The Hunt For Red Faced Bernanke

"The Federal Reserve, in collaboration with the giant banks, has created the greatest financial crisis the world has ever seen," said Rep. Ron Paul, R-Texas. "The problem with debt must be addressed."


On Tuesday, The Captain of our sinking financial ship, Bumbling Ben Bernanke, went before the House Financial Services Commitee for the bi-annual Congressional inquisition of the Fed on the Economy and Monetary Policy.

The Commitee showed up carrying ugly sticks, and from the git-go appeared out for blood. Congressman Ron Paul went for Bumbling Ben's jugular immediately. In a two and half minute rapid fire opening statement, Mr Paul laid bare the truth about the US Federal Reserve's complicity in the ongoing financial crisis, and effectively called Bernanke onto the carpet. The rumble was on.

Bumbling Ben, sitting in front of the Commitee and the C-Span viewing audience, sat there as smug as ever and proceeded as usual to hide behind the illegal Federal Reserve Act of 1913.

Questions about unemployment, debt, stimulus, and government regulation of the players in the financial markets were common. Unfortunately there were far too few questions of Bumbling Ben regarding his ill fated monetary policy. Ron Paul of course got his monetary policy shot in during his opportunity to grill Bernanke. Mr. Paul lectured Bumbling Ben on the "real" definition of Inflation, a growing money supply. Mr. Bernanke replied Inflation is "the growth in prices of goods" while refusing to admit the Fed is "growing the money supply".

Florida Congressman Alan Grayson stepped to the plate in the very late innings of the Inquisiton carrying the biggest of ugly sticks to take a swing at Bumbling Ben. Bernanke was caught with his pants down as Mr. Grayson proceeded to fillet, grill, and fry Bumbling Ben about currency swaps with foreign banks and where he gets the authority to hand out "half a Trillion Dollars" of the taxpayers money to foreigners without consulting the Congress [and the Constitution] first. Hiding once again behind the Federal Reserve Act, Bernanke refused to answer Mr. Graysons questions demanding to know "where the money went".

"I don't know," was Bumbling Ben's reply. Congressman Grayson laughed in his face.

The House Financial Services Commitee Inquisiton of Ben bernanke revealed little in the way of answers about the Economy and Monetary Policy. It did, however, serve notice to Bumbling Ben Bernanke and his FOMC cronies that the Congress and the American people are watching closely now, and unlikely to remain content to sit in the dark any longer and allow the Fed to continue sqaundering the nation's wealth as they line the pockets of their friends on Wall Street.

The American public must not allow the Fed to come up for air here. We must continue to pressure them for answers to our questions regarding their actions behind closed doors that we are being asked to pay for. We must continue to pressure our elected representatives to "go after the Fed" and either clean that Constitutional travesty up, or close it down.

VIDEO HIGHLIGHTS OF THE HOUSE FINANCIAL SERVICES HEARING CAN BE VIEWED AT THE LINKS BELOW.

Ron Paul Opening Statement Fed Hearing
http://www.youtube.com/watch?v=pSRvnXtrmtE

Ron Paul with Federal Reserve Chairman on definition of inflation
http://www.youtube.com/watch?v=dGyA4LeaEvg&eurl=http%3A%2F%2Fnews%2Egoldseek%2Ecom%3A80%2FRonPaul%2F1248198029%2Ephp&feature=player_embedded

Florida congressman Alan Grayson laughs in Ben Bernanke's face - priceless!
http://www.youtube.com/watch?v=00ECLxK2YTs&eurl=http%3A%2F%2Fjsmineset%2Ecom%2F&feature=player_embedded

Senate Banking Hearing with Fed. Reserve Chairman Bernanke [full hearing]
http://www.c-span.org/Watch/Media/2009/07/22/HP/A/21200/PENDING+homepage+Senate+Banking+Hearing+with+Chairman+Bernanke.aspx


US Fed's Bernanke On Defense At Capitol Hill Hearing
WASHINGTON -(Dow Jones)- U.S. Federal Reserve Chairman Ben Bernanke spent the first day of his Capitol Hill testimony on defense, with Republicans criticizing the central bank and attacking the Obama administration's plans to make it a new super regulator of the financial system.

But Bernanke fired back with a strong defense of the central bank's crisis measures. He rejected assertions that the Fed's liquidity programs are stoking inflation and argued in favor of the Fed keeping its consumer protection role.

Bernanke also made clear that he thinks the central bank can monitor systemic risk while maintaining its ability to protect consumers.

"I'm proud of the work we've done," he told the House Financial Services Committee.

Bernanke said inflation concerns are misguided, and reiterated to lawmakers that central-bank policy makers expect inflation to be subdued for the next two years.

"I don't think the financial markets are indicating a great deal of concern about inflation," he said, pointing to long-term Treasury rates that are still " quite low."

Furthermore, Bernanke defended the Fed's plans to purchase up to $300 billion in longer-term Treasury securities against charges that the Fed is monetizing the debt and stoking inflation. When those purchases are completed, the Fed will still have fewer Treasurys on its balance sheet than it did two years ago, Bernanke said. "We are not taking a significant portion of U.S. Treasurys."

"Let's be clear about what's going on - the Federal Reserve is not putting money out into the economy. What we're doing is creating bank reserves. It's not chasing any goods," Bernanke continued.

Posey of Florida, like Paul of Texas earlier, was unconvinced.

"It's going to cause inflation," Posey insisted.

Additionally, the committee's top Republican, Spencer Bachus, R-Ala., said CIT Group Inc.'s (CIT) near-collapse represents another example of the poor job the Fed has done in identifying and averting systemic risks.

Bachus also criticized the Obama administration's plans to deem the Fed a new regulator of systemic risk. Asking the Fed to take on such a role would only result in a "false sense of security which will inevitably be shattered at the expense of the taxpayer," said Bachus.
http://money.cnn.com/news/newsfeeds/articles/djf500/200907211440DOWJONESDJONLINE000599_FORTUNE5.htm

Bernanke says Fed can take on supercop role
WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke ran into skepticism Tuesday from U.S. lawmakers wary of expanding the Fed's duties to police big financial companies. They argued that the Fed failed to spot problems that led to the financial crisis in the first place.

"The Fed has made some big mistakes," said the House panel's highest-ranking Republican, Spencer Bachus.

An Obama administration proposal to make the Fed the supercop of globally interconnected financial companies would be "just inviting a false sense of security that inevitably will be shattered at the expense of the taxpayer," Bachus warned.

Bernanke countered that the administration's proposal would be a "modest reorientation" of the Fed's powers, not a great expansion of them.

Bernanke also argued against congressional proposals to let the Government Accountability Office, Congress' investigative arm, audit the central bank. He feared that audits that delve into the Fed's interest-rate decisions could compromise its independence in setting interest-rate policies.

"A perceived loss of monetary policy independence could raise fears about future inflation," he warned.

Rep. Ron Paul, a Reopublican and a frequent Fed critic, rejected that argument and said the Fed already makes political calculations.

"Just the fact that (the Fed) can issue a lot of loans and special privileges to banks and corporations," Paul said. "That's political."

Rep. Bill Posey, a Republican, who wants the Fed to be more open, argued that some people rightly say "you can find out more about the operations of the CIA, than the Fed. The public has the right to know."
http://finance.yahoo.com/news/Bernanke-says-Fed-can-take-on-apf-2960346446.html?x=0

Don't Reappoint Ben Bernanke
By John Tamny
...in an August 2005 Wall Street Journal op-ed, he asserted that there is a "highest level of employment that can be sustained without creating inflationary pressure." More recently the Bernanke Fed addressed the prospect of future inflation amid economic weakness. This time it was the Phillips Curve in reverse, specifically an FOMC release that noted that due to "increasing economic slack here and abroad, the Committee expects that inflation will remain subdued."

It would be hard to contemplate a more impoverishing notion than the one that says economic growth is the cause of inflation, and economic weakness is its cure. What this means is that should the U.S. economy reverse direction in such a way that unemployment falls, the Bernanke Fed would use rate machinations to pour cold water on it as a way of keeping unemployment higher than it otherwise might be. For this reason alone, Obama should not re-nominate Bernanke.

Importantly, there are other reasons to send Bernanke back to academia. As is well-known, the Fed's basic mission as approved by Congress centers on unemployment and inflation. If both are kept low on the Fed's watch, our central bank is doing its job. Sadly for Bernanke, the direction of both unemployment and inflation point to an impressive failure on the part of the Fed in terms of its core mission.

Indeed, the rate of unemployment--admittedly not the most reliable of government statistics--sat at 4.8% when Bernanke took over in January of 2006. Since then, the rate of joblessness in the U.S. has risen all the way to 9.5%.

As for inflation, while economic thinkers will continue to debate whether it's the Fed or Treasury that sets the tone when it comes to the value of the dollar, those who believe the Fed should keep the greenback strong and stable can't possibly be happy with its decline on Bernanke's watch. The dollar has collapsed against gold since his nomination. Trading at $470 per ounce back in 2005, gold has nearly doubled against the dollar during his Fed tenure.

Fed apologists will doubtless point to low government measures of inflation as a counterargument, but as has regularly been shown, the consumer prices which make up the Consumer Price Index (CPI) change for all manner of reasons that have nothing to do with the value of money. Looking at gold's surge, we can see that inflation has been and remains very much a problem. But hostage to a Phillips Curve mindset learned on campus, Bernanke is blind to the very inflation that holds down the economy like nothing else.
http://www.forbes.com/2009/07/17/ben-bernanke-federal-reserve-opinions-columnists-john-tamny.html

The Evil Empire has A Name, And It's Name Is Goldman Sachs

By now many of us have seen Henry Paulson grilled like an Oscar Meyer Wiener during a recent Congressional hearing. Stop for a moment and put yourself in Hank's shoes. Suddenly you're at the center of the financial universe...or so you'd like to believe.

Perhaps Henry Paulson was correct in his assessment that if nothing was done, the financial system would collapse...sure it would Hank, if one believed the financial system "was Goldman Sachs".

As Goldman Sachs posts huge profits from the economic crisis, the question is: Did it cause the problems in the first place?
By Alex Brummer
No name is more ubiquitous in the pantheon of global finance than that of Goldman Sachs. At a time when world commerce and banking has been brought to a shuddering halt by greed, excess and foolishness, this investment bank provoked astonishment and disgust this week by handing out record bonuses.

Certainly, there can be no dispute that while much of the world is being devastated by falling trade and reduced living standards and when governments are faced with the biggest debt mountains in history, Goldman Sachs is living high off the hog. The group's earnings in the past three months alone were $3.44billion - 65 per cent up on the same period last year.

As the financial crisis unfolded, the fingerprints of Goldman Sachs have been seen on almost everything that has happened. Along with the other Wall Street investment houses, it was at the centre of the scandal under which sub-prime mortgages - provided to the lowest echelons of American society - were packaged up as solid investments with a good return and sold on to unsuspecting investors.

Goldman even went as far as to buy a couple of brokerage firms who sold these corrupt mortgages 'so that it better understood how the market worked'.

Having helped to create a market in which it underwrote $76.5bn of sub-prime mortgages, it sold off these broker firms which meant it had protected itself from huge losses when the mortgage market went bad.

Goldman Sachs's greatest triumph of all, however, has been to emerge from the credit crisis not only unscathed, but extravagantly enriched - despite having to be bailed out itself.

It has achieved this by a mixture of guile and influence. In the wake of the Lehman collapse, Goldman Sachs was also facing the precipice. Its share price was plunging and it had to take any help it could get. This, of course, came from its former boss Hank Paulson.

He allowed both Goldman and Morgan Stanley to change their status from broker-dealers to bank holding companies. This meant that Goldman could borrow directly from the U.S. central bank, the Federal Reserve, and shore up its business as money drained away. It also was forced to allow the taxpayer to take a $5bn stake in the company.

The paradox is that Goldman Sachs had come as close to destruction as at any time in its long history. Indeed, the boast from its chairman, Lloyd Blankfein, to me (at a briefing session for London-based writers) that the firm had enough liquidity to withstand almost anything, turned out to be poppycock.

Even now, Goldman Sachs could not be operating at its current velocity without the help of the trillions of dollars being flushed through the financial system by central banks including the Federal Reserve and the Bank of England.

Because of its friends in the highest places of global finance, no one even dares question the notion that what is good for Goldman Sachs is good for the global economy.

That, I suspect, is a precept that is going to be increasingly challenged.
http://www.dailymail.co.uk/debate/article-1200481/ALEX-BRUMMER-As-Goldman-Sachs-posts-huge-profits-economic-crisis-question-Did-cause-problems-place.html

Here's Matt Taibbi's controversial article on how Goldman-Sachs helped bring about and profit from our current financial crisis. It originally appeared in Rolling Stone Magazine. Please read it in its entirety. The article is an eye opener, and it exposes and offers an easy to follow timeline into the organization that has stolen the American Government from it's citizens:

Inside The Great American Bubble Machine
It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers - one of Goldman's last real competitors - collapse without intervention. ("Goldman's superhero status was left intact," says market analyst Eric Salzman, "and an investment-banking competitor, Lehman, goes away.") The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.

Immediately after the AIG bailout, Paulson announced his federal bailout for the financial industry, a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds. In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bankholding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding - most notably, lending from the discount window of the Federal Reserve. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs - and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.
http://www.correntewire.com/great_american_bubble_machine_0

Glenn Beck. Love him or hate him the man can make a point that is difficult to argue with most times. In the following video from his Glenn Beck Show, Glenn offers us a scintillating look at the web of deceit that is Goldman Sachs. Glenn gives us a relatively easy to understand chalk talk that uncovers Goldman Sachs' infiltration of the US Government. If this doesn't scare you, and prompt you to contact your Congressman demanding an investigation and the dismantling of Goldman Sachs, then why are you here reading this? This is MUST SEE TV!

You Won't BELIEVE The Goldman Sachs Governmental Ties Chart! [VIDEO]
http://www.youtube.com/watch?v=khGZ3a4zTNU&feature=related

The next video is a conversation about Goldman Sachs that includes Rolling Stone writer Matt Taibbi, Rob Johnson, and Mike Lux. This is a most revealing conversation, and should further enrage those looking for someplace to put the blame for this Global Financial Crisis.

We Don't Care. We Don't Have To Care. We're Goldman Sachs.[VIDEO]
Goldman Sachs has openly, blatantly gone back to business as usual, knowing they will be bailed out by taxpayers if their high rolling gambles don't work, and they don't care who knows about it.

The reason they can be so breathtakingly arrogant, so stunningly cavalier about not giving a damn about things that any other company's PR and government relations department would advise them against, is that they know they have the power to do anything they want to do. The Obama White House needs to take Goldman Sachs to the woodshed rhetorically, and they should have the Justice Department investigating them for anti-trust violations and all manner of stock manipulation. It is time to start squeezing the management at Goldman, and making them nervous about being broken up into pieces that are not too big to fail.
http://www.huffingtonpost.com/mike-lux/we-dont-care-we-dont-have_b_236218.html

Goldman Sachs: A Vampire On The Jugular of America
By Darryl Robert Schoon
We are in for some truly terrible times. The green shoots “seen” by Geithner and Bernanke make the LSD-based hallucinations of my generation seem rooted in rational experience; but those believing in these hallucinatory green shoots will find reality to be far different when the banker’s world of credit-based paper disintegrates.

According to Mancur Olsen’s theory, it is the dominance of special interest groups, e.g. the bankers, the healthcare industry, the military-industrial complex, etc., that led to the demise of the power and influence of the US.

Bankers are well aware of this entropic decline and are repositioning themselves in China and other nations where expansion still seems to be the order of the day. In this, they will fail, for the collapse of the West’s paper-based financial system will affect all nations, not just those now in decline.

Credit-based capital markets are in extreme distress everywhere and were it not for heavy government aid and intervention, they would have already collapsed. The bankers’ credit-based paper money has weakened the entire global economy and when it collapses, all credit-based paper money could be virtually worthless with only gold and silver retaining monetary value.

The case for gold and silver is simple as it is old; as the same story has been repeated during the last 1,000 years, first in the East then in the West. Gold and silver were money. Then paper currencies backed by gold and silver were introduced by bankers and governments and were substituted for gold and silver. Then gold and silver were removed from paper money because governments had spent the gold while printing more and more paper money. As a result, every experiment with paper money ended in disaster.

This is the true cost of accepting the banker’s paper coupons as money. Over time, the banker’s paper money loses more and more value. We are in the end-times of our experiment with the bankers’ paper money and the system it gave rise to, credit-based capital markets.

Those who have their wealth invested in paper-based IOUs, e.g. treasuries, bonds, etc., will suffer the most in the coming meltdown. In the coming days, paper-based IOUs will become increasingly worthless and in the coming years, most IOUs will have little or no value, including government treasuries and currencies, as IOUs increasingly become ICPs—I Can’t Pay.

This is because the largest bubble of capitalism’s end-game is being formed right now, a bubble of stupendous proportions, a bubble composed of extraordinary amounts of government debt; and, when this bubble bursts, governments and their citizens will be its victims.

Of course, Goldman Sachs and the rest of the paper boys are hoping the vast majority of investors will continue to believe in their paper promises and will continue to leave their paper money on the table, their table, and to let the bankers do with it what they will.

This is the reason that financial interest groups have marshaled their considerable resources to defend paper markets against the increasing threat of rising prices of gold and silver as the price of gold and silver indicates the level of systemic distress in paper-based capital markets.

Over the past decade, private bankers have emptied national treasuries of gold bullion, selling this bullion on the open market in order to keep the price of gold low in order to mask the increasing vulnerability of their paper-based assets.

The US claims the US Treasury still holds approximately 7,000-8,000 tons of gold but has not allowed a public audit of its reserves since 1954; and since 1999 the UK and Swiss have seen their gold reserves decimated as bankers freely sold their gold in order to cap the rise in the price of gold to keep the banker’s paper money scheme intact.

This is perhaps the last opportunity for private investors to purchase gold when it is being diverted from public treasuries in order to keep gold prices artificially low. These publicly subsidized prices will not be available forever; for when the banker’s Ponzi-scheme of paper money collapses, gold will never again be this cheap.

But most investors will continue to play the banker’s game with the banker’s paper money and continue to invest in paper assets as it is the only game they know. What they don’t know is that the banker’s game is almost over; and, for those who understand what is happening, this is the opportunity of a lifetime to profit—and to survive.
http://news.goldseek.com/GoldSeek/1248098201.php

Every American MUST be educated on the TRUTH about the fall of their Government via the coup organised by Goldman Sachs and its alumni. This it what happens when Americans don't pay attention, and put far too much "faith" in their Government. The "evil empire" that threatens America, threatens it from deep within. And that evil has a name, and it's name is Goldman Sachs. Goldman Sachs, and its surrogate the US Federal Reserve, must be destroyed if we are to save our country, and save our constitution. Contact your Congressman TODAY!

Rabid Congress Shreds Paulson

Congress got their chance today to grill Paulson for his actions last fall as Treasury Secretary. His intimidations, threats, interference with the free market, and intentional misperceptions with regards to Ken Lewis, TARP, stimulus, bailouts, Bank of America, Merrill Lynch, Lehman Brothers, etc. were repeatedly brought up and questioned. And grill him they mostly did, as they should have, at least the parts that we were allowed to see… The media’s treatment of this hearing was beyond sickening. CNBC continuously broke from coverage not only to bring useless updates on the current collapse of CIT, or an untimely interview with JPMorgan’s CFO to express how stupidly awesome their last quarter was (when ignoring all the derivative losses they no longer need to report, of course), but CNBC also, and repeatedly, broke in to let Kudlow or some other media shill defend Paulson and admonish Congress for their treatment of Paulson. They even had a former fed governor, McTeer, come on to agree with Kudlow’s defense of the man who oversaw this historic financial debacle. Is any of this any surprise? No, not at all unfortunately. We are more than familiar with CNBC’s ultra biased slant on their reporting of business. But today was a new low, a far more reaching new low when you thought they were already as low as they could get.
-Chris Mullen, Gold-Seeker.com


Rep. Jordan on CSPAN's "Washington Journal"
Representative Jim Jordan had probably the best five minutes of allotted time with former U.S. Treasury Secretary Henry Paulson before a House of Representatives Oversight subcommittee this morning. ...here is an interview with Susan Swain in which Jordan discusses the Oversight hearing and his thoughts on the Bank of America/Merrill Lynch deal.
http://news.goldseek.com/GoldSeek/1247762684.php


Highlights of Former U.S. Treasury Secretary Henry Paulson before Congress
http://news.goldseek.com/GoldSeek/1247764888.php

This is MUST SEE TV! See Rat Fink Henry Paulson squirm before Congress like no other has before him. Mr. Paulson has elevated stammering speech to a new level. PRICELESS! To watch the Paulson Wigglefest in it's entirety, follow the links below:

Paulson Hearing: AM Session
http://www.c-span.org/Watch/Media/2009/07/16/HP/R/20860/Paulson+Defends+Role+in+BofA+Merrill+Lynch+Merger.aspx

Paulson Hearing: PM Session
http://www.c-span.org/Watch/Media/2009/07/16/HP/R/20953/Paulson+Defends+Role+in+BofA+Merrill+Lynch+Merger.aspx


International Forecaster
Goldman Sachs is in big trouble, but the media refuses to dig and get the same story the alternative media has dug up. As usual the SEC is looking in a different direction, as far away from the real action as possible.

The latest allegation is front-running their own client orders, never mind everyone else’s. As we reported earlier they are using a government created program. A good question is are they front-running for both themselves and the government, which might make it semi-legal? Of course nothing ca be semi legal. It is either legal or it isn’t. Goldman has been confronted on the issue and refuses to answer detailed questions, just saying, “your suggestion that we monitor our website to facilitate front-running is untrue and offensive.” Unfortunately, this confirms our worst suspicions. If we were using the Goldman 360 portal for trading we’d stop until we at least investigate to make sure we were not being cheated. Where may we ask is the SEC? Camping out on the moon most likely. This episode is just beginning. This is another example of cross corruption and arrogance by both our government and Goldman.
http://news.goldseek.com/InternationalForecaster/1247681648.php

NO! NOT THE VENERABLE GOLDMAN SACHS !
By: Jim Willie CB, GoldenJackass.com
So Goldman Sachs was allegedly caught with their clever Ultimate Insider Trading software, whose handy Unix boxes monitor trade orders at the New York Stock Exchange. The secured information was then in microseconds used to create rafts of computer trade orders intended to snatch pennies per trade but with hundreds of millions of shares, enough to log beaucoup profits at quarter’s end. Yes, GSax has plenty of expertise, just maybe not the legal kind. They might have taken insider trading to a new level worthy of the history annals. They supposed smarter than genius cadre really screwed up when they admitted the code and the trade program could be used to manipulate markets. So the public and authorities must believe that the venerable Goldman Sachs could gather illicit trading profits, had the capability to gather illicit trading profits, but did not gather illicit trading profits. Finally, the masses have some evidence of how GSax has managed to beat the market consistently. They appear to have front-run the NYSE stock market, and brazenly defy the prosecutors because they might exert considerable control over them. Thanks to their strong control of most USGovt financial apparatus, the FBI helped to contain the problem. The only trouble is that London and Germany have their hands on the software, and might actually reveal its inner workings. One can only hope they reveal more about it than exploit its usage further. Is this a trade secret issue or a crime secret issue? You decide! One might wonder if GSax might become too distracted and preoccupied with managing the leak, so that they take their eye off the five game fields they attempt to control. One colleague claims the Powerz are stuck managing bigger and heavier and more numerous balls in a vast juggling act bound to end.
http://news.goldseek.com/GoldenJackass/1247771829.php

Putting the Gold in Goldman
By Eric J. Fry
Meanwhile, back at the former Treasury Secretary's old stomping grounds, business continues as usual…or rather, as UN-usual.

Despite the enormous volatility besetting all major financial markets during the last two years, Goldman Sachs has steadily increased its risk exposure, as measured by value-at-risk (VAR) – a widely utilized risk metric. VAR, as presented in Goldman’s quarterly reports, displays the firm’s probable maximum loss per trading day. During the recent quarter, Goldman’s daily VAR established a new record high for the firm of $245 million.

One might have imagined that last fall's stock market collapse, coupled with the near-implosion of the financial system, would have reduced Goldman's appetite for risk just a smidge. But the VAR data tell the exact opposite story.

Goldman upped its risk exposure, even while borrowing billions of dollars from the government. And by the way, Goldman's VAR did not merely increase in absolute terms, it also increased relative to the size of the company’s shareholder equity. In other words, no matter how you slice or dice the numbers, this swashbuckling financial firm has been ramping up its risk exposure.
http://www.howestreet.com/articles/index.php?article_id=10168

The USDollar is vulnerable here and now, as a new wave of bank losses is imminent from numerous types of mortgages along with some basic types. Let’s see if the grapevine is correct, that the USDollar will begin to see a trashing initiative starting this weekend, out of Asia. They must be impatient beyond description. This autumn is expected to see some rather tumultuous events unfold, as the US financial structures are breaking across most of its ramparts even as loyalty to it is fading like a mist. There will be no return to the US of yesteryear, only a tragic march.
-Jim Willie CB

The Federal Reserve Is Crushing The American Dream

Unlocking the Money Matrix - The Summers Gold Price Suppression Scheme
By Jake Towne, the Champion of the Constitution
Here is how the scheme works:

1. Central banks, like the FED, takes gold bars from their vaults and leases them to cartel entities like Goldman Sachs at a low rate typically around 1%. Unless the sale is announced like Gordon Brown's infamous sale of 60% of England's gold reserves from 1999-2002 at $275/oz., the central bank continues to carry gold on lease and gold in the vault as one line item on their balance sheet.

2. The cartel then sells the physical gold into the futures market at spot price. The spot and future prices were suppressed by this extra supply. Large dumps can be orchestrated to cause "waterfalls" in the price due to algorithm or stop-loss trading.

3. Now the cartel has plenty of capital which could be leveraged by an investment bank at 30:1 or higher and used for ANY transaction. (Similar plays on interest rate mismatches were also executed on fiat currencies, most infamously the Japanese Yen-US Treasury carry trade, but these plays were made far easier with the golden 'canary' silenced.)

4. The physical gold bars leave the exchanges. Most of the central bank gold is melted down to meet the supply deficit, and now adorns the necks of Indian women or rests in the vaults of investors.

There are approximately 160,000 metric tons of aboveground gold stock. The World Gold Council reports that the world's central bank gold reserves are at 29,698 metric tons as of June 2009, and this is a fall from the 35,582 metric tons reported in 1990 while the world's money supply has more than tripled since then. However, the WGC statistics do not have the rigor of independent audits and are incorrect as shown by the abrupt doubling of China's disclosed reserves overnight. As Ed Wener of GATA reported in 2005 and James Turk related in 2009, it is highly probable that 12,000 to 15,000 additional metric tons has been leased by the central banks into the marketplace.

In the March 2001 audit of the Exchange Stabilization Fund (ESF), the Treasury refers its (unconstitutional) powers to "deal in gold, foreign exchange, and other instruments of credit and securities the Secretary considers necessary" to promote "orderly exchange arrangements and a stable system of exchange rates." Along with the blatant remark by Greenspan above, this appears to me to be a carte blanche to trade in the gold market, and as late as 2000 the FED still publicly reported the ESF as controlling an unspecified portion of our nation's gold. To this day, the US government and the FED report gold stock on lease and gold in the vault as a single line item.

It is not outside the realm of possibility – though unproven - that the US government completed a gold swap transaction with Germany, where we traded gold stored in the US for gold stored in Germany as Turk surmised in "Behind Closed Doors," which was based on FED meeting minutes in 2001. Of course, the swapped gold from Germany would then have been used by the US government to dump gold on the London market. Recent events with Germany and subsequent Obama-Merkel meetings hint that they may be calling for the return of their gold. The Bundesbank even published a document back in 2000 that gave a hypothetical example of a gold swap with the FED.
http://news.goldseek.com/GoldSeek/1247554800.php

Federal Reserve Warns of Economic Disaster If HR 1207 Passes
Presently, the Government Accountability Office has not been able to audit the Federal Reserve System. Mr. Kohn said on this topic, “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.” Mr. Kohn, and others within the Federal Reserve, believes that government meddling in the U.S. Central Bank could come at a high cost, “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.”
http://blog.puppetgov.com/2009/07/13/federal-reserve-warns-of-economic-disaster-if-hr-1207-passes/

Government meddling in the US Central Bank? Who is this jackass kidding? Himself, obviously. The money the US Central bank plays with is, quite frankly, the government's money. The government created the Federal Reserve, and if the government so choses they can destroy the Federal Reserve just as easily. The US Government backs the money, NOT the Federal Reserve. Their assertion here is ludicrus. Mr Kohn, Mr Bernanke, and their bankster buddies have all gotten far to big for their britches. It is high time the American people demand the death penalty for these thieves. The Federal Reserve is a 100% unconstitutional entity that has been stealing the wealth of the American People for FAR TO LONG. Contact your congressman and senator today and DEMAND the destruction of the US Federal Reserve.

The Game Changer?
By: Theodore Butler
I am convinced that the CFTC now fully appreciates the position limit and manipulation problem in silver. Fix the position limit problem in silver and the manipulation is over. Let me repeat that. If the CFTC sets position limits in COMEX silver at 1000 to 1500 contracts for both longs and shorts and discontinues the phony hedging exemptions currently granted to the big US banks and other shorts, the silver manipulation is history. I think this is in the cards. I think this is what Chairman Gensler and Commissioner Chilton intend. But it won’t happen if the big shorts get their way. If they are allowed to continue to hold their manipulative short positions, then we must wait for the physical shortage to break the manipulation.

For more than 20 years, the CFTC has turned a blind eye and a deaf ear to the problem of legitimate position limits in silver. Apparently, that has changed. The new Chairman appears to be interested in the public’s opinion on this issue. It’s time for you to speak up. It’s time to be specific. The issue is position limits, not the budget deficit, not the dollar, not his previous employment at Goldman Sachs. He is doing what he should be doing and as such, deserves to be treated with respect. Ask him and the other commissioners to reduce the position limits in silver to between 1000 to 1500 contracts, or please explain why that limit is not appropriate. Ask him to do away with the phony exemptions granted to a few big shorts or make transparent the reason why they are short. Make it short, sweet and specific - lower the silver limits to equal all other commodities and disallow phony exemptions. Send this article if you want. This could be a game changer. Don’t delay.

Ggensler@cftc.gov
Mdunn@cftc.gov
Bchilton@cftc.gov
Jsommers@cftc.gov

http://news.silverseek.com/TedButler/1247586939.php

US Mint AGAIN Suspends Gold Coin Sales
Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .”

The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.
http://prudentinvestor.blogspot.com/2009/07/us-mint-again-suspends-gold-coin-sales.html

Commodity exchanges can dump gold debts on ETFs
Dear Friend of GATA and Gold:
GATA board member Adrian Douglas discloses in the report below, titled "The Alchemists," that the New York and Tokyo commodity exchanges have been permitting their gold futures contracts to be settled not in real metal but in shares of gold exchange-traded funds (ETFs). This essentially allows the gold shorts (and the exchanges themselves, which guarantee futures contracts) to transfer their obligations to third parties that may not have the metal they claim to have and that, in any case, are operated by the investment banks running major short positions in gold.

Thus it is likely that the paper claims to the world's supply of gold are greater than even GATA has suspected -- that the gold supply is even more oversubscribed and that "paper gold" is being created at an ever more frantic rate to suppress gold's price.

The ability to offload futures contract gold obligations to the ETFs could become the principal mechanism of the gold price suppression scheme. GATA asks its supporters to call Douglas' report to the attention of financial journalists, market regulators, and elected officials everywhere.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
The Alchemists
By Adrian DouglasSaturday, July 11, 2009
http://www.stockhouse.com/BULLBOARDS/MessageDetail.aspx?p=0&m=27281188&s=HGU&t=LIST&l=0&r=0

Fed Independence or Fed Secrecy?
By: Dr. Ron Paul, U.S. Congressman
Last week I was very pleased that hearings were held on the independence of the Federal Reserve system. My bill, HR 1207, known as the Federal Reserve Transparency Act, was discussed at length, as well as the general question of whether the Federal Reserve should continue to operate independently.

The public is demanding transparency in government like never before. A majority of the House has cosponsored HR 1207. Yet, Sen. Jim DeMint's heroic efforts to attach it to another piece of legislation elicited intense opposition by the Senate leadership.

The hearings on Capitol Hill provided us with a great deal of information about the types of arguments that will be levied against meaningful transparency and how the secretive central bankers will defend the status quo that is so beneficial to them.

Claims are made that auditing the Fed would compromise its independence. However, by independence, they really mean secrecy. The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves. I am happy to challenge this type of "independence."

They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs. We should just trust them. This is patently ridiculous. The market is a complex and intricate thing. No one knows what the market needs other than the market itself. It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled. Bankers are not all-knowing and cannot ignore the rules of supply and demand. They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.

They claim the Fed must remain apolitical. No organization is apolitical that relies on the president to appoint the chairman. In fact, it is subject to the worst sort of politics -- power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight. The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long term considerations. They do this partly because of the political appointee process for the chairmanship.

The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress' constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long. This was the issue that got me involved in politics 35 years ago. It is very encouraging to finally see the issue getting some needed exposure and traction. It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue.
http://news.goldseek.com/RonPaul/1247509937.php

Audit would harm country, Fed vice chair warns
WASHINGTON -- Federal Reserve Vice Chairman Donald Kohn on Thursday launched a robust defense of the U.S. central bank's independence and warned that efforts to put monetary policy under political sway would hurt the economy.

Curbing the Fed's independence could both result in higher long-term interest rates and hurt the United States' credit rating, Kohn said.

"Any substantial erosion of the Federal Reserve's monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation," Kohn said in remarks prepared for delivery before a congressional committee.

Kohn is due to testify later on Thursday. A copy of his remarks was released before the hearing.

Kohn's testimony comes as Congress debates President Barack Obama's plan for regulatory reform, which envisions the Fed taking on the role of systemic risk regulator, in a bid to fix a system that failed to prevent a financial crisis last year.

The proposal to expand the Fed's powers has increased calls for accountability at the central bank, and a bill put forward by Republican Congressman Ron Paul to expose it to a full audit by a government watchdog has won support from a majority in the House of Representatives.
Kohn said such a move could be highly detrimental.

"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.

Kohn said allowing that the Government Accountability Office to audit Fed monetary policy would be a bad mistake.

"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.
http://www.reuters.com/article/companyNewsAndPR/idUSN0945907120090709

U.S. banks still dominate COMEX gold, silver shorts
By: Gene Arensberg
ATLANTA -- Both gold and silver continued to get sold down this past week, probably a case of fearful investors raising cash ahead of a perceived storm brewing. However, both metals are nearing obvious areas of implied technical support and the news lately sure seems to be more supportive of gold and silver prices than not.

Trouble is that public support for the “governistas” in Washington has become the new bear market. Barack Obama and the current majority in Congress were elected by people who expected them to fix a broken economy. Instead there is a rapidly growing sentiment in the U.S. that the new majority representation decided to take advantage of the situation (and take advantage of every American) to force their radical, big spending, socialist agenda through on the basis of their “mandate.”

“Yes we can,” has become, “Yes we can because we are in power.”

“Hope” is quickly morphing into disillusionment, mistrust and despair as more and more Americans end up in the unemployment line and the official unemployment rate approaches double digits.

Americans don’t like it when their elected officials take obvious advantage of them.

For the national economy, confidence is a prerequisite to recovery, but when the government is more interested in pushing through controversial new, higher tax plans and shaky-science “green” save-the-planet-at-our-expense proposals during a crisis (when the economy is reeling and the taxpayers are just plain unable to pay for them) … well, confidence can be hard to come by.

The economy is just going to have to recover in spite of, not because of all the “help” being thrown at it.

It may not be too late for the in-your-face politicos to reverse course and salvage or repair some of the damage done, but that seems unlikely. Moderates and independents are already distancing themselves from the crew they voted for this past big election. Unless there is a real recovery showing soon, it won’t be long before even the president’s rank and file supporters turn on him, just like they did with another smiling democratic president ridden in to “correct the economy due to Republican abuses” in 1976.

The “good news?” It was under that 1977-1981 “leadership” by Jimmy Carter that we last saw a parabolic spike higher for gold and silver.
http://www.stockhouse.com/Columnists/2009/Jul/13/U-S--banks-still-dominate-COMEX-gold,-silver-short

U.S. Budget Gap Exceeds $1 Trillion for Fiscal Year
July 13 (Bloomberg) -- The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy.

The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg.

Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing because the jobless rate continues to rise -- reaching a 26-year high in June -- and companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the $787 billion stimulus program President Barack Obama signed into law in February.

“This is a difficult pill to have to swallow,” said Richard Yamarone, director of economic research at Argus Research Corp. in New York. “The economy and banking system need these funds to recover, yet it will ultimately hit Americans’ wallets hard. It’s a necessary evil.”

The Treasury is increasing auctions of securities to finance the government’s spending. After more than doubling Treasury note and bond offerings to $963 billion in the first half, another $1.1 trillion may be sold by year-end, according to Barclays Plc. The second-half sales would be more than the total amount of debt sold in all of last year. http://www.bloomberg.com/apps/news?pid=20601103&sid=a4huQyL1pP2k