This page has been archived and commenting is disabled.

Senator Kyl Joins Kay Hagan In Encouraging Fed Opacity, Ironically Warns On Dangers Of Ongoing Monetization

Tyler Durden's picture




 

Oh where to start with this one. We wrote yesterday about Senator Hagan's brilliant Fed insights (or, at least the variety that comes from having none). We hope readers have had a chance to ask Kay Hagan any questions they may have about the Fed's ability to contain the next multi-trillion monetary implosion in light of a total lack of knowledge about the Fed's activities, as we are confident she will answer any and all questions. It appears that she now has the fervent fact-checking support of Republican Arizona Senator Jon Kyl, who is opposed to the Federal Reserve Sunshine Act (S 604) on the grounds that any Fed "disclosure could unnecessarily raise concerns about the financial condition of the recipients, cause consumer and investors to lose confidence in them, and worsen their balance sheets (along with the credit crisis that the Fed is trying to solve)."

We appreciate Senator Kyl's candor even if he seems to have confused the words "unnecessarily" with "necessarily" and "solve" with "create." But we are confident his position, once again, stems from his risking his political post and credibility on the premise of Fed "dollar destruction" containment. We are eagerly waiting for Senator Kyl's freeform thoughts on what provides him with such confidence.

Another topic, highlighting Senator Kyl's erudite comprehension of matters monetary is his disclosure vis-a-vis the ongoing $1.7 trillion Fed monetization program (sorry, we meant, Quantitative Easing - after all there are whopping 30 minute intervals between agency auctions and repurchases: are we going to split hairs here).

I would observe that Congress provided the Federal Reserve with a great deal of independence in order to ensure that control over the nation's money supply is not influenced by short-term political or partisan pressures - pressures that could otherwise result in the temptation to use the government's money-creating authority to finance government expenditures (including budget deficits). Such "monetizing" of the debt - that is, financing deficits or paying off the national debt by printing more money - would lead to rampant inflation. I, therefore, support the independence that has been carved out for the Fed in matters of monetary policy to protect against that kind of abuse.

It is refreshing that the Fed's independence has led to such normal outcomes as 97% of positive trading days at such institutions as Goldman Sachs, and principal trading at the major investment banks (a trade, by the way, which has a losing counterparty, known as the US taxpayer) being the only source of record revenues this quarter, in many cases by a margin of over 80%. Yet we completely agree with the Senator on the threats of monetization: it would be truly unfortunate if instead of dabbling in semantics, Ben Bernanke decided to rename the upcoming QE 2 program into "Monetization for a Stronger America." It would be very scary if at that point the Fed has some accountability as it may become overtly obvious that the Fed is printing trillions of money, lending quadrillions, and collateralizing everything with pennystocks. Concerns about our future would then be truly "unnecessarily" raised.

We ask readers to write their congressmen to see how many of them are as well-versed in all matters pertaining to the Federal Reserve, and to send us the responses. We will happily disclose just who it is in the US Senate who believes that an American system that encourages reckless risk taking and makes billionaires out of millionaires, even as it destroys the middle class.

A very unperturbed letter from Sen. Kyl below.

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 10/20/2009 - 11:32 | 104370 Stevm30
Tue, 10/20/2009 - 15:27 | 104725 c jackson
c jackson's picture

Dear Senator Kyl,

I find it extremely disheartening that you encourage the opacity of the Federal Reserve, and yet you are my representing Senator.

As you very well may know, the Federal Reserve is the source of our monetary problems, the enabler to our fiscally irresponsible "representatives", and the proverbial "thorn" in the side of every working man and woman in America.

The Federal Reserve does not "solve" problems, as you stated Sep. 22, but on the contrary, it creates the problems through credit and monetary expansion. I am sure you are aware of this, which is why I, as your constituent, am writing this letter.

America was not founded by men who believed that a central bank could handle or solve the monetary and fiscal problems our country faced. On the contrary, they were vehemently opposed to the creation of a central bank, which is something I would have hoped you knew, but apparently you do not. Thomas Jefferson once wrote:

 "The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution. I am an enemy to all banks discounting bills or notes for anything but coin."

He goes on regarding private centralized banking:

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

It is an utter disgrace that you are opposed to the audit and dismantling of the Federal Reserve. As a Senator, you took an oath to defend the Constitution, and the People of the United States of America. Your opposition to the transparency of the Federal Reserve is the antithesis of that oath, Senator.

With that being said, as your constituent in the State of Arizona, your support of the opacity of the Federal Reserve System will guarantee my vote for your challenger in the coming election. Not only will I NOT VOTE FOR YOU, but I will educate and therefore encourage every family member and friend of mine to do the same. Unless, of course, you change your position to that of our Founding Fathers, and to true moentary freedom on which our country was founded.

Shame on You, Senator Kyl.

Yours Very Truly,

Tue, 10/20/2009 - 11:38 | 104378 Careless Whisper
Careless Whisper's picture

Why is it that most lawyers can't grasp economic issues?

Tue, 10/20/2009 - 13:07 | 104487 Anonymous
Anonymous's picture

Mis-application of the concept of equal.

Rather than thinking in terms of 1+1 Equals 2, they think of it as everybody getting an equal slice of pie. Of course, not realizing that 1+1=2, they cannot functionally balance the .gov checkbook, and must use the Fed as their tool.

Anarchy and dictatorship, here we come!!!

Tue, 10/20/2009 - 13:38 | 104544 Anonymous
Anonymous's picture

because law has nothing to do with logic or facts, but rather the manipulation of the allowed items that are in the debate. Attorneys, in general, have very skimpy pre-law credentials with many obtaining an english degree. While this may help them write grammatically correct legal proceedings it has nothing to do with thinking logically or even doing any analysis from facts that you have assembled in front of you. Attorneys will work on making an item dissapear rather than deal with it and make sure their theory/idea is actually correct.

Tue, 10/20/2009 - 17:09 | 104899 Anonymous
Anonymous's picture

It has nothing to do with any profession.

A politician who does not "understand" chooses to do so because it is NOT in his/her interests to do so.

Perhaps a more accurate description is BOUGHT AND PAID FOR.

Now, we will see them crawling out of the woodwork to defend their paymasters.

THROW THE BUMS OUT.

Tue, 10/20/2009 - 11:47 | 104386 lizzy36
lizzy36's picture

Individuals who want to run for elected office should have to pass a basic financial literacy course. 

Tyler and Marla, should adminster said course (i don't know why but that thought made me laugh).

Tue, 10/20/2009 - 11:56 | 104398 SV
SV's picture

Lizzy, be advised he is on the Finance Committee too! Don't you feel better now?

Tue, 10/20/2009 - 12:06 | 104410 lizzy36
lizzy36's picture

Well Maxine Waters is on the House Financial Services Commitee, so the benchmark for morons on these committees is clearly very high.

Missed your comments, glad you are back.

Tue, 10/20/2009 - 12:08 | 104413 SV
SV's picture

True, true... Thanks!

Kudos and snaps a-plenty to TD for the retardation spotlight!  ;)

Tue, 10/20/2009 - 12:27 | 104436 VegasBD
VegasBD's picture

No  need for a test, even this CAPTCHA w/o a calc would be fine.

Tue, 10/20/2009 - 11:49 | 104389 koaj
koaj's picture

scum

Tue, 10/20/2009 - 11:51 | 104390 aint no fortuna...
aint no fortunate son's picture

Is Kyl on drugs? What a freaking moron - he and Hagan and God knows how many other clueless fools have our best interests at heart when they don't even freaking know what they're babbling about? Left, right, middle... except for a handful of exceptions like Ron Paul and Alan Grayson these fools should all be booted out of office.

End of empire - plain and simple. We're freaking toast.

Bring in the cockaroaches... they can have this turd heap we used to call a country.

Tue, 10/20/2009 - 17:14 | 104904 Anonymous
Anonymous's picture

Please do not make any excuses for financial illiteracy.

They do KNOW what they are babbling about !

Their chosen course of action is the defence of their paymasters.

Tue, 10/20/2009 - 11:53 | 104393 Anonymous
Anonymous's picture

no bank campaign contributions = no reelection
'nuff said

Tue, 10/20/2009 - 12:05 | 104409 Seraph
Seraph's picture

 I have the exact same letter on my kitchen counter. Very unfortunate.

Tue, 10/20/2009 - 12:21 | 104427 waterdog
waterdog's picture

I believe that when the Fed was created with independence, the congress never thought a federal tax cheat would become the treasury secretary, that a psycotic school boy would become chairman, and that trillions of taxpayer's money would be funneled to criminals by the school boy.

Tue, 10/20/2009 - 12:40 | 104454 Cursive
Cursive's picture

I definitely believe that someone knew what they were doing.  You can bet that the bankers knew what they were doing.  The Federal Reserve Act of 1913 was a takeover of our democracy.  We need to once again heed the advice of John Adams and Andrew Jackson.

Tue, 10/20/2009 - 13:45 | 104562 Anonymous
Anonymous's picture

yeah, right. I'll bet you're all fired up about Obama's tax rate, but were just fine under Bush's tax rate - which were exactly the same. I wonder how much cognitive dissonance it takes to equate Paulsons give away with Geithner - who inherited the program after the majority had been spent/given. Even Fox news 'reports' that it was paulson that came up with the idea to give the money to the banks, or criminals as you like to call them. Fine, but lets actually place the blame where it started. And that ain't with obama. He's not helping anything, but its not like we'd be in a great big happy place if McCain were around. Please explain to me what policies McCain had that would have made things better than current, or the deficit better than current. Please.

Tue, 10/20/2009 - 15:22 | 104717 Anonymous
Anonymous's picture

Now you are getting to the heart of the matter. The winner of the presidential race makes no difference to TPTB.

Tue, 10/20/2009 - 22:44 | 105259 Shiznit Diggity
Shiznit Diggity's picture

Exactly. Why all the "socialist" criticism of Obama? He's not appreciably more socialist than Bush was. Are people unaware that we have long been a socialist country? Or more precisely semi-socialist: we're free marketeers on the upside and socialists on the downside.

Tue, 10/20/2009 - 12:34 | 104442 Cursive
Cursive's picture

If Sen. Kyl believes what he wrote, he is an utter moron.  His letter is an homage to central bankers.  And this man is supposed to represent the party that believes in less government.  With few exceptions, these guys are either Demicans or Republicrats.  We really do need a third party alternative or a major schism within one or both of the current parties.

Tue, 10/20/2009 - 13:53 | 104579 ghostfaceinvestah
ghostfaceinvestah's picture

Vote for and support candidates, not parties.  I would support both Ron Paul and Alan Grayson.

Likewise I have given money to Schiff.

If your choices suck (as in many cases), go down one layer and start supporting people at the primary level.

A third party isn't going to happen without a Revolution (a distinct possibility), but there is plenty that can be done within the existing infrastructure.

There are plenty of good candidates on both sides of the aisle, it is just that many never see the light of day, the party power structure pushes them aside before they even surface.  But they are out there.

Tue, 10/20/2009 - 12:35 | 104446 Commander Cody
Commander Cody's picture

Don't suffer the fools in Congress.  Tell them to wise up and get with the program to wrest our country back from the oligarchs or they are toast come election time.  Oh, and tell them often!

Tue, 10/20/2009 - 12:37 | 104448 lsbumblebee
Tue, 10/20/2009 - 13:45 | 104560 ZerOhead
ZerOhead's picture

The senate and house members should have their titles displayed in this simple way.

Sen. Jon Kyl  Republican Arizona

Sponsored by.... banking, healthcare, pharma, defence contactors... (insert corp names and amounts)

 

Tue, 10/20/2009 - 13:48 | 104569 ghostfaceinvestah
ghostfaceinvestah's picture

I would prefer:

Sen. Jon Kyl, Fascist, AZ.

Let's call a spade a spade.

Tue, 10/20/2009 - 15:25 | 104721 MinnesotaNice
MinnesotaNice's picture

lol... that would be great... who can we get to sponsor that legislation... Grayson maybe... Paul maybe...Schiff if he runs and is elected?

Tue, 10/20/2009 - 12:37 | 104449 A_MacLaren
A_MacLaren's picture

Co-Sponsors of S. 604 are up to 30 now...

Need to pressure ALL senators...

http://www.govtrack.us/congress/bill.xpd?bill=s111-604

 

Tue, 10/20/2009 - 12:41 | 104456 lizzy36
lizzy36's picture

looks like there are 2 sentors pushing for an audit....

0/20 12:37PM =DJ Two US Senators Seek Audit Of Federal Reserve

By Michael R. Crittenden Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--Two members of the U.S. Senate panel with oversight of the Federal Reserve are pushing for an audit of the extensive lending programs put in place by the central bank over the last year. Sens. Jeff Merkley (D., Ore.) and Bob Corker (R., Tenn.) introduced legislation Tuesday that would give government auditors the ability to audit the Fed's lending programs and eventually provide the names of firms that participated in the programs.
Tue, 10/20/2009 - 13:10 | 104492 chet
chet's picture

Kyl:  "I, therefore, support the independence that has been carved out for the Fed in matters of monetary policy to protect against that kind of abuse."

Alice in Wonderland:  "If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary-wise, what it is, it wouldn't be. And what it wouldn't be, it would. You see?"

Tue, 10/20/2009 - 13:38 | 104539 faustian bargain
faustian bargain's picture

This almost ranks up there with the video of Reid insisting that taxes, while you do have to pay them, are still voluntary. That's Reid, the majority leader. Leader. Of the majority party in the Senate.

 

edit: Top dog. Head Honcho. El Numero Uno.

Tue, 10/20/2009 - 13:46 | 104567 ghostfaceinvestah
ghostfaceinvestah's picture

Surprise, surprise, Fascists on both sides of the aisle.

If you haven't done already, support Schiff for Senate.  He may be a bit kooky sometime, but I can guarantee he is not a Fascist.  Fascists hate gold and sound money.

Tue, 10/20/2009 - 15:02 | 104686 Anonymous
Anonymous's picture

Also support Kokesh and Rand Paul.

Tue, 10/20/2009 - 15:02 | 104685 hooligan2009
hooligan2009's picture

I think we are all rather missing a key point. The Fed is politically motivated by using interest rates already. We would all acknowledge, I think, that the Fed has favoured an industry group (banking) at the expense of every other industry and consumer by letting a future interest bill on the debt on it balance sheet be paid by taxpayers, without any vote or representation. I think we should also acknowledge that the Fed is bailing out villains who over-borrowed (whether they are banks, corporates or consumers) by penalising those heroes who refused to cheat and instead, saved money. Since most savers are the elderly or baby boomers or those who wanted to save up to buy something rather than get ripped off by loan sharks, there is another political decision being made by the Fed. In these days of the convergence of fiscal and monetary policy, there is a glaring absence of democratic accountability of monetary policy that is entirely political and will result in a nation even more biased against honest heroes in favour of banks and villains. There is no vote for heroes, no accountability and no process for the owners of savings or properly run businesses to say, hey I don't think that you should do that. The Fed is expressing opinions when it sets monetary policy in the way it has, and these opinions are as much politically based as those decisions that favour one form of policy in the White House or Congress. This is the evolving need for representation based on taxes paid, remember this? "No taxation without representation". I think even the banks would struggle to dispute this.

Tue, 10/20/2009 - 18:04 | 104959 Anonymous
Anonymous's picture

@ hooligan 2009

Very well expressed.
Audit the Fed and prosecute the miscreants.

Tue, 10/20/2009 - 15:43 | 104744 Apocalypse Now
Apocalypse Now's picture

Senator-

You are a traitor to your country, your family, and your party and should be stripped of your citizenship.  You are not a representative of the people, you are a representative for the financial industry that paid for your election campaign.

How does it feel to go home and see your family and know that you are nothing but a purchased hack?  Do you think your family, your neighbors, and your parents are proud of you for showing that you have absolutely no spine?  With the TBTF banks and fed on the ropes, this is the chance to win back our freedom - both the politicians freedom and the republics freedom, and what are you doing - sucking your thumb!

If you feel a change of heart and want to be a real man, puff out your chest, have some self respect, and actually do what you feel is right regardless of contributions to your next campaign.  You know that the fed is giving money to their friends (friends of the printing press), looting the treasury, sending money overseas with no information provided, and we will pay taxes for it all - but you are OK with all of that because why, are you a friend?  The people you are supposed to be representing can only assume you are being bribed (campaign contributions) or blackmailed, since you appear to be a public enemy.

You disgust me and should be embarassed for yourself and that cheesy letter, you can wear a suit and look respectable but you deserve no respect.  The campaign contributions that you were given were just paper - you were bought with paper?  Character is something but paper, well, that's just made from trees.

Tue, 10/20/2009 - 15:50 | 104764 I am a Man I am...
I am a Man I am Forty's picture

Kay Hagan was a lawyer for Bank of America.  She's bought and paid for by banking lobbyists.

Bill Withers should do a remake and change the words, to "Ain't no sunshine until she's gone."

http://www.youtube.com/watch?v=tIdIqbv7SPo

 

Tue, 10/20/2009 - 16:20 | 104815 hooligan2009
hooligan2009's picture

well put Apocolypse Then! I was going to crack a funny and say "whats your point?" heh

Wed, 10/21/2009 - 00:01 | 105295 Apocalypse Now
Apocalypse Now's picture

More like Now&Later - Catch Joe Biden's latest admission that we are already in a depression.

Public ridicule and transparency will change the system - sunlight.

Tue, 10/20/2009 - 16:33 | 104837 Mark Beck
Mark Beck's picture

I read the letter over and over, and the political doublespeak is a thing to behold. Without the FEDs temptation to monetize fiscal debt Senator Jon Kyl would not get his paycheck.

Is Kyl saying that he (the government) is not qualified to oversee the Nations money. That perhaps the politicians are less trust worthy than the FED. God help us.

Kyl is a banking boob unfit for office.

Tue, 10/20/2009 - 16:42 | 104853 hooligan2009
hooligan2009's picture

Make the Fed pay tax? hmm..how would that work? no tax = no say...ponders in a work crazed daze..hang on I have to keep working so the Fed and the Government can take my money and sponsor villains..bleh

Tue, 10/20/2009 - 16:59 | 104887 hooligan2009
hooligan2009's picture

working a little harder now so my savings will earn zero interest and the villainous banks can have it at zero and charge me 5%..chit why am i doing this again?

Tue, 10/20/2009 - 17:26 | 104913 Anonymous
Anonymous's picture

Folks,

If you want to SEE a change in politics, vote OUT every incumbent irregardless of their political affiliation whether Democrat or Republican.

Don't be blindsided by their appeal for party loyalty etc.
and who is to blame for this or that.

Thats the classic strategy of 'divide and rule'.

If they don't support the "audit the Fed" legislation, that would confirm where their loyalties lie.

Talk to your family members, neighbours, friends and add momentum to the opposition to the way things are being done.

Tue, 10/20/2009 - 17:34 | 104925 Anonymous
Anonymous's picture

Well apparently Senator Kyl doesn't like you to comment about such things with bold statements on his facebook profile. he deleted my remarks. kinda goes hand in hand with the desire for opaque fed. he's a waste.

Do NOT follow this link or you will be banned from the site!