Wednesday, July 29, 2009

Bernanke May Have to Sacrifice Lending Powers or Independence

We are one step closer to the Fed becoming politicized and where Congress is essentially running monetary policy. If this happens the next time there is a financial crisis the carnage will make the latest round look like a Sunday picnic.

In addition, Fed audits--a move pushed by Congressman Ron Paul--is an absolute joke because the Fed is required by law to turn all its profits over to Congress. If the Fed were allowed to hold on to its profits in the form of retained earnings, like any other business can do, it would have the largest capital base of any institution in the world--in the multi trillions.

Ron Paul and the two hundred some-odd lawmakers in the House who are behind this bill simply do not understand this, nor do they understand the potential jeopardy they put the economy into by doing this.

We had one hundred years of panics, bank busts and depressions before we had an independent Fed and that's why Congress created the Fed back in 1913. So unless there is some modern day, JP Morgan and John Rockefeller (both of whom literally acted like a central bank and stopped the Panic of 1907) to come to the aid of the financial system next time around, you'd better get on the phone or shoot an email to
your Congressional representatives and let them know that this is a huge mistake.

Read article here.

By the way...this is one step closer to re-imposing a gold standard. In the event of that, you'd better think about moving to Canada where they don't have these destructive belief systems.

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