I thought this was an interesting video of Rep. Alan Grayson asking if the Federal Reserve is manipulating the stock market, because there is evidence someone is. Also about 4 minutes into the video the Federal Reserve counsel admits they are a private company, not a federal government agency as most people have been led to believe. Watch him squirm.
Well we can thank our Congress in 1913 for making the unconstitutional Federal Reserve (which is no more federal than federal express) in charge of our coining our money instead of Congress as the Constitution calls for.
This is what even the US is calling for at the G20 Summit in Pittsburgh, Pa.
The sun is setting on the US dollar as the ultra-loose monetary policy of the US Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC. (The Hongkong & Shanghai Banking Corporation)
A United Nations report recommended that a new one-world currency should be created to replace the dollar as the standard for foreign-exchange holdings in international trade.
“If the plan succeeds, the United Nations would effectively end up replacing the United States as the issuer of the one-world international currency used as the standard of foreign exchange to settle international trade transactions,” Red Alert reported. “The move would obviate the need for any nation state in the future to be the arbiter of world trade, marking yet another blow to national sovereignty on the path to one-world government.”
Smith, author of “Rediscovering Gold in the 21st Century,” has argued that the simplest solution for Americans looking to protect their wealth is to convert it from unstable dollars into gold, “the most stable currency in the world.”
“The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the UK – debt is racing up to 100pc of GDP,” he said
Crucially, China and rising Asia have reached the point where they can no longer keep holding down their currencies to boost exports because this is causing mayhem to their own economies, stoking asset bubbles. Asia’s “mercantilist mindset” of recent decades is about to be broken by the spectre of an inflation spiral.
The policy headache was already becoming clear in the final phase of the global credit boom but the financial crisis temporarily masked the effect. The pressures will return with a vengeance as these countries roar back to life, leaving the US and other laggards of the old world far behind.
A monetary policy of near zero rates – further juiced by quantitative easing – is completely incompatible with circumstances in most of Asia, the Middle East, Latin America, and Africa. Divorce is inevitable. The US is expected to hold rates near zero through 2010 to tackle its own crisis.
What is occurring is an epochal loss in the relative wealth and economic power of the old G10 bloc of rich countries compared to rising regions of the world. The euro, yen, sterling, Swiss franc and other mature currencies will be relegated along with the dollar in this great process of rebalancing, but the Greenback will bear the brunt.
The Fed’s super-loose policy is turning the dollar into the key funding currency for the next phase of the global “carry trade”, taking over the role of Japan during its period of emergency stimulus.
Mr Bloom said regional currencies would emerge as the anchor for their smaller trading partners, with China, Brazil, or South Africa substituting the role of the US. Australia is already linking its fortunes to China through commodity ties.
By Lyubov Pronina
July 10 (Bloomberg) — Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”
“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.”
The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.
The question of a supranational currency “concerns everyone now, even the mints,” Medvedev said. The test coin “means they’re getting ready. I think it’s a good sign that we understand how interdependent we are.”
Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.
Article 1 section 8:
“The Congress shall have Power To lay and collect Taxes……..To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;” (nothing in the Constitution about private banks like the Federal Reserve which isn’t federal at all.)
Congressman Ron Paul tells MSNBC that the very entity responsible for the economic crisis is now more powerful than Congress..
“They’re giving a tremendous amount of more power to the Federal Reserve – the very institution that created our problem. That’s about the way Washington works,” said the Congressman.
“Too much regulations to begin with, so they give it more. The Federal Reserve creates the problem, so we give them more power. It’s fiat money that’s the problem, so we allow them to double the money supply – you can’t solve the problems that way. That’s like saying you can take care of a drug addict by just giving them more drugs,” concluded Paul, adding that the lack of understanding about how the Federal Reserve created the problem and how the free market ought to work was the root of the crisis.
Responding to the Obama administration’s new regulatory reform plan, which will officially hand the Federal Reserve complete dictatorial control over the U.S. economy.Paul emphasized that no amount of regulation could compensate for a financial system created and controlled by the Federal Reserve that was completely unstable to begin with.
“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress,” said Paul.
As the LA Times reports, the government, in conjunction with the private Federal Reserve, would effectively have the clout to simply seize and take over any company it desires or considers a threat to the economy. Take over like General Motors?
In order to appease those opposed to the plan, such as Sen. Christopher J. Dodd, chairman of the Committee on Banking, Housing and Urban Affairs, the Obama administration has agreed to create a “watchdog” council of regulators to “advise the Fed”.
However, as former chairman Alan Greenspan has most recently pointed out, given that the Fed is an independent entity, and therefore accountable to no one, it will have the power to simply reject and overrule any advice it is offered.
Well it just isn’t going to stop is it, until this man turns America into a complete government controlled country….as in Communist country and Congress is just standing by and letting him. In fact most seem to be working with him. Once these huge beauocracies are created they are never undone.
President Barack Obama’s plan to create a U.S. insurance office after the $182.5 billion bailout of American International Group Inc. may take powers from the states that have overseen the industry for more than 135 years.
Obama called for the creation of a federal Office of National Insurance within the Treasury Department to monitor the industry, represent U.S. interests in international insurance agreements, and look for gaps in state oversight. The proposal was announced this week as part of Obama’s planned overhaul of the U.S. financial regulatory system.
The administration endorsed broader federal oversight of firms posing a threat to the financial system, and said more regulation may be needed for parts of companies outside the reach of state supervision. AIG’s Financial Products unit, which brought the company to the brink of bankruptcy after it sold credit protection to firms including Goldman Sachs Group Inc., wasn’t under the states’ umbrella.
“AIG highlighted gaps in our insurance regulatory system,” said Leigh Ann Pusey, president of the American Insurance Association, which has pushed for federal oversight for a decade. “We had 20 different states with authority over 72 insurance subsidiaries of AIG just in this country.” The states didn’t work together “until the crisis hit,” she said.
The creation of a federal regulator is supported by some of the country’s largest insurers, including Allstate Corp. and Travelers Cos. Some smaller firms are opposed. The National Association of Mutual Insurance Companies, a trade group for policyholder-owned companies, said in a statement it had “concerns with some of the language in the draft paper” released by the Treasury to coincide with Obama’s announcement.
How Big a Risk?
“I cannot point to a single insurance company that I believe is systemically risky,” Vaughan said. “We do know that insurance companies can be part of larger institutions that may be systemically risky. So we have to find a way to fit into this structure, and I think it takes a very balanced approach.”
Representative Melissa Bean, an Illinois Democrat, said AIG’s collapse illustrated the problems of insurers with holding companies outside the reach of state overseers. Bean has proposed legislation to create a national regulator that is optional for most insurers and mandatory for companies judged to pose a risk to the broader system.
AIG’s government rescue includes an investment of as much as $70 billion in preferred stock and warrants, $52.5 billion to buy mortgage-linked assets owned or backed by the insurer, and a $60 billion credit line.
Unprecedented, Uncomfortable
“This was an unprecedented level of federal commitment of taxpayer dollars without any oversight or authority, and that makes everyone uncomfortable,” Bean said in an interview. “Without the holding company data and the insights and expertise at a federal level, we can’t anticipate what those systemic risks might be in the industry.”
The insurance proposal is part of Obama’s larger plan to set up an agency that oversees consumer financial products, brings hedge funds and private equity firms under federal supervision for the first time and widens the U.S. Federal Reserve’s power to monitor large firms.
The president’s announcement of the proposal marked the beginning of a congressional process that may alter his plan, with some lawmakers opposing any expansion of the Fed’s power. Obama, who has called the “sweeping overhaul” of regulation one of his domestic priorities, said he wants to sign legislation by year-end.
While we’re trying to get all this info from the federal reserve by the hardest, maybe we should consider sticking to the Constitution for coining our money. The founding fathers warned us about the “central banks” long ago, because they had dealt with them back then and knew what would happen. Remember, “those who fail to from learn history are doomed to repeat it.”
The Constitution gives Congress the power to “coin” money….not to delegate it to “private banks”, i.e. federal reserve.
….To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;…….
The Federal Reserve’s balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant’s Interest Rate Observer, told CNBC.
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With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.
“If the Fed examiners were set upon the Fed’s own documents—unlabeled documents—to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”
Grant said he would support legislation currently making its way through Congress calling for an audit of the Fed.
Moreover, he criticized the way the Fed has managed the financial crisis, saying the central bank’s target rate should not be around zero.
“I think zero is the wrong rate for almost any economy,” Grant said, adding the Fed has “embarked on a vast experiment in moral hazard. Interest rates are the traffic signals in a market economy, and everything’s green. … You have to wonder whether these interest rates are the right clearing rate or rather they are the imposition of a central bank.”
Amid a disparity between analysts predicting there will be no rate hikes soon and the fed funds futures indicating tightening by the end of the year, Grant said he thinks the Fed indeed will begin raising rates as inflation creeps into the picture.
Fed funds futures have fully priced in as much as a half-point rise in the target rate from its current range of zero to 0.25 percent.
“If the hairs on the back of your neck stand up when there’s too much unanimity of opinion, then one begins to worry about this,” he said. “The Fed proverbially has been late.”
The Federal Reserve unveiled its most detailed picture yet of its record $1 trillion expansion of credit, as Chairman Ben S. Bernanke responds to congressional pressure for greater transparency from the central bank.
For the first time, the Fed announced details on the number of borrowers and the ratings of securities pledged as collateral for loans. The data come in a new monthly report released by the central bank today in Washington.
Officials still stopped short of identifying the firms, a measure called for by some lawmakers and the subject of freedom-of-information requests and lawsuits.(Which I might add, the federal reserve it not bound to because it isn’t federal…..it’s private.)
Fed officials believe naming companies would undermine the central bank’s efforts to stabilize the economy, a senior Fed official said at a press briefing today.
Congressional Votes
The Fed’s effort at greater transparency in its emergency lending programs is a response to an April 2 nonbinding budget amendment sponsored by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and the panel’s ranking Republican, Alabama Senator Richard Shelby, Bernanke said. That proposal passed 96-2.
The Fed didn’t mention the tougher measure, also nonbinding, sponsored by Sanders, which passed 59-39 on the same day. Bloomberg News filed a lawsuit against the Fed in November seeking the names of borrowers.
Sanders, in a statement last month, threatened to pass the measure again “in a stronger form” if Bernanke failed to accept it. Bernanke told Sanders in February that identifying borrowers would be “counterproductive” and result in “severe adverse consequences for the economy.”
Read entire article at Bloomberg.com
This is how matters quickly escalate in geo-finance. China’s suggestion – backed by Russia, Brazil, and India, and clearly aimed at breaking US dollar hegemony – is making its way onto the agenda of the G20 Summit next week. ‘Dollar-dämmerung’ no longer looks so far-fetched.
China’s Communist Party seems to fear that the Federal Reserve is orchestrating a beggar-thy-neighbour devaluation – and a disguised default on America’s foreign debt – by resorting to the nuclear option of printing money to buy US Treasury bonds.
China’s proposal is to activate the IMF’s power to issue Special Drawing Rights (SDRs). The IMF would be groomed as de facto central bank for the planet. The SDRs would gradually become an “accepted means of payment”. Call it the ‘globo’.
n theory, this world reserve bank would be above politics. China’s plan suggests a resource currency along the lines of the “Bancor” floated by Keynes at Bretton Woods. This was anchored on 30 commodities, giving it a broader base than the Gold Standard. Such a currency would prevent the “credit-based” debauchery of today’s fiat system, says Mr Zhou.
The China-Russia plans may never come to much. As President Barack Obama put it, the US is going through a “rough patch” but still commands the world’s biggest economy, under a stable democracy and the rule of law. He might have added that it will largely avoid the aging crisis already dulling Japan’s dynamism, and soon to ensnare Germany, Italy, above all China.
For all its bluster, Beijing must move with care. After years of export-driven mercantilism China is even more dependent on US markets than America is dependent on Chinese capital. The risks of currency and trade conflict are not symmetric. The hegemon must prevail.
But 10 years hence the picture may look different. If the G20 opens the door wide enough next week, a world currency may yet come into being.
Entire article @ Telegraph.co.uk
Steve Hilton
babybttrfly
Mike
