Kohn warns Congress on meddling in Fed's affairs

[jakeXT]

Source: Reuters


Kohn warns Congress on meddling in Fed's affairs
Thu Jul 9, 2009 2:48pm EDT

By Alister Bull

WASHINGTON (Reuters) - The U.S. Federal Reserve on Thursday launched a robust defense of its independence and warned that efforts in Congress to put monetary policy under political sway would hurt the economy.

Fed Vice Chairman Donald Kohn said opening up some of the U.S. central bank's most sensitive decisions to political scrutiny could result in higher long-term interest rates and hurt the United States' credit rating. Kohn was speaking before a Congressional panel where he was seeking to beat back a proposal that would open policy decisions by the U.S. central bank to audits by a federal watchdog agency.

...

"The Federal Reserve strongly believes that removing the statutory limits on GAO audits of monetary policy matters would be contrary to the public interest by tending to undermine the independence and efficacy of monetary policy," he said.

...

"The bond rating agencies view operational independence of a country's central bank as an important factor in determining sovereign credit ratings, suggesting that a threat to the Federal Reserve's independence could lower the Treasury's debt rating and thus raise its cost of borrowing," he said.

Read more: http://www.reuters.com/article/GCA-Economy/idUSTRE5685LK20090709?pageNumber=1&virtualBrandChannel=0

[Joanne98]

1. Oh the rating agencies might get mad. LOL

Their ratings are crap anyway.

[BR_Parkway]

2. They're like witch doctors with scary masks - ooooohhhh, don't touch

or you'll make things bad....

I'd say screw it, dissolve them -- but at least we only have one set of bastards to deal with. Can you imagine if Congress took back monetary policy and it got changed every month depending on which lobbyists were forking out the most cash?

[Ikonoklast]

8. Yeah, Greenspan never let politics color his decisions.

Oh, wait, yes he did, that's why we're in this mess.

[RandomThoughts]

3. Politics and ideology already effect the Fed.

Everyone has ideologies and politics. It is true the Fed should not try and manipulate economy to get people elected, but who is to say they are not already doing that if it is kept secret?

And who is to say whether they are supporting one sector over another already. What is a good economy? Who defines that? A few people at the fed or elected representatives?

Or is it meant to sound like extortion?

[lib2DaBone]

4. Is this an Extortion threat from the Fed?

..Congress had no right to give away the United States' power to issue money interest free. This was a total sell-out of the American people to the Bankster/Gangsters Trust from New York. Woodrow Wilson's hand shook so bad.. that he could hardly sign the bill. He knew it was wrong.

http://en.wikipedia.org/wiki/Federal_Reserve_Act

Controversy about the Federal Reserve Act and the establishment of the Federal Reserve System have existed since prior to its passage in 1913, and include whether Congress has the Constitutional power to delegate its power to coin money or issue paper money, whether the Federal Reserve is a banking cartel established to protect large banks, or whether the Federal Reserves' mistakes increase the frequency and severity of boom-bust economic cycles such as the Great Depression of the 1930s.

[florida08]

5. sounds like a threat

We'll see who's in control of this country..the Fed or Congress..Pass the Transparency and Sunshine Acts.

[DCKit]

6. More economic blackmail from the masters of the universe. n/t

[stevebreeze]

7. why would we want to influence the fed they are doing a great job

with the economy!

[sybylla]

9. Maybe the Feds should try demonstrating that they can manage it without inteference

So far they're doing a heck of a job.

[bemildred]

10. "We've done such a good job, how can you question our decisions?"

Things could suck worse, right? That's always true.
:rofl:

[Grinchie]

11. Thats why the Fed was Created on Christmas Eve.

Those bad ole senators that hadn't been bought out might have been present to vote on your back door snatch and grab.

It's surprising that he would even moan about this, since they own nearly everyone in Congress, and have the power to help or harm anyone they choose.

Knowledge that the ability to push industry in any direction should wake people up to the realization that there are many promising alternative energy systems that have been totally ignored, unfunded, and even suppressed, in order to preserve the oil industry. In 1960, during the first few years of Photovoltaics for the Space program, they predicted that Solar Cells would soon cost 10 cents per watt. The reality is that due to the lack of money for research, explicitly traceable to the federeal reserve and the Government, Photovoltaics still cost around $5.00 per watt, which ultimately forces people to use oil, because you cannot afford the capital investment in solar if you are that average person, or don't have a printing press like the Fed and it's wholly owned subsidiary, the U.S. Military.

We had a huge, thriving Aerospace industry that was making the first baby steps toward space travel, and the policies of the fed helps destroy and delay this important step in mankinds understanding of the universe. What does the Fed do? They create a Housing Bubble and get everyone trapped right where they are.

The truth of the matter is that people do not understand Money. They do not understand the evil nature of the Fractional Reserver Banking System, the key principle in creating money out of thin air. If the term creating money out of thin air is too abstract, let me put it another way. If I have a pile of Gold, but it's heavy, I can write a note with my signature that specifies I give the gold to someone for payment. That someone takes my note, and then, when he's ready to pick up the meavy gold, when he's ready, he presents the note to me and I give him the physical money. That is money that is backed up by something. The "Note" is just a convenience. We call them "Personal Checks" today.

Now the Dollars we use today are not backed up by Gold or any asset. The only thing that makes them worthwhile are the words "This Note Is Legal Tender". This is the Government mandating that you __WILL__ pay with these paper monopoly dollars. You will also be mandated to accept these monopoly dollars in payment for anything. Here is the secret though.. The Mopnolpoy money is not backed by Gold, wheat, whiskey, or any other commodity of real worth. Sure, you could buy Gold, Whiskey, and wheat whith the dollars, but there is no guarantee that the Gold will exists, or that a few million other people want it at the same time. The same goes for the other commodities. The overall value of the commodities is totally market driven. At any monet, you could get more or less gold. Their is no fixed sum. Wehn you get less gold for a dollar, the dollar is said to have inflated. When you get more gold for the same dollar, it is said to have been deflated.

The drop in Housing prices in the range of 30% to 50% is part of a massive deflation of money caused by the reality that the money really was never there in the first place. When you inflate housing prices beyond what you would be able to rent it for. You don't rent a house for 1000 dollars a month, when the mortgage is 5000 dollars a month, unless you are very stupid, or know without a doubt that you can unload that albatros to the next sucker.

A lot of suckers showed up late to the game, and they were welcomed into the game, only to be cleaned out in the first hand, and become trapped in the real estate ponzi scheme.

Take note that the run up in prices was supported by creating money out of thin air, based upon debt. The debt itself was the security, but that debt depends on the value of the security, and the ability to recover that debt.

Using the house rental example: Where your rental income is 1000, and outflow is 5000, you can see the 4000 dollar liability you have each month. The big question is, how many people have been ensnared in this trap? How many owe money on their property than it would actually sell for, especially using the the basic, fundamental golden rule of property, which is being able to at least have a monthly net gain. (This applies to both income generating property or income from wages used to carry the property)

The situation that we are in does not seem directly attributable to malfeasance to the Federal Reserve. They worked very hard to seperate themselves from the Criminals that actually comitted the fraud, but the Federal Reserve is definately responsible for the policies that allowed the fraud to expand to the collossal scope it is in right now.

They enabled the Big Investment Banks in 2008 to get virtually free money from the Treasury Auction Facility, which was then used Corner the Oil markey, and ultimately drove the price of oil to 150 dollars a barrel. Does the media ever even mention the hardship this caused millions of American, beyond the obvious fact that it was more expensive to fill up your tank? How many business became net losers after the price of food skyrocketed? How many restaurants lost business. How many waiters lost tip income? etc..

So, the Congress finally acts in July 2008 and shuts down the Enron loophole in the Commodity Futures Trading Act in September of 2008. They announced it in July of 2008. The price of Oil plummets, as all the speculators who have artificially raised the price of oil scramble for the exit. Did I say plummet? It fucking crashed!

Yet, the commission assigned to investigate the cause of the price spike reported that "We have found no evidence of Speculation". Yeah, right buddy. Nothing to see here, please move along.

History is full of evidence that shows that Central Banks have abused their immense power, yet people tend to have short memories. I don't.

Audit the Fed and it will be apparent how widespread the fraud is.











http://www.youtube.com/watch?v=bIEPyGQFIqs

[truedelphi]

12. I loved it - how the Federal Reserve stopped us from having a

Great Depression a mere sixteen years after its creation, and then it made sure that Goldman Sachs did not set us up for a second Big Downturn, THE HUGE NASTY (circa 2008-2018.)

I had totally forgotten about how the Feds creators were so heroic that they gave up their Chrismas Eve for our sake, so many many years ago!