WASHINGTON (AP) – Suddenly the Federal Reserve is everybody’s punching bag. Strip the Fed of its bank regulation powers, some in Congress are demanding. Get probing audits of its behind-the-scenes operations, others say.

The chairman of the Federal Reserve Board is always fair game for criticism and second-guessing, usually over interest rate actions. But this year the criticism is much broader

Ron Paul

 as Congress responds to widespread public anger that the Fed bailed out Wall Street but not ordinary Americans, and with unemployment in double digits.

Former Fed Chairman William McChesney Martin Jr. famously said that the central bank’s job was to yank away the punchbowl just when everybody is starting to party. And while Fed Chairman Ben Bernanke has signaled the Fed will keep interest rates low for now, a round of higher rates inevitably will come.

The Fed finds itself both the punchbowl keeper and the punching bag. Imagine the outcry when it does begin to crank up rates – perhaps just ahead of next year’s midterm elections.

Fireworks seem likely at Senate confirmation hearings early next month on President Barack Obama’s nomination of Bernanke to a second four-year term as chairman.

Bernanke, first appointed by President George W. Bush, has worked closely with both Treasury Secretary Timothy Geithner and Bush Treasury Secretary Henry Paulson in confronting the worst financial crisis in decades. Geithner also has gotten his share of congressional wrath, mainly for his administering of the $700 billion bank bailout fund.

“In the past, the Federal Reserve was held in very high esteem,” said Rep. Ron Paul, R-Texas, a libertarian who twice ran quixotic presidential campaigns and remains a darling of skeptics of Washington. Now, it’s “the source of our problem,” suggests Paul, author of the best-seller “End the Fed.”

Usually an outlier, Paul suddenly has found an army of at least 307 House colleagues and 30 senators marching behind his legislation to subject the Fed to intense scrutiny by Congress’ Government Accountability Office. The House Financial Services Committee endorsed Paul’s approach 43-26 last week over objections from its chairman, Rep. Barney Frank, D-Mass.

The bill would authorize Congress to audit not only the Fed’s lending programs but its basic decisions to set monetary policy by raising or lowering interest rates. Paul has been introducing a version every year since the early 1980s, but this is the first time it has garnered any serious attention.

For the rest of the article please go here:

http://apnews.myway.com/article/20091122/D9C4MSNG0.html

Face Forward Comments:

I am not sure, long term, what needs to be done with the Federal Reserve.  They are so large and control so much now, it could take decades to withdraw from their monetary control.  Having said that, I do know one thing.  I would very much like the Fed audited.  There are far too many inside deals going on and far too much of tax payers money being used to cover the mistakes of those banks. 

When the Federal Reserve was created it was for the distinct purpose in 1913 it was for the distinct purpose of helping the US avoid recessions.  If you have followed Glenn Beck at all you know the bill to create The Fed was a late night back-room political deal pushed through by the liberals (progressives) under Woodrow Wilson.  While they claim to be non-partisan and not part of government or private industry, they have always favored liberal monetary policy.

Here is a snippet from Wikipedia on The Federal Reserve:

The main motivation for the third central banking system came from the Panic of 1907, which renewed demands for banking and currency reform. During the last quarter of the 19th century and the beginning of the 20th century the United States economy went through a series of financial panics. According to proponents of the Federal Reserve System and many economists, the previous national banking system had two main weaknesses: an “inelastic” currency, and a lack of liquidity. The following year Congress enacted the Aldrich-Vreeland Act, which provided for an emergency currency and established the National Monetary Commission to study banking and currency reform. The American public believed that the Federal Reserve System would bring about financial stability, so that a panic like the one in 1907 could never happen again; but just 22 years later in 1929, the stock market crashed again, and the United States entered the worst depression in its history, the Great Depression. Some economists including Milton Friedman, Ben Bernanke, Robert Latham Owen and Murray Rothbard believe that the Federal Reserve System helped to cause the Great Depression.

HONG KONG/SINGAPORE Federal Reserve officials on Thursday downplayed the consequences of the falling U.S. dollar, underscoring that deflation is still a threat, especially with commercial real estate prices falling.

Dallas Fed President Richard Fisher said in an interview with Market News International that the weakening dollar, which hit a 15-month low against major currencies on Monday, is only one of the factors the Fed watches when setting policy.

“You pay attention to this,” Fisher said in reply to a question about the effects of a weaker dollar.

“On the other hand, in terms of its inflationary input, unless it becomes disorderly, a depreciating dollar — a gradually depreciating dollar — doesn’t necessarily add an enormous inflation impulse.”

Fisher will become a voting member of the Fed’s policy-setting committee in 2011.

The dollar has fallen 7 percent so far this year and likely has become a funding vehicle for bets on higher-yielding currencies in growing emerging markets.

Philadelphia Fed President Charles Plosser, answering journalists’ questions after a speech in Singapore, was also not worried about dollar weakness.

“There’s no particular reason you wouldn’t expect the dollar to go back to where it was before the panic set in — that is essentially all it has done at this point. I don’t view that as anything particularly of concern,” he said.

For the rest of the story please go here:

http://www.reuters.com/article/topNews/idUSTRE5AI1HH20091119?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher

Face Forward Comments:

Don’t let them kid you folks….weak dollar = High Prices = Higher Wages = Inflation / Hyperinflation

Former Federal Reserve Chairman Alan Greenspan said he sees the U.S. economy slowing next year as the surge in stocks comes to an end.  “The odds are we flatten out,” Greenspan said today in a Bloomberg television interview, referring to the equity market. “That flattening out will put some sort of dull face on 2010.”

Greenspan said he expects the economy to grow at a 3 percent to 4 percent annual pace in the next sixth months before slowing down. As a result, unemployment isn’t likely to decline much from last month’s 9.7 percent rate, he said. Even so, he doesn’t expect the economy to relapse into recession next year.

The world’s largest economy shrank at a 0.7 percent annual rate from April through June, the best performance in more than a year, revised figures from the Commerce Department showed today in Washington. U.S. gross domestic product contracted at a 6.4 percent pace in the first three months of 2009.

Growth will be boosted in coming months by the inventory cycle as companies bring stockpiles of goods into line with sales, Greenspan said. The Standard & Poor’s 500 Index has jumped 55 percent since its low for the year on March 9, an ascent that’s had a “very positive” impact on the economy, he said.

While stopping short of predicting hyperinflation, the former Fed chief said the economic recovery won’t prevent continued downward pressure on consumer prices.

For the rest of the article please go here:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aVSDHcHHwkBE#

Face Fwd Comments: Sarcasm Alert

But Mr. Greenspan, what about all of that money Mr. Bush just had to get approved to bail out all of those banks? And what about the fear of God Mr. Obama tried to put into the public about a horrible 8% unemployment rate if we didn’t pass the stimulus package. Please don’t tell me the politicians lies to me. Please Mr. Greenspan say it ain’t so.

Okay America, have you had enough yet? Are you still so enamored with this administration and the liberal set of lawmakers now in office, that you enjoy the tax burden that’s been put on you and your grandchildren. Is the Cult of personality for Obama so big that you cannot see that he has to go and take Pelosi with him.

Socialism is the least of our worries if we don’t put a stop to our government’s spending. Try unemployment at 30 to 40 percent when the money that is being printed has less value than the paper it is printed on. Wait until the cities and charities run out of money and the poor (you and me) have no way top provide food for our family. Wait until the government has no way to help you because the interest on the money that they owed is more than the GDP of our country. Wait until the scenes around a relief truck of rice that you see in Africa, arrive here. Just wait…..or do something in 2010 and 2012 to change the look of our politicians in power.

I strongly urge you to check the voting record of every elected official in DC. If they have voted for the TARP, Stimulus or any other government spending program, vote them out. This country needs a political revolution and it starts with you voting.

WASHINGTON — The U.S. Treasury Department is discussing ways to keep in reserve some emergency bailout funds even if the Troubled Asset Relief Program isn’t extended beyond the end of the year.

Treasury Secretary Timothy Geithner may opt to extend the program, which expires on Dec. 31. But even if the program isn’t extended, officials want to keep at least some of the money that has yet to be committed to any particular program on hand in case financial conditions worsen and the government is forced to step in.

The decision of whether to extend TARP has become embroiled in a debate over the unpopularity of the $700 billion bailout and the nation’s mounting fiscal woes.

Mr. Geithner hasn’t yet determined whether to extend the government’s TARP authority, Treasury officials said. Even if TARP is allowed to expire, the program won’t technically end until the government’s investments are repaid and the U.S. is no longer a shareholder in financial institutions.

Treasury officials are discussing whether there is any way to preserve that money without extending TARP. While there is no plan to spend additional bailout funds, Treasury officials want the ability to respond in case financial conditions deteriorate.

Neal Wolin, Treasury’s deputy secretary, said it was too early to make a decision on whether to extend TARP. “We will be looking at and making judgments about [extending TARP] in the weeks and months ahead,” Mr. Wolin said in response to questions after a speech Thursday.

As markets begin to stabilize and the economy shows signs of strength, some lawmakers are demanding the program cease and that any unused and repaid TARP funds go to pay down the nation’s debt. Last week, a group of 39 Republican senators and one Democrat sent a letter to Mr. Geithner urging him to let TARP expire and to use returned bailout funds “for debt reduction.” About $128 billion of the $700 billion remains uncommitted.

For the rest of the article by Deborah Solomon and Michael R. Critenden please go here:

http://online.wsj.com/article/SB125383359689939119.html

Face Fwd Comments

Does it bother anyone besides myself, that we are having to ask The Fed to give our money back? Our Money? If you believe as I do, that it should have never been given in the first place, then yes, it probably bothers you. It should come as no surprise that there was only one Democrat of the 39 law makers that asked for the money back.

We are about to hit our 12 trillion dollar debt ceiling. I’ll write that again just to make sure you got it……12 trillion dollars. That’s 1,000,000,000,000,000,000 times 12 or another way of putting it there are one million millions in one trillion. In other words one trillion divided by one million equals one million. Get the idea? It’s a bunch of money.

What would be the right thing to do if you were to hit your debt ceiling at home? Reduce your debt of course. What is Mr. Geithner and The Fed going to do? They are going to ask the government to raise the the debt ceiling so the government can continue to borrow money to pay it’s debt and run it’s programs. And we are already 12 trillion dollars in debt!

The same Federal Reserve that is holding our unspent TARP money hostage and is unwilling to give it back, is now going to try to get our lawmakers to raise the debt ceiling so we can borrow more money from them. Want to talk about a sweetheart business deal. Imagine if your bank said to you, “hey, you have some money on deposit here but we are not going to give it to you. Instead we are going to raise your ability to borrow so you can owe us more”. I believe you would turn that offer down.

No mater if you are a conservative, or a liberal……rather you are a Democrat, Republican or Independent you should be concerned that our government is now a beggar nation to our own Federal Reserve. This has not just happened on Obama’s watch. The power and money grab has been going on since their inception back.

The Scheme for the Federal Reserve Banking System Started at Jekyll Island NY somewhere around 1910 and was ratified in 1913 by Congress. On December 19, 1913 Congress had two versions of a Federal Reserve bill with forty major differences. Many Senators left town for the Christmas break. In a matter of hours, the forty differences were reconciled and the bill was voted on with 22 of the 88 Senators not in town. It passed and was on Wilson’s desk for signature by December 22. The passage of the Federal Reserve Act became known as “the Christmas massacre”. They (the banks) used strong arm politics through the elected officials and snuck a dirty bill though. Using the same dirty political tactics, they have been achieving policy changes to their favor ever since.

From the beginning “The Fed” and the people who proposed it have known that the end purpose was to enslave the people of this country.  The idea of enslaving a people not with chains but with debt is not new.  Many “company towns” did exactly that by making sure the people in the town owed the stores so much money they could not leave. 

It is time for the Tax Paying Americans to throw off the chains of slavery that the US banking system (The Fed) and our own government has placed on us.  Those chains are the debt that will never be paid. The Fed does not want the government of America out of debt, and our elected officials are cooperating to help them achieve it.  We must stop the Fed and get rid of the current set of lawmakers and take our government back.  We must elect financially conservative lawmakers, repeal most of the entitlements, and get our nation back for our kids.  This one tax payer that no longer wants to pay someone else’s bill.