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The Longwave Group On Why The Fed Must Be Abolished

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THE LONGWAVE ECONOMIC AND FINANCIAL CYCLE - WINTER WARNING, December 7, 2009

Who’s In Charge? – The Regulators

Big Brother is alive and living in Washington, D.C. but he is not well.

 

A malaise of weaknesses and failures, unearthed during the recent credit crisis, continues to permeate through various regulatory agencies such as the Federal Reserve Board, as well as the Securities and Exchange Commission (SEC) and threatens the very survival of the American financial system.

The U.S. Federal Reserve System was established by an Act of Congress in 1913, directly as a result of the banking crisis and stock market crash of 1907. While Congress had no constitutional authority to pass the Federal Reserve Act, its intent was to erect a central bank “as a lender of last resort” in order to protect the assets of the bankers. Indeed, in his book, “Secrets of the Federal Reserve,” author Eustace Mullins purports that the Fed is actually owned by wealthy banking families, such as the Rothchilds, Rockerfellers, Goldmans, Morgans and other bankers. Naturally, this Act also established a fiat monetary system, empowering the Fed to create/print money out of thin air. Thus began the Federal Reserve’s long history of acting, primarily, in the best interests of its owners an under a shroud of secrecy. Indeed, in their book, “A Monetary History of the United States, 1867 – 1960,” authors Milton Friedman and Anna J. Schwartz argue that it was the Federal Reserve which actually exacerbated the economic situation at the outset of the Great Depression by maintaining tight credit conditions in early 1931 and raising its discount rate in two increments to 3.5% later that same year.

As another source, Dow Theory Letter publisher Richard Russell has recently unearthed the following excerpt of a manuscript from yesteryear. “Few Americans know of the betrayal that was plotted on Jekyll Island, Georgia, which was destined to defraud Americans of their wealth and opportunity, and would eventually lead to the subjugation of our great democratic experiment to a centralized global dictatorship. In November of 1910, after having consulted with the Rothschild banks in England, France and Germany, Senator Nelson Aldrich boarded a private train in Hoboken, New Jersey for his destination in Georgia; a hunting club owned by JP Morgan. Aboard the train were six other men: Benjamin Strong, President of Morgan’s Bankers Trust Co., Charles Norton, President of Morgan First National Bank of New York, Henry Davidson, Senior Partner of JP Morgan, Frank Vanderlip, President of Kuhn Loeb’s National City Bank of New York, A. Platt Andrew, Assistant Secretary of the Treasury, and Paul Warburg. The Secret meeting, as described by one of its architects, Frank Vanderlip, went as follows.

There was an occasion near the close of 1910 when I was as secretive, indeed as furtive, as any conspirator. I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System. We were all told to leave our last names behind us. We were told further that we should avoid dining together on the night of our departure. We were instructed one at a time … where Senator Aldrich’s private car would be in readiness, attached to the rear end of the train for the South. Once aboard the private car, we began to observe the taboo that had been fixed on our last names. Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. The goal was to establish a private bank that would control the national currency. The challenge was to slip the scheme to the representatives of the American people. Earlier, it had been called the Aldrich Bill and received effective opposition.

The planners of the revised bill titled it ‘The Federal Reserve Act’ to mask its real nature. It would create a system controlled by private individuals who would control the nation’s issue of money. Furthermore, the Federal Reserve Board, comprised of twelve districts and one director (the Federal Reserve Chairman) would control the nation’s financial resources by controlling the money supply and available credit, all by mortgaging the government through borrowing. The plan worked. The Federal Reserve Bill was held until December 23rd. (two days before Christmas) before it was presented to the House and Senate. Only those senators and congressmen who had not gone home for the holidays – those who owed favors to, or were on the payroll of the bankers – were present to sign the legislation. The name ‘Federal Reserve Bank’ was designed to deceive and it still does. It is neither federal, nor is it owned by the government. It is privately owned. It pays its own postage like any other corporation. Its employees are not civil service. Its physical property is held under private deeds and is subject to local taxation, unlike government property.”

The U.S. Securities and Exchange Commission (SEC), established by the Securities Exchange Act of 1934, together with the Securities Act of 1933, was designed to promote stability in the American capital markets and to improve protection for investors, following the stock market crash in October, 1929. The Commission has a staff of 3,500 located in its Washington headquarters, as well as in eleven regional offices throughout the country. Within the Commission’s mandate is the responsibility to oversee the inspection of securities firms, brokers, investment advisors and rating agencies. It is in this area where the commission has experienced the most difficulty in recent times. Since the resignation of Chairman Harvey Pitt in November, 2002, after only a15-month tenure, the Commission’s effectiveness in this responsibility seems to have been steadily deteriorating. Indeed, this slippage culminated in the revelation of the Bernie Madoff ponzie scheme fraud of a year ago, wherein the SEC had been alerted to this situation many times, but neglected to investigate. The Commission’s website asserts that “In the wake of the Madoff fraud, the SEC’s Office of the Inspector General launched an internal investigation in December, 2008, to determine why the agency did not detect the scheme.” Long Wave Analytics suggests that the answer to that question lies in the staffing of too many junior personnel, not enough staff with investment experience and too many lawyers who never worked a day of their lives in the investment industry.

The current commission Chair, Mary Schapiro, has instituted “decisive and comprehensive steps to reduce the chances that such frauds will occur or be undetected in the future”, such as, revitalizing the enforcement division, revamping the handling of complaints and tips, as well as recruiting staff with specialized experience.

The Congress

In a recent confirmation hearing before the Senate Banking Committee, Federal Reserve Board Chairman Ben Bernanke was read the “riot act” by Kentucky Republican and major league baseball hall of famer, Senator Jim Bunning. Former Fed Chairman, “Alan Greenspan refused to look for (economic) bubbles, or try to do anything other than create them. Likewise, it is clear from your statements over the last four years that you failed to spot the housing bubble, despite many warnings. Instead of close supervision (regulation) of the biggest and most dangerous (U.S.) banks, Mr. Greenspan ignored the growing balance sheets and increasing risk. You did no better. In fact, under your watch, every one of the major banks failed, or would have failed had you not bailed them out. On derivatives, Mr. Greenspan and other Clinton administration officials attacked Brooksley Born when she dared to raise concerns about the growing risks. They succeeded in changing the law to prevent her or, anyone else from effectively regulating derivatives. After taking over the Fed, you did not see any need for more substantial regulation of derivatives, until it was clear that we were headed to a financial meltdown, thanks in part to those products. (Moreover,) you still refuse to provide details on the Fed’s bailouts last year and on all the toxic waste you have bought.

Mr. Greenspan sold the Fed’s independence to Wall Street through the so-called “Greenspan Put.” Whenever Wall Street needed a boost, Alan was there. However, you went far beyond that when you bowed to the political pressures of the Bush and Obama administrations and turned the Fed into an arm of the (U.S.) Treasury. Under your watch, the Bernanke Put became a bailout for all large financial institutions, including many foreign banks. Then, you put the printing presses into overdrive to fund the government’s spending and hand out cheap credit to your masters on Wall Street, which they used to rake in record profits, while ordinary Americans and small businesses can’t even get loans for their everyday needs. You have decided that just about every large bank, investment bank, insurance company and even some industrial companies, are too big to fail. Rather than making management, shareholders and debt holders feel the consequences of their risk taking, you bailed them out. In short, you are the definition of moral hazard. Instead of taking that money and lending (it) to consumers and cleaning up their balance sheets, the banks started to pocket record profits and pay out billions of dollars in bonuses. Because you bowed to pressure from the banks and refused to resolve them, or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives. You (have) also admitted that you do not have an exit strategy for all the money you have printed and securities you have bought. That sounds to me like you intend to keep propping up the banks for as long as they want.

You told us AIG and its creditors had to be bailed out because they posed a systemic risk, largely because of their credit default swaps portfolio. Those credit default swaps, by the way, are over-the-counter derivatives that the Fed did not want regulated. Well, according to the TARP Inspector General, it turns out the Fed was not concerned about the financial condition of the credit default swaps partners when you decided to pay them off at par. From monetary policy to regulation, consumer protection , transparency and independence, your time as Fed Chairman has been a failure. You stated time and again during the housing bubble, that there was no bubble. After the bubble burst, you repeatedly claimed the fallout would be small. You clearly did not spot the systemic risks that you claim the Fed was supposed to be looking out for. I will do everything I can to stop your nomination and drag out the process as long as possible. We must put an end to your and the Fed’s failures and there is no better time than now.”

Other members of the Senate Banking Committee suggested at the hearing that Chairman Bernanke is likely to be confirmed for a second term as head of the central bank. Some lawmakers said the Fed had “failed” or done a “horrible job” as a regulator and indicated they would push ahead with a proposal that would strip much of the Fed’s regulatory authority. Mr. Bernanke acknowledged that the central bank had made regulator mistakes, admitting that the Fed had “certainly” not done a “perfect job” at regulating excessive risk-taking in the financial sector, a cause of the recent financial crisis. While Mr. Bernanke’s initial term as Fed Chairman expires on January 31, 2010, Committee Chairman Christopher Dodd stated that he didn’t know how soon the committee would hold a confirmation vote and whether or not it would occur before the end of the year.

Last month, the House Financial Services Committee passed a provision, sponsored by Texas Republican Representative Ron Paul, which would subject the Fed’s interest rate decisions to broader audit scrutiny by the Government Accountability Office (GAO), an arm of Congress. Mr. Paul explains that provisions in his amendment would limit interference in monetary policy. The measure, co-sponsored by Representative Alan Grayson, a Democrat from Florida, would exclude any unreleased transcripts, or minutes of Federal Open Market Committee (FOMC) meetings. It calls for an audit of the Fed and its 12 regional banks by the GAO within a year after enactment. In a November
29th.commentary in the Washington Post, Fed Chairman Bernanke stated that curbing the central bank’s authority to supervise the banking system and tampering with its independence would “seriously impair” economic stability in the United States. Furthermore, in a recent Bloomberg Radio interview, former Fed governor Frederic Mishkin argued that Ron Paul’s proposal is “incredibly dangerous in terms of promoting inflation. If you make the central bank beholden to politicians on a short-run basis, you get very bad outcomes: high inflation and less of the ability to deal with shocks like the ones we had recently.”

Taking his case to the next level, in his most recent book entitled “End The Fed”, Mr. Paul argues that “It is and should be a mainstream cause to end the power and secrecy of the Fed. It’s my own view that ending the Fed would address the most vexing problems of (the) politics of our time. It would bring an end to dollar depreciation. It would take away from the government the means to fund its endless wars. It would curb the government’s attacks on the civil liberties of Americans, stop its vast debt accumulation that will be paid by future generations and arrest its massive expansions of the welfare state, that has turned us into a nation of dependents. If you solve the money monopoly problem by ending the Fed, you solve many other problems, too. Essentially, you take away from the government the capacity to use financial trickery to expand without limit. It is the first step to restoring constitutional government. Without the Fed, the federal government would have to live within its means. It would still be too big and too intrusive, just like all state governments are today, but the outrageous empire at home and abroad would have to come to an end.”

The Banks

It is a well documented fact that a few big American banks have long fostered and enjoyed close relationships with U.S. regulators and agencies such as the Federal Reserve Board and the U.S. Treasury. History is also replete with Goldman Sachs executives attaining government postings such as the Secretary of the Treasury; including Robert Rubin and Hank Paulson of recent decades. These relationships of trust are developed and nurtured over time to the point where advice is sought and information exchanged regarding situations on a strictly confidential basis. It is difficult for Long Wave Analytics to believe, for example, that the Federal Reserve didn’t send up a trial balloon last February musing about the prospect of initiating a quantitative easing program involving new Treasury bond issues. How else could Goldman amass $27 billion (U.S.) in trading profits in the first nine months of the year. A 50 basis point move in yield on a 10-year maturity, for example, translates into a price change of $4.20 per $1,000 bond. On a long position of $1 billion (U.S.) of a 10-year Treasury bond, this means a capital gain of $42 million (U.S.).

Who’s in charge? We believe it to be the big American and European banks because, after all, they are the owners of the U.S. Federal Reserve.

Written By: Ian Gordon & Christopher Funston Ian

Full presentation

h/t Joe

 


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Wed, 12/09/2009 - 14:41 | Link to Comment faustian bargain
faustian bargain's picture

Sweet.

Wed, 12/09/2009 - 14:47 | Link to Comment Ruth
Ruth's picture

and they wonder if their policies need reviewed?   lol

Wed, 12/09/2009 - 14:50 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

Blame it on Plato.

Wed, 12/09/2009 - 16:33 | Link to Comment Anonymous
Wed, 12/09/2009 - 19:02 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

The model as the perfect Form is why we're here Alice, hmmm ...Plato's play dough?

Wed, 12/09/2009 - 14:53 | Link to Comment JohnKing
JohnKing's picture

Alternative currency is the only answer, it's legal and does an end run on the monetary fascist regime. We don't need their stinkin paper.

Wed, 12/09/2009 - 15:35 | Link to Comment VegasBD
VegasBD's picture

Kennedy tried.

Wed, 12/09/2009 - 15:58 | Link to Comment WaterWings
WaterWings's picture

I think the only reason Dr. Paul is still with us is because the media does a great job of making this honest man look like a looney. And that's if you're into politics. Otherwise you've 'never heard of him', so he must not be important - even though he has the spirit of Jefferson.

Wed, 12/09/2009 - 20:29 | Link to Comment Anonymous
Wed, 12/09/2009 - 16:25 | Link to Comment Anonymous
Wed, 12/09/2009 - 14:58 | Link to Comment aint no fortuna...
aint no fortunate son's picture

"The greatest trick the Devil ever pulled was convincing the world he didn't exist."

from The Usual Suspects


Wed, 12/09/2009 - 18:04 | Link to Comment Daedal
Daedal's picture

I thought that was from Devil's Advocate.

Wed, 12/09/2009 - 15:04 | Link to Comment OutLookingIn
OutLookingIn's picture

I hear pitchforks rattling!

Wed, 12/09/2009 - 15:16 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

The real question is who is in charge of those big American and European banks? The rabbit hole indeed goes deep...

Wed, 12/09/2009 - 15:21 | Link to Comment faustian bargain
faustian bargain's picture

Just hazarding a guess that it's the same families who owned them in 1913.

Wed, 12/09/2009 - 15:47 | Link to Comment Anonymous
Wed, 12/09/2009 - 19:29 | Link to Comment Ripped Chunk
Ripped Chunk's picture

What is Nelson remembered for again??

Wed, 12/09/2009 - 16:21 | Link to Comment Steak
Steak's picture

An organization can be corrupt and destructive without having strings being pulled by some nondescript upper echelon.  1000 Goldman bankers acting on their own greed and self interest are probably more destructive than the same number trying to act in unison under the orders of some aristocratic patriarch.

Wed, 12/09/2009 - 16:51 | Link to Comment JohnKing
JohnKing's picture

Their compensation plan rewards psychopathic behavior. The more pain you cause, the more you make.

 

Wed, 12/09/2009 - 16:53 | Link to Comment Miles Kendig
Miles Kendig's picture

Steak, I would say far more destructive.  Hence the reason I keep harping on one of my pet themes that questions IF those that created and loosed this structure have the capacity or will to reign it in knowing that their efforts may end in failure.

Thu, 12/10/2009 - 09:39 | Link to Comment blindfaith
blindfaith's picture

Your 401K is !!!!!  we are like virsus who feed on the patient until dead.  The same 401K that sent your job to China so your 'paid to play' manager could look good when he sends you your report on how 'well' your 401K is doing!  You don't need to understand the business, you ARE the business.

Wed, 12/09/2009 - 15:20 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Good post. We need to see more such posts on ZH.

Wed, 12/09/2009 - 16:51 | Link to Comment Miles Kendig
Miles Kendig's picture

And we can further discuss the issues of a gold based currency vs a colonial scrip patterned system of exchange.

Wed, 12/09/2009 - 15:38 | Link to Comment Anonymous
Wed, 12/09/2009 - 23:41 | Link to Comment aaronvelasquez
aaronvelasquez's picture

Longwave is some guy living in his mother's basement who just finished "The Creature From Jekyll Island."

Thu, 12/10/2009 - 10:01 | Link to Comment mojine
mojine's picture

... and a cut and paste master!

Wed, 12/09/2009 - 16:41 | Link to Comment Anonymous
Wed, 12/09/2009 - 16:41 | Link to Comment Grifter
Grifter's picture

Meanwhile our elected representatives tackle the tough issues and vote on eliminating the BCS:

http://sports.espn.go.com/ncf/news/story?id=4727426

Sigh...

Wed, 12/09/2009 - 21:29 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

Yeah, but where would this great nation be if we didn't know which professional baseball players were using steroids?

 

Wed, 12/09/2009 - 16:44 | Link to Comment Gwynplaine (not verified)
Wed, 12/09/2009 - 17:05 | Link to Comment SilverIsKing
SilverIsKing's picture

Haven't you heard?  CO2 emissions causes inflation and if we don't pass the heathcare bill, the big banks will fail.

Wed, 12/09/2009 - 17:21 | Link to Comment bilbert
bilbert's picture

I'm not sure that is correct - If I remember correctly, we need to pass the healthcare bill to reduce global warming.............

Wed, 12/09/2009 - 17:39 | Link to Comment SilverIsKing
SilverIsKing's picture

I stand corrected.  Thank you.

Thu, 12/10/2009 - 02:02 | Link to Comment geopol
geopol's picture

No, It was the spread of H1N1,

Wed, 12/09/2009 - 17:08 | Link to Comment Anonymous
Wed, 12/09/2009 - 17:24 | Link to Comment anynonmous
anynonmous's picture

And I always thought the Rockerfeller-Rothchild connection was the stuff of conspiracy clubs, you know black helicopters, Bilderbergers etc.; the kind of clubs where tinfoil hats adorn the members and they discuss how to store a year's worth of food. But then I read the article above and come across some current mainstream news items which advocate a type of eugenics and global government and talk about domestic surveillance drones as if they were reporting on the latest Yankee trade. Then bizarro stuff like the White House School Safety Czar as an advocate of things unspeakable or a President who says one thing about the TARP on Tuesday and on Weds his Treas. Sec. goes and does just the opposite. Then we have Tiger the paragon of all things good and pure only to find out that the guy is, and actually always has been a prick both on and off the course but that the media chose to keep quiet about it.

Where do I apply for my tinfoil hat?

Wed, 12/09/2009 - 18:03 | Link to Comment Anonymous
Wed, 12/09/2009 - 21:31 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

 

SHINEY SIDE OUT!!!

 

Thu, 12/10/2009 - 16:23 | Link to Comment WaterWings
WaterWings's picture

No freaking wonder...

Wed, 12/09/2009 - 21:29 | Link to Comment Privatus
Privatus's picture

Obama's bumfuckery czar, Kevin Jennings, is a truly sickening freak. Who's next for Attorney General, Charles Manson?

Wed, 12/09/2009 - 17:29 | Link to Comment chunkylover42
chunkylover42's picture

The whole thing is being choreographed to recapitalize underfunded bank balance sheets.

Wed, 12/09/2009 - 17:42 | Link to Comment SilverIsKing
SilverIsKing's picture

BINGO!  One more like that and you get to trade in your prize for the larger one.

Wed, 12/09/2009 - 17:49 | Link to Comment Tour de France
Tour de France's picture

Well, it is not so much that fed needs to be abolished, but it should really be targeting inflation rates.

Wed, 12/09/2009 - 17:50 | Link to Comment Anonymous
Wed, 12/09/2009 - 18:08 | Link to Comment Anonymous
Wed, 12/09/2009 - 21:34 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

 

Your ideas are intriguing to me and I wish to subscribe to your newsletter.
Wed, 12/09/2009 - 17:55 | Link to Comment Anonymous
Wed, 12/09/2009 - 17:59 | Link to Comment Anonymous
Wed, 12/09/2009 - 18:06 | Link to Comment Prophet of Wise
Prophet of Wise's picture

Just hazarding a guess that it's the same families who owned them in 1913.

To the last drop of Idumean blood. Let there be no doubt not one name has changed nor apprenticeship granted to any man outside the Synagogue.

http://www.save-a-patriot.org/files/view/whofed.html [Chart of who "owns" the Federal Reserve]

http://www.save-a-patriot.org/files/view/frcourt.html [Court Rules Federal Reserve is Privately Owned]

http://www.save-a-patriot.org/files/view/news5bbs.html [Misconceptions Regarding the Federal Reserve One Man's Letter to the Editor]

http://www.iamthewitness.com/DarylBradfordSmith_Rothschild.htm [The History of the House of Rothschild]

 

Wed, 12/09/2009 - 18:34 | Link to Comment Miyagi_san
Miyagi_san's picture

Looking at the family tree , it looks like Lehman had to be "killed" off so JPM takes control...

Thu, 12/10/2009 - 12:37 | Link to Comment Anonymous
Thu, 12/10/2009 - 12:39 | Link to Comment Anonymous
Wed, 12/09/2009 - 18:12 | Link to Comment Anonymous
Wed, 12/09/2009 - 18:16 | Link to Comment Daedal
Daedal's picture

Frederic Mishkin argued that Ron Paul’s proposal is “incredibly dangerous in terms of promoting inflation. If you make the central bank beholden to politicians on a short-run basis, you get very bad outcomes: high inflation and less of the ability to deal with shocks like the ones we had recently.”

Mishkin, you rat bastard. The central bank is beholden to politicians and private interests already -- Hello! What do you think Bernanke does in meetings with Obama, Geithner, and the Bankster Execs? Yeah, the Fed is independent alright, independent to do whatever it wants without oversight.

Power corrupts; absolute power corrupts absolutely.

Wed, 12/09/2009 - 18:29 | Link to Comment SilverIsKing
Wed, 12/09/2009 - 18:34 | Link to Comment Daedal
Daedal's picture

Ah, yes, Columbia. What does it say about the state of our educational system when the academic elites are fools? Allow me to get situated in a hand-basket. Ok, let's go.

Wed, 12/09/2009 - 18:50 | Link to Comment DaveyJones
DaveyJones's picture

the Fed is wed,

inbred, and overfed

with banking family thoroughbred

or so I've read. 

 

Wed, 12/09/2009 - 20:16 | Link to Comment Rick64
Rick64's picture

During the time of Brooksly Born (Clinton yrs.) The Fed,Treasury, and Congress chose to ridicule and dismiss her concerns and calls to regulate the derivitives market. Then they had a warning when LTCM nearly collapsed with exposure at 1.25 trillion against 4 billion in capitol. That got the attention of the congress, but they didnt do much to regulate it, and took away any power she (Brooksly Born) had and effectively shut her down. This sounds familiar. This was in 1998, 11 yrs. ago. By the way Timmy,Larry were in the picture too. They told her that if she tried to regulate the derivitives market she would cause the worst financial crisis since WWII. Ironic Huh. The derivitives market was valued at 25-30 trillion dollars at the time. Now 595 trillion!!!

Wed, 12/09/2009 - 20:24 | Link to Comment Rick64
Rick64's picture

Putting the pressure on Brooksly Born was Big Banks via Rubin (secretary of the treasury) and Greenspan.  Congress told her she would cause problems in the market if she tried to regulate  the derivitives market. They didn't even know what derivitives were. sorry for rambling on but this is too rich a story. On Frontline called The Warning.

Wed, 12/09/2009 - 20:56 | Link to Comment pezhead
pezhead's picture

 

Just received this email today from my apparently 'Dear Friend' and Senator....

 

Dear Friend,

Thank you for your message expressing support for the Federal Reserve Sunshine Act. I appreciate hearing your thoughts on this important issue.

The Federal Reserve Sunshine Act (S. 604 / H.R. 1207) was introduced in the Senate on March 16, 2009, and in the House of Representatives on February 26, 2009. The Senate bill was referred to the Committee on Banking, Housing, and Urban Affairs and the House bill was referred to the Committee on Financial Services. Both bills reform the manner in which the Board of Governors of the Federal Reserve System is audited by the General Accountability Office (GAO) and the manner in which such audits are reported.

Under the Federal Banking Agency Audit Act (PL 95-320), the GAO has the authority to conduct financial and performance audits of the Board of Governors, and the Federal Reserve banks and branches. However, such audits are limited, as the law stipulates that monetary policy operations, foreign transactions, and the Federal Open Market Committee operations are excluded from the scope of the GAO audits. The Federal Reserve Sunshine Act seeks to expand the GAO's authority by removing these limitations.

As the Federal Reserve Sunshine Act is currently written, I am opposed to the legislation. Under common usage of the term audit -- an examination of accounts and records -- there is already a 100 percent audit of the Federal Reserve. Furthermore, Congress already reviews semi-annual reports on monetary policy submitted by the Board of Governors as required under the Full Employment and Balanced Growth Act (PL 95-523).

When Congress passed the Federal Banking Agency Audit Act in 1978, the legislation attempted to balance the need for public accountability of the Federal Reserve with the need to insulate the Reserve's monetary policy function from political pressures. I believe this balance must be maintained going forward.

The formulation of monetary policy is a decision-making process that involves information gathering from a host of foreign governments and central banks. The information provided from those exchanges is critical and extremely sensitive. The immediate and broad disclosure that S. 604 would require could disrupt the financial markets, and jeopardize our country's international finance relationships. Ultimately, it would be taxpayers who would bear the brunt of any losses resulting from policies caused by untimely disclosure of sensitive information. Because of this, I do not believe the benefits of legislation like the Federal Reserve Sunshine Act outweigh the costs.

Again, thank you for contacting my office. It is truly an honor to represent North Carolina in the United States Senate, and I hope you will not hesitate to contact me in the future should you have any further questions or concerns.

  Sincerely,

  

  Kay R. Hagan

 

Wed, 12/09/2009 - 21:32 | Link to Comment Privatus
Privatus's picture

.

Wed, 12/09/2009 - 22:12 | Link to Comment Anonymous
Thu, 12/10/2009 - 01:11 | Link to Comment Anonymous
Thu, 12/10/2009 - 16:45 | Link to Comment WaterWings
WaterWings's picture

20% physical cash? You're better off buying more ammo and just using vasolined cotton balls when you're running through the forest eating bugs, twigs, and berries. I'm mean, those Fed Notes are great for starting a cooking fire, but there are better things to use for tinder. 

Don't get me wrong, I could see it getting that bad (Wolverines!), but in that scenario your cash will only buy what fools are selling - and it's better not to have to look for supplies after a collapse.

Wed, 12/09/2009 - 22:23 | Link to Comment B9K9
B9K9's picture

Who’s in charge? We believe it to be the big American and European banks because, after all, they are the owners of the U.S. Federal Reserve.

Wait for it ... no shit, Sherlock. Do you think you deserve a brownie for this astute observation?

He who complains has already lost. The smart folks understood the facts of life long ago and traded accordingly. They've amassed fortunes while complainers have gained, well, an interwebs forum.

There simply is no resisting fractional reserve banking. Captive money/wealth must be accessed by an addicted government/populace. Think of the children! It's like an alcholoic having a cupboard full of booze - an impossible situation to resist. Print those IOUs against reserves (ie fraudulent receipts aka "MONEY"). We're good for them - promise!

Thus, given humanity's utter incapabality to resist, it merely behooves one to draft behind the looters who rape, steal & pillage while the dummies protest (if even that) to no effect.

Either deal with reality, or get out of the game.

Wed, 12/09/2009 - 23:03 | Link to Comment Anonymous
Wed, 12/09/2009 - 23:14 | Link to Comment Johnny Dangereaux
Johnny Dangereaux's picture

Lead...the new gold...oh, and salt peter or whatever it is that will make gun powder....

Good job Mr realist....enjoy your solitude.

Read this:

http://www.apfn.org/apfn/reserve.htm

It is an enlightening story....how do we chop off the head?...figuratively, of course.

 

Wed, 12/09/2009 - 23:15 | Link to Comment Anonymous
Wed, 12/09/2009 - 23:37 | Link to Comment Anonymous
Thu, 12/10/2009 - 00:10 | Link to Comment JR
JR's picture

The true founding father of the Federal Reserve System--which Senator Robert Owen on July 25, 1921, called “the most gigantic financial power in all the world"—was Mayer Amschel Bauer of the House of Rothschild.

Rothschild and later the international banking group that secretly planned the writing of the Federal Reserve Act and its enactment into law did not then, nor do its members now, believe in representative government.  They believe in government by an uncontrolled oligarchy “whose acts only become apparent after an interval so long that the electorate would be forever incapable of doing anything efficient to remedy depredations.”

The quoted portion is from Ezra Pound, written in 1950 from St. Elizabeth’s Hospital in Washington, D.C., where Pound was held prisoner without trial for 12 years by the Federal government.

Contrast the meeting in 1773 of the ex officio planners of a System that eventually would bring the money and credit of the people of the United States into the hands of a few powerful international bankers, and make it law, with that of the 56 men who laid their lives and fortunes on the line July 4th, 1776, to sign the Declaration of Independence in the belief that “all men are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

The 1773 meeting took place in Mayer Amschel Bauer’s Goldsmith Shop in Frankfurt over whose door hung a Red Shield (or Rothschild) to advertise his business.  According to William Guy Carr in “Pawns In the Game,” Rothschild’s purpose was to convince these twelve wealthy and influential men that if they agreed to “pool their resources,” they could finance and control the World Revolutionary Movement and ultimately the wealth, natural resources, and manpower of the entire world.

Rothschild argued that Law was Force in disguise, and that established governments were immaterial because, of necessity, they had to ask the aid of “Capital” which “Is entirely in our hands.” 

The seven men who later attended that secret meeting in 1910 on Jekyll Island to create a legal monopoly  of America's money supply for their own benefit represented an estimated one-fourth of the total wealth of the entire world. According to Anthony Sutton in “Wall Street,” “Warburg’s revolutionary plan (was) to get American Society to go to work for Wall Street.”

Will the Rothschild-to-Rockefeller dream of global governance come to fruition this week in Copenhagen, where, according to Dr. Mark Hendrickson in The Cuckoo’s Nest Visits Copenhagen, “the highest estimated costs of a global cap-and-trade regime (is) the U.N.'s own figure of $552 trillion during the 21st century”? “Since global GDP today is around $65 trillion, the U.N. is talking about sacrificing nearly a decade's worth of wealth in the name of combating climate change…(under) a new U.N. body called ‘the Conference of the Parties (COP).’ …COP needs sweeping powers because ‘the way society is structured will need to change fundamentally.’ Such ‘change’ won't be cheap, so the U.N. seeks a ‘massive scaling up of financial resources’ to fund COP.”

But, after all, it was John D. Rockefeller, III, who gave a check in the amount of $8,500,000 to Trygve Lie, First Secretary-General of the United Nations on March 25, 1947, that bought the land on Manhattan Island which houses the UN building. David Rockefeller had hoped, of course, to sew up the Rockefellers' unrelenting drive for a world government based on socialism and feudalism by 2005.  Oh well, he's just four years late. 

Thu, 12/10/2009 - 04:43 | Link to Comment order6102
order6102's picture

clearly its all jews fault! what is next? Holocaust and concentration camps?

Thu, 12/10/2009 - 16:29 | Link to Comment WaterWings
WaterWings's picture

No. Space aliens. Why do people drag religion into this? Maybe because it's easier to ridicule when you really can't come up with any unique criticism. Plenty of you provocateurs around - did you forget to sign out before you posted this?

Thu, 12/10/2009 - 00:23 | Link to Comment JR
JR's picture

audit, no abolish, the Fed--and about 500 congressmen:

OPEN LETTER TO SENATOR JUDD GREGG

Lawrence Lepard
posted Dec 4, 2009

To:
Senator Judd Gregg
US Senator - New Hampshire (R)
201 Russell Senate Office Building
Washington, DC 20510  
(202) 224-3324
 
Dear Senator Gregg:
 
I saw your recent comments on CNBC calling Ron Paul's Audit The Fed bill an outrage. No, sir, you are an outrage. I cannot believe you are a Senator. I cannot believe you are a Republican. (I used to be a Republican, now I am an Independent). You are a disgrace. The disdain dripping from your Senate enriched lips makes me want to puke. You criticize Congressmen for supporting this bill as an election ploy. Yes, Congressmen want to be re-elected by the people they represent. They do so by actually "representing the people", who are overwhelmingly in favor of this bill. You have a problem with that?
 
I am completely disgusted with you and other politicians like you. Sir, you are a national joke - a disgrace really, and you should resign before the intelligent voters in New Hampshire throw you out, as I am sure they will do in the next election.
 
I believe you are a disgrace because you blatantly lied in your statement on CNBC. To wit, you misrepresented the HR 1207 Audit the Fed bill. Your statement that this bill is an attempt by Congress to manage monetary affairs is a blatant lie. The bill calls for transparency. The monetary affairs of the U.S. are already being managed by Goldman Sachs, at the expense of the people. ALL THIS BILL CALLS FOR IS TOTAL TRANSPARENCY. The only parties who will be hurt by this disclosure are those who have benefited at the expense of the tax payer. Do you have a problem with that?  Who elected you, taxpayers or financial interests? Oh, I see.
 
Here is what amazes me. It amazes me how inexpensive you are to buy. According to www.opensecrets.org <http://www.opensecrets.org> you recently received $8,000 from Goldman Sachs, and $7,000 from Citigroup. If I give you more than $15,000 can I get you to support the Audit the Fed bill?  It seems very inexpensive to me, and I would be willing to send you the money.
 
You sir, are just another corrupt, stupid politician who has been complicit in ruining this country. How can you live with that?  I know I could not. Why don't you do one honorable thing in your life and resign. We the American people at least deserve that. It would not fully atone for your sins, but it would be a start.
 
You say that the Audit the Fed bill is just run away populism and has echoes of William Jennings Bryan. This statement is rich with irony because as you no doubt know Bryan's words were that "thou shalt not crucify the working man on a cross of gold" thereby arguing against the gold standard and for free silver, or an inflationary monetary policy. Implicitly your comments criticized Bryan although he is on the same side of the argument as your beloved Federal Reserve. So do you agree with Bryan or disagree? If you disagree with Bryan (as your comments imply) then you are on our side-honest money. If you agree with Bryan then why are you criticizing his populism? Senator, if you are going to use historical references to try to enhance your argument you might at least try to get them right. Scholarly references that are wrong tend to make the user look stupid. Doesn't Phillips Exeter Academy teach history? The Ann Arbor, Michigan public schools have served me well.
 
Furthermore, what is wrong with populism? You are from New Hampshire. The state motto is "live free or die". How can you reconcile that with a society of economic royalists, statists, and federalists? The US FED is an abomination on the people. It is a counterfeiter. It is unconstitutional, and just because it has been around since 1913 that does not make it legitimate. I will go so far as to say that the FED has done a huge amount of damage to the people of this and other countries. If you disagree, read Ron Paul's book, End The Fed and dispute the case on its merits. Dr. Paul has forgotten more about natural law, ethics and monetary policy than you know. YOU SIR ARE STUPID. YOU SHOULD RESIGN AND GIVE SOMEONE ELSE A CHANCE TO SERVE THE PEOPLE. WHEN WE SEE YOU ON TV WE LAUGH AT YOU.
 
RESIGN, or we will continue to ridicule and mock you.
 
It is very simple, say the words, "I resign, I am not competent to hold this position of trust".
 
Sincerely,
Lawrence Lepard
Wellesley, MA

 

http://www.321gold.com/editorials/guest/lepard120409.html

Thu, 12/10/2009 - 04:38 | Link to Comment order6102
order6102's picture

another one from people who don't understand fed functions... To conduct Monetary Policy fed must be independent. its given very much so... Should be fed stip from regulatory functions - YES. but abolish fed? NO! WTF going to conduct Monetary Policy? Congress?

Thu, 12/10/2009 - 16:34 | Link to Comment WaterWings
WaterWings's picture

No, really. You should sign out before you post this garbage. I hate to say this, because it sounds elitist and snobby, but go read some history books on banking. Come back when you can explain this:

To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;

 

Here's something to get you started:

http://www.lewrockwell.com/paul/paul619.html

Thu, 12/10/2009 - 20:03 | Link to Comment Prophet of Wise
Prophet of Wise's picture

THE EPHAH OF COMMERCE

There is a remarkable Prophetic Vision recorded by the Prophet Zechariah, that has mystified all creation. "Then the Angel that talked with me went forth, and said unto me, Lift up now thine eyes, and see what is this that goeth forth. And I said, What is it? And he said, This is an EPHAH that goeth forth. He said moreover: This is their resemblance through all the earth. And, behold, there was lifted up a 'Talent of Lead': and this is a WOMAN that sitteth in the midst of the EPHAH. And he said, This is WICKEDNESS. And he cast her down into the midst of the EPHAH: and he cast the weight of lead upon the mouth thereof. Then lifted I up mine eyes, and looked, and, behold, there came out TWO WOMEN, and the wind was in their wings; for they had wings like the wings of a Stork: and they lifted up the EPHAH between the earth, and the heaven. Then said I to the Angel that talketh with me, Whither do these bear the EPHAH? And he said unto me, To build her an house in the LAND OF SHINAR: and when it is prepared she shall be set there in her own place. Zechariah 5:5-11

The "EPHAH" which the Prophet saw go forth, is the largest of Hebrew dry measures, and is often used as a symbol of Commerce, and its "resemblance," or going forth through all the earth, doubtless refers to UNIVERSAL COMMERCIALISM. In this "Ephah" sat a "WOMAN" who was called "WICKEDNESS." This "WOMAN" attempted to rise but the Angel thrust her back, and replaced the lid made of a "Talent of Lead." Then "Two Women," with the wings of a Stork, came, and lifted the "Ephah" high in the air and carried it with the swiftness of the wind to the "LAND OF SHINAR" to build her a HOUSE. Now the "LAND OF SHINAR" was the place where they built the ancient Tower of Babel (Gen. 11:1-9), on whose site ancient BABYLON was located. As this vision of the Prophet occurred many years after the Fall of ancient Babylon, the HOUSE that is to be built for this "Ephah," or the "WOMAN" who was transported in it, must be built in some future City of Babylon.

As we have seen the "Ephah" stands for COMMERCE, and as the occupant of the "Ephah" is called WICKEDNESS," it reveals the fact that the "Commercialism" of the time of the Visions's fulfillment will be characterized by all manner of dishonest schemes and methods. And the fact that the "WOMAN" is thrust back into the "Ephah" and covered with a "Talent of Lead," indicates that those dishonest schemes and methods are to be kept out of sight. The further fact that the "Ephah" is borne to the "LAND OF SHINAR" by two "Stork Winged Women" is not without significance. The Stork, according to the Mosaic Law, is an unclean bird. The name "Chasid" by which it was known, signified the "PIOUS BIRD," and may well stand for the pursuit fo wealth under the guise of religion. That will doubtless be a characteristic of those Babylonian days.

This vision of the "Ephah" by the Prophet Zachariah is still further confirmatory proof that the ancient City of Babylon is to be rebuilt and become the COMMERCIAL CENTRE OF THE WORLD. Every influence political and commercial will favor this and as the "Stork Winged Women" will be favored by the "wings of the wind," the tendency of Commercialism to that part of the world, when the time comes to carry the "Ephah" to the "Land of Shinar," we can readily see that it will not take long,, with the wealth of the world at the command of the Merchants of that day, to rebuild Babylon and make it the great Commercial Centre of the world. Once however, Commerce is firmly established in Babylon, the occupant of the "Ephah" -- "WICKEDNESS," will lift the lid and reveal herself, and no one will be able to buy or sell but he who has the "MARK OF THE BEAST."

As to the probability of the ancient city of Babylon being rebuilt we have only to consider the events that in recent years have been happening in that part of the world looking to just such a thing.

In the Department of War of France, at Paris, there is to be seen the records of valuable surveys and maps made by order of Napoleon I, in Babylonia, and among them is a plan for a New City of Babylon, thus showing that the vast schemes of Napoleon comprehended the Rebuilding of the Ancient City of Bablyon, and making it his Capital, as his ambition was to conquer the whole of Europe and Asia, and he recognized to that end the strategic position of ancient Babylon as a governmental and commercial centre.

It is a fact that the whole region of Mesopotamia, Assyria and Babylonia, only needs a system of irrigationto make it again the most fertile country in the world, and steps are being made in that direction. http://www.gao.gov/new.items/d05872.pdf [major irrigation project]. In 1850 the British Government sent out a military officer with his command to survey and explore the river Euphrates at a cost of $150,000 ($3.8 million today), and when the European war broke out, the great English Engineer who built the Assouam dam in Egypt, was engaged in making surveys in the Euphratean valley for the purpose of constructing a series of irrigation canals that would restore the country and make it again the great grain producing country it once was. As a result towns and cities would spring up and railroads would be built. http://www.army.mil/-news/2009/02/12/16799-iraqi-railroad-rolls-back-into-taji/. Abdul Hamid, of Turkey, granted a concession to Emperor William of Germany to build a railway from the Asiatic side of the Bosphorus, by way of Aleppo, to the Tigris river, and from there to Bagdad, and from Bagdad via Babylon (via Babylon, mark that) to Kuwait on the Persian Gulf, and most of the road has been rebuilt to Bagdad.

With these facts in mind it can readily be seen that it is the purpose of the Europeans to revive the country of Babylonia and rebuild its cities, and when once the time comes the city of Babylon will be rebuilt almost in a night and on a scale of magnificence such as the world has never seen.

The rapid growth of modern cities is one of remarkable phenomena of the times. Since 1880 more than 600 cities have been constructed in America. Less than 200 years ago the site of the City of Chicago was but a swampy expanse at the mouth of the Chicago river. Now it has been transformed into a beautiful Metropolis stretching 25 miles along the shore of Lake Michigan, with 6,000 miles of streets, many of them beautiful boulevards 120 feet wide. In 1840 Chicago had only 4,470 inhabitants, today the population is over 3,000,000. It's looming debt defaults notwithstanding one only needs to witness the rapid growth of Dubai and many cities throughout China to realize such a feat is certainly within reach. Once the powers of the world are ready the revived City of Babylon will spring up in just a few short years.

Babylon the Great will be an immense city, the greatest in every respect the world has ever seen. It will be a typical city, the London, the Paris, the Berlin, the Petrograd, the New York, the Chicago of its day. It will be the greatest commercial city of the world. Its merchandise will be of gold and silver, precious stones and pearls, of purple, and silk, and scarlet and costly wools and the finest and most fashionable garments and linens. Its fashionable society will be clothed in the msot costly raiments and decked with the most costly jewels. Their homes will be filled with the most costly furniture of precious rare woods, brass, iron, granite and marble, with the richest of draperies, mats and rugs. They will be filled with the most costly of perfumes, cinnamon, fragrant odors, ointments and frankincense. Their banquets will be supplied with the sweetest of wines, the richest of pastry, and the most delicious of gourmet meats. They will have horses and chariots and the swiftest of fast moving vehicles on earth and in the air. They will have slaves and they will trade and traffic in the "souls of men." That is women will sell their bodies, and men their souls, to gratify their lusts.

The markets will be crowded with cattle, sheep and horses. The wharves will be piled high with goods imported from all climes. The manufacturers will turn out the richest of fabrics, and all that genius can invest for the comfort and convenience of men will be found on the market. It will be a city given over to unsurpassed pleasure and business. Business men and promoters will give their days and nights to scheming how to make money fast, and the pleasure loving will be constantly planning new pleasures. There will be riotous joy and ceaseless feasting. As it was in the days of Noah and of Lot, they will be marrying and giving in marriage, buying and selling, building and planting.

The blood will run hot in their veins. Money will be their god, pleasure their high priest, and unbridled passion the ritual of their worship.

It will be a city of music. Amid the noise and bustle of its commercial life will be heard the music of its pleasure resorts and theatres. There will be the sound of "harpers and musicians, of pipers and trumpeters." The world's best singers and players will be there. Its theatres and places of music will be going day and night. In fact there will be no night, for the electric illumination of the city by night will make the night as bright and shadowless as the day, and its stores and places of business will never close, night or day, or sabbath, for the mad whirl of pleasure and the absorbing desire for riches will keep the wheels of business constantly moving. And all this will be easy because the "God of this World" -- Satan, will possess the minds and bodies of men, for we read that Babylon at that time will be "the Habitation of Devils, and the Hold of Every Foul Spirit, and the Cage of Every Unclean and Hateful Bird." The city will be the seat of the most imposing "OCCULTISM," and mediums, and those desiring to communicate with the other world, will then go to Babylon, as men and women now go to Paris for fashions and sensuous pleasures. In that day demons, disembodied souls, and unclean spirits will find at Babylon the opportunity of their lives to materialize themselves in human bodies, and from the atmospheric heavens above, and from the Abyss below they will come in countless legions until Babylon shall be full of demon possessed men and women, and at the height of its glory, and just before its fall, Babylon will be ruled by SATAN HIMSELF, incarnate in the "Beast" -- ANTICHRIST.

But before its destruction God will mercifully deliver His own people, for a voice from heaven will cry --

"Come Out of Her, My People, That Ye be Not Partakers of Her Sins, and that Ye Receive Not of Her Plagues."

As Sodom and Gomorrah could not be destroyed until righteous Lot had escaped, so Babylon cannot be destroyed until all the righteous people in it have fled. The destruction of the city will be sudden and without warning. A fearful storm will sweep over the city. The lightning and thunder will be incessant. The city will be set on fire and a great earthquake will shake it from centre to circumference. The tall office buildings, the "Hanging Gardens" and the great towers will totter and fall, the crust of the earth will crack and open, and the whole city with its inhabitants will sink like a "Millstone" into a lake of burning bitumen, and the smoke will ascend as of a burning fiery furnace, and the horror of the scene will be intensified by vast clouds of steam, generated by the waters of the Euphrates pouring into that lake of fiery asphalt, and when night comes on those clouds of steam will reflect the light of the burning city so it can be seen for miles in all directions in that level country. And the kings of the earth, and the merchants, and the shipmasters, and sailors, and all who have profited by her merchandise, will stand afar off and cry and wail because of her destruction, but the heavens will rejoice for God will have rewarded her Double according to her works, and BABYLON WILL BE NO MORE.  

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