• How you doing Mike. I've been a little preoccupied with work. I try to pop in once in awhile.

    I kind of wonder what would happen if they did a little seperation. Kind of like the Church and state....Bank and state and see which fails first.

    December 17, 2009 at 10:32 a.m.

  • Hello JR74,longtime

    You could be on to something.

    December 16, 2009 at 11:45 a.m.

  • Mike said..
    "The Federal Reserve System is a hybrid agency; part government agency and part of the banking system."

    There is your problem right there. Neither one of those to systems can opperate well. Just sayin.... :)

    December 16, 2009 at 9:18 a.m.

  • The Fed is currently subject to an audit:

    "The Federal Reserve's ultimate accountability is to Congress, which at any time can amend the Federal Reserve Act. Legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives, and twice annually on its plans for monetary policy to the banking committees of Congress. Fed officials also testify before Congress when requested.

    To ensure financial accountability, the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor. In addition, the Government Accountability Office, as well as the Board's Office of Inspector General, can audit Federal Reserve activities."

    The Fed has made some mistakes, but it now has become the whipping boy after being called in to clean up another mess caused by Congress. And after doing this Congress wants more control of the Fed - put the inmates in charge of the asylum?

    December 12, 2009 at 6:05 p.m.

  • Thanks for the reply Mike.

    Hopefully the balloon can be deflated slowly this time.

    As far as a complete congressional audit of the Federal Reserve goes,I am not sure.

    Much like my comments about complete congressional oversight and review of the CIA that was called for last year. I do not think it would be in Americas best interest to have 535 or so congress people privy to all information.

    The Fed is a little different than the CIA, but no one can say to me that if that many congressmen, plus their aids and office staff, know the exact workings of either agency, that leaks will not occur, that possibly could be detrimental to the US.

    December 12, 2009 at 4:47 p.m.

  • Legion357

    Absolutely, but you forgot one variable …10% unemployment.

    Ben Bernanke said he would make adjustments on the interest rates to avoid high inflation, but right now there are no indications of that.

    In the case of Alan Greenspan, as long as the economy was going strong, no one wanted to be responsible for bringing it all to a halt until it was too late.

    I see your point because Wall Street has not yet been regulated but they now are operating on 10%-12% leverage instead of 30%... This may hold back the bubble for a little while until we get some kind of financial reform in place.

    December 12, 2009 at 4:28 p.m.

  • One question Mike, in previous posts on this blog you have posted...

    "I heard Alan Greenspan's mea culpa to congress when he told congress he kept interest rates artificially low, knowing that would help the housing bubble."

    "I heard the Fed Chairman say the interest rates will not be raised for the next few years."

    "This what Bernanke said last Friday.

    The Fed has said it expects to keep interest rates near zero for an "extended period," in part because high unemployment has idled so many workers. That, together with unused factories and empty building, means that inflation is not a short-term worry."

    So would not keeping interest rates artificially low, at near zero, also create a similar scenario, down the road, as did Alan Greenspan's policy of keeping the interest rate artificially low and result in another bursting bubble?

    December 12, 2009 at 4:04 p.m.

  • Mike...although you still put him in that category of I've got mine which I will still have to disagree on with you... I thank you for respecting him.

    I however I still do think and always will think he a wonderful person with many, many revolutionary ideas to make this country a better place.

    As for some of his past votes on important isssues in America, I am sure he had a very reasonable explanation for those votes.... and I can guarantee you it didn't have to do with selfish ways as so many of our senators as well as congressmen/women are - (I've got mine attitude!)

    Ron Paul has such great views on so many different things and his views and beliefs about the FED are spot on. The FED is treating us all like their puppets and it has to stop. They saw a window open and took that chance and have been on the run with us for far to long now.

    We have to come together as Americans...we need to MAKE them stop.

    December 12, 2009 at 3:29 p.m.

  • Rollingstone
    I am not disagreeing with your post, I heard Alan Greenspan's mea culpa to congress when he told congress he kept interest rates artificially low, knowing that would help the housing bubble. Now He admitted he did not understand the derivative market but he did not want to be the one to stick a pin in the balloon.

    Nothing I have read about Ben Bernanke has led me to believe that he is a dishonest person that can be manipulated. That’s all I am saying...I may be wrong.

    You're right Zorro. since the Fed operates under a cloak of darkness, much like the CIA, who really knows besides the board of governors and those that need to know. I think most people want to keep it that way.

    December 12, 2009 at 2:21 p.m.

  • This comment was removed by the user.

    December 12, 2009 at 2:18 p.m.

  • The entire topic about the Fed and what it has done in the past and might do in the future is too complicated for the ordinary citizen to get his head around. What the Fed does is then re-told by talk radio people with a spin and that is what they believe. It is sad that everything has become agenda driven.

    December 12, 2009 at 1:51 p.m.

  • Mike there are numerous papers that speculate about election year Fed policy. I read one paper that flat out said the monetary base has been expanded in every presidential election in the past 30 years. Unfortunately I can't find that paper.

    I did find this:

    It would not surprise me at all if in fact there was an election year cycle to Fed policy.

    December 12, 2009 at 1:40 p.m.

  • No one has said that the Fed's actions are above reproach and they did go through 32 congressional hearings in 2009. They were also audited by the GAO... Congress and the GAO did not find anything criminal to prosecute.

    313 sponsors in the House Committee will more than likely be the first step to send this legislation over to the Senate for an up-and-down vote. The Fed was not expected to be a shrinking violet, it is territorial much like all government agencies.

    December 12, 2009 at 1:05 p.m.

  • Rollingstone
    I read the article you linked but it was basically about the stock market fluctuation during year one of a presidential election,middle,and so forth.

    I can understand the correlation but does the Fed set its monetary policy on the rise and fall of the stock market or vice versa?some could see it as manipulation if that were true.

    December 12, 2009 at 12:53 p.m.

  • If all of the actions of the Fed are above reproach, then they have nothing to fear from an audit. That they appear to have pulled out all the stops to head off such an audit tells most thinking people all they need to know.

    In the words of the late Dr. Adrian Rogers: "You cannot legislate the poor into freedom by legislating the rich out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything the government does not first take from somebody else. When half the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend is about the end of any nation. You cannot multiply the wealth by dividing it."

    December 12, 2009 at 12:44 p.m.

  • Rollingstone
    Is it a sugar high I got from eating three donuts this morning or are we on the same page of this issue?

    I wouldn't use the word beholding to a president but it is an evident that Alan Greenspan and others were persuaded by their current president but I think that Ben Bernanke would resign before he would implement policy that did not meet his conservative philosophy. Paul Volcker showed that independence.

    I don't know what the impact of Senator Dodd's bill to overturn the Fed’s banking regulatory powers will be. Congress may not be totally incompetent but they certainly do not have enough qualified lawmakers to understand what it takes to regulate the banks. You will certainly disagree with this statement but Barney Frank is known by his peers as being one of the brainiest legislators; yet he does not completely understand the derivative market and all the loopholes.

    BTW I have been questioned on my use of the word federal agency to describe the Fed…Besides being an instrument of congress, a quick peek at their website one will find these words on the first page.

    The Federal Reserve is the central bank of the United States. Its unique structure includes
    • a federal government agency, the Board of Governors, in Washington, D.C., and
    • 12 regional Reserve Banks.

    December 12, 2009 at 12:34 p.m.

  • Mike you asked about the political influences on the Fed during Presidential elections. There is a well known theory about the "economic election cycle."

    It should be apparent that the biggest issue in every election is the economy. The Fed chairman is appointed by the president so he is beholding to him for re-appointment. Congress gets in involved by making legislation that effects Fed operation - Humphrey / Hawkins for example.

    The Fed is subjected to a enormous political pressure. So it should not be a surprise to anyone why we and the economy get whip sawed around all the time. So we should be very wary when Congress trys to gain more control of the Fed. Congress is incompetent and it would be a complete disaster if that happened.

    December 12, 2009 at noon

  • exresident said


    “It's quite clear that you're an expert on monetary policy and the federal reserve bank. Perhaps, if you get a chance, you could help us understand where money comes from.”

    I have never insinuated that I was an expert on any subject but writing from a left of center perspective in this city, one tends to become an expert on sarcasm.

    The blog was meant to be about the legislation Ron Paul introduced.. I wrote about the problems that might incur if the lawmakers went too far and a little background on the person that introduced the bill. I also posted a little history of the Fed, the pros and cons of the agency, and some of their most recent actions it took.

    Who is this collective "us?"..Are you representing a group or do you think you are the voice of the majority?

    I have said more than once, get ten economists in one room, you will likely get ten different answers.

    December 12, 2009 at 11:27 a.m.

  • jhnsn283

    Don't include me in that Ron Paul haters club…. I said that Ron Paul appeals to the libertarian "I've got my mine” mindset.. I also said he was a nice man of principles but in the past I have said that a politician with a set of principles is one that is in a safe seat.

    I don't know what it is that makes everyone afraid of Ron Paul but he lost election at the ballot box. …That is an indisputable…Ron Paul ran against a weak field of GOP candidates; not so for President Obama…. The little-known senator had to overcome many more obstacles than what Ron Paul could ever imagine and he made use of the internet to get record number of donations from the grassroots.
    Capitalism was never mentioned but if it was, I don’t think anyone would say it was evil..I don’t adhere to the laissez –faire economic philosophy that the free market will always correct itself, if left alone. That philosophy does not account for greed.

    I had never voted for Ron Paul but I do watch his interviews, will read his book, and I will never attack him personally and he has never given me a reason to think that he is not a nice principled man.

    December 12, 2009 at 11:05 a.m.

  • BSspotter

    I wish you would be easy on the bandwidth because I have read your boilerplate message numerous times…Being concise is not a bad thing.

    I was correct in saying that the Federal Reserve is a federal agency because the word “agency” “can mean an “official delegate our agent.”

    I did not say anything about Ron Paul that wasn't true… This is the same man that voted "no"(only one) to give Rosa Parks a $30,000 Congressional Gold Medal.. This same man voted against FEMA aid for the victims of Rita in his congressional district (Galveston) but he knew his colleagues would cover his back and vote for the appropriation. He did keep his 100% no tax pledge, but he was there for the photo op when the aid reached Galveston. As I said, he is a nice man but he is a politician. About five minutes of Google research can verify this information,

    I've heard all the pie-in-the-sky rhetoric such as a culture of dependency and the evils of government but the libertarian mindset boils down to a disdain for government, taxes (sales, property, and income) and a "I’ve got mine” philosophy. (IMO)… The libertarians don't get involved in the social issues such as gay marriage or abortion but they are adamant about taxes and the general welfare clause of the Constitution. They hold this view at the local state and federal level. The taxes they want to save are their own; nothing else. It's pretty easy to win an election by saying "I will cut your taxes” but those people will ignore the infrastructure and other necessary expenditures in hopes of getting reelected. After four years the electorate finally catches on, boots them out ,and the incoming administration will have to raise taxes to fix what the previous administration failed to do. California's proposition 13 is a good example of that. The wannabes cut property taxes and made it darn near impossible to raise taxes without a amending their state constitution.

    No one likes taxes, big government, or needless regulations but we have a process such as the ballot box; to resolve our differences. Citizens of the United States are all capitalist and socialist… I hope the corporations that I am invested in, will prosper but I am also a recipient of Social Security and in August I will be receiving Medicare. Every industrial nation in the world has a component of socialism. I do think it is right for a prosperous nation to take care of those that are less fortunate. I will take it a step further and say that I think it is a moral obligation but that is just my opinion.

    December 12, 2009 at 10:38 a.m.

  • arlewil
    I know you don't agree with my blogs but all of your responses have been civil. I do appreciate that.

    That was a crust of my message, transparency is a good thing, take the Fed chairman behind closed doors, allow a few trusted legislators to grill him on some of his actions that may not have not been kosher… They don't have to approve of his nomination but if they go all "Tea Party "and call for the abolishment of the Federal Reserve System, the president will veto the legislation. If the lawmakers call for a congressional vote for every monetary decision by the Fed or require the Fed to turn over foreign financial information; the president will veto the legislation…. The votes are not there for an override.

    We will not go back on the gold standard, nor will we abolish the Fed… That is an indisputable fact, so as President Clinton said "let's mend it, not end it.”

    December 12, 2009 at 9:33 a.m.

  • (Cont'd from previoues post)

    Over the course of history, societies have most often chosen gold and silver as money, although all kinds of commodities have served as monies.

    Government tends to oppose monetary systems based on precious metals (commodity standard) because they IMPOSE RESTRAINT on ambitious politicians. Government can be stymied in its money creation by people’s redemption claims of paper into precious metal under a commodity standard. Not surprisingly, government prefers a system in which the paper money CANNOT be redeemed into anything. Then it can increase the supply of money without restraint.

    Unable to print money it wants, government under a commodity standard must resort to borrowing or taxation, both of which are more obvious and meet a sterner resistance than the silent means of inflation.

    December 12, 2009 at 8:45 a.m.

  • Exresident,

    Where does money come from? This is a great question as it is imperative to understand this to understand the destructive nature of historical centralized banking systems and our current centralized system headed by the Federal Reserve.

    It DOES NOT originate with government! Money originally came about because people grew dissatisfied with barter, the primitive system in which goods are exchanged DIRECTLY for one another. A money economy, unlike barter, is one in which goods are exchanged INDIRECTLY for each other. People who are dissatisfied with the clumsy barter system perceive that if they can acquire a more widely desired (more marketable) good than the one they currently possess, they are more likely to find someone willing to exchange with them. That more widely desired good can be anything from berries to shells to gold (all of which have been used at some time in history). The more that a good begins to be used as a common medium of exchange, the more people who have no particular desire for it in and of itself will be eager to acquire it anyway, because they know other people will accept it in exchange for goods. Even if you have no direct use for a precious metal, you will still want to acquire it because you know you can make exchanges with it. In that way, gold and silver (or whatever else the money happens to be) evolves into a full-fledged media of exchange, or money!

    Money, therefore, comes about spontaneously as a useful commodity on the market. It is NOT arbitrarily introduced by GOVERNMENT decree!

    Money has to originate on the market in this way, since ONLY then would people know what its value was. In the process of becoming a money, it would acquire an array of prices of other goods in terms of itself. Only with this pre-existing array of barter prices could people use the money. If it were just forced on the people out of nowhere, the public would have no way of assessing its value, and it would be useless to them. A paper money, therefore cannot ORIGINATE from a simple government decree. It HAS to have a link to a money that society had spontaneously adopted in the past, however distant that may be.


    December 12, 2009 at 8:43 a.m.

  • Mike
    I don't normally agree with much of your blogs, however you are right on this issue of a bill that audits and makes transparent moneytary policy decisions by the Fed. This portion of legislation would turn markets upside down world wide. Other parts of the Fed are audited now and our ancestors were wise to make the Fed independent of politicians with regard to monetary decisions.

    December 12, 2009 at 8:19 a.m.

  • I agree with you BSspotter... Especially on the perception that capitalism is is 100% fascism...and it is absolutely the highest of all evils in this world! Capitalism will always be and I am fine with an extent! But, what the GOVT is doing to us little people is wrong and unjust and it has to stop...and to even speak of Ron Paul in such a way as this article does as well as some posters have is just wrong and unfair. What a shame it is to be so prejudice and ignorant towards a man of such honor and revolutionary ideas to make this country a better place for ALL..not just SOME!

    December 11, 2009 at 10:05 p.m.

  • jhnsn283, it's more like "I'll Keep Mine" versus "I'll Take Yours".

    What Mike & others fail to understand (willingly or not) is that Big Govt programs only pour sugar in the gas tanks of the productive engines of society. Big Govt undermines natural economic forces and compromises everyone's right to self-determination.

    Big Govt & Big Business are tangled in an unholy alliance which unfairly generates the perception that capitalism is evil. No, fascism is evil; capitalism operates in spite of Big Govt.

    Philosophically speaking, there can be no contradictions. If you detect a contradiction, you must check your premises. In this case, on one hand, we have the maximum benefits of natural law, ethical self-interest & bottom-up govt. On the other, we have the abomination of forceful, lopsided mega-dependence (not interdependence). One of those things weighs your ability & achievement on the cosmic scales of justice and allows you hard-earned prosperity. The other is false & unsustainable. Take your pick.

    December 11, 2009 at 9:42 p.m.

  • Some of you Ron Paul haters really need to reassess your views. To say he is an "Iv'e got Mine" type of person is so far from the truth. How sad of you to speak of a man such as him in that way.

    The reason Ron Paul didn't make it as far as the other losers than he was running agaisnt is because everyone was afraid of him and all his abundant knowledge on how to actually have this country be ran in a Legal and Just manor. They shunned him away and made him "SEEM" unimportant by not giving him the same amount of television time and interviews and didn't want him at presidential candidate parties. Bottom line THEY FEARED HIM and the possibility of what he could do to them all if he became the next president.

    He is entirely all about the little people unlike any other recent candidates than ran for this past presidency or the NOW current president for that matter!

    Ron is a very gracious and kind person. And he holds his values and moral beliefs very high. I know, I have met him in person on several occasions. He has nothing but the highest hopes for all Americans to be able to live a life free of rich, political losers(the real "I've got mine" scumbags) such as the ones in congress,most senators, and above all else the FED!

    December 11, 2009 at 9:04 p.m.

  • I meant to comment before bsspotter,but he beat me to it.I didn't mean to repeat him from his first comment.

    December 11, 2009 at 8:47 p.m.

  • The Federal Reserve banks are privately owned,and are as much federal as FedEx. here is a link.

    December 11, 2009 at 7:56 p.m.

  • (cont'd from previous post)

    Mike: “He appeals to the “I've got mine”, libertarian mindset but hardly anyone else.”

    This is a skewed mischaracterization of libertarianism as a heartless philosophy. Libertarianism advocates volunteerism and deplores theft & force. Libertarians understand that ethical self-interest is what drives progress, but when the government impedes/destroys naturally-occurring incentives to achieve (invent, produce, create wealth & jobs) and rewards inactivity & entitlement, the means of self-sufficiency degrade for all as fewer jobs are created due to the barriers of entry and penalties for existence. As humans (I promise WE are), libertarians do perform voluntary acts of kindness but oppose top-down, bureaucratic wealth distribution schemes because they understand that you can’t legislate compassion, and the theft of productive ends for the benefit of unproductive means is immoral & destructive. Compassion is being conditioned out of us by our short- & narrow-sighted welfare system.
    Mike: “That is why he only got 42 delegates in the recent 2008 presidential election, and he came in 5th in the libertarian strong hold, “Live Free or Die” state of New Hampshire.”

    Really, is that why? So, the Republican voting base likes handing out entitlement checks. They’d probably disagree, that is, unless they knowingly supported John McCain. I contend they had no idea what they stood for and supported who they were told.
    Mike: “There's no denying that the Fed was complacent in the recent economic crises…”

    I think you mean “complicit”. The seeds of this crisis were germinated by the Fed's easy credit.
    Mike: “When I get through reading "Too Big to Fail"(sometime before 2012) I will have to read "Secrets of the Temple" by William Grieder and "End the Fed" by Ron Paul.”

    I hope "End the Fed" will exorcise the demon spirit of John Maynard Keynes from your consciousness. By the way, you wouldn’t be reading that book if it weren’t for the "greedy" self-interests of the author, publisher, logging company, chainsaw operator, glue & ink maker, shipping company, truck driver, etc. that made that book possible.

    December 11, 2009 at 7:48 p.m.

  • Preface-
    The Federal Reserve System is NOT a federal agency. It is a cartel of private banks with a federal charter. It enjoys both the freedom & secrecy of a private institution while holding the absolute, unchecked power to inflate (debase) the money supply on behalf (not benefit) of the public. Congress wrongfully abdicated its Constitutional obligation with said charter. Most advocates of Fed secrecy are the beneficiaries of the gravy train of easy credit which props up our beloved Welfare-Warfare State and floats our non-productive consumer-based economy. The Fed’s easy credit system has been the key enabler of dishonest/irresponsible business practices and ROOT CAUSE of our economic meltdown.
    Mike: “The Fed will not reveal how it conducts its monetary policy or its dealings with foreign central banks.”

    The Fed’s foreign affairs are just as important as the domestic. We have exported trillions in dollar inflation, and there is a growing sentiment that foreign countries should unload their devalued (by design) dollar reserves in favor of the euro. These dollars will come home to roost, and we’ll see price increases as never seen before – the likes of which high interest rates can’t suppress. (China holds $2-3T in reserves.) I can't understand the defense of secretive dealings with foreign governments & banks.
    Mike: “Congressman Paul is a good principled man but his views have not changed since 1971.”

    Neither has the problem. I respect his steadfast adherence to a set of proven (but ignored) principles versus the growing power & force of the arbitrary, whimsical Rule of Man and justifications based solely on political expedience.
    Mike: “The congressman's views on paper money, hatred of the Fed, wars, the IRS and other Federal government agencies are well known.”

    You use the term “hatred” as if he's merely driven by a simple, unjustified emotion. His reasons are concise, rational and sufficient.
    Mike: “If you were left up to him the government would quit printing entitlement checks.”

    He has said repeatedly that the entrenched entitlement system would not cease overnight. He had a transition plan, but most ignored it due to its ultimate goal of a sound currency.


    December 11, 2009 at 7:48 p.m.

  • Mike,
    Typically, I disagree with you but you are right about Ron Paul. To me, he is just a wasted vote as far as being relevant. As far as the Fed, the money was not used as intended, the banks did not send it forward. I can not say that I blame the banks but the intended purpose was not achieved. I wish someone would come up with some solution but the fact of the matter is that neither the Republicans nor the Democrats will come up with something. They are there to serve all the PACs that are financing their next reelection and forget that they are there to represent the people.

    December 11, 2009 at 6:07 p.m.

    AP Economics Writer
    Posted that statement in his article, not me, formed from his sources, which no one knows but him.

    If indeed the Fed Chairman say the interest rates will not be raised for the next few years, doesn't that sound a lot like Japans lost decade policy, or Alan Greenspan's policy during his term of office?

    A increase in the supply of currency in the market always results in inflation, by holding interest rates lower than they normally would be, will not that create another financial bubble just waiting to burst?

    December 11, 2009 at 6:03 p.m.

  • This what Bernanke said last Friday.

    "The Fed has said it expects to keep interest rates near zero for an "extended period," in part because high unemployment has idled so many workers. That, together with unused factories and empty building, means that inflation is not a short-term worry.

    December 11, 2009 at 5:54 p.m.

  • You posted "Economists worry the flood of red ink could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery.

    I heard the Fed Chairman say the interest rates will not be raised for the next few years..As of now ,he is not predicting inflation but he looks at the data and I don't have privy to that information.

    December 11, 2009 at 5:43 p.m.

  • Paul Volker was instrumental in bringing down the inflationary spiral we were in and returned credibility in US monetary not yielding to partisan politics.

    I think you present an apples and oranges example.We cannot quit spending until the job figures come down...We lost over 8 million jobs since the recession and we need about 20 million over the next 5 years...We will raise the debt ceiling $1.8 trillion to about $14 trillion of debt. When the job figures start to come down then the administration will start fiscal restraint.

    December 11, 2009 at 5:38 p.m.

  • Well since you opened the door by posting"Paul Volker raised the interest rate extremely high to get us out of the Carter fiasco.", I will comment just a little.

    Federal budget deficit for November hits $120.3B

    AP Economics Writer

    WASHINGTON (AP) -- The federal deficit for the first two months of the new budget year is piling up faster than last year's record imbalance.

    Economists worry the flood of red ink could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery.

    That's less than analysts had expected and down from a $176.4 billion imbalance in October.

    Spending to shore up the financial system was much lower over the past two months compared with a year ago, but the administration still projects that for the entire year, total government outlays will be 3 percent higher.

    A flood of red ink might cause interest rates to rise, just like in the Carter administration.

    December 11, 2009 at 5:16 p.m.

  • itisi

    I am in a favorable mood today;so you have a good day because I really don't have any answers for your post... It really doesn't make a lot of sense to me...Perhaps that's my fault.

    My blog was not about the economy,TARP, gold,T-bills,or a $500,000 loan.

    December 11, 2009 at 4:56 p.m.

  • The Fed may have pumped a trillion into the credit market, but it’s not being used. Why do you think some of these banks are able to repay some of the TARP money?

    Why do you think Gold is hot right now? T-Bills are hot.

    If you or I were doing what the Fed is doing, we would be in jail…

    I think you’re comments are out of touch with what is going on in the financial system.

    Go out and try to borrow $500,000 to open or expand a business, if you can get it will take a while…

    December 11, 2009 at 4:44 p.m.

  • I think I know what you meant now by 535 members questioning every move…

    1. Right now their opinions don't really matter without the official documents they seek to get.
    2. Foreign nations would not be forthcoming with information, if they knew everyone would have access to that information.

    The Fed, the executive and legislative branch, and the private sector all have a history of financial mayhem.

    So the Fed intentionally expanded the money supply before the 2008 presidential election? Can you supply a reliable source or link?

    Today, the retail sales went up and I saw some other tidbits indicating that this economy is starting to slowly recover but I sent my crystal ball out for repairs… The Fed chairman and other leading economist do not see inflation on the horizon.

    December 11, 2009 at 3:57 p.m.

  • Rollingstone
    No,as I stated Fed will not reveal how it conducts its monetary policy or its dealings with foreign central banks.Congress does not have access to this information.

    I meant that Alan Greenspan kept the interest rates artificially low during the Bush years..He admitted it to congress.

    You call for a lot of speculation that I don't have ready answers for but we will not get rid of the Fed,so the best option will be to make it more accountable without hindering its effectiveness.

    Paul Volker raised the interest rate extremely high to get us out of the Carter fiasco.

    December 11, 2009 at 3:29 p.m.

  • Mike you said, "Think about it, do we really want all the 535 members of Congress questioning every move the Fed makes?" Don't they do that now?

    And then you say, "Because the agency is always pushed to a business friendly low interest rates but then it loses its vigilance on price stability." The primary goal of the Fed is low unemployment as mandated by Congress. They are not suppose to meddle in Fed business, yeah right!

    The Fed was started to end the financial/banking panics that plagued the country prior to 1913. Look back to that time and tell me how well you think the Fed has done. Between the Fed, Congress and the Executive Branch it has been a history of financial mayhem.

    It is no secret that the Fed intentionally expands the money supply before every presidential election. I agree that the Fed in this current crisis did prevent a bigger collapse, a crisis that they helped to bring on.

    Now the Fed is back in uncharted territory with a huge expansion in the money supply. It will certainly cause severe inflation once the excess industrial capacity is used up. Then what? Just look at what the economy did during the Carter Administration for a clue.

    December 11, 2009 at 3:14 p.m.