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.