America’s Rating as a Free Country Continues to Plummet

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This is a sad article for me to post….we are losing our freedoms folks.

Freedom can be defined in many ways. However, one of the greatest indicators of freedom and liberty is economic freedom. True free-market capitalism is the basis of individual liberty. However, America is no longer a top 5 contender, and we haven’t been for a years. Actually, America is barely even in the top 10. The 2012 Index of Economic Freedom study reports that America continues to fail. Who took first place in economic freedom in 2012? The



answer may surprise you. It was Hong Kong. Hong Kong’s score was an 89.9%, which was a 0.2% increase from 2011. Following Hong Kong in order: Singapore, Australia, New Zealand, Switzerland, Canada, Chile, Mauritius, Ireland, and finally America at number 10. America’s economic freedom score was a 76.3%, which is down 1.5% from 2011. In fact, America is no longer even rated as a “Free” nation, which is a title granted only to countries with a score above 80%, but a “Mostly Free” nation. Right behind America rated at number 11 is Denmark. Denmark places the highest total tax pressure on its citizens in the world.

This study takes the following 10 benchmarks into account when rating countries: Freedom from corruption, property rights, individual fiscal freedom, restrained government spending, monetary freedom, business freedom, labor freedom, trade freedom, investment freedom, and financial freedom. As mentioned earlier, economic freedom is more vast than it may sound on the surface. It includes all of the above benchmarks, which affect our everyday lives. Money is not the root of all evil; however it is at the root of our lives and if we are not economically free one must ask themselves if our freedom simply a fallacy. There are 9 other countries more economically free than America and our rating is dropping drastically. In 2010, America was rated number 8.  With the numbers trending down and all of the benchmarks trending towards negative values America’s rating should not be expected to improve when the 2013 ratings are released.

There can be no liberty unless there is economic liberty. -Margaret Thatcher

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Fed Sends Thank You Letters To Congress For Letting Them Destroy Our Economy In Secret

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It was Politico that first broke the story about the thank you letters that Federal Reserve Chairman Ben Bernanke sent to five members of Congress back in July.  Bernanke acknowledged in the letters that there was never any worry that the “Audit the Fed” bill would actually get through Congress and be signed into law, but he was still extremely grateful that a number of members of Congress got up and publicly denounced the bill….

In July, the Fed chairman sent letters of gratitude to five Democratic members of Congress after they delivered speeches on the House floor urging fellow lawmakers to reject the “Audit the Fed” bill authored by retiring Texas Republican Ron Paul, the central bank’s chief antagonist.

Their efforts failed to defeat the bill, but they were not in vain, at least in Bernanke’s eyes.

“While the outcome of the vote was not in doubt, your willingness to stand up for the independence of the Federal Reserve is greatly appreciated,” Bernanke wrote in the letters, which were obtained by POLITICO through a Freedom of Information Act request.

So who did Bernanke send those letters to?

According to Politico, the thank you letters were delivered to U.S. Representatives Barney Frank, Elijah Cummings, Melvin Watt, Carolyn Maloney and Steny Hoyer.

By refusing to take action against the Federal Reserve, the U.S. Congress is silently endorsing their incredibly foolish policies.

Sadly, most Americans don’t even realize that the Federal Reserve has more control over our economy than anyone else does.  Most Americans that are actually concerned about politics are busy arguing over whether Obama or Romney will be better for the economy when it is actually the Fed that controls the levers of economic power.

Just think about it.

The Federal Reserve played a major role in creating the housing bubble which severely damaged our financial system a few years ago.

As the chart below shows, after 9/11 the Federal Reserve dropped interest rates to historically low levels.  This allowed potential home buyers to get into much larger mortgages, and the big banks (which the Fed supposedly “regulates”) started making home loans to almost anyone with a pulse.

When interest rates started to go back up to normal levels in 2005, many home owners discovered that their adjustable rate mortgages started to become much more painful.  By 2007, we started to see a massive wave of mortgage defaults.  In 2008, the financial system crashed.

In response to the financial crisis of 2008, the Federal Reserve dropped interest rates to record low levels.  The effective federal funds rate is essentially at zero at this point, and the Fed has promised to keep interest rates at ultra-low levels all of the way into 2015.

But didn’t artificially low interest rates cause many of our problems in the first place?  The central planners over at the Fed are convinced that this is the right course for our economy, but can we really live in a zero interest rate bubble indefinitely?  Won’t this eventually cause even greater problems?….

The Fed is also destroying our economy by recklessly printing money.

Once upon a time, the U.S. monetary base rose at a very steady pace.  But since the financial crisis of 2008, Ben Bernanke has been flooding the financial system with money and this has caused an unprecedented explosion in our money supply.

It isn’t too hard to see from this chart what the foolish “quantitative easing” policies of the Federal Reserve have done to our monetary base….

Fortunately a lot of the money from previous rounds of quantitative easing is being stashed by the big banks as “excess reserves” with the Federal Reserve, but when that money starts flowing into the “real economy” (and it will at some point), we are going to have a major problem on our hands.

But more than tripling our monetary base was not enough for Bernanke.  He recently announced yet another round of quantitative easing which he says will last indefinitely.

Basically, Bernanke is taking a sledgehammer to the U.S. dollar.  Our currency is being systematically destroyed, and the U.S. Congress is standing by and doing nothing.

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Media Blackout: Ron Paul Calls Out Herman Cain For Lie Over Fed Audit During GOP Debate

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Well I believe this is a first for me. I don’t think I’ve ever posted an article from the Huffington Post ….but here goes…..because have you heard about this on CNN or Fox News?  I don’t think so, at least not as of today.

I might add, I just found out not too long ago that Herman Cain was head of the Kansas City Federal Reserve office…folks that is not a good sign for Mr. Cain. To me, it means he’s not the friend of the Tea Party like we might think he is. We better be careful of voting for him based on this fact alone.

Do you still stick by this, that that this is frivolous, or do you think it’s very important? Sixty-four percent of the American people want a full audit of the Fed on a regular basis.”

Cain said that, in fact, he didn’t oppose an audit, and that when he served on the Fed it was a different institution. “You have misquoted me. I did not call you or any of your people ignorant. I don’t know where that came from,” he said. “You’ve gotta be careful of the stuff you get off the Internet.”

A careful check of the Internet, however — guided by the Paul campaign — turns up audio of Cain saying just what Paul accused him of saying. As recently as 2010, long after the Fed began engaging in the lending Cain says he opposed, Cain belittled those calling for an audit.

Cain said, “Some people say that we ought to audit the Fed. Here’s what I do know. The Federal Reserve already has so many internal audits it’s ridiculous. I don’t know why people think we’re gonna learn this great amount of information by auditing the Federal Reserve. I think a lot of people are calling for this audit of the Federal Reserve because they don’t know enough about it. There’s no hidden secrets going on in the Federal Reserve to my knowledge,” he said.

Glenn Beck’s Decline: What Caused It?

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What’s going on with Glenn Beck? Or is this the elite’s propaganda trying to get rid of Beck?

Glenn Beck’s Decline: What Caused It?

Six months ago, Glenn Beck held his “Restoring Honor” rally on the
National Mall, drawing a crowd of about 100,000. Newspapers and
magazines featured the rally on front pages around the country. The next
month, The New York Times Magazine devoted a cover story to him. “In record time,” the piece observed, “Beck has traveled the loop of curiosity to ratings bonanza to self-parody to sage.”

Just six months later, however, Beck seems to have traveled somewhere
else entirely. His ratings and reputation are in steep decline: His
show has lost more than one million viewers over the course of the past
year, falling from an average of 2.9 million in January 2010 to 1.8
million in January 2011. He now ranks fifth among Fox’s six weekday talk
hosts, trailing lesser-known personalities like Shepard Smith and Bret
Baier. Beck’s three-hour radio show has been dropped in several major
cities, including New York and Philadelphia, and has seen a ratings
decline in most other markets.

Beck’s commercial viability also seems to have suffered. His viewership
among 25- to 54-year-olds, a prized advertising demographic, declined by
almost one-half in 2010. An advertising boycott organized by liberal
groups has caused over 300 companies—including Procter & Gamble,
UPS, Coca-Cola, and Wal-Mart—to stop showing commercials during Beck’s
show. The Beck brand isn’t what it used to be off the airwaves either:
His most recent non-fiction book, Broke: The Plan to Restore Our Trust, Truth and Treasure, was his first book in eight years not to reach number one on The New York Times best-seller list.

Recently, however, conservatives have been criticizing Beck openly.
Bill O’Reilly, who feted him for an hour after the Restoring Honor
rally, has rapidly become more and more dismissive. The Weekly Standard’s Bill Kristol has criticized Beck’s “rants about the caliphate taking over the Middle East.” Conservative Washington Post blogger Jennifer Rubin called Beck a “ranting extremist,” and former Bush administration staffer Pete Wehner wrote for Commentary’s website, “If conservatism were ever to hitch its wagon to this self-described rodeo clown, it would collapse as a movement.”
What happened? Beck built a following by making outlandish,
conspiratorial claims—about ACORN, Obama, and so on. (Bizarrely, his
extremism may have augmented the number of curious liberal viewers
tuning in: A Pew Research Center poll from last September found that 9
percent of Beck’s Fox viewers identified as Democrats, and 21 percent as
moderates or liberals.) But “anytime you have extreme stimulus,” says
Alexander Zaitchik, author of the unauthorized Beck biography Common Nonsense, “you’ll have diminishing returns.”

To be fair, Beck’s decline may be stark in part because of the
extraordinary rapidity of his earlier ascent. “What he was doing in his
first two years was unprecedented,” says Zaitchik. And Michael Harrison
of Talkers, a radio trade publication, cautions that, “in radio,”
one has “to look [at] over a year’s ratings. … It’s just too soon to
determine anything.”

Then there is always the possibility he will still recover. Beck has
successfully changed his persona before: He was a morning drive-time DJ
on Top 40 stations long before becoming a political pundit. “He’s a
showman,” says Harrison. “I have no doubt in my mind” he’ll adapt. On
the other hand, maybe Beck really has reached a tipping point.
Demagogues, after all, have a way of outwearing their welcome.

New Republic

The Federal Reserve: History of Lies, Thievery, and Deceit

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This is a very interesting and factual article:

The Federal Reserve: History of Lies, Thievery, and Deceit 

by Dr. Ken Matto

Former Congressional Candidate, 6th District N.J.

“I place economy among the first and most important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt.”

-Thomas Jefferson

Did You Ever Wonder Why The National Debt Keeps Going Up and Up?

One of the most ungodly and fraudulent institutions ever perpetrated on the American people and the world, is the Federal Reserve System which through deceit became the central bank of the United States in 1913. The idea came about on a meeting in Jekyll Island off the coast of Georgia in 1910. The bankers in this country, especially J.P. Morgan, created a currency panic in 1907 in order to get the American people to accept the idea of a central bank.

A central bank already existed in England from as far back as 1694. The Rothschilds completely dominate the banking system. It is estimated their wealth goes into the trillions.

Baron Nathan Mayer Rothschild boasted:

• “I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain’s money supply controls the British Empire, and I control the British money supply.”

The idea of a central bank is to so enslave the people of the country to a debt money system that you continue to collect taxes continuously which just covers the interest. The duped people of the United States are paying about $400 billion dollars per year to the IRS which is the collection agency for the Federal Reserve. By the way, the Federal Reserve is a privately owned bank with 10 private members. The Chase Manhattan Bank is a member which is owned by the Rockefellers who are Rothschild Agents. I will list the ten member banks at the end of this article..

At this point the citizens of the United States falsely owe these lemmings over 13 trillion dollars. Have you ever asked the following question?


Read the entire article @ Scion of Zion

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Where is the Money Mr. Bernanke?

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This is Rep. Alan Grayson, a liberal Democrat from Florida, who was defeated this election.  He is well known in Washington for agreeing with Ron Paul’s questioning of the Fed.  Watch this and the hair on the back of your neck will raise.  Who knows where the money is going? This is the Chief Inspector General for the Fed, Elizabeth Coleman. Here is the ineptness of Washington at it’s best:


You mean GM and Chrysler weren’t the only ones?

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So, Ford was bragging about not taking any bailouts, GM was the only bad one…and we were sending US dollars to bail out foreign carmakers too?  Well, why not, we apparently are going to bail out the EU too.  Sure, let the taxpayers suffer, let the unemployed suffer, but by golly, lets help everyone outside this country.  I can’t wait for the progressives to go home..

Ford, BMW, Toyota Took Secret Government Money

Ford, BMW, Toyota Took Secret Government Money In the depths of the financial collapse, the U.S. Federal Reserve pumped $3.3 trillion into keeping credit moving through the economy. It eventually lent $57.9 billion to the auto industry — including $26.8 billion to Ford, Toyota and BMW.

The Fed on Wednesday was forced to reveal the identity of the companies it aided during the crisis, after contending to Congress that keeping their identities and the details of such lending secret was essential. Much of Wall Street, and corporate giants such as General Electric, Harley Davidson and McDonald’s, took advantage of the Fed’s help. We’ve done the math on how the Fed propped up the auto industry.

While Chrysler and General Motors had to go to Congress to beg for cash in 2008, every other automaker’s finance arm was having trouble as well. Typically, once they lend money to a buyer, they sell the loan, get the cash upfront, then pump the proceeds back into the business. They also take out short-term loans called commercial paper that keeps the day-to-day business afloat. The crash cut the circuit, raising the chances the automakers couldn’t make loans to buyers and keep selling new vehicles.

That’s where the Fed stepped in. In normal circumstances, the Fed only lends money to banks, leaving the decisions about who should get credit to them. But when the financial markets started to collapse in late 2008, the Fed set up several programs to lend money directly to corporations, a highly unusual step.

According to the data, from October 2008 through June 2009 the fed bought $45.1 billion in commercial paper from the credit arms of four automakers – Ford, BMW, Chrysler and Toyota – along with GMAC (the former General Motors credit arm). Of those, Ford sold the most, with $15.9 billion.

The Fed also lent $13 billion to investors who bought bonds backed by loans to new car buyers from automakers and banks. The Fed made clear that while investors got the loans, the move was meant to keep the lenders in business; the credit arms of Ford, Chrysler, Nissan, Volkswagen, Honda and Hyundai all benefited directly.

Ford spokeswoman Christin Baker said the two programs “addressed systemic failure in the credit markets, and that neither program was designed for a particular company, or even a particular industry.” Ford Credit has disclosed through SEC filings and conference calls with media and investors that it was taking part in both programs.

BMW told Bloomberg that the Fed lending “supported our financial profile and offered us an additional funding source, especially at times when the money markets and capital markets did not function properly and efficiently.”

According to the Fed, the commercial paper loans have been paid in full, while some $2 billion remains outstanding on loans for bond investors.

The secrecy surrounding the details of the loans only masked how much aid corporate America and Wall Street needed. While General Motors and Chrysler took the brunt of the blowback for relying on government handouts, the reveal of the Fed numbers show that a far bigger slice of the U.S. auto industry needed help.

Obama Defends Insane QE2 Takedown of Global Economy

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That’s right the Federal Reserve has already printed enough money… let’s just print some more….can you say “more” inflation ….and perhaps “hyperinflation”?

Obama Defends Insane QE2 Takedown of Global Economy

In response to China and Russia complaining about the insanity that is QE2, Obama has defended the Federal Reserve. “U.S. President Barack Obama defended the Federal Reserve’s policy of printing dollars on Monday after China and Russia stepped up criticism ahead of this week’s Group of 20 meeting,” reports Reuters today. “I will say that the Fed’s mandate, my mandate, is to grow our economy. And that’s not just good for the United States, that’s good for the world as a whole,” Obama said during his extravagant trip to India.

Should we be surprised that Obama’s mandate is the same mandate of the international banksters that own the Federal Reserve and have pawned it off for nearly a century as an agency of the U.S. government? No, of course not. Barry Obama is a script-reader for the global elite. He will read anything that scrolls across his teleprompter.

As Michael Snyder of the Economic Collapse noted last week, many economists now believe that the Federal Reserve has crossed the Rubicon by announcing another wave of quantitative easing.

“Have we now reached a point where the Federal Reserve is simply going to fire up the printing presses and shower massive wads of cash into the financial system whenever the U.S. economy is not growing fast enough? If so, what does the mean for inflation, the stability of the world financial system and the future of the U.S. dollar?” writes Snyder.

It means the end of the dollar as the world’s reserve currency. It means another round of completely insane and suicidal debt ultimately owed to banksters.

According to the financial talking heads in the corporate media, printing money out of thin air and creating astronomical debt piled upon previously astronomical debt will stimulate the economy and get things working again. “The sad truth is that the Federal Reserve is not trying to build an economic recovery on solid financial principles. Rather, what the Federal Reserve envisions is an “economic recovery” based on new debt creation,” writes Snyder.

“If 1.8 trillion dollars didn’t work before, why does the Federal Reserve think that 900 billion dollars is going to work now? This new round of quantitative easing will create more inflation and will cause speculative asset bubbles, but it is not going to fix what is wrong with the economy.” In fact, it will make things worse, far worse, for the average citizen.

“Most Americans have absolutely no idea how fragile the world financial system is right now. Once the rest of the world loses faith in the U.S. dollar and in U.S. Treasuries this entire thing could completely unravel very quickly.”

In short, the situation is the exact opposite of what Obama says it is. After the Fed prints around $600 billion and uses it to purchase government bonds, the skids will be greased for a fall of the global economy. (In my opinion, I think this is on purpose to create their World Government and new world currency-MD) China and Russia know this. And this is why they are complaining at the G20 about the insane QE2 death spiral about to take place.

Ron Paul believes QE2 represents the beginning of the end of the Federal Reserve system. “I think the Fed will self-destruct,” Paul told CNBC.

“People will desert the dollar. I think the Chinese are hinting that already. They are not wanting our dollars as much as raw materials. This is a deeply flawed monetary system. Here we have a small group of people who can create $600 billion with the stroke of a pen… I don’t know where people are coming from to think that this can work. What really astounds me me is how tolerant the people are, the people in Congress and the financial market, where did this authority come from? Now somebody outside of the government can spend trillions of dollars and not think anything about it. It doesn’t work, it’s a failure. And next year it will be more. Bernanke is very clear on what he is going to do — he is going to create money until he gets economic growth and there is no evidence to show that just creating money causes economic growth.”


Outside opinions…

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This is a Very interesting read and well worth your time.


Written by Dr. Jack Wheeler
Thursday, 17 June 2010

It was a sobering dinner party last night (6/16).  Hosted by a London billionaire in his exquisite home – a Boccaccio hung on the wall behind me – the wine flowed liberally, but the conversation between the ten of us was stone-cold serious.

There were lighter moments, as when I proposed a toast to “a great hero of Europe – Geert Wilders.”  Every one raised their glass in a smile, but the biggest smile was that of a spectacularly gorgeous super-model (you’ve seen her in many a high-fashion ad).  She was from Holland.

Then a well-known Hollywood producer raised his glass to toast his hero – Ronald Reagan.  “We need him again,” he commented.  I guarantee you’ve watched one of his TV shows.

But when a self-made billionaire with an 11-figure private equity fund and a clear grasp of Austrian economics starts to talk about America’s prospects, you listen.  So we all listened.

Being in London, he started there.  “To call (new Brit PM David) Cameron a disaster is like calling Hurricane Katrina a squall.  He’s as much a Conservative as I am a Moslem.  I have already started preparing to relocate to Switzerland.  If he succeeds in his current push to raise capital gains taxes from 18% to 50% — and it looks like he will – the British economy and the London real estate market will crash.  The best play around will be to short the pound.

“In short, Cameron and Osborne (George Osborne, David Cameron’s Oxford classmate and now in Cameron’s cabinet as Chancellor of the Exchequer, equivalent to our Treasury Secretary) lead secret lives.  Just as they hide from the public that they are homosexual behind the pretense of a marriage, they hide their liberal agenda behind the pretense of being conservative. They will destroy Britain’s economy just as sure as Obama is destroying America’s.”

There followed a spirited exchange about financial escape hatches —  if the euro, the pound, and the dollar fall off their respective cliffs, where does anybody go?  The time-worn adage of “buy gold, buy silver, buy Swiss Francs” may work for individuals, but world equity markets are in a trap from which there is no clear exit.

One opinion was, “The best run governments around today are those of Canada and Singapore – having one’s savings denominated in their currencies is not a bad idea.”  Then we got back to America.

“You know what my biggest fear is?” our host asked.  “It’s not really Obama, for what he’s done is to accelerate what the liberals have been slowly doing for decades – so quickly that their socialism is obvious to everyone.  Which means the solution is obvious to everyone.  My biggest fear is that voters will give Republicans the power to repair America on November 2nd – and the Republicans won’t have the courage to do it.”

All I could respond with was “Ouch,” to shake my head and sigh.  I mentioned an email I just got from a friend of many years in Las Vegas.  He’s a very successful banker and businessman who knows everyone in Republican politics in Nevada – and I had asked his opinion of how Sharron Angle might possibly beat Harry Reid.  The reply I got back shocked me.  He will do nothing to help her, he said, as she is too “extreme.”

Why is she considered extreme? our host asked, not on intimate terms with Nevada primary elections.  Because she wants a government restricted to constitutional activities, I replied, which means, for example, eliminating such things as the Department of Education and the Environmental Protection Agency.

Our host leaned over the table to look at me as if his eyes were lasers.  “Jack, you need to explain something to your friend.  You need to explain something to America and all those Congressmen you know.  Amputate or die.  That’s the choice America has right now.  That’s the choice Republicans will have after November 2nd, because they’re the only surgeons around who can do the surgery.”

Everyone was quiet so he continued.  “Gangrene will kill you.  If you don’t amputate a finger or other limb that’s gangrenous, it will spread bacterially [via Clostridium perfringens], and you will die.  Look at these unconstitutional growths of government on the body public as gangrenous infections that have to be amputated for the body to continue living.”

He looked around the table at all of us.  “You know that I know all the main players in the world economy.  Some are fools who don’t know what they are doing like Strauss-Kahn (Dominque Strauss-Kahn, head of the IMF, International Monetary Fund), some are not like Trichet (Jean-Claude Trichet, president of the European Central Bank).  America has no adult on the economy’s lever – Geithner is more of a hopeless disaster than Bush’s Paulson was, and Bernanke is worse than Greenspan.

“So I don’t know any player whose smarts I really respect who has much hope for America, who doesn’t see an alternative future than the destruction of America’s wealth through hyper-inflation.  They think elephants will fly before Republican elephants will do what is necessary if the voters give them the power to do it.”

He looked at me – so everyone else did.  “Are they wrong, Jack?” The question hung in the air as I felt my face redden.

“Thanks, pal,” I responded with a smile to gain a little time.  Everyone did laugh for just a moment, then I had to jump into the waiting silence.  Here’s what I said.

“The situation is dire, there is no doubt, the gravest since the Civil War.  The only hope I see is with the anger of the TeaPartyers.  That anger is directed just as much towards Republican cowards as towards Democrat fascists.  We don’t have to wait long to see the power of that anger.  Just six days from now (6/22) in South Carolina, Nikki Haley the TeaPartyer is going to wipe out Gresham Barrett the RINO, even though the state GOP establishment is doing everything slimy to smear her.

“I think your player-friends have to see things not as Democrat vs. Republican but as the Court Party – the establishment in power be they Democrat or GOP – vs. the Country Party, the TeaPartyers who want an end to all the corruption, Dem or GOP.  Your players are part of the Court Party.  The TeaPartyers you might think are like those who led the French Revolution – but they are like those who led the American Revolution instead.

“Yes, the TeaPartyers own most of the 300 million guns in America, but they don’t want blood unless there’s no choice.  Note the ‘unless.’  November 2nd better be an honest election.   What the TeaPartyers must grasp is Churchill’s call after the battle of El Alamein [November 1942], that November is only ‘the end of the beginning.’

“So you are right – the only hope is radical surgery to cut out all the metastasizing cancer, to amputate unconstitutional gangrene, or another metaphor, to be like Alexander and cut the Gordian Knot with a swordstroke.

“But the question really is not whether Republicans have the courage to perform the surgery, to defund ObamaCare, to defund the entire Obama agenda, to defund entire agencies like the Department of Education, Energy, and the EPA.  It is whether the TeaPartyers have the courage and capacity to force the Republicans to. I mean, how is eliminating the EPA extreme, and EPA unconstitutional fascism not extreme?  We’ll find out, because they are America’s only hope now.”

Everyone waited for our host’s response.  “And the hyper-inflation?  The debt’s already baked in the cake, no matter what future spending is cut.”

“Hyper-inflation is only another word for total default.  The only way to avoid it is a government default on its debts only.  Then we can switch from a worthless fiat currency to an asset-backed currency.”  I smiled.  “Gold brings freedom.”

He smiled in return and raised his glass.  “We can all drink to that.  To gold, to freedom, and these TeaPartyers – may Jack be right about them.  May they amputate fascism before the fascists amputate our freedom.”


Who Was the Largest Profit Maker in 2009 ?

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I heard this on last Thursday’s program Financial Issues on American Family Radio. When Dan   Celia asked the question of who do you think made the largest profit of anyone in 2009 I was thinking Wal-Mart,Exxon, Goldman Sachs or something like those. But I was wrong, it was the US Treasury Dept. Yes, you heard right, the US Treasury Dept.

Record Profit for U.S. Federal Reserve in 2009

The U.S. Federal Reserve, the central bank for what remains the world’s largest economy, announced on Tuesday that it made a record profit of $52.1 billion in 2009, enabling it to pass on $46.1 billion, another record amount, to the Treasury Department.

The Federal Reserve generated record profits last year, reflecting money made off its extraordinary efforts to rescue the country from the worst economic and financial crisis since the 1930s.

The central bank announced Tuesday it logged a record windfall of $52.1 billion. Of that total, a record $46.1 billion gets turned over to the Treasury Department.

It marks both the biggest profit and payment to Treasury on records dating back to 1914, when the Fed began operating. The previous record payment turned over to the Treasury — of $34.6 billion — was registered in 2007. In 2008, the Fed reported a payment of $31.7 billion.

The Fed’s efforts to end the crisis are separate from the $700 billion taxpayer-funded financial bailout program authorized by Congress in 2008 and overseen by the Treasury Department.

Originally set up to shore up banks, money from the publicly-derided program also has been doled out to rescue other types of companies, including General Motors, Chrysler and GMAC. President Barack Obama is weighing a levy aimed at recovering tax dollars from government-rescued financial institutions.

The bigger profit reported by the Fed came from $46.1 billion in earnings from the securities it held last year.

Such income went up as the Fed’s holdings of securities mushroomed.

The Fed launched several securities-buying programs last year to help revive the economy. Its goal is to drive down rates on mortgages and other consumer debt.

Under one program that ended last year, the Fed snapped up $300 billion worth of government debt. Under another program, the Fed is on track to buy $1.25 trillion in mortgage securities from Fannie Mae and Freddie Mac, and an additional $175 billion in debt issued by the mortgage giants. Those programs have boosted the value of securities held by the Fed.

The Fed faces a risk, however. The Fed could lose money if the central bank had to sell those securities and their prices were to fall. The Fed might need to sell the securities to sop up some of the unprecendented amount of money pumped into the economy during the crisis.

The Fed is funded from the interest earned on it vast portfolio of securities. It is not funded by Congress.

After covering its expenses, the Fed gives what is left over to the Treasury Department.

Besides the income from its securities, the Fed said it earned $5.5 billion from holdings related to the takeover of investment firm Bear Stearns and insurance company American International Group. The Fed also earned $2.9 billion from loans extended to banks, investment houses and others.

Fed posts record $52B profit for 2009 with $46B going to Treasury

Furthermore currency swap arrangements with 14 other central banks around the world and investments held in currencies other than the dollar brought in $2.6 billion. One of the economic experts who spoke to the Washington Post about what was then the anticipated Fed profit for 2009, was Vincent Reinhart, a scholar at the American Enterprise Institute and a former official at the Fed. He said:

This shows that central banking is a great business to be in, especially in a crisis. You buy assets that have a nice yield, and your cost of funds is very low. The difference is profit.

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