Defending the Fed

Now, here's something you don't see every day...

Amid a growing backlash against the Federal Reserve, whose popularity has been plunging in public opinion polls since they started spending trillion of dollars to prop up the financial industry, a lone voice defends their practices and argues against any audits.

Don't Punish Fed with Audit
...
Is the Federal Reserve hiding the identities of banks who received up to $2 trillion in loans in the last year? Representative Ron Paul (R:TX) and now Representative Barney Frank(D: MA) think the Fed should be audited to reveal the names of these foreign and domestic banks. Federal Reserve Chairman Ben Bernanke opposes Paul's audit bill, saying it would make it seem like the Fed was no longer setting interest rates independently of political oversight. This perception alone would increase inflation. However, the real threat is even worse than that.

The Federal Reserve has acted quickly and creatively to pull the economy back from the brink of a major depression. It did so because of its ability to act swiftly without going to Congress for approval. Secrecy was needed last year to allow banks to apply for liquidity from the Fed without fear they would be tagged as failing banks. Congressional auditing ability would seriously hamper the Fed's ability to act at a time when this creatively and innovation is needed the most.

Well, that's one school of thought.

There's a completely different line of thinking that involves the central bank having been created by and for big banks in order to foist bank losses on the public while keeping the gains private.

Moreover, some object to the not-so-inconsequential matter of a nearly century long debasement of the currency, where America's money has lost more than 90 percent of its value since the creation of the Federal Reserve in 1913.

And just what does Mrs. Amadeo think about money?

Her views are made abundantly clear at her website - World Money Watch.

Money is a mental concept. It is no longer based on anything tangible - not gold, not business values, and certainly not home values. Money has become an exchange of energy. As such, it provides a useful footprint that reflects the awareness level of the human race. Watching trends in the world's money helps us track our evolution.

Well, that explains a lot.

Interestingly, there's a section for comments on the About.com article.

After a brief survey, my favorite comment is the third one:

Pull your head out of your a$$

Of course we need to audit the Fed. All government activity should have accountability. It is almost treasonous not to hold the government accountable for their actions...

There are a total of 36 comments and, save for the one titled "I Love My Overlords" (which is believed to be facetious), none defend Ms. Amadeo or the Fed though a couple are critical of Ron Paul, figuring that Barney Frank has been brought on board to help Dr. Paul sell his forthcoming book titled "End the Fed".

Comments

[Anthony Alfidi:]

She uses the same line of "reasoning" heard from national security hawks who never met a document they didn't want classified. Secrecy invites abuse and enables fraud.

Sep 03 07:05 AM

[jeremiah74:]

i dont think this is as straigthforward as one thinks.. if your goal is to restore confidence in the banking system, then secrecy may actually be appropriate, a benevolent lie if you will.. but only for a while

at some point you have to open up your book and tell people what you did exactly. maybe the argument is that we might at any point relapse into a crisis so its risky to reveal who is on the Fed's breathing machine. in which case, one must ask how healthy the banks look, despite all the hype and stock price run ups

Sep 03 07:25 AM

[MKW:]

Money, whether fiat or based on Gold, Silver, Zinc, or Rubidium is simply the biggest and most pervasive "Gentlemen's Agreement" the world has ever seen.

Sep 03 08:26 AM

[basehitz:]

Does Kimberly work for CNBC? To be certain, the one’s with vested interest in the status quo would not want “we the sheeple” actually knowing what these geniuses have done to us. . . like completely trashing the dollar as these financial wizards “engineer” the economy. A good book is Bill Fleckenstein’s “Greenspan’s Bubbles”. He highlights Greenspan’s statements and specific policy actions showing blatant market manipulation. And when the tech bubble blew up, Maestro created a second bubble, housing. Only this time, it wasn’t just stock traders that got nailed. This time the world economy imploded. Nice job fellas.

And after all the mischief caused by these manipulators, some want to give them more power and protect their secrecy. My concern is that if we continue to allow Banana Ben to print money whenever he wants, that if the debt bubble implodes, the consequences will dwarf the last collapse.

Sep 03 09:41 AM

[TeresaE:]

Since the head of GE (which owns NBC and most of our media) now sits on the Fed Board, shouldn't his tv stations be printing disclaimers whenever they make ANY comments on Wall St or banking?

bwaaahaaaahaaaa.

All is well, now go and line your kids up for the untested flu vaccine. The government, banks, Wall St and Big Pharma only have our best interests at heart. They have proven this time, and time, again.

Sep 03 10:20 AM

[debtacid:]

“The Federal Reserve has acted quickly and creatively to pull the economy back from the brink of a major depression. “

What cack. The Fed has turned this recession in to a depression and no amount of fedspin can change it. They have not made a single structural improvement to an economic foundation built on fraud and fiat money. Every civilization is built on sound money and the Fed has done nothing but debase it since 1913. The Fed needs the white hot light of politics to shine on it.

Sep 03 10:24 AM

[TinyTim:]

"Money is a mental concept. It is no longer based on anything tangible"

Well of course not.
Not after the Fed got done with it.

Where's this bimbo come from anyway?

Sep 03 03:31 PM

[derryl:]

If you want the rich to keep getting richer and the middle class to pay for it then the lady makes a good point. When the middle class are thoroughly impoverished they will make more willing servants. I suppose it's all part of the plan to make us the serfs in the new world order, profitlessly toiling for the pleasure of our masters.

Sep 04 01:33 AM

[dustbusterz:]

Mrs. Amadeo is wrong. Our government's job is not to bail out anybody. Private or business. That is why we have a free market. this free market is supposed to cleans us of poorly managed business so other (well managed businesses can thrive and grow). By bailing out these zombie banks, we actually make our country less of a super power by holding back the progress that is supposed to happen in a free market society.

Example. A gas station is not run profitably, it will close up and soon after , a new and better un station will replace it. same goes for auto manufacturers and Insurance companies, and banks.! Bank closes, you can't bank there any more ,so you go to the next bank(which in turn thrives and grows)replacing the skunk bank that just closed. An Auto Manufacturer runs the place into the ground and closes, another either grows or opens to replace it.There is no such animal as too big to fail.Go ahead,Audit these rats. Lets find out what they don't want us to know about the money they stole from us to line the pockets of their friends who are supposedly too big to fail.

Sep 30 09:57 PM