Federal Reserve Proposes ‘Term Deposit Facility’ to Withdraw Money from Banking System

On Monday the Federal Reserve put forth the idea of creating a new way to withdraw money from the banking system when the need to tighten money policy presents itself.

Dubbed a term deposit facility, what it will do is allow banks or other financial institutions opportunity to earn interest on loans that are of longer duration to the central bank.

There were no specifics from the Fed on how the interest rates would be determined on these loans, but the idea they could be decided through an auction or a specific type of formula was thrown out by the Federal Reserve. One parameter known for sure at this time is they maturity of the loan wouldn’t be longer than one year, with the majority probably being from one to six months, said the Fed.

All of this emerges from the fears coming from the extraordinary and possibly reckless spending, whereby the banking system has been extended $2.2 trillion in credit, which will inevitably generate a high inflationary rate as the money flows throughout the economy when lending begins in earnest again.

Other tools looked at being used in an attempt to keep inflation from getting out of control has been the sales of assets of the banks, along with reverse repurchase agreements.

The Fed has been asserting it has the effectiveness to take the stimulus capital out of the market before the inevitable inflation gets out of control. According to the Fed they will be able to do that before inflationary pressures arise; a highly dubious assertion which is unlikely to be backed up since inflationary pressures in some sectors like food prices are already beginning to rise.

This is part of the frustration the banking industry has been experiencing, where they are pressured by Obama to loan to risky companies in order to create more jobs and help the economy, while at the same time regulators tell them to build up their cash reserves and abstain from taking too many risks which could create more problems. These mixed signals can’t coincide, and so you have to have one or the other, but not both.

Of course if banks respond and start lending, which will put the money out there to be used, the consequences will be inflation surging to very high levels.

This is why the Fed is preparing these various mechanisms in an attempt to manage the amount of money loaned into the market in order to keep inflation low. It’s highly doubtful they’ll be able to do this, no matter what gimmicks they develop to keep the money out of the market.

The Fed knows that once the economy actually starts to recover (which it hasn’t), there will be a flood of money pouring into the market. They will attempt to tighten the money supply so the amount of money going out won’t result in extraordinary inflation. I don’t think they can do it, and Americans will have to endure more pain over the long term because of the misguided actions of the Federal Reserve.

Source: Federal Reserve Proposes ‘Term Deposit Facility’ to Withdraw Money from Banking System

The Known Universe

The Known Universe takes viewers from the Himalayas through our atmosphere and the inky black of space to the afterglow of the Big Bang. Every star, planet, and quasar seen in the film is possible because of the world's most complete four-dimensional map of the universe, the Digital Universe Atlas that is maintained and updated by astrophysicists at the American Museum of Natural History.

The Known Universe

TIME Magazine Names Ben Bernanke "Person of the Year 2009" !?

Ben Bernanke is a nerd and he just happens to be the most powerful nerd on the planet.

Bernanke is the 56-year-old chairman of the Federal Reserve, the central bank of the U.S., the most important and least understood force shaping the American — and global — economy. Those green bills featuring dead Presidents are labeled "Federal Reserve Note" for a reason: the Fed controls the money supply. It is an independent government agency that conducts monetary policy, which means it sets short-term interest rates — which means it has immense influence over inflation, unemployment, the strength of the dollar and the strength of your wallet. And ever since global credit markets began imploding, its mild-mannered chairman has dramatically expanded those powers and reinvented the Fed.

Professor Bernanke of Princeton was a leading scholar of the Great Depression. He knew how the passive Fed of the 1930s helped create the calamity — through its stubborn refusal to expand the money supply and its tragic lack of imagination and experimentation. Chairman Bernanke of Washington was determined not to be the Fed chairman who presided over Depression 2.0. So when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks, investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed's balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation. He didn't just reshape U.S. monetary policy; he led an effort to "save the world economy."

Continue reading - Ben Bernanke - TIME's Person of the Year 2009



His critics in Congress — liberals and conservatives alike — couldn’t believe it Wednesday.

Fed Chairman Ben Bernanke? Time’s Person of the Year?

“Give me a break,” said Rep. John Conyers (D-Mich.), a frequent Fed critic.

Bernanke's confirmation, while hardly in jeopardy, has become a lightning rod for anger on the left and right over the Fed’s handling of the financial meltdown.

The critics’ argument goes like this: If Bernanke and his number crunchers at the Fed really were such whiz kids, they would have seen the whole financial meltdown coming and headed it off. Instead, the economy was teetering on the precipice and required last-minute heroics by the bearded central banker to save it, moves that make some in Congress deeply uncomfortable.

To that end, the timing of Time’s announcement gave critics fodder for the hottest new bipartisan sport: Bernanke-bashing.

“I find it ironic that a man who has spent the last year rewarding others for failure is now being named Person of the Year for his failures. But if Time magazine is in the business of rewarding failure, Ben Bernanke is their man — he has certainly excelled at that” was the verdict from the Senate’s leading Bernanke critic, Jim Bunning (R-Ky.), the sole senator to vote “no” on Bernanke’s first nomination as Fed chairman in 2006.

Vermont independent Sen. Bernie Sanders also found Time’s choice “ironic,” since in the article bestowing the honor, the magazine discusses how Bernanke, like his predecessor, fell asleep at the switch.

“Bernanke was as clueless as [Alan] Greenspan about the coming storm. He dismissed warnings of a housing bubble. He insisted that economic fundamentals remain strong,” Sanders said, quoting the article at a news conference to discuss his attempt to defeat Bernanke’s renomination.

But, forever the contrarian, Paul said he is “delighted” by Time’s choice.

“I think its very, very good that he’s gotten an award to draw the attention to the Federal Reserve, which really should be looked at with a great deal of skepticism because it’s the Federal Reserve that gave us the crisis,” Paul said in an interview.

“The Federal Reserve Board chairman is literally more powerful than the president because he can work in secrecy; he can have arrangements with other foreign governments, with other central banks; he can do all this on his own. ... This to me is very, very significant, and it should be recognized,” Paul said. “I’m delighted that they are at least pointing the finger in the right direction, although their conclusions are completely wrong.”

Continue reading - Few cheers on Capitol Hill for Time's Ben Bernanke pick

Ron Paul Reacts to Bernanke as Time's Person of the Year


Ron Paul on Fox Business: Bernanke is World's Greatest Counterfeiter


Ron Paul: Ben Bernanke is More Powerful Than Barack Obama

The Hubble Ultra Deep Field in 3D

What an awe-inspiring grandeur, the Universe.
The beauty of the Universe is simply beyond what words can describe.

The Hubble Ultra Deep Field in 3D

Requiem for the Dollar

Ben S. Bernanke doesn't know how lucky he is. Tongue-lashings from Bernie Sanders, the populist senator from Vermont, are one thing. The hangman's noose is another. Section 19 of this country's founding monetary legislation, the Coinage Act of 1792, prescribed the death penalty for any official who fraudulently debased the people's money. Was the massive printing of dollar bills to lift Wall Street (and the rest of us, too) off the rocks last year a kind of fraud? If the U.S. Senate so determines, it may send Mr. Bernanke back home to Princeton. But not even Ron Paul, the Texas Republican sponsor of a bill to subject the Fed to periodic congressional audits, is calling for the Federal Reserve chairman's head.

I wonder, though, just how far we have really come in the past 200-odd years. To give modernity its due, the dollar has cut a swath in the world. There's no greater success story in the long history of money than the common greenback. Of no intrinsic value, collateralized by nothing, it passes from hand to trusting hand the world over. More than half of the $923 billion's worth of currency in circulation is in the possession of foreigners.

In ancient times, the solidus circulated far and wide. But it was a tangible thing, a gold coin struck by the Byzantine Empire. Between Waterloo and the Great Depression, the pound sterling ruled the roost. But it was convertible into gold—slip your bank notes through a teller's window and the Bank of England would return the appropriate number of gold sovereigns. The dollar is faith-based. There's nothing behind it but Congress.

But now the world is losing faith, as well it might.

Continue reading - Requiem for the Dollar

Ben Bernanke grilled on his second term renomination in the Senate floor

I definitely agreed with Bunning that Ben Bernanke is the definition of moral hazard! We must put an end to the Fed’s failures, and there is no better time than now. END THE FED!

Sen. Jim Bunning Grills Bernanke, With Response


Sen. Jim DeMint Questions Bernanke During Renomination


The Ed Show - Ron Paul on Bernanke's Renomination

The Dollar Bubble

The Dollar Bubble starring Peter Schiff, Ron Paul, Marc Faber, Gerald Celente, Jim Rogers, and others. Prepare now for the U.S. dollar collapse.

The Dollar Bubble

End The Fed Rallies, 22-11-2009

'End the Fed' rally: Where did our money go?


NYC Media March & End The Fed


NYC End The Fed Rally 11.22.09 (Pt. 2)


End The FED March in New York City


End The FED Arrives at the NY Supreme Court


END THE FED with Ron Paul and Liberty Fighters!

Ron Paul at End The Fed Houston 11-22-09 Part 1 of 3


Ron Paul at End The Fed Houston 11-22-09 Part 2 of 3


Ron Paul at End The Fed Houston 11-22-09 Part 3 of 3


Adam Kokesh at the Houston End The Fed Rally, November 22, 2009 - Part 1


Adam Kokesh at the Houston End The Fed Rally, November 22, 2009 - Part 2


Jonathan Kocurek at the Houston End The Fed Rally, November 22, 2009


Paula Stang at the Houston End The Fed Rally, November 22, 2009


Steven Susman at the Houston End The Fed Rally, November 22, 2009


Jeff Daiell at the Houston End The Fed Rally, November 22, 2009


Tim Brown at the Houston End The Fed Rally, November 22, 2009


Erik Prejean at the Houston End The Fed Rally, November 22, 2009

Preparing Americans for Hyperinflation

Preparing Americans for Hyperinflation

Audit the Fed in the News

House Panel Approves Broad Auditing of Federal Reserve Wall Street Journal

A key House panel on Thursday approved an amendment offered by Rep. Ron Paul (R., Texas) to give federal watchdogs massive new authority to audit the Federal Reserve.

House panel approves Ron Paul’s proposal to audit the Federal Reserve Politico

The measure, based on a Paul proposal that has attracted more than 300 co-sponsors, passed, 43-26, as an amendment to a financial reform bill. Florida Democrat and fellow Fed critic Alan Grayson co-sponsored the amendment with Paul and played a leading role drumming up support for it among committee members. The adoption of this amendment is an extraordinary victory for Paul, whose libertarian, anti-Fed leanings have often been dismissed by the political establishment.

Panel votes to audit the Fed; cap its spending at $4 trillion MarketWatch

“If you care about transparency of the Fed, you would allow a look at monetary policy,” Paul said. “We’re dealing with trillions of dollars that doesn’t get audited. There is no reason why the world can’t know, eventually, what the Fed is doing.”

Ron Paul wins a key battle in war to open Fed’s books Los Angeles Times

“If we get the audit and get the books open, make them answer the questions, I am convinced that the American people will be so outraged that then we will have reform of the monetary system,” Paul has said.

Panel Votes to Broaden Oversight of the Fed New York Times

Mr. Paul’s bill would abolish a longstanding exemption that shielded the Fed from Congressional audits of its monetary policy. Supporters of the Fed’s independence have argued the shield provided crucial insulation from political pressure, which would make it much harder for Fed officials to take unpopular action aimed at heading off inflation.

Greenspan, Volcker Opposed Ron Paul Audit Provision Wall Street Journal

Greenspan and Volcker, in a letter sent to the committee’s chairman and ranking Republicans, warned that the provision threatened the ability of the Fed to foster price stability independent of political interference.

Threatening the Fed’s independence Washington Post

Alan S. Blinder is a former vice chairman of the Federal Reserve Board, is a professor of economics and public affairs at Princeton University.

There are a few more hits on this story all over today, these are just a few. Great work so far everyone, but the fight isn’t over. We are still pushing for an up or down vote on Audit the Fed on the House and Senate floors.

World economy setting itself up for a bigger bust, says Marc Faber

SINGAPORE: Marc Faber - the man commonly referred to as Dr Doom by the investment community – said that the real financial crisis has yet to come for the global economy.

Speaking at a conference in Singapore on Wednesday, he said there will be another big bust stemming from credit expansion.

Mr Faber said: "The crisis has not solved anything. On the contrary there is less transparency today than there was before. The government's balance sheet is expanding, and the abuses that have led to the one cause of the crisis have continued.

"I think eventually there will be a big bust and then the whole credit expansion will come to an end. But before that happens, they will print money, and they will grow into very high inflation rate, and the economy will not respond.

"The average family will be hurt by that, and then in order to distract the attention of the people, the governments will go to war. People ask me against whom? Well, they will invent an enemy."

"At some stage, somewhere in future, we will have a war - that you have to be prepared for. And during war times, commodities go up strongly," said Mr Faber.

"If you want to hedge against war, you don't want to own derivatives in UBS and AIG, but you have to own them physically, like farmland and agricultural commodities. That is something to consider for you as a personal safety and hedge. You have to own some commodities," he added.

Analysts generally agreed that gold is an attractive asset class for investments.

Daryl Guppy, CEO, Guppytraders.com said: "The strength of gold is in direct relation to weakness in US dollar. The weakness in US dollar is likely to continue. You see the dollar index heading down towards to 71 US cents is not a support level. It could in fact fall lower than that.

"So there is a probability of a sustained rallied increase in the price of gold - long-term uptrend. Gold is not driven by fundamental factors, not driven by demand; it is driven by our perceptions of US dollar and currency changes.

Continue reading: World economy setting itself up for a bigger bust, says Marc Faber

Interest on U.S. debt - $4,800,000,000,000

NEW YORK (CNNMoney.com) -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.

If that's hard to grasp, here's another way to look at why that's a problem.

The country depends heavily on borrowing to fund what it wants to do. But the more debt it racks up, the more likely it becomes that creditors could demand a higher interest rate for making new loans to the government.

Higher rates in turn make it harder to pay off the underlying debt because more and more money is going to pay off interest - money, by the way, which is also borrowed.

And as more money goes to interest, creditors may become concerned that the country can't pay down its principal and lawmakers will have less to fund all the things government is supposed to do.

CNN Money - $4.8 trillion - Interest on U.S. debt

Rep. Peter DeFazio levels Goldman Sachs, Summers, and Treasury Sec Tim Geithner

Rep. Peter DeFazio levels Goldman Sachs, Summers, and Treasury Sec Tim Geithner

The thrilling potential of SixthSense technology

It will be launched next month in open source so everyone can modify their own sixth sense device! I think there will be an explosion in the usage of the sixth sense technology in the years to come. Hooooray!

The thrilling potential of SixthSense technology

Société Générale: Prepare for potential 'global economic collapse'

Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

In a report entitled "Worst-case debt scenario", the bank's asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.

Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years.

Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

The underlying debt burden is greater than it was after the Second World War, when nominal levels looked similar. Ageing populations will make it harder to erode debt through growth. "High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt," it said.

Inflating debt away might be seen by some governments as a lesser of evils.

Source: Société Générale tells clients how to prepare for potential 'global collapse'