issuance knowing full well what the syndicate of 18 will decide in advance of what the final amount will be, but will also ramp stocks on November 3 to make the actual QE announcement seem like a surprise. This also means that the Primary Dealers of America, which include among them such hedge funds as Goldman Sachs, such mortgage frauds as Bank of America, such pathological liars as Wells Fargo, such insolvent foreign banks as Deutsche, RBS, UBS and RBS, and such middle-market excuses for banks as Jefferies, are now in control of US monetary, and as we explain below fiscal, policy.
I think it's safe to say the FED has no idea of what it's doing.
The reason being, that it has to ask the investment banks how big QE2 should be and how often they think it should be monitored.
Or maybe they're just taking an order for the next catered event in the "to big to fail" investment banking series.
I seriously guess they are to big, since it looks as though they're are running the show.
Hell they don't even bother to hide it any more.
the New York Fed has issued a survey to Primary Dealers, which asks for suggestions on the size of QE2 as well as the time over which it would be completed. It also asks firms how often they anticipate the Fed will re-evaluate the program, and to estimate its ultimate size. This is nothing short of a stunning indication of three things: i) that the Fed is most likely completely paralyzed due to the escalating confrontation between the Hawks and the Doves, and that not even Bernanke believes has has sufficient clout to prevent what Time magazine has dubbed a potential opening salvo into a chain of events that could lead to civil war: in effect Bernanke will use the PD's decision as a trump card to the Hawks and say the market will plunge unless at least this much money is printed, ii) that the Fed is effectively asking the Primary Dealers to act as underwriters on whatever announcement the Fed will come up with, and thus prop the market, and, most importantly, iii) that the PDs will most likely demand the highest possible amount, using Goldman's $2-4 trillion as a benchmark, and not only frontrun the ultimate issuance knowing full well what the syndicate of 18 will decide in advance of what the final amount will be, but will also ramp stocks on November 3 to make the actual QE announcement seem like a surprise. This also means that the Primary Dealers of America, which include among them such hedge funds as Goldman Sachs, such mortgage frauds as Bank of America, such pathological liars as Wells Fargo, such insolvent foreign banks as Deutsche, RBS, UBS and RBS, and such middle-market excuses for banks as Jefferies, are now in control of US monetary, and as we explain below fiscal, policy.
Monday, October 25, 2010
Poor America: And this is how you got that way
http://www.cnsnews.com/news/article/debt-has-increased-5-trillion-speaker-pe
Remember when Nancy said this?
Pay as you go, no more putting it on the tab.
Well that's not exactly what happened, is it.
The Senate went out of it's rights of duty, to resurrect the bank bailout, after the House had voted it down.
Not only did they exceed the boundaries of their duty, they also disregarded the voice of "the People".
The banks are once again begging for money, if they don't get it they will die, and even though it's detrimental to the taxpayer, the FED plans on granting their wishes.
People that is our money the FED is using, and what they are using it for is not helping us out.
It's being used to keep the banks afloat.
Well that beast is so dead it stinks.
We cannot keep adding to the deficit, your dollar buys nothing now.
If they add more, it buys less.
When Rep. Nancy Pelosi (D-Calif.) gave her inaugural address as speaker of the House in 2007, she vowed there would be “no new deficit spending.” Since that day, the national debt has increased by $5 trillion, according to the U.S. Treasury Department.
"After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go, no new deficit spending,” Pelosi said in her speech from the speaker’s podium. “Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt
Remember when Nancy said this?
Pay as you go, no more putting it on the tab.
Well that's not exactly what happened, is it.
The Senate went out of it's rights of duty, to resurrect the bank bailout, after the House had voted it down.
Not only did they exceed the boundaries of their duty, they also disregarded the voice of "the People".
The banks are once again begging for money, if they don't get it they will die, and even though it's detrimental to the taxpayer, the FED plans on granting their wishes.
People that is our money the FED is using, and what they are using it for is not helping us out.
It's being used to keep the banks afloat.
Well that beast is so dead it stinks.
We cannot keep adding to the deficit, your dollar buys nothing now.
If they add more, it buys less.
When Rep. Nancy Pelosi (D-Calif.) gave her inaugural address as speaker of the House in 2007, she vowed there would be “no new deficit spending.” Since that day, the national debt has increased by $5 trillion, according to the U.S. Treasury Department.
"After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go, no new deficit spending,” Pelosi said in her speech from the speaker’s podium. “Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt
Sunday, October 24, 2010
Here We Go Again..... Dollar Debasement
http://market-ticker.org/akcs-www?post=170185
Now do you believe your government has absolutely no control over the banks and the Federal Reserve?
They will have made a conscious decision to just let you starve, by allowing the FED to cater to Goldman's needs.
And they are needs, the banks need to get those unstable assets that they didn't really commit to the MBS investors out of their hair.
The FED itself is demanding that the banks buy them back because they're not a legally sound material as well as go against the written rules of the being eligible to be considered a viable MBS.
Goldman wants the FED to buy away their Fraud and embezzlement charges, in an out of sight out of mind kind of way.
From the President on down, they continue on with the false story of "there's really no problem here" when the fraud and embezzlement is so blatant that the banks themselves are admitting to it in sworn statements to the court.
It's past time to take our country back from these criminals.
We don't live in that world, and if you're not wealthy, you're screwed - on purpose - by these very people.
All you can do, America, is bend over and a find a stick for your teeth.
Now do you believe your government has absolutely no control over the banks and the Federal Reserve?
They will have made a conscious decision to just let you starve, by allowing the FED to cater to Goldman's needs.
And they are needs, the banks need to get those unstable assets that they didn't really commit to the MBS investors out of their hair.
The FED itself is demanding that the banks buy them back because they're not a legally sound material as well as go against the written rules of the being eligible to be considered a viable MBS.
Goldman wants the FED to buy away their Fraud and embezzlement charges, in an out of sight out of mind kind of way.
From the President on down, they continue on with the false story of "there's really no problem here" when the fraud and embezzlement is so blatant that the banks themselves are admitting to it in sworn statements to the court.
It's past time to take our country back from these criminals.
Goldman came out with a report basically demanding (you know how these guys are) $4 trillion in money printing - so says the FX chatter and Zerohedge.That is, the truth is that he helped the banks CAUSE the Depression we are in right now. In a just world and a nation of laws he'd be serving a life sentence breaking rocks.
The result? The dollar took an instant header, down more than a 1/2% this evening alone.
How about the price of some of the things sensitive to threats of monetary debasement? These are all price changes since the futures started trading this evening - that is, they're six hour changes in price. These are all things you need to buy, either directly or indirectly.
Oil, up 1%.
Wheat, up 1.49%.
Corn, up 2.05%. (Oh yeah, and ethanol on your gas will soon be mandated to be 15%, not 10%.)
Soy, up 1.5%.
Rough Rice, up 1.51%.
Oats, up a stunning 4.27% (!)
Cotton is lock-limit up 500 ticks. To be fair there's a crop disruption related to Cotton, which is adding to the problem. Dollar debasement, of course, isn't helping.
Remember, these are all soft commodities we produce right here at home. These aren't import prices, they're home-grown products (excepting oil, of course.)
And they're moving - at anywhere from double to eight times the devaluation in the dollar.
The stock futures, of course, are skyrocketing, with the Dow futures up nearly 100 points. After all, everyone loves the market impact of you going broke trying to buy food - especially if you're not rich, and most of America isn't.
This is all quite impressive. And what's even more impressive is that Bernanke and our government will, of course, claim that there is "no inflation", because they don't count the rise in the price of food or energy - even though every person in America has to buy those things.
Bernanke's "inflation target" of 2% a year was just met - literally - in less than six hours.
But don't expect him to stop.
He's will do this every day for the rest of the year, and into next year.
He won't stop unless someone removes him from office.
And there is no indication that anyone is going to do that.
Remember, both the Republicans and Democrats love Ben Bernanke. Obama renominated him and both Republicans and Democrats have lauded him for allegedly "saving us from a second Depression" - even though it is now clear that he knew what the banks were doing and he lied to both Congress and The American People about it.
We don't live in that world, and if you're not wealthy, you're screwed - on purpose - by these very people.
All you can do, America, is bend over and a find a stick for your teeth.
Wednesday, August 4, 2010
Foreclosed On—By the U.S.
http://online.wsj.com/article/SB10001424052748704499604575407584128526218.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsForth
Lets all remember what the FED actually is, and that would be a private institution
The Federal Reserve System (12 Fed Res banks) is a private entity - according to the 1913 Federal Reserve Bank Act - owned by its shareholders (national banks). The Chairman is appointed by the US President,and confirmed by the US Senate to give it the sense of being a federal agency, but it most certainly is not.
So who my friends is foreclosing on the trash called assets that Bear Stearns died owning or owing upon as the case actually now presents itself to be?
The Federal Reserve is, NOT the US Government.
That's a point I feel should be made very clear now that the monthly 30 million dollar payments loom large for the acceptance of the responsibility of Bear's blowout.
The FED owes and is responsible for the repayment of the money, which they borrowed supposedly in good faith,from the American taxpayer.
Those CDS's are going to be an extremely hard swallow since they are now seen for what they are, absolutely worthless.
James Currell is struggling to prevent his Minnesota home from being foreclosed. But his lender isn't a bank. It is the U.S. government.
The Federal Reserve Bank of New York is facing the prospect of foreclosing on a number of properties in the coming months, from homes to commercial buildings, a result of a souring mortgage portfolio it took over when it helped bail out Bear Stearns in 2008.
As it deals with delinquent borrowers, a team of New York Fed officials and outside advisers are trying to avoid having the U.S. government, along with local sheriff's departments, seize commercial properties and homes as it copes with falling real-estate values. In the process, the New York Fed is getting a hard lesson in the challenges of mortgage lending.
It is an unprecedented test for the most powerful of 12 regional branches of the Federal Reserve System. In its 96-year history, the Fed hasn't made or controlled loans to U.S. citizens and businesses outside of banking since the 1930s, when it was done on a much smaller scale. Now, under the watchful eye of Congress, the New York Fed must recoup a $29 billion loan secured by the Bear assets.
"For the Fed to come in and foreclose on properties puts it at some reputational and political risk," said Vincent Reinhart, a former senior Fed staffer who is now an economist
Lets all remember what the FED actually is, and that would be a private institution
The Federal Reserve System (12 Fed Res banks) is a private entity - according to the 1913 Federal Reserve Bank Act - owned by its shareholders (national banks). The Chairman is appointed by the US President,and confirmed by the US Senate to give it the sense of being a federal agency, but it most certainly is not.
So who my friends is foreclosing on the trash called assets that Bear Stearns died owning or owing upon as the case actually now presents itself to be?
The Federal Reserve is, NOT the US Government.
That's a point I feel should be made very clear now that the monthly 30 million dollar payments loom large for the acceptance of the responsibility of Bear's blowout.
The FED owes and is responsible for the repayment of the money, which they borrowed supposedly in good faith,from the American taxpayer.
Those CDS's are going to be an extremely hard swallow since they are now seen for what they are, absolutely worthless.
James Currell is struggling to prevent his Minnesota home from being foreclosed. But his lender isn't a bank. It is the U.S. government.
The Federal Reserve Bank of New York is facing the prospect of foreclosing on a number of properties in the coming months, from homes to commercial buildings, a result of a souring mortgage portfolio it took over when it helped bail out Bear Stearns in 2008.
As it deals with delinquent borrowers, a team of New York Fed officials and outside advisers are trying to avoid having the U.S. government, along with local sheriff's departments, seize commercial properties and homes as it copes with falling real-estate values. In the process, the New York Fed is getting a hard lesson in the challenges of mortgage lending.
It is an unprecedented test for the most powerful of 12 regional branches of the Federal Reserve System. In its 96-year history, the Fed hasn't made or controlled loans to U.S. citizens and businesses outside of banking since the 1930s, when it was done on a much smaller scale. Now, under the watchful eye of Congress, the New York Fed must recoup a $29 billion loan secured by the Bear assets.
"For the Fed to come in and foreclose on properties puts it at some reputational and political risk," said Vincent Reinhart, a former senior Fed staffer who is now an economist
Friday, March 19, 2010
Court orders Fed to release bailout documents
http://finance.yahoo.com/news/Court-orders-Fed-to-release-rb-4001267651.html?x=0&sec=topStories&pos=6&asset=&ccode=
I can't wait to see this. As a concerned taxpayer I believe "WE" do have the right to know just exactly which banks we were bailing out.
Dime to a dollar says they all weren't American.
In a significant victory for news media, a federal appeals court said the Federal Reserve must disclose records on emergency lending programs to banks bailed out by the government in the financial crisis.
The Second Circuit Court of Appeals on Friday ordered the Fed to release details of programs it adopted starting in late 2007 to shore up the financial system and forestall a complete meltdown of global financial markets.
Bloomberg LP, the parent of Bloomberg News, and News Corp's Fox News Network sought details of the central bank's actions under the federal Freedom of Information Act, or FOIA, which requires government agencies to make documents public.
The Fed argued against disclosure, citing an exemption that it said lets federal agencies keep secret various trade secrets and commercial or financial information.
It also said allowing disclosure of participants in the programs and the collateral they posted could cause "competitive and reputational harm," perhaps triggering bank runs, and impede the central bank's ability "to effectively manage the current, and any future, financial crisis."
Writing for a unanimous three-judge appeals court panel, Chief Judge Dennis Jacobs said, however, that to give the Fed power to deny disclosure because it thinks it best to do so "would undermine the basic policy that disclosure, not secrecy, is the dominant objective of.
"If the Board believes such an exemption would better serve the national interest," he added, "it should ask
I can't wait to see this. As a concerned taxpayer I believe "WE" do have the right to know just exactly which banks we were bailing out.
Dime to a dollar says they all weren't American.
In a significant victory for news media, a federal appeals court said the Federal Reserve must disclose records on emergency lending programs to banks bailed out by the government in the financial crisis.
The Second Circuit Court of Appeals on Friday ordered the Fed to release details of programs it adopted starting in late 2007 to shore up the financial system and forestall a complete meltdown of global financial markets.
Bloomberg LP, the parent of Bloomberg News, and News Corp's Fox News Network sought details of the central bank's actions under the federal Freedom of Information Act, or FOIA, which requires government agencies to make documents public.
The Fed argued against disclosure, citing an exemption that it said lets federal agencies keep secret various trade secrets and commercial or financial information.
It also said allowing disclosure of participants in the programs and the collateral they posted could cause "competitive and reputational harm," perhaps triggering bank runs, and impede the central bank's ability "to effectively manage the current, and any future, financial crisis."
Writing for a unanimous three-judge appeals court panel, Chief Judge Dennis Jacobs said, however, that to give the Fed power to deny disclosure because it thinks it best to do so "would undermine the basic policy that disclosure, not secrecy, is the dominant objective of.
"If the Board believes such an exemption would better serve the national interest," he added, "it should ask
Tuesday, January 19, 2010
The FED says bring it on
http://www.reuters.com/article/idUSTRE60I4FJ20100120?feedType=RSS&feedName=businessNews&rpc=23&sp=true
Federal Reserve officials on Tuesday launched a vigorous defense of their dealings with American International Group, calling for a congressional audit and denying any inappropriate action with respect to payments the bailed-out insurer made to banks.
Fed Chairman Ben Bernanke invited a full congressional audit of the U.S. central bank's dealings with AIG and the New York Federal Reserve Bank turned over 250,000 pages of documents to a House committee that has scheduled a hearing on the matter next week.
The U.S. House of Representatives Oversight and Government Reform Committee is investigating whether the New York Fed improperly limited public disclosures about payments to banks to unwind $62.1 billion in AIG credit default swaps.
Federal Reserve officials on Tuesday launched a vigorous defense of their dealings with American International Group, calling for a congressional audit and denying any inappropriate action with respect to payments the bailed-out insurer made to banks.
Fed Chairman Ben Bernanke invited a full congressional audit of the U.S. central bank's dealings with AIG and the New York Federal Reserve Bank turned over 250,000 pages of documents to a House committee that has scheduled a hearing on the matter next week.
The U.S. House of Representatives Oversight and Government Reform Committee is investigating whether the New York Fed improperly limited public disclosures about payments to banks to unwind $62.1 billion in AIG credit default swaps.
Wednesday, January 13, 2010
The Three-Pronged Attack on the Fed
http://www.minyanville.com/articles/Mish+Shedlock-AIG-bailout-fed-bernanke-FCIC-goldman+sachs/index/a/26362
Mish fails to mention that it's a disposable diaper, they hold more you know, with less leakage, and at this point it actually looks more like the size of a depends, in more ways than one.
We have a right to know what's in that crap filled diaper and to change it.
The Fed is pulling out all stops to defend its secrets, including publishing self-serving mathematical gibberish. Please consider the St. Louis Fed article on the Social Cost of Transparency.
(Editor's Note: See also, Everything You Need to Know About the Financial Crisis Inquiry Commission.)
Unless you're an academic wonk, you'll be stymied by pages that look like this:
Mish fails to mention that it's a disposable diaper, they hold more you know, with less leakage, and at this point it actually looks more like the size of a depends, in more ways than one.
We have a right to know what's in that crap filled diaper and to change it.
The Fed is pulling out all stops to defend its secrets, including publishing self-serving mathematical gibberish. Please consider the St. Louis Fed article on the Social Cost of Transparency.
(Editor's Note: See also, Everything You Need to Know About the Financial Crisis Inquiry Commission.)
Unless you're an academic wonk, you'll be stymied by pages that look like this:
Monday, August 31, 2009
Federal Reserve made $14 billion on turmoil loans: report
Looks like a win win situation all the way around to me, except if your a taxpayer that is
http://finance.yahoo.com/news/Federa...sset=&cc ode=
The Federal Reserve has made $14 billion in profits on loans made in the last two years, The Financial Times reported on Monday, citing officials close to the matter.
The U.S. central bank also earned about $19 billion from interest and fees charged to institutions that tapped liquidity facilities during the global financial crisis, the report said.
If the Fed had invested the same amounted loaned out
http://finance.yahoo.com/news/Federa...sset=&cc ode=
The Federal Reserve has made $14 billion in profits on loans made in the last two years, The Financial Times reported on Monday, citing officials close to the matter.
The U.S. central bank also earned about $19 billion from interest and fees charged to institutions that tapped liquidity facilities during the global financial crisis, the report said.
If the Fed had invested the same amounted loaned out
Wednesday, June 3, 2009
Bernanke: start work now to curb budget deficit
http://finance.yahoo.com/news/Bernan...sset=&ccode =
Oh NOW Ben is worried lol.
Federal Reserve Chairman Ben Bernanke is urging Congress and the Obama administration to start plotting a strategy to curb record-high U.S. budget deficits. Failing to do so could eventually erode investor confidence and endanger the economy's prospects for long-term health, he said.
Bernanke's comments, before the House Budget Committee on Wednesday, come as concerns grow at home and overseas about the United States' mounting red ink.
"Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance," Bernanke said.
The White House estimates that the government will rack up an unprecedented $1.8 trillion budget deficit this year. That would be more than four times last year's all-time high.
The recession has taken a bite out of tax revenues paid by people and companies. At the same time, the government's spending has risen, paying billions to shore up banks, help the unemployed and others hurt by the downturn, the longest since World War II.
Bernanke said that such forceful government intervention to fight the worst financial crisis since the 1930s and lift the U.S. out of recession was "necessary and appropriate" even though it worsened the nation's budget deficit.
Bernanke acknowledged that Congress and the administration face "formidable near-term challenges" that must be addressed as they take steps to stabilize the financial system, reduce home foreclosures and spur banks to lend more freely. The success of these efforts will be crucial to turning the economy around
Oh NOW Ben is worried lol.
Federal Reserve Chairman Ben Bernanke is urging Congress and the Obama administration to start plotting a strategy to curb record-high U.S. budget deficits. Failing to do so could eventually erode investor confidence and endanger the economy's prospects for long-term health, he said.
Bernanke's comments, before the House Budget Committee on Wednesday, come as concerns grow at home and overseas about the United States' mounting red ink.
"Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance," Bernanke said.
The White House estimates that the government will rack up an unprecedented $1.8 trillion budget deficit this year. That would be more than four times last year's all-time high.
The recession has taken a bite out of tax revenues paid by people and companies. At the same time, the government's spending has risen, paying billions to shore up banks, help the unemployed and others hurt by the downturn, the longest since World War II.
Bernanke said that such forceful government intervention to fight the worst financial crisis since the 1930s and lift the U.S. out of recession was "necessary and appropriate" even though it worsened the nation's budget deficit.
Bernanke acknowledged that Congress and the administration face "formidable near-term challenges" that must be addressed as they take steps to stabilize the financial system, reduce home foreclosures and spur banks to lend more freely. The success of these efforts will be crucial to turning the economy around
Tuesday, May 26, 2009
Common sense by Dr. Murray Sabin
Why Gold Will Rise to at Least $6,000 per Ounce
By Dr. Murray Sabrin
May 26 2009 3:58PM
www.politickernj.com
This article was printed in a forum that I frequent along with the question if Dr. Sabin was crazy.
My answer to their question is no, and that it is the only way to stabilize our economy as well as the global economy.
In November 2003, a month before the 90th anniversary of the creation of the Federal Reserve, I spoke to a group of money managers and bond traders in south Florida about the Federal Reserve’s nine decade legacy. At that time the price of gold was approximately $380 per ounce. I informed the attendees that gold was the most undervalued asset on the planet. Nearly six years later, gold has nearly tripled in price and may have been the best performing asset class in the world since then, and one of the best investments in this decade.
Hopefully, the money managers who heard my remarks about the evolution of our monetary system took my advice for their clients’ sake and added gold to their personal portfolios as well. But then again, gold was so out of favor as an asset class by Wall Street a few years ago, it would not be surprising that the attendees ignored my advice and did not add the yellow metal to their portfolios.
With gold currently trading at $950 per ounce, where will the price of gold be six years from now? Conceivably, much higher than any current forecast. How high? Later in this essay, I will explain how returning to a “hard money” dollar and a sound banking system will require a gold price of at least $6,000 per ounce and possibly much higher
Before we hypothesize a future price of gold, it is imperative we understand the current financial crisis and the need to abolish fractional reserve banking, paper money and central banking. In other words, for the American economy—and the global economy-- to enjoy sustainable prosperity we need to inject a heavy dose of free enterprise in our money and banking systems.
This is easier said than done. The political and financial elites of America want to maintain the status quo, namely, the creation of money out-of-thin air, artificially low interest rates, and massive bailouts engineered by the FED and the U.S. Treasury.
Nevertheless, the financial meltdown of the 21st century has been well documented in two outstanding books of the past year, William Fleckenstein’s Greenspan Bubbles and Thomas Woods’ Meltdown. If you have not read them both, they should be on the top on your summer reading list. Both authors place the blame for the back-to-back bubbles, the dotcom bust and the housing collapse, squarely on the Federal Reserve’s easy money polices under Fed chairman Alan Greenspan.
In a nutshell, easy money drives down interest rates, which in turn set into motion feverish activity and speculation in sector or sectors of the economy that benefit from the flow of new money from the FED. The excess credit propels prices higher for common stocks, real estate, commodities, etc. When the FED “tightens” credit to rein in the overheated economy, the inevitable correction sets in. Bankruptcies soar, unemployment rises, stock prices drop precipitously, and state and local governments face huge revenue shortfalls as income and sales tax revenues drop. In other words, the unsustainable boom appears to create a perpetual “party” in the economy, only to be exposed as a period of “false” prosperity.
The booms and busts of the past two decades are textbook examples of the financial and economic crises caused by central banking. Of all the schools of thought, only the Austrian School of Economics explains how waves of boom and bust are inevitable if central bankers try to substitute credit created out-of-thin air for genuine savings. Working in the same tradition, economist Jesus Huerta de Soto in his monumental survey of world economic history (Money, Bank Credit and Economic Cycles), explains how economic fluctuations are the result of bank credit expansion prior to the establishment of central banking and how business cycles have unfolded since the creation of the first central bank in England (1692).
To prevent further boom-bust cycles, the following changes in the U.S. monetary/banking system should be implemented ASAP. These would require banks to restructure along the following guidelines.
All demand deposits would be backed by 100% reserves. In other words, fractional reserve banking would be prohibited as a violation of property rights. This would eliminate the bank run, because banks would have all the money in reserves to meet depositors’ requests for cash. This reform would be potentially deflationary since the banking system would have to contract the amount of money and credit in the current inflationary system to restore 100% reserve banking.
Banks would offer time deposits from one day to 30 years or more. This would provide a pool of real savings for banks so they could perform their role as financial intermediaries without government protection and intervention.
FDIC insurance would be eliminated. Banks and depositors would operate in a free market. Savers would determine how much risk they want to incur and lend their funds to banks based on their time horizons.
Permanent bank capital—preferred and common stockholders—would be the foundation of a free enterprise banking system. Risk of default would be allocated among shareholders and savers.
The Federal Reserve would be abolished and would no longer manipulate short-term interest rates and be the lender of last resort. The FED’s track record of the past century should convince any objective observer and analyst that it has been a failure. The dollar’s purchasing power has fallen by more than 95% since the FED was created and the business cycle is still with us.
The dollar will once again be defined as a weight of gold. What should the ratio be between the supply of dollars and the 260,000,000 ounces of gold held by the Federal Reserve?
There are several ways to revalue the dollar in terms of gold and make the U.S. dollar a hard money once again. This would create a 100% gold dollar. Americans as well as foreigners are used to conducting their exchanges dollars so the goal is to regain the confidence of dollar holders by ending the devaluation of the dollar.
All currency and demand deposits and other forms of money would be convertible into gold. That would mean all forms of money that people are familiar with would “backed” by gold. Inasmuch as there about $1.6 trillion of this form of money outstanding that would be backed by about 260,000,000 million ounces of gold held by the Federal Reserve, the price of gold or more accurately the value of the dollar would be 1/6,153 of an ounce of gold. In other words, the price of gold would be $6,153 per ounce.
According the Rothbard/Salerno definition of the “True Money Supply,” the current amount of dollars in the economy that functions as the general medium of exchange is about $5.5 trillion. Based on this approach, the FED’s 260,000,000 ounces of gold would have a dollar/ratio of 1/21,153, or the price of gold would be $21,153 per ounce. Before you mortgage the house and sell the kids to make more than twenty times your money, another economist challenges the Rothbard/Salerno definition of the true money supply.
Economist Frank Shostak in his essay on the money supply, argues that savings deposits should be removed from the definition of money because they are a credit deposit rather than a demand deposit. Based on the Shostak approach, investment manager Mike Shedlock calculates M’, (M Prime), as approximately $2.2 trillion. The gold/dollar ratio would be 1/8.461 or a gold price of $8,461 per ounce under this definition of the money supply.
Clearly, no matter what definition of money is used to restore a gold backed dollar, the price of gold will have to be adjusted upward by a factor of at least six or more from today to reflect the enormous deprecation of the dollar since the FED was created nearly a hundred years ago.
The revaluation of the dollar will not happen because Ben Bernanke, chairman of the Federal Reserve and Timothy Geithner, U.S. Treasury Secretary embrace hard money principles and realize 100% reserves are necessary for the banking system to function as a reliable financial intermediary. The restoration of a gold backed dollar will occur when dollar holders lose confidence in the purchasing power of the greenback. The sooner the next great money and banking reforms are implemented, the less chance there will be for a global monetary debacle, given the trillions of dollars the FED and other central banks have created in the past six months. In the meantime, load up on the yellow metal. It is your best insurance policy against Obama, Congress, Bernanke, and Geithner.
Dr. Murray Sabrin
By Dr. Murray Sabrin
May 26 2009 3:58PM
www.politickernj.com
This article was printed in a forum that I frequent along with the question if Dr. Sabin was crazy.
My answer to their question is no, and that it is the only way to stabilize our economy as well as the global economy.
In November 2003, a month before the 90th anniversary of the creation of the Federal Reserve, I spoke to a group of money managers and bond traders in south Florida about the Federal Reserve’s nine decade legacy. At that time the price of gold was approximately $380 per ounce. I informed the attendees that gold was the most undervalued asset on the planet. Nearly six years later, gold has nearly tripled in price and may have been the best performing asset class in the world since then, and one of the best investments in this decade.
Hopefully, the money managers who heard my remarks about the evolution of our monetary system took my advice for their clients’ sake and added gold to their personal portfolios as well. But then again, gold was so out of favor as an asset class by Wall Street a few years ago, it would not be surprising that the attendees ignored my advice and did not add the yellow metal to their portfolios.
With gold currently trading at $950 per ounce, where will the price of gold be six years from now? Conceivably, much higher than any current forecast. How high? Later in this essay, I will explain how returning to a “hard money” dollar and a sound banking system will require a gold price of at least $6,000 per ounce and possibly much higher
Before we hypothesize a future price of gold, it is imperative we understand the current financial crisis and the need to abolish fractional reserve banking, paper money and central banking. In other words, for the American economy—and the global economy-- to enjoy sustainable prosperity we need to inject a heavy dose of free enterprise in our money and banking systems.
This is easier said than done. The political and financial elites of America want to maintain the status quo, namely, the creation of money out-of-thin air, artificially low interest rates, and massive bailouts engineered by the FED and the U.S. Treasury.
Nevertheless, the financial meltdown of the 21st century has been well documented in two outstanding books of the past year, William Fleckenstein’s Greenspan Bubbles and Thomas Woods’ Meltdown. If you have not read them both, they should be on the top on your summer reading list. Both authors place the blame for the back-to-back bubbles, the dotcom bust and the housing collapse, squarely on the Federal Reserve’s easy money polices under Fed chairman Alan Greenspan.
In a nutshell, easy money drives down interest rates, which in turn set into motion feverish activity and speculation in sector or sectors of the economy that benefit from the flow of new money from the FED. The excess credit propels prices higher for common stocks, real estate, commodities, etc. When the FED “tightens” credit to rein in the overheated economy, the inevitable correction sets in. Bankruptcies soar, unemployment rises, stock prices drop precipitously, and state and local governments face huge revenue shortfalls as income and sales tax revenues drop. In other words, the unsustainable boom appears to create a perpetual “party” in the economy, only to be exposed as a period of “false” prosperity.
The booms and busts of the past two decades are textbook examples of the financial and economic crises caused by central banking. Of all the schools of thought, only the Austrian School of Economics explains how waves of boom and bust are inevitable if central bankers try to substitute credit created out-of-thin air for genuine savings. Working in the same tradition, economist Jesus Huerta de Soto in his monumental survey of world economic history (Money, Bank Credit and Economic Cycles), explains how economic fluctuations are the result of bank credit expansion prior to the establishment of central banking and how business cycles have unfolded since the creation of the first central bank in England (1692).
To prevent further boom-bust cycles, the following changes in the U.S. monetary/banking system should be implemented ASAP. These would require banks to restructure along the following guidelines.
All demand deposits would be backed by 100% reserves. In other words, fractional reserve banking would be prohibited as a violation of property rights. This would eliminate the bank run, because banks would have all the money in reserves to meet depositors’ requests for cash. This reform would be potentially deflationary since the banking system would have to contract the amount of money and credit in the current inflationary system to restore 100% reserve banking.
Banks would offer time deposits from one day to 30 years or more. This would provide a pool of real savings for banks so they could perform their role as financial intermediaries without government protection and intervention.
FDIC insurance would be eliminated. Banks and depositors would operate in a free market. Savers would determine how much risk they want to incur and lend their funds to banks based on their time horizons.
Permanent bank capital—preferred and common stockholders—would be the foundation of a free enterprise banking system. Risk of default would be allocated among shareholders and savers.
The Federal Reserve would be abolished and would no longer manipulate short-term interest rates and be the lender of last resort. The FED’s track record of the past century should convince any objective observer and analyst that it has been a failure. The dollar’s purchasing power has fallen by more than 95% since the FED was created and the business cycle is still with us.
The dollar will once again be defined as a weight of gold. What should the ratio be between the supply of dollars and the 260,000,000 ounces of gold held by the Federal Reserve?
There are several ways to revalue the dollar in terms of gold and make the U.S. dollar a hard money once again. This would create a 100% gold dollar. Americans as well as foreigners are used to conducting their exchanges dollars so the goal is to regain the confidence of dollar holders by ending the devaluation of the dollar.
All currency and demand deposits and other forms of money would be convertible into gold. That would mean all forms of money that people are familiar with would “backed” by gold. Inasmuch as there about $1.6 trillion of this form of money outstanding that would be backed by about 260,000,000 million ounces of gold held by the Federal Reserve, the price of gold or more accurately the value of the dollar would be 1/6,153 of an ounce of gold. In other words, the price of gold would be $6,153 per ounce.
According the Rothbard/Salerno definition of the “True Money Supply,” the current amount of dollars in the economy that functions as the general medium of exchange is about $5.5 trillion. Based on this approach, the FED’s 260,000,000 ounces of gold would have a dollar/ratio of 1/21,153, or the price of gold would be $21,153 per ounce. Before you mortgage the house and sell the kids to make more than twenty times your money, another economist challenges the Rothbard/Salerno definition of the true money supply.
Economist Frank Shostak in his essay on the money supply, argues that savings deposits should be removed from the definition of money because they are a credit deposit rather than a demand deposit. Based on the Shostak approach, investment manager Mike Shedlock calculates M’, (M Prime), as approximately $2.2 trillion. The gold/dollar ratio would be 1/8.461 or a gold price of $8,461 per ounce under this definition of the money supply.
Clearly, no matter what definition of money is used to restore a gold backed dollar, the price of gold will have to be adjusted upward by a factor of at least six or more from today to reflect the enormous deprecation of the dollar since the FED was created nearly a hundred years ago.
The revaluation of the dollar will not happen because Ben Bernanke, chairman of the Federal Reserve and Timothy Geithner, U.S. Treasury Secretary embrace hard money principles and realize 100% reserves are necessary for the banking system to function as a reliable financial intermediary. The restoration of a gold backed dollar will occur when dollar holders lose confidence in the purchasing power of the greenback. The sooner the next great money and banking reforms are implemented, the less chance there will be for a global monetary debacle, given the trillions of dollars the FED and other central banks have created in the past six months. In the meantime, load up on the yellow metal. It is your best insurance policy against Obama, Congress, Bernanke, and Geithner.
Dr. Murray Sabrin
Friday, May 22, 2009
44 states lost jobs in April, led by California
http://finance.yahoo.com/news/44-sta...-15328854.html
Forty-four states lost jobs in April, led by California where employers slashed 63,700 positions, as the recession took a further toll on U.S. workers.
Trailing California in over-the-month job losses were: Texas, which saw 39,500 jobs vanish; Michigan, which lost 38,400 jobs; and Ohio, where payrolls fell 25,200, according to a U.S. Labor Department report issued Friday.
California's unemployment rate dipped to 11 percent last month, fifth-highest in the country. Michigan's jobless rate was the highest at 12.9 percent, followed by Oregon at 12 percent, South Carolina at 11.5 percent and Rhode Island at 11.1 percent.
As the recession eats into sales and profits, companies have laid off workers and turned to other cost-cutting measures, such as holding down hours and freezing or trimming pay.
Since the recession began in December 2007, the U.S. has lost a net total of 5.7 million jobs. The nationwide unemployment rate now stands at 8.9 percent, a quarter-century high.
Federal Reserve Chairman Ben Bernanke and some economists hope the pace of layoffs will moderate as the recession eases its grip and likely ends later this year.
But even if employers reduce firings, the nationwide unemployment
Forty-four states lost jobs in April, led by California where employers slashed 63,700 positions, as the recession took a further toll on U.S. workers.
Trailing California in over-the-month job losses were: Texas, which saw 39,500 jobs vanish; Michigan, which lost 38,400 jobs; and Ohio, where payrolls fell 25,200, according to a U.S. Labor Department report issued Friday.
California's unemployment rate dipped to 11 percent last month, fifth-highest in the country. Michigan's jobless rate was the highest at 12.9 percent, followed by Oregon at 12 percent, South Carolina at 11.5 percent and Rhode Island at 11.1 percent.
As the recession eats into sales and profits, companies have laid off workers and turned to other cost-cutting measures, such as holding down hours and freezing or trimming pay.
Since the recession began in December 2007, the U.S. has lost a net total of 5.7 million jobs. The nationwide unemployment rate now stands at 8.9 percent, a quarter-century high.
Federal Reserve Chairman Ben Bernanke and some economists hope the pace of layoffs will moderate as the recession eases its grip and likely ends later this year.
But even if employers reduce firings, the nationwide unemployment
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