Senate Sellout Threatens Congressman Paul’s “Audit the Fed” Bill

“Bernie Sanders has sold out and sided with Chris Dodd to gut Audit the Fed in the Senate. His “compromise” is what the Administration and banking interests want: they’ll allow the TARP and TALF to be audited, but no transparency of the FOMC, discount window operations or agreement with foreign central banks. We need to take action and stop this!” -Ron Paul

Washington, D.C. – Congressman Ron Paul (TX-14) expressed disappointment that his landmark legislation to audit the Federal Reserve Bank – which passed by a wide margin in the House Financial Services committee and has over 319 House co-sponsors – was threatened by a compromise in the Senate today.

More specifically, Paul’s language (passed by the House) to audit the Federal Reserve has been stripped from the Sanders Amendment to the Senate financial reform bill. Instead, the Sanders Amendment now contains softer compromise language that exempts monetary policy decisions, discount window operations, and agreements with foreign central banks from Government Accounting Office (“GAO”) audit.

This is of particular concern when several countries such as Greece, Portugal, and Spain are seeking IMF help in the midst of their financial crises, because American taxpayers provide fully 17% of all IMF funding.

“Taxpayers are weary of bailing out privileged banks and corporations in the US, and we certainly cannot afford to bail out entire countries. The possibility of this happening behind a veil of Federal Reserve secrecy is not acceptable,” stated Congressman Paul. “This compromise language represents a huge missed opportunity by Congress to finally make the Fed accountable for trillions of taxpayer dollars it administers. Full transparency, via a full GAO audit, is the only acceptable option. However, I am grateful to Senator Vitter for offering the original full audit language in an alternative amendment to the bill.”

Senate Sellout Threatens Ron Paul's Audit the Fed Bill

Bernanke Letter to Dodd Opposing Amendments to Audit the Fed

The following is the full text of a letter Federal Reserve Chairman Ben Bernanke sent to Senate Banking Committee Chairman Christopher Dodd over a proposed amendment to the financial overhaul to audit the Fed.

Dear Chairman:

I am writing to express my deep concern about possible amendments to the Senate financial regulatory reform bill (S. 3217) that would, for the first time, permit the Government Accountability Office (GAO) to audit monetary policy deliberations and operations. Such amendments, if enacted, would seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation.

The Congress and the American people have a right to know how the Federal Reserve is carrying out its responsibilities and how we are using taxpayers’ resources. I strongly supported greater openness before I came to the Federal Reserve and now, as Chairman, I believe in it even more so.

In fact, during my tenure, the Federal Reserve has increased its commitment to transparency in a variety of ways, including the creation of a monthly report that provides Congress and the public detailed information on the range of programs and tools that the Federal Reserve has used to respond to the financial crisis as well as our open market activities and lending to depository institutions. Importantly, these monthly reports provide the number and distribution of borrowers under each lending facility established under section 13(3) of the Federal Reserve Act; the value, type, and quality of the collateral that secures advances under each facility; and trends in borrowing under the facilities.

Moreover, the financial statements of the Federal Reserve, including both the Board of Governors and the Federal Reserve Banks, are already fully audited by an independent accounting firm that ensures that the financial statements completely and accurately report the financial condition of the Federal Reserve System. These audited financial statements are made available to the public, both in print and on our website, and are submitted annually to the Congress.

There appears to be a widespread misconception about the role the GAO already plays in oversight of the Federal Reserve. The GAO has the authority to audit and review all of the supervisory and regulatory functions of the Federal Reserve. In addition, the GAO is authorized to conduct audits of the credit extended by the Federal Reserve to specific companies under the authority provided by section 13(3) of the Federal Reserve Act, including the loans to American International Group, Bear Steams and the Maiden Lane entities. Indeed, I have personally welcomed and encouraged the GAO to conduct a full and complete audit of the Federal Reserve’s lending facilities for AIG and the Federal Reserve has been cooperating with the GAO in its review of the two Maiden Lane facilities related to AIG.

Continue reading - Bernanke Letter to Dodd Opposing Amendments to Audit the Fed

Today Greece, Tomorrow the World

Greece is just the beginning. The crisis will spread across Europe and finally to the United States. The US will be the last to fall because we have the dollar, and people still believe in the dollar.

Ron Paul: Greece is just the beginning!

Greece Riots

ATHENS—A nationwide general strike paralyzed Greece on Wednesday as protests against the government's recently announced austerity measures turned violent, with an apparent firebomb attack on a central Athens bank killing three people.

Wednesday's 24-hour strike is seen as a key test of the government's ability to shepherd through tough austerity measures in exchange for a €110 billion ($143 billion) bailout loan from the European Union and the International Monetary Fund.

The strike coincided with protests that brought out tens of thousands of Greeks, one of the country's largest protests in years. Angry youths rampaged through the center of Athens, torching several businesses and smashing shop windows.

Greece's government, facing spiraling borrowing costs and a debt payment this month that it can't meet, is scrambling to pass through legislation implementing a three-year austerity and reform program it agreed to as part of the loan deal with the EU and IMF. Parliament is expected to vote as soon as Thursday on the measures.

Under terms of the bailout deal, Greece's government has announced a €30 billion package of measures that will slash public-sector wages, cut pensions, freeze public- and private-sector pay and liberalize Greece's labor laws. In addition, Greece has pledged to raise taxes—including a two-percentage-point increase in Greece's top value-added tax rate, to 23%—and to increase excise taxes for fuel, tobacco and alcohol.

Some officials saw a broader shift behind the protests. Tens of thousands of ordinary Greeks turned out to express their disenchantment with the current and previous Greek governments, whose corruption and accounting legerdemain they see as spurring the current budget crisis. "We may have an uprising in the making," said one senior government official.

"This rally was double the size of the largest rally that has ever been held in Greece," said Spyros Papaspyros, president of Adedy, a civil-service umbrella union. "Tomorrow afternoon, we will also be holding a protest in front of parliament, and if the government doesn't listen, there will be more strike action next week."

Wednesday's 24-hour general strike hobbled government services across Greece, shutting ministries and public offices. State hospitals and public utilities were operating with skeleton staff. Shopkeepers joined the strike at midday local time, while journalists, bank workers, teachers, court workers, lawyers and doctors also walked off the job. All flights in and out of Greek airports were canceled, while rail and ferry operations nationwide have been suspended.

Continue reading - Three Killed in Fire as Strikes Grip Greece

Seeing is believing.

Greek protests turn deadly


Greece riots: 100,000 fight against harsh cuts in Athens financial crisis protests


Clashes at Greek protests over budget cuts


Euro dream over? Death over debt looms as Greece financial crisis spreads


Eurozone under warfare: Engdahl on Greece crisis

Barney Frank in 2005: What Housing Bubble?

A speech by Barney Frank, Chairman of the House Financial Services Committee, on the House Floor in 2005 where he refutes any concern about a housing industry bubble and advocates for the government to continuing expanding home ownership.

Barney Frank in 2005: What Housing Bubble?

China Bank Reserve-Ratio Rise May Prove Insufficient

May 3 (Bloomberg) -- China’s third increase of bank reserve ratios this year left benchmark interest rates and the yuan’s peg to the dollar unchanged, risking the need for more concerted effort to contain property prices and inflation in coming months.

The requirement will increase 50 basis points effective May 10, the People’s Bank of China said on its Web site yesterday. The current level is 16.5 percent for the biggest banks and 14.5 percent for smaller ones.

The latest move adds to a government crackdown on property speculation after record price increases in March and came on a holiday weekend, with Chinese markets shut today. Within an hour of the central bank announcement, Finance Minister Xie Xuren said that officials remained committed to expansionary policies to cement the nation’s recovery.

“Beijing still prefers to fine-tune credit conditions and the property market rather than using blunter instruments that impact the entire economy,” said Brian Jackson, a Hong Kong- based strategist at Royal Bank of Canada. The danger is that the approach “will not be enough to keep these price pressures under control, which would then force policy makers to tighten more aggressively later on.”

Removing Cash

Yesterday’s decision will remove 300 billion yuan ($44 billion) from the financial system and may push back an interest-rate increase until “early June,” according to Deutsche Bank AG.

(*POOF* illusory credit disappeared, magic much?)

Continue reading - China Bank Reserve-Ratio Rise May Prove Insufficient

China May ‘Crash’ in Next 9 to 12 Months, Faber Says

May 3 (Bloomberg) -- Investor Marc Faber said China’s economy will slow and possibly “crash” within a year as declines in stock and commodity prices signal the nation’s property bubble is set to burst.

“The market is telling you that something is not quite right,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong today. “The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”

An index tracking Chinese stocks traded in Hong Kong dropped 1.8 percent today, the most in two weeks, after the central bank raised reserve requirements for the third time this year. The Shanghai Composite has slumped 12 percent this year, Asia’s worst performer, as policy makers seek to rein in a lending boom that’s spurred record gains in property prices. China’s markets are shut for a holiday today.

Faber joins hedge fund manager Jim Chanos and Harvard University’s Kenneth Rogoff in warning of a crash in China.

China is “on a treadmill to hell” because it’s hooked on property development for driving growth, Chanos said in an interview last month. As much as 60 percent of the country’s gross domestic product relies on construction, he said. Rogoff said in February a debt-fueled bubble in China may trigger a regional recession within a decade.

The government has banned loans for third homes and raised mortgage rates and down-payment requirements for second-home purchases. Prices rose 11.7 percent across 70 cities in March from a year earlier, the most since data began in 2005.

The government has stopped short of raising interest rates to contain property prices. Within an hour of the central bank announcement on reserve ratios, Finance Minister Xie Xuren said that officials remained committed to expansionary policies to cement the nation’s recovery.

Continue reading - China May ‘Crash’ in Next 9 to 12 Months, Faber Says

Greenspan Wanted Housing-Bubble Dissent Kept Secret

As top Federal Reserve officials debated whether there was a housing bubble and what to do about it, then-Chairman Alan Greenspan argued that the dissent should be kept secret so that the Fed wouldn't lose control of the debate to people less well-informed than themselves.

"We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand," Greenspan said, according to the transcripts of a March 2004 meeting.

At the same meeting, a Federal Reserve bank president from Atlanta, Jack Guynn, warned that "a number of folks are expressing growing concern about potential overbuilding and worrisome speculation in the real estate markets, especially in Florida. Entire condo projects and upscale residential lots are being pre-sold before any construction, with buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on 'flipping' the properties--selling them quickly at higher prices."

Had Guynn's warning been heeded and the housing market cooled, the financial collapse of 2008 could have been avoided. But his comment was kept secret until Friday, when the central bank released the transcripts of Federal Open Market Committee meetings for 2004 and CalculatedRisk spotted it. The transcripts for 2005 to the present are still secret.

Continue reading - Greenspan Wanted Housing-Bubble Dissent Kept Secret

Ron Paul and Alan Grayson: Audit the Fed!

Ron Paul and Alan Grayson appeared on MSNBC’s Dylan Ratigan Show to discuss their efforts to audit the secretive Federal Reserve.

Ron Paul and Alan Grayson: Audit the Fed!

Ron Paul - My Battle Against The Fed

Presented by Ron Paul at the "Birth and Death of the Fed" conference at Jekyll Island, Georgia, 27 Febuary 2010. Includes an introduction by Mises Institute founder and chairman Llewellyn H. Rockwell, Jr., and closing remarks by Institute president Douglas E. French.

My Battle Against The Fed

Renaissance 2.0 - The Emerging Global Empire

It describes The Emerging Global Empire or what has come to be called the new world order or new world economic order. The primary force driving this is the simple math of the bond market, debt-based money. Please pass this along because it’s critical that more people start learning how this drives the world…governments do not.

This lesson hopefully paints the strategic picture on what’s happening in the world so we can correctly interpret the endless stories the media pumps out, rather than being stuck in false paradigms, like the left vs. right political paradigm. Once this strategic perspective is understood, then it’s easy to understand how hundreds of random stories that seem to make no sense in the left vs. right political paradigm actually make a TON of sense. Stories like these: a Harvard billionaire taking over Chile, the government’s response to the crash of 2008, increasing govt debt, Goldman Sachs taking over Greece, British banks pressuring Iceland, the US military presence in 75% of all countries, the G2 relationship, JPM Chase destroying municipalities and funding the destruction of Apalachia while its CEO Jamie Dimon gets setup as the next Treasury Secretary to get ready to steal even more from Americans, and many many more. All of a sudden after lesson 5 the world becomes a lot clearer.

Then after this lesson, the series will start imagining a different, brighter future than the one illustrated in this lesson.

Renaissance 2.0: Lesson 5 (part 1 of 2) - The Emerging Global Empire


Renaissance 2.0: Lesson 5 (part 2 of 2) - The Emerging Global Empire

BREAKING! Goldman Sachs Sued by SEC for Fraud Tied to CDOs

April 16 (Bloomberg) -- Goldman Sachs Group Inc. was sued by U.S. regulators for fraud tied to collateralized debt obligations that contributed to the worst financial crisis since the Great Depression. The firm’s shares tumbled as much as 16 percent and financial stocks slumped.

Goldman Sachs misstated and omitted key facts about a financial product tied to subprime mortgages as the U.S. housing market was starting to falter, the Securities and Exchange Commission said in a statement today. The SEC also sued Fabrice Tourre, a Goldman Sachs vice president.

“The product was new and complex but the deception and conflicts are old and simple,” SEC Enforcement Director Robert Khuzami said in the statement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”

The SEC alleged that Goldman Sachs, led by Chief Executive Officer Lloyd Blankfein, 55, structured and marketed CDOs that hinged on the performance of subprime mortgage-backed securities. The New York-based firm failed to disclose to investors that hedge fund Paulson & Co. was betting against the CDO, known as Abacus, and influenced the selection of securities for the portfolio, the SEC said. Paulson wasn’t accused of wrongdoing.

Continue reading - Goldman Sachs Sued by SEC for Fraud Tied to CDOs

SEC Press Release

Peter Schiff: Why The Meltdown Should Have Surprised No One

This is one of the best economics lecture that no one should have missed presented by Austrian economist, Peter Schiff. In addition, I have included a clip showing the dire predictions he made during 2006-2007 before the occurrence of the financial meltdown as mentioned in the lecture called "Peter Schiff Was Right". Take a back seat and enjoy the lecture. Highly recommended!

Peter Schiff - Why The Meltdown Should Have Surprised No One


Peter Schiff Was Right

Rasmussen "Shock Poll" w/ Dr. Paul video interview: Ron Paul 41% Obama 42% in 2012!

SHOCK POLL: 2012 Presidential Election Match-Up

Barack Obama 42%
Ron Paul 41%

Rasmussen Reports - Election 2012 Poll

Election 2012: Barack Obama 42%, Ron Paul 41%

Ron Paul To Bernanke: Where Would The Money Come From...? We'd Create It Out Of Thin Air!

Ron Paul To Bernanke: Where Would The Money Come From...? We'd Create It Out Of Thin Air!