Tuesday, October 11, 2011

The US Federal Reserve Is A Complete Failure Per Their "Mandate"

Federal Reserve Mandate: Conduct the nation’s monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices.

Every picture tells a story...

Debasing the currency of the USA does NOT promote "stable prices".  Prices rise as the value of the US Dollar falls:

Full employment through the debasement of the currency?  Hardly:

The United States Congress created the Federal Reserve with the Federal Reserve Act of 1913.  Ultimately, the US Congress is responsible for the Federal Reserve...and it's actions. 

Failure of the US Congress to recognize the failure of the Federal Reserve to "meet it's mandate" borders on dereliction of duty.  Further failure of the US Congress to address this failure of the Federal Reserve borders on treason.

The current Congression Oath Of Office [1884]:

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God.

The US Federal Reserve is "the enemy within".  Clearly, the US Congress avoids addressing the failure of their Federal Reserve because it is that Federal Reserve which writes the blank checks that keeps them in public office. 

The Federal Reserve's failure to meet it's "mandate" is preventing the citizens of the United States from pursuing life, liberty, and happiness.

The "monetary policies" of the US Federal Reserve are the root cause of today's Global Financial Crisis..they are not the solution. 

If the US Congress is serious about "job creation", they must first get serious about the failure of the US Federal Reserve.  Not until the US Congress does their job, and defends the Constitution by disbanding the Federal Reserve...returning monetary policy to the US Treasury where it belongs..., will the US rise from the depths of this pervasive economic crisis caused by the Federal Resreve and the Congress' lack of "true oversight" of an entity that their institution created almost 100 years ago.

The Fed Pays a King's Ransom to China
By Richard Benson
So what else could the Fed possibly do to keep our economy moving in the right direction? Why not go to the Chinese and promise to pay them a big fat premium on their current long term treasuries (that were purchased at much higher interest rates) and let them swap them into short term treasury bills and notes. Indeed, looking at the prices of US Treasury notes and bonds, most are trading at premiums of 10 to 15 percent for recent issues, and 50 percent or more for those issued just a few years ago. By allowing other countries to get out of longer term treasuries at a time of record low interest rates, it will give them an extraordinarily large gift and potentially enormous profits that can be used in several ways: China would likely use the profits to offset currency losses when the Fed goes back to printing money in QE3 to fund our deficit; and, in Europe, the profits could be used to help recapitalize their banks which are loaded up with Greek, Irish, Italian, and Spanish debt.

When foreign countries have fewer treasury notes and bonds left in their arsenal to sell, when they do get around to selling their dollar holdings it’ll push the dollar down without pushing interest rates up. (Note: Short term treasuries will not go down in price if sold. Indeed, they can only go down if the Fed raises rates, and even then they quickly adjust back to a par price of 100.) At that point, America can dare China to sell the dollar, because pushing the dollar down is our policy.

So basically now you know what the Fed’s recent “Operation Twist” is all about (a more appropriate name might be “Operation Payoff”). We are paying a King’s Ransom to pave the way to devalue the dollar in the next QE3 and beyond. Just remember the downside of a falling dollar will be higher import prices and higher inflation.

Quantitative easing, or when there's nowhere left to run
By Alasdair Macleod
"The idea that QE is primarily to help the economy recover is Keynesian guff, a cover for the true reason. Without it, the U.S. and U.K. would have to compete for global savings at far higher interest rates. What price $2 trillion in new Treasuries with no QE? What price L175 billion in new gilts? The debt trap has already sprung. And few investors yet seem aware of the irony that loading up banks with Treasuries and gilts is exactly what the eurozone banks have already done for the PIIGS. Whatever the current difficulties faced by European banks and the U.S. and U.K. governments and their banking systems, there is only one option for all of them: Buy time by printing yet more money. This is why the banking system in the eurozone and elsewhere will survive. Banks need governments as much as governments need them. The cost of this survival will be borne by the unwitting saver, who has been frightened into cash only to find it being debased more rapidly than before."

Gold rush in India has now become a sprint
According to a JPMorgan report, India is home to more than 18,000 tonnes of gold (about 11 per cent of the global stock), worth about $1.1 trillion (versus an equity market cap of $1.2 trillion). Gold holdings are also more evenly distributed across Indian households as compared to stocks.

"The Indian retail investor, through thick and thin, has invested a substantial quantity in the best performing asset class in the last two-three years, which is gold. Indians always have this fascination for gold and rightly so.

It has done well for them," says Bharat Iyer, head of India equity research at JPMorgan.

Silver eagle bullion sales move into record territory [...but the price of Silver is down on the year]
Mike Zielinski reports at Coin Update that demand for U.S. Silver Eagle coins this year has already surpassed last year's demand with three months still to go this year. Zielinski's commentary is headlined "Silver Eagle Bullion Sales Move into Record Territory" and you can find it posted at the coinupdate.com website.

By Greg Hunter
When?  That’s the question that is on the minds of people following the economy.  When will the “you know what” hit the fan and we start another global meltdown.  I am not going to string you along.  I will tell you right now, I don’t know.  I will tell you the headlines I read and the things I am hearing from people in power around the globe say we are in deep danger.  The time is close.

1 comment:

  1. Anyone reading G Edward Griffin's "Creature from Jekyll Island" will know that everything is moving exactly to plan. Create more debt slaves...and print more money.

    Preserve your wealth buying stacking precious metals!