Category: End The Fed

by Smitty

Tyler Durden at Zero Hedge:

From the lows in March 2009, 1150 S&P points have been ‘created-or-saved’ thanks to central bank largesse. That is a cost of $2 million for every S&P 500 point since the Fed started to expands its balance sheet by $2.3 trillion. Money-well-spent, we are sure you’ll agree.

I am reminded of being very young, (was I even four years old?) at the grocery store with mom. She paid for our stuff, and handed the cashier a $10 or $20, and he made change. Seeing that mom had a higher number of bills and coins than she had started with, I valiantly attempted to argue that she had made money in the transaction. Indeed, you have to view the insanity of our financial system through a four-year-old’s to see any sense to it.

Alternately, the S&P score is all just an expensive AC/DC reference:

by Smitty

Thie is Dean Baker on 03 February at Empire Unplugged. From Wikipedia:

Dean Baker (b. July 13, 1958) is an American macroeconomist and co-founder of the Center for Economic and Policy Research, with Mark Weisbrot. He previously was a senior economist at the Economic Policy Institute and an assistant professor of economics at Bucknell University. He has a Ph.D. in economics from the University of Michigan.

Baker comes out as a proponent of central banking in general, though not necessarily a cheerleader for the Federal Reserve in its present state.
As this is purely audio in nature, I’ll save the vertical space and offer the segments as a block of four:

While I think Baker has done an admirable job defending the idea of central banking, the bigger question is, whether, $15.3 trillion later, that dog hunted, that hog punted, and that wog bunted. Baker’s argument that growth was swell when Happy Days was the “reality” of the U.S. situation may not hold water. What the prosperity then comes at the expense of our dot com bubble, housing bubble, and higher ed bubble?
Baker at least agrees that greater transparency is needed. I’m not sure I concur that Bernanke should be so thoroughly scapegoated. The Federal Reserve is not the fire department, only coming out on an acute basis for specific problems. It is more like air traffic controllers, managing continuous traffic flow. Inflating the currency is like putting more and more planes in the air, and hoping that they don’t try to land several at once, killing not only those onboard the flights, but everyone else in the pattern that can’t get elsewhere.
Whatever our political policy becomes, if we are not balancing the budget and making continual reductions on the debt, we are doomed.
I regret that I may not have time to get Jeffrey Tucker’s response processed and posted.

by Smitty

I don’t fully agree with #8, “The Federal Reserve is Unconstitutional”. The Federal Reserve Act followed the usual course of legislation, and was signed into law by Woodrow “Effing” Wilson. In my opinion, the Federal Reserve urinates all over the spirit of the Constitution, for reasons Julie well and truly elaborates.

However, just as it’s not explicitly illegal to sit down with a case of whiskey and drink yourself to death, I wouldn’t argue that the Federal Reserve is strictly un-Constitutional. Plenty of other nonsense afoot today is, but Bicycle Pump Ben is not.

by Smitty

Freedom Works has a great piece on what is among the most crucial issues of our day: Ending the Fed. Couple of quick points, emphasis mine,

Fed Chairman Ben Bernanke is desperate to protect his privileged secrecy. Bloomberg writes that he “argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort — and that needy institutions would be reluctant to borrow in the next crisis.” Helicopter Ben, a nickname he acquired by essentially stating that the government could “defeat” deflation by dropping money out of helicopter, cares more about protecting the reputation of his cronies than letting the American people know where their money is going.

Hey, get stuffed, Bernanke. As far as I can tell, you have just said that fair markets are bad. That transparency==stigma. That we cannot handle the truth. We may need to borrow Nigel Farage to ask the Who Are You? question.

An overwhelming 75% of Americans want a comprehensive audit of the Federal Reserve, according to a recent Rasmussen poll. The calls for a true audit are getting louder and stronger by the day. The fight for transparency is transcending party lines, with fiscal conservatives such as Ron Paul and self-identified Democratic socialist Senator Bernie Sanders working together to remove the Fed’s cloak of secrecy. More Republican presidential candidates are starting to echo Ron Paul’s long held beliefs on the Fed.

I think that an actual look at Bernanke’s shenanigans is going to drive the stake through the Federal Reserve heart. There is just no way under the sun that this bogus distinction for the Federal Reserve, such that “its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government” is thoroughly and completely wrong, as well as counter to the spirit of our Constitution.

More at Zero Hedge. Is there anything more painful than someone refusing to admit that it’s over?

Update: some post-Fed thoughts in U.S. News.

by Smitty

The actual title of the notional organization, mentioned at The Enterprise Blog is Global Liquidity Facility (GLF).

And with the European Central Bank about to reprise the role of the Fed in the 1930s, economic analyst Ed Yardeni thinks Bernanke may well ride to the rescue of the eurozone and the global economy:

Given the ECB’s reluctance to act, I suspect that the Fed will spearhead the formation of a Global Liquidity Facility (GLF) to avert a global financial meltdown. Fed Chairman Ben Bernanke demonstrated that he is a master at putting together such emergency measures back in 2008. In effect, it would act as the world’s central bank. Mr. Bernanke is clearly very worried about the prospect that the European sovereign debt crisis is a contagion that could spread to the US, as evidenced by his bizarre town hall meeting with troops returning from Iraq on November 10. The GLF would receive deposits from the Fed and other participating central banks, including the ECB. The funds would be used to buy the bonds of debt-challenged governments that would be required to accept strict supervision of their fiscal and regulatory policies by the IMF.
You might be thinking that I’ve gone mad. Actually, I’m simply predicting the behavior of our wild and crazy Fed officials. Last Wednesday, Boston Fed President Eric Rosengren noted that the Fed and the ECB worked together during the 2008 global market meltdown, and “if there was a (new) crisis I would expect that there would be some coordinated activities (again). We would want to make sure … that people have access to short-term credit markets.” He added, “We’re not at that point right now, but there are clearly stresses in short-term credit markets.” He said, “We’re watching that very closely, and if it becomes appropriate for us to take more actions to try to relieve that, I fully assume that we would do something.” Mr. Rosengren isn’t on the FOMC, but he is one of Mr. Bernanke’s most supportive colleagues.

There would certainly be a firestorm in Congress, but Bernanke is unlikely to seek (or if he did, get) another term anyway.

I am still working hard, trying to envision how any candidate for POTUS can argue that the crap undertaken by the Federal Reserve is even remotely in keeping with the spirit of the Constitution.

Watching the worldwide slouch toward financial ruin just oozes the sense of the #Occupy movement. Except that at least the #Occupiers are not claiming any sort of superiority, or condescendingly making idiotic decisions with Other Peoples’ Money. And when the #Occupiers want to off themselves, they do it expediently with a drug overdose, and not some lingering totentanz.

End the Fed. Before the Fed ends us.