If after reading the two previous posts on the Federal Reserve as saviour of the western world and the Federal Reserve as responsible Central Bank willing to accept bankrupt equities as collateral in its discount window, left your with any unanswered questions, fear not for there is light at the end of the tunnel, and it is called Kay Hagan, Democratic Senator from North Carolina. Senator Hagan believes S 604/HR 1207 is unnecessary: you see the "immediate and broad disclosure that S. 604/HR 1207 would require, could disrupt the financial markets, and jeopardize our country's international finance relationships." Which presumably means that Senator Hagan grasps, comprehends and can explain in simple English such things as $600 billion worth of liquidity swap lines to foreign Central Banks, and the need for those. Additionally, she is aware that the Fed's discount window on occasion holds stocks of bankrupt companies as collateral. Not only that, but it is likely the case that professing a deep understanding of the functions of the Federal Reserve, Senator Hagan is willing to stake her political career and the well-being of her children in guaranteeing that the kind of systematic interference that the Fed has perpetrated via a $6.5 trillion dollar funding gap at foreign CBs is not only tolerable, but in fact beneficial for the US economy, and that a result of the dollar printer's constant and aggressive intervention in global and domestic monetary policy, the likelihood of major risk flaring episodes occurring in the future is zero.
After all, without definitive answers to these questions what naive and gullible Fed marionette would be willing to go to the public, defending legislation to perpetuate the opacity of the actions of the Federal Reserve, and in fact become a proxy for the anger of whatever is left of America's 150 million strong (and declining) middle class for if and when the entire situation disintegrates (which, based on simple physics, it will).
Which is why we solicit all our readers to contact Senator Hagan with a clear list of questions vis-a-vis the Federal Reserve (and if you have a problem coming up with some, feel free to copy some from Alan Grayson's key five information requests to be answered before Bernanke is reconfirmed). Senator Hagan may be reached at 1-877-852-9462. Once she gets back to you with answers, please forward those on to us so we may immediately publish them for broad consumption as many do not share Ms. Hagan's level of insight and moral certitude in the actions of the Federal Reserve.
Letter sent out earlier today by Senator Hagan slamming the Federal Reserve Sunshine Act:
October 19, 2009
Thank you for your message expressing support for the Federal Reserve Sunshine Act. I appreciate hearing your thoughts on this important issue. I apologize for my delayed response.
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.
Kay R. Hagan
United States Senator, North Carolina
Please do not reply to this email. Instead, if you have further questions, please visit www.hagan.senate.gov and fill out my web form for your inquiry. Thank you.