From Lew Rockwell at LRC Blog:
Writes a friend:
CNBC didn’t run any commercials during Bernanke’s testimony this morning, until Ron Paul began to speak. They came back live after his questioning, choosing to resume with Maxine Waters. State-controlled media indeed.
Ben Bernank was in the House Financial Services Committee this morning, prevaricating as usual.
Ben "Bernank" Bernanke will appear in the Senate Banking Committee on Tuesday 3/1/2011 and in the House Financial Services Committee on Wednesday 3/2/2011 (starting at 10:00AM EST on both days); it is his semi-annual policy report to Congress.
Bloomberg columnist Caroline Baum has 5 questions for Bernank, in her effort to help out the Senators and Congressmen in the committees who may not be as astute as her in economic and financial matters, has come up with 5 questions she would ask Bernank. As she says, "To expect our elected representatives to have a good grasp on quantitative easing when Fed chief Ben Bernanke says the term is a misnomer is too much to ask."
(Can we expect them to have a good grasp on anything? I mean, other than on taxpayers' money?)
You can read about her 5 questions here, which I thought were not that much above what our elected representatives would be capable of asking. (Why QE2 is $600 billion, when are you going to raise short-term rates....etc.)
I have my own questions to Bernank:
Where is gold that is supposed to belong to the US government?
How much gold is there, at Fort Knox? At the Federal Reserve Bank of New York?
If gold is not there, where did it go, how did it go, and who is responsible?
Has the Fed participated in any way in gold/silver price manipulation?
You said the Federal Reserve did not, and would not monetize Treasury debt. QE2 is de facto monetization, as you purchase Treasuries from the Primary Dealers that they got at the Treasury auctions only a few weeks before. Did you lie?
How much loss has been sustained on the Fed's balance sheet since the start of QE2, as the rates on Treasury notes and bonds have been going up and the prices falling?
How much are you paying to the Primary Dealers? How many extra billions are you giving to the PD by buying Treasuries from them, instead of buying directly through TreasuryDirect, for example?
How do you respond to the accusations that your QE2 has unleashed the powerful price inflation around the world that in turn has triggered popular uprising against the rulers? Guide us through your logic that monetary inflation (QE2) does not cause price inflation. And don't give us the crap that there is no price inflation in core CPI, which excludes two of the items that matter most to people around the world who try to earn a decent living: food and energy.
Is QE3 coming? Your Fed governors are saying yes (you and Bullard, for example) and no (Plosser, for one). When will we know? (And please stop this "good Fed, bad Fed" routine; it's getting tired.)
And what was the reasoning behind QE2, again? QE1 was to help out Wall Street banks who are the Fed member banks. QE2, did you say it was to help out the US federal government? How do you think it has helped, other than the levitating stock market and soaring commodity market?
Since when has the Fed had the third mandate of raising the stock market? Why do you think the stock market is the reflection of the economy?
that pose a risk to the economy.
The House Financial Services Committee (chair: Barney Frank) has approved the legislation, by 31-27, that would give the government the power to dismantle financial firms that it thinks pose a risk to the economy, even if they are healthy. It will also force big financial firms to pay the fees upfront for dismantling.
The question here is: WHO IS TO DECIDE, AND HOW? HOW IS 'RISK' DEFINED? BY WHOM?
By Timmy Geithner and Ben Bernanke, who didn't see anything bad coming their way? Or Barney Frank who insisted Fannie Mae and Freddie Mac were sound businesses? Or Chris Dodd who was a "friend of Angelo"? Or another Presidential Task Force headed by an ex-banker supported by ex-campaign staff?
As this is part of so-called financial overhaul attempt by the government, it also contains the audit of the Federal Reserve.
Panel OKs key regulatory measure; House vote next
(12/2/09 AP via Yahoo Finance) [emphasis is mine]
"WASHINGTON (AP) -- A key House panel voted Wednesday to slap new restraints on big Wall Street institutions and to demand greater openness from the nation's central bank, clearing a significant hurdle in the drive for a sweeping financial regulations overhaul.
"Motivated by the crisis that caused a near collapse in financial markets, the House Financial Services Committee approved legislation 31-27 that would give the government the right to dismantle financial firms that pose a risk to the economy, even if they are healthy.
"The legislation also would require a detailed congressional audit of the privacy-shrouded Federal Reserve and would assess fees up front on large financial institutions to pay for the failure of their competitors.
"The action sets the stage for a full House vote next week on comprehensive regulatory changes meant as a response to the financial sector's meltdown more than a year ago. That package, set to go to the House floor on Wednesday, would include the creation of a new consumer finance protection agency, restrictions on complex financial instruments blamed for feeding last year's panic and restrictions on Wall Street compensation."
Why don't we, citizens, have the right to dismantle institutions that pose a risk to the economy? The first on my list would be the Federal Reserve, IRS next, and then dismantle the entire federal government, as the biggest risk to the economy and liberty and welfare of the citizens.
Read the post on 30-day makeover of the U.S. by Lew Rockwell.
by Mel Watt (D, NC). What a surprise.
Federal Reserve Policy Audit Legislation ‘Gutted,’ Paul Says
(Bob Ivry, 10/30/09 Bloomberg) [emphasis is mine]
"Oct. 30 (Bloomberg) -- Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.
"The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.
"“There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.” "
"Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee."
"Paul said he intends to introduce an amendment to the bill when it comes to the House floor for a vote restoring the legislation’s original language."
Mr. Watt's district includes Charlotte, NC, where Bank of America, the largest lender in the U.S., is headquartered, as noted by the article.
If you are in Mr. Watt's district, or Chairman Frank's district and want to know what on earth the Federal Reserve has been doing with your money and a whole lot of others, PLEASE write to them and tell them they must restore the original bill as introduced by Ron Paul.
on September 25, 2009. Historic, as Barney Frank says.
Here's the link to yesterday's entire full-committee hearing of H.R. 1207 in House Financial Services Committee.
http://www.house.gov/apps/list/hearing/financialsvcs_dem/fchr_092509.shtml
I was impressed with the disciplined way that Chairman Barney Frank ran his committee when I was watching part of the hearing, but I now have some respect for him (which it hardly existed in me before) after hearing his opening remark. I missed it yesterday, as I caught only the last hour or so of the hearing.
Barney Frank started off by saying "This is a historic hearing." He noted that Ron Paul first filed this bill for the first time in 1983, and 12 years that the Republican Party control the agenda of the Committee they found no time for the hearing . He was pleased, in the show of bipartisanship, to be the one to give this important piece of legislation its first hearing ever.
Frank went on to state that the openness and transparency issue with the Federal Reserve was a bipartisan issue, and was not new; in fact, under Chairman Gonzales in 1983, the Committee succeeded in making the Federal Reserve more open. At that time, the meetings of FOMC were kept secret. The Federal Reserve denied even the existence of the minutes of the meetings, which happened to be found later in a drawer, Frank remarked.
Also (and that's where he gained my respect), he said in 2003 Ron Paul had been slated to be the chairman of the Domestic Monetary Policy Subcommittee, and that subcommittee immediately disappeared. It was merged into the International Monetary Policy Subcommittee. "There were people who wanted to shield the Federal Reserve from Mr. Paul's influence," Frank said.
Before he yielded to Ron Paul for his opening remarks, Frank expressed his concerns in proceeding with the legislation, which he had already expressed previously; that he didn't want to make the disclosure of the audit results interfere with the market in any way, and wouldn't want to allow any party from profiting from the Fed's moves (buying and selling in the financial market).
Well, many think that's been happening already anyway for quite a long time. He doesn't need to worry about that aspect, because that's what many large, influential financial institutions have already been successful in anticipating the Fed's moves and profiting from it, with or without insider knowledge.
I would love to know (on top of my head, for no particular order):
"Has the Fed tried to manipulate the stock market?"
Rep. Grayson made the Fed general counsel very uncomfortable in today's historic hearing.
(Latest at the top)
Hearing over. But Mr. Woods, that microphone is still live.
Rep. Royce: We're compounding the boom-bust cycle.
Mr. Woods: The Federal Reserve creates "moral hazard" because it can create money as much as they want. Why equity ratio is so low in the financial industry? Because they have the lender of last resort [the Federal Reserve].
Rep. Royce is citing the Richmond Fed's study that 40% of bad assets is backed by the Fed (?), and mentions "moral hazard".
Rep. Brad Sherman is asking about the loans that the Fed has extended and which the Fed hasn't disclosed the detail of the loans. Handing out risky loans on the concessionary term and tell the public "don't worry" doesn't seem like a good way.
Rep. Michele Bachmann is for tightening the scope of the Fed operation.
Someone was showing a U.S. dollar bill right behind Mr. Woods, and Rep. Watt and Chairman Frank told him to stop.
Chairman Frank is asking if the [audit] information should be made public instantaneously.
Rep. Ron Paul again.
Rep. Melvin Watt is insisting if Mr. Woods distinguish between the policy audit and the audit (opening the book), and saying the discussion is not of any substance.
Thomas Woods: we don't support any watered-down version of the bill. It would be the dignified way for the Fed if they simply accept the audit. Otherwise, people would increasingly wonder what the Fed may be hiding.
(Latest at the top)
Thomas Woods of Ludwig von Mises Institute is the other witness.
Mr. Alvarez is done. The other witness is taking the seat.
Rep. Donald Manzullo is asking whether the Fed is monetizing money for helping companies like AIG.
Rep. Adam Putnam is listing off the items NOT disclosed about the Fed's operations and asking why.
Oh my goodness. This Californian Congressman (Rep. Edward Royce) cites Ludwig von Mises! [First I ever heard anyone other than Ron Paul cite von Mises.] The general counsel was saved by the Chairman Frank from answering the questions and embarrassing himself.
Rep. Alan Grayson made Mr. Alvarez, general counsel of the Board of Governors of the Fed, squirm, insisting to know whether the Fed has been manipulating the stock market and who specifically has been doing it.
Rep. Ron Paul asked about the potential Fed's manipulation in the gold market, and currency swaps with foreign central banks.
Ron Paul's H.R. 1207 is being heard in the House Committee on Financial Services, thanks to Barney Frank. It's a historical day, regardless of whether the bill will pass. 96 years after the Federal Reserve System came into being, Congress is finally debating whether to audit the institution that wields enormous power over the nation's financial and economic policies. It's about time.
You can watch the hearings on the Committee's website.
(By the way, the member of the Federal Reserve Board, who wrote the op-ed piece for Wall Street Journal to coincide with this occasion, was a member of the Working Group on Financial Markets , aka the Plunge Protection Team.)
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