“A Process That Only We Fully Understand”

By James Kwak

Bernie Sanders’s “audit the Fed” amendment, which expands the ability of the Government Accountability Office to review Federal Reserve operations, seems to be gaining some momentum. Opponents, including the Obama administration and Fed chair Ben Bernanke, are mounting a defensive effort. There are two main arguments that I have heard.

The first is that publicizing which banks take advantage of Fed lending facilities will stigmatize those banks and could increase panic in the midst of a financial crisis. I’m not particularly convinced by this argument, since most supporters of the amendment are fine with releasing such information with a delay. Section 1152(a)(2) of the amendment eliminates the provision in 31 U.S.C. 714(b) that shields from audit monetary policy decision-making and financial transactions by Federal Reserve banks, but replaces it with this:

“Audits of the Federal Reserve Board and Federal reserve banks shall not include unreleased transcripts or minutes of meetings of the Board of Governors or of the Federal Open Market Committee. To the extent that an audit deals with individual market actions, records related to such actions shall only be released by the Comptroller General after 180 days have elapsed following the effective date of such actions.”

Transparency is supposed to be good for markets, because it gives parties in the market the information they need in order to make rational decisions. I understand the concern that immediate disclosure could make banks avoid using Fed lending facilities in a crisis, which could be bad. But I don’t see why the 180-day delay doesn’t solve this problem. Let’s say (for argument’s sake) that Goldman Sachs borrowed money from a Fed liquidity program in May 2008. If they can’t bear the market receiving this news in November 2008, doesn’t that imply that they really are in big trouble, and the market should know about it? In other words, Goldman and the Fed have six months to solve whatever problem Goldman had. If they can’t solve it by then, then Goldman is no longer worth protecting.

The second argument is that increased GAO oversight will unduly “politicize” or “interfere with” monetary policy. On its face, this objection doesn’t seem to apply, since the amendment would explicitly not bring to light transcripts or minutes of meetings that the Fed had not itself already released.

More fundamentally, though, this objection rests on a disturbing view of how government should operate. Equating information with politicization or interference is a misleading way to justify undemocratic processes. In general, government agencies are supposed to be overseen by Congress (of which the GAO is an arm). As a basic principle, it’s good that the people’s elected representatives have visibility into what the other arms of the government are doing, so that they can make better decisions about, for example, whether heads of regulatory agencies should be reconfirmed, or whether the statutes governing those agencies should be modified. We even have Congressional oversight over deeply secretive operations, such as our intelligence operations. If “politics” means accountability to officials who are actually accountable to the people, then that’s a good thing.

There is a lot of skepticism about Congress these days, and that skepticism is justified. But the alternative — allowing government agencies to operate in secret because we think our Congressional representatives are bozos — is worse.

But the Fed is different, people say. Monetary policy is so technical, and so hard to explain to the public, and so dependent on the credibility of the central bank, that any exposure to politics would be dangerous.

The idea that monetary policy is too technical for Congress to understand, and therefore should be done in secret, I don’t buy. So is, say, climate policy. That’s a complex scientific topic, of crucial importance to the future of our nation (and the human race), that is clearly beyond the ability of Congress to understand and discuss responsibly. But we don’t exempt the EPA from Congressional oversight.

The idea that monetary policy, to work at all, must be sealed off from political interference has a little more merit to it. The idea (to simplify) is that elected politicians always want to lower interest rates in order to boost growth and jobs; in order to maintain inflation-fighting credibility, central banks have to be completely apolitical, and the markets have to believe that they are apolitical. But from there to the idea that there must be a blanket of secrecy over all decision-making is much too large a leap.

Ryan Grim’s article discussing Federal Reserve transcripts from 2004 is especially instructive in this context. The article focuses on a meeting of the Open Market Committee at which there was debate about whether there was an unsustainable housing bubble. The minutes of that meeting, released the same year, whitewashed the debate. More revealingly, the recently-released transcript includes this gem from Alan Greenspan:

“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.”

That is the money quote of this whole debate about the Fed, and I’m sorry I buried it 750 words into this post. (I’m not a news reporter, as you no doubt know.) The Fed and its defenders think that monetary policy should be entirely up to them — which it is — and that no one else should even participate in the debate. They are so concerned about this prerogative that they react violently even to suggestions that Fed policy-making should be reviewed after the fact.

This goes hand-in-hand with the idea that the Fed chair is a de facto dictator and that even questioning him is economic treason. We saw this during the Bernanke reconfirmation debate, when supposed experts and Wall Street insiders claimed that, were Bernanke to be voted down, the markets would collapse. I think this claim is almost certainly false, but if it were true that would be even worse: how can it be a good thing that our economy is held hostage to the health of a fifty-six-year-old man? (And Greenspan was seventy-nine when he stepped down.)

Look, we all know there are debates about monetary policy. Intelligent economists have them all the time in public, and Federal Reserve bank presidents have them as well through their public appearances (though in somewhat measured tones). We all know what the arguments on the various sides of those debates are. What we gain by trying to hide them and pretending they don’t exist — except for increasing the dangerous mythology of the omniscient Fed chair — is beyond me.

Monetary policy is important. It is also somewhat technical. It should not be decided by vote of Congress every six weeks. That’s why we entrust it to a committee of twelve people, seven of whom are presidential appointees confirmed by the Senate and five of whom are bank presidents chosen by boards of directors themselves chosen (in a majority) by private banks. Their actions (raising or lowering key rates) are announced the same day that they meet, and commentators jump all over them immediately. The idea that Ben Bernanke would do something he thought was bad for the economy because he was afraid of what a GAO report might say about his decision-making process (remember, the decision is public immediately) is both preposterous and, frankly, insulting to Ben Bernanke.

I don’t actually think auditing the Fed is the most important step we need to take to fix our financial system. And I am open to considering alternatives to the Sanders amendment, if any serious ones were to be put forward. But hiding behind the idea that the Fed is so magical that it has to be hidden from the people it serves is about as undemocratic as it gets.

PS: In Chapter 6 of their forthcoming Crisis Economics (I got a free advance copy from Roubini Global Economics), Nouriel Roubini and Stephen Mihm dicsuss how the Fed’s role changed during the recent crisis — from a traditional “lender of last resort” model to an “investor of last resort” model in which the Fed bought up all kinds of non-traditional assets (e.g., long-term Treasuries, agency bonds) in an attempt to stop the economic downturn. Roubini and Mihm are generally positive about the short-term impact of these policies. But, they argue, by taking the Fed far afield from its traditional scope of action, they raise the issue of democratic accountability:

“The Fed has instead stepped into the financial system and effective subsidized its operations, potentially incurring losses that could ultimately fall on the shoulders of taxpayers. Put differently, it’s engaging in monetary policies that bleed imperceptibly into the traditional domain of fiscal policy — namely, government’s power to tax and spend. Those are prerogatives of the legislative branch, but in this crisis Bernanke’s policies have blurred that line.”

In another passage, they refer to this as “an end run around the legislative process.” This, it seems to me, strengthens the argument that increased oversight of the Fed is warranted.

PPS: Brad DeLong has an argument against the Sanders amendment. But his argument seems to be that the Sanders amendment does not solve the real problems with the Fed:

“I do not think that the Federal Reserve is working reasonably well. I do not think that the dominant views of monetary policy in the FOMC right now are informed by American values and a reality-based assessment of the state of the economy. That a good many of the people speaking and voting in the FOMC are the wrong people to do so did not matter (much) when the Federal Reserve was dominated by the incredibly charismatic (yes, I mean that) philosopher-central banker-princes of William McChesney Martin, Arthur Burns, Paul Volcker, and Alan Greenspan, but it matters now.”

I’m not sure DeLong makes a strong case in his post that the Sanders amendment is actually bad — just that the Fed’s problems go deeper than those that will be solved by greater oversight.

58 thoughts on ““A Process That Only We Fully Understand”

  1. Yeah, if this was 1940-1987 FED we could believe they are not cooking the books. But ever since Alan-don’t-call-me-former-broker-Nixon/Reagan-lackey-bubble-man-supreme-Greenspan, all has been a sham.

    Obama should have put the 82 year old Volcker in and let him work until he dropped. Of course, I know that never was going to happen, but Obama might just regret this failure come 2012.

  2. When banks borrowed this money from the Federal Reserve, it was with the understanding that the transaction would be kept confidential. If the transaction is disclosed, then in future banks won’t come to the Fed for this kind of help, even if they need it.

  3. 1 Kings, I have no idea what makes you think the 1940-1987 Fed was A-OK.

    But since you brought it up.

    What about the 1913-1939 Fed?

  4. Yes they will. They have no choice. If they do have another choice, they can go elsewhere please. We’d appreciate it. There is a long year delay in disclosure. If they can’t get solvent after that, isn’t that the point of bankruptcy?

  5. Hey James, that is the most insightful and penetrating quote of “Fed minutes” we have EVER seen. And of course you would see it inside old , formerly hidden transcripts. And we count on you to filter data James like a great blogger, not give us fluff news with the best quote at the beginning which assumes we’re all illiterate.

    Translation: We’ll take the Kwak version of this over 98% of the “reporters” out there.

    The quote certainly shows Greenspan’s monster size Ego and disdain for the general public. I applaud Bernie Sanders and Ron Paul for banging the gong, and I pray to God they never stop, but I don’t see any results coming from it. I think the first sign that the Fed was a corrupt institution was when Alan Blinder was shoved out the door by Greenspan and told not to let the door hit him on the way out. Alan Blinder is probably the most intelligent and classy guy the FOMC has ever had, and when a classy guy like him decides he’s had enough with it, the alarm bells should go off something is seriously wrong with the corrupt institution called the Fed. Our second huge sign was when New York Federal Reserve lawyers were encouraging AIG to hide material facts from the SEC and the public.

    See my blog post which mostly borrowed from the Hugh Son Bloomberg story (which everyone should read) here:

    Bragging about free books again eh Kwak??? I’m kelly green with envy (half-joke, half-serious).

  6. Greenspan was talking about transparency about transparency. Ironic, equally as bad .

  7. The first refutation is sound although 180 days is excessive. It’s funny how the EMH flacks are like cockroaches scrurrying for cover in the sudden light the moment their vaunted “transparency” would no longer be flattering to the rackets. Once again it’s heads-I-win-tails-you-lose.

    The second argument is profoundly true, and we can go much further with it.

    As the first postscript exemplifies, the Fed already is an aggressively ideological, extremist, politicized cadre heavily dependent for guidance on its racket masters. The lie that its current policy is some non-political, non-ideological, “independent” natural position is one of the most pernicious examples of the Status Quo Lie.

    Conversely, a real audit and the imposition of real accountability, including accountability to the public interest and not to organized crime, which is today slandered as an attempted “politicizing”, would in fact constitute a relative de-politicizing of it, as it was brought back into the realm of its proper function, a humble servant of the people.

  8. Quack, Quack! Audit the Fed! Be careful what you wish for.

    Today’s market action should have taught you that civilization (or what is left of it) hangs by a few threads. All this Eighteenth Century stuff has no place to stand in an electronic world in which prices evaporate because some idiot pushes the wrong button on a screen.

    The truth is that nothing will save what remains but opacity, mendacity and money from helicopters.

  9. Let’s assume that Felix Salmon is right (and he probably is). Does it make it any better they are trying to hide information from the public, because heaven forbid the bald guy’s little Kingdom of unquestioned authority might be torn asunder?????? Oh nooooooo!!!! We can’t have that!! It might break the rhythm of the CNBC anchors kowtowing!!!

  10. The alternative is to live, invest or trade within a ponzi or fiction?

    No thanks.

    I’ll take the crash now and fundamentals to invest in after that. Next time, perhaps I won’t be priced out by leveraged banks-on-central banks and be forced to change my investment strategy to “momentum”. What a life that’s not.

    I also can’t wait to see savvy people get jobs that produce something besides creative debt. Oh, can’t wait!


    In case you haven’t noticed I wanted to let you know that the RSS feed hasn’t updated since the “Why Harvard Kids … ” article on 4 May.


  12. When it comes will you call the Sanders compromise the sellout that it is?

    Everything these Senators say are only words. This bill is very bank friendly.

  13. Is my memory fading or doesn’t 13 Bankers cover what happens when a central bank (Second Bank of US) plays in politics. Doesn’t getting congress more involved invite that?

  14. first time commenter, long time reader.


    isn’t it obvious that the banks aren’t lending because they can get a better return on their (unlimited & free) money by lending it back to the government risk-free or do the carry trade rather than lend to domestic consumers and businesses?

    if they split the banks from the casinos and just gave the banks free money, they would lend it because it would be their only option. it seems too obvious to be true, right? why is this not discussed?

  15. I think so. Think the carry trade got covered today in a fright with the dollar rising. The banks are still so levered and today seems to show exactly that and no one’s under the bid. Bottom just dropped out, didn’t it? Little peek at reality. That Wall Street Journal article showed the billions moving off the balance sheet of big banks STILL before the Q report. It’s right in front of us. No one disputing it. Amazing times.

  16. Robert wrote:

    “Think the carry trade got covered today in a fright with the dollar rising. ”

    May 6, 2010

    “Look at how violently the Carry Trade was unwound right before the market crashed. Something terrible must have happened forcing some big funds to liquid at any cost! I sincerely hope this was just an one day event or the better, an accident..… this kind of thing almost always results in several large funds being forced to liquidate – this is why we often get the initial rebound, but then more selling pressure. I can’t imagine that doesn’t happen this time too.”


    May 6, 2010

    Fat fingered a trade? LOL, with the global financial system imploding around us and the charts teeing up the FIRST OF MANY collapses like his to come it was a friggin panic sell. We were all at the friggin gates and we rushed like hell.

    OK, I gotta go figure out my charts. I have a lot to digest. I am afraid that things might be a little screwey for a few days and we may have to work off even shorter time frames till this normalizes. They are a mess I bet. Pay attention in the am to see what happens overseas. ”


  17. While the senate seems to be making progress with regard to the audit the Fed portion of the bill, it seems more of a situation where something may be better than nothing.

    The one-time audit would focus on the Fed’s emergency lending to financial institutions in the months leading up to and after the 2008 financial crisis. At its peak, at the end of 2008, the Fed’s lending totaled $1.16 trillion. While I’m disappointed this is only a one off audit event that is covering a very limited time period, as previously stated, something is better than nothing.

    No doubt that the Fed harbors many secrets, but at this writing it seems they will have to remain secret for the foreseeable future.

  18. I don’t give a flipping frag what he was talking about. What he was saying is that he and his lackeys know more about whatever and that, in a democracy which we are, he was saying some people aren’t good enough to participate in the debate because they aren’t as special as him. just insert blacks or any other minority and see what a treasonous criminal Greenspan is.

  19. Poor Bernie, now Obama and Rahmbo are gonna try to take him out (politically) for standing up for the American people. Thanks for all you’ve done Bernie. You are truly a great man.

  20. Don’t have a problem with the FED and it’s mission-the rich do have more of a say than the middle to poor. Always has, always will.
    Do have a problem with hopelessly corrupt ‘free-marketers’ who DO NOT have the country’s well being as mission, or at heart.

  21. chrism,
    I think I read something exactly like what you are saying, I’m thinking it was on Zerohedge blog sometime early this morning (May 6th). I’m gonna try and find it and post the link here in this Baselinescenario comment thread sometime later this evening. Although I’m not knowledgeable on those things it seemed to make a lot of sense to me and I thought it was a terrific observation as I think you have made the same terrific observation here. Some of these firms are laughing at the Fed now. Frankly I don’t trust Bernanke anymore. I held my tongue hoping I was wrong on this guy, but the book is in. Bernanke is too similar to Greenspan and the sooner this guy is thrown out, the better.

  22. Somebody put $16tn. into the economy says the honorable,and former SEC Chair Mr. Cox during the meltdown to backstop “Bank Failures”? That’s $16,000,000,000,000,000,.00 a lot of zero’s a’

  23. Totally bummed that the following Democrats voted against the Brown Kaufman amendment on too big to fail.If your lucky enough to have one of the senators represent your state, you can always vote them out in the next election cycle. No doubt, money talks and BS walks, but we the people are the ones that pull the lever on election day.

    The 27 Democrats who voted against the amendment:

    * Akaka (D-HI)
    * Baucus (D-MT)
    * Bayh (D-IN)
    * Bennet (D-CO)
    * Carper (D-DE)
    * Conrad (D-ND)
    * Dodd (D-CT)
    * Feinstein (D-CA)
    * Gillibrand (D-NY)
    * Hagan (D-NC)
    * Inouye (D-HI)
    * Johnson (D-SD)
    * Kerry (D-MA)
    * Klobuchar (D-MN)
    * Kohl (D-WI)
    * Landrieu (D-LA)
    * Lautenberg (D-NJ)
    * McCaskill (D-MO)
    * Menendez (D-NJ)
    * Nelson (D-FL)
    * Nelson (D-NE)
    * Reed (D-RI)
    * Schumer (D-NY)
    * Shaheen (D-NH)
    * Tester (D-MT)
    * Udall (D-CO)
    * Warner (D-VA)

  24. Re: @ Barbara____Two-Thirds are probably not up for re-election until 2014-16, and the remaining third have no competition for 2012. Pathetic bunch,and their juniors (house) have no other choice but to show their feeble feathered hands.

  25. “it’s(the Fed) engaging in monetary policies that bleed imperceptibly into the traditional domain of fiscal policy — namely, government’s power to tax and spend. Those are prerogatives of the legislative branch…” So the banks froze my business and thousands others last spring ending tax receipts to gov. To cry about the deficit without discussing the Fed’s role is insane. I thought my reps would take back our country but, alas.

  26. Barbara,
    Jerkwads, every single one of them. Especially Schumer and Gillibrand. I tell you, Kwak and Johnson would never let me post here again if I put up all the vulgarities and little scenarios about what I would do to those two sellouts. I could make a pamphlet and sell it as a “How to” for angry Greeks.

  27. (I just posted this as a comment on a previous thread, but it seems appropriate here as well.)

    As for the scam federal “elections”, the rational and moral thing to do where it comes to these rigged elections is either to refuse to vote in them while publicly affirming that it’s a boycott; or, if people really want to partake of the voting process, there should be an agreed upon none-of-the-above write-in line.

    The language should be something like: “This is a fraudulent election between two corrupt candidates from two corrupt parties, and I refuse to endorse this fraud by voting for either side of the sham.”

    Maybe that could use some editing, but that’s the gist of it.

  28. Read the minutes of the Federal Reserve
    Watch the movie “The Wizard of Oz”
    Now tell me the Wizard and the Fed Chair don’t operate the same way.

  29. This isn’t the part where we have to call Colonel Trautman in to summon you out of the forest is it???

  30. Let me take this slowly.

    (1) Greenspan and the FOMC approved the proposed transparency measure (speeding up publication of FOMC minutes).

    (2) Greenspan and the FOMC approved transparency about the transparency (they included the discussion of the move in the prior meeting’s minutes).

    (3) Greenspan pointed out that the Fed has to be careful about being too transparent, because if it overshoots, markets would take any ratcheting back of transparency as a sign of crisis.

    Where is the “trying to hide information from the public?” He simply made an abstract statement that I think we can all agree on in principle if not in practice.

    The person who wasn’t transparent here was Ryan Grim, who obscured the timing of the comment and clipped it of context (saying it was within “moments” of a housing bubble discussion, when it was actually 45 pages of text away (and b).

  31. This Qwak-ism is rich;

    “But the Fed is different, people say. Monetary policy is so technical, and so hard to explain to the public, and so dependent on the credibility of the central bank, that any exposure to politics would be dangerous.”

    Reality check: people say transparency and accountability “six months after the fact” would cripple the credibility of the Fed.

    And so far that’s the winning argument? Oh man we got trouble with a capital T right here in River City.

  32. If you are over thirty you will probably not live long enough to see that nirvana. The crash you are hoping for would dissolve every asset, wreck every institution, bring every gun nut out of the closet with both barrels blazing. You think the outcome would be sane democracy? Imagine the whole country looking like New Orleans after Katerina.

    What we need is continued slight of hand while reining in the leverage. These Congressional blowhards are the last place to expect help. Try to think about this like an adult rather than a college sophomore.

  33. No. It wasn’t that some people aren’t “good enough.” Its that the usually good transparency sometimes has bad consequences.

    Say that you ratchet up transparency, and so someone doing a very preliminary investigation of an asset bubble gets into the minutes when they wouldn’t have last year. Suddenly, you’re going to see the price of that asset drop – even if ultimately there is no bubble. In the worst case scenario, company balance sheets suddenly suck, so they’re forced to sell those declining assets into a flooded market. The frenzy feeds on itself, and you see companies going out of business.

    And you can’t ratchet back transparency, because then the market will worry that you’re hiding things.

  34. I think a bigger deal is this:

    If a bank is desperate, it will take the money even with transparency obligations. But the Fed got all of the banks together and made them all take TARP money so that no bank was singled out as weak. The Fed was concerned that if money was given just to a few banks, it would start a run on those banks.

    Whether the year long delay is enough to limit those effects, I don’t know. But keep in mind, Anony, that there are a lot of people who don’t think a big bank could be put through a bankruptcy effectively. Lehman has been a massive undertaking by itself.

  35. Re: @ RickK____The so called anomaly of yesterday, was “Not” a “Fat Finger” as were told. Let me reiterate “Not”! This was a precurser of things to come – a well thought out diabolical plan to muddy the waters. It worked, and showed just how fragile “Flash Trades” can disrupt world markets. Transparency no more, the “Program Traders” can destroy capitalism as we know it,as a cyberspace attack from an unknown entity?

  36. The People will always vote for the free lunch. You just don’t know how to sell it so you abstain.

  37. Fed Audit Compromise Amendment Praised By Fed Critics

    05- 7-10 02:14 – excerpts

    “A trio of prominent economists said in an email to HuffPost on Friday that the compromised version of an amendment to audit the Federal Reserve would still be a “great victory.”

    Rep. Ron Paul, the Texas Republican and longtime Fed critic who co-sponsored the audit-the-Fed measure that successfully passed the House, said in a YouTube video on Thursday that Sen. Bernie Sanders (I-Vt.) had ruined his bill….

    “I’m not a bit surprised that the Federal Reserve got to the Senate,” (Ron) Paul said. “At the last minute, [Sanders] switched it and watered it down, and really it adds nothing. It’s a possibility that it even makes the current conditions worse.”


  38. I thought you were ignoring me, little stalker-boy.

    But thanks for the comment, which certainly reveals your mindset.

  39. I believe that the real reason for the mess that every state in today inside the US and Including CA is also due to:
    Federal Reserve and their control or our money and the lobbying to encourage more Loans to break the US Treasury and break the bank and Guide us to borrow money from the IMF (the World Bank) so we go under the World Government and then we will be also paying a world taxes.
    The Council of Foreign Relations has had people in two major political parties for many years who dictate to the elected US president of each party the direction Left and Right to force us to react left and right and fool the US citizens and encourage policies to Spend down the US Treasury and Print More money and borrow money from the Fed and the other countries and the IMF..
    And the big bankers who lobby against banking and securities regulation because their Friends in the Council of Foreign Relations and Both Parties at the same time they are moving assets from real securities to false securities.
    We are suffering all around the country from CFR Political Lobby Social Engineering that has been going on in Capital Hill since the Federal Reserve has been established.
    These people in the CFR who told the president the policy paths are the very same people who are hang around the West Wing are the very same professional politicians who micromanaged the Viet Nam War and made those stupid policies that would not let us bomb 200 feet off the Ho Ch Ming Trail. Or any Missile sites that were being constructed during that war…
    One of these people is Henry Kissinger, another is Robert McNamara…
    Our past presidents, the current, and future presidents will also be a puppets of the CFR and the Big Bankers.
    Did you ever wonder how proposed laws and legislation for Farm policy, Drugs and HealthCare or Fiscal Policy have hundreds of pages suddenly pop up for a quick vote, they were printed in the Offices of the CFR in NY long before they ended up in a cardboard box in Capital Hill to be put forward by the president for an immediate vote..
    During the Reign of the Federal Reserve and the actions of the CFR:
    We have seen a slow and steady decline of Jobs and Farms and Factories and the US currency…
    The Rise of the ACLU
    The Rise of the Other nations that were funded by loans made by Nixon and those past presidents.
    The Rise of the Foreign Oil Lobby paying for Protestors of Nuclear Power.
    Other countries are now becoming a slave to the IMF.
    Some countries are already there.
    Notice what just happened to Greece.
    These CFR people are the same people who set the presidents policy to support this government and take this one out….
    Why: because their goal is to get all those other governments under the One World Government, (“The New World Order”)
    This is also why we have illegal Aliens living here, it is because they want to intentionally bankrupt the US treasury.
    This is why the Social Security and the Handouts and the free programs and taxes keeps going up and up.
    We need to take back the US government and force them to the Laws of the US Constitution because if they bankrupt the US treasury they will force us financially to support the one world government and then we will be under a new set of rules and they will be able to steal more of our money and it will be completely legal.
    We are gravitating towards a form of modern feudalism.
    The CFR, The Big Banks, The Big Oil Lobby, and the Big money on Wall Street, Big Washington Accounting Firms (D&T), and the Professional Politicians and Professionals Lobbyists on Capital Hill, the Drug Companies, The Biggest Drug dealer syndicates also have a big choke hold control the mass Media.
    The Mass Media Companies: i.e. Clear Channel, Fox, NBC, Washington Post, Wall Street Journal, Time Warner, and the biggest papers and financial magazines.so they write articles that spin CFR ideals and spin and spin to get more of their blood friends in Political Office and the ones who oppose their master plan out of politics and on the street or in Jail or set up by bribes and females who set them up like we have seen with John Edwards. Notice how none of the financial media never quoted any independent financial Auditors or mentioned that a market collapse was immediate. Notice how NBC knew more about the past election results before anyone else.
    Notice how a world leader or candidate who wishes to push their Big lobbyist views and supports their Big lob agenda gets big Air Time Interviews, Full page ads, Hero Status, on the cover of Time…
    Notice how a world leader or a Political Candidate who is against their views and master plan gets bad press, slandered, shut down, spun out, overthrown, invaded, no loans from the IMF and torn to shreds till a new Candidate that Supports the IMF suddenly pops up for election and is popular in the mass media.
    So today if you are in the “In Politically Correct Crowd” if you wish to see the IMF and the World Bank Get bigger and support the ACLU and Big Oil and Goldman Sacs and you support more borrowing and spending, more social programs we cannot afford and the hot topics of the Two Big Political Parties and their big plans on future taxing and spending and taxing, exporting Jobs, and doing the things that continue to empty the US treasury and support the One World Government Master Plan.
    It is also not in their interest to eradicate drug dealers moving into the small neighborhoods distributing illegal narcotics to the children who hang around the local park basketball hoop and in the neighborhoods near the public schools and sell to the addicted because they prey and pacify the large masses and can run unhindered and un-opposed and this furthers their stealing agenda. This is why we need to protect our selves and our children
    We must not be surprised when we hear any big politician here and abroad talk about loan credit borrowing from the IMF when the US treasury runs empty and China no longer wants US bonds.

    These are my thoughts about the Shadow Government and what they have done to our Great Country.
    It is badly bruised but keeps on standing.
    Please Read an old paperback called the Shadow Government.
    May not be entirely accurate, but Sincerely thought out,

  40. Audit the Federal Reserve and lets find out what is really in that private Fort Knox. When every business in the US is expected to be taxed and Audited then they should be held to the same standard. This is not top down only government.
    A government is for the people and by the people or it ceases to remain a Government. The Federal Reserve is King George all over again. The Citizens of the US demand that the Fed opens its books. The government should not regulate and hold its citizens to a standard it cannot accept for itself. As above so below. Why is the Fed so secretive, Yes they influence our officials and keep on manipulating our markets and our currency to control the citizens for their social engineering agenda of world dominance. The party is over. I am a taxpayer and I demand tranparency and not secrecy. I want no more surprises and I want to know that I can invest in Stocks and Bonds that have real value and are not manipulated and assets sucked out and skimmed. I also do not wish to see the political canidates give campaign money that originated in my blood sweat and tears of years of labor and effort working at jobs while the big skim was being done down at the Fed. I am a US Taxpayer and a US Citizen, this is my Government, it does not belong to the big banks and Corportations and I demand real Fiscal Accountability Period.

    I have spoken.

  41. I don’t know about that junior, but proudly affirming you abdicate your civil duty reveals much about yours.

  42. Thanks for the compliment. I do take pride in civic principles, which dictate that when the kleptocracy has unilaterally broken the social contract, our civil duty is to resist and reject it to the full extent of our power, including boycotting its sham elections, thereby not abetting the crimes.

    So yes, you understand me well.

    As for your own failures, would that be the failure of your civil duty, out of cowardice or viciousness, or simply the lack of being smart enough to understand what’s happening?

  43. this should be called the wizard of oz flap

    get the fed out from behind the curtain

    we all know that dorothy was did better knowing she couldn’t rely on the wizard and his “fakery”

    next we should lift the curtain that the supreme court hides behind

    supreme court sessions should be visible to the public, televised in real-time

  44. Hoist by his own petard….read the feds rules for collateral and margins for borrowing. the banks, as i read it, were allowed to borrow from the federal reserve against 1-4 unit mortgages at about 95%…which they had to promise to the federal reserve were triple A rated, (by agencies they paid to rate them!)…it’s called a bic program, borrower in custody. the bank doesn’t even have to turn over or deliver copies of the mortgages to the federal reserve they just have to make them available for inspection…then they get 95% of the face value as a fed loan at .5%.p.a. .why is this good for the banks?…because they have already sold the loans in securitized mortgage pools but never delivered title. (they can claim that it’s for convenience and possibly as a cost cutting move or an oversight, etc. etc.). as a result, they were able to keep the mortgage paperwork and title in house and borrow against them although they had sold the core value. As a foreclosed homeowner, i wonder why “my” bank only transferred the trust deed over to the investment pool 6 days before the foreclosure in feb 2010 although the SEC prospectus of 2007 claims the trustee held the mortgages on behalf of the investing pool. What if the fed also advanced directly or indirectly money to the investors in the securitized pool …the same $700k house became a vehicle to print twice that amount. the trustee for the investors was wells fargo and the bank of america the originating bank…so much for anti trust laws..

  45. Maybe they will, maybe they won’t.

    How bout they don’t set up unsustainable programs with huge front-end bonuses for themselves, thereby backing themselves into a corner where it’s necessary to borrow from the “Lender of Last Resort”?

    Negative cash flows translated into mega-IPO’s (and bust)?!

    Never-ending real estate appreciation made a (temporary) reality by expanding the pool of eligible buyers (liars loans and bust)?!

    And at every step, mega bonuses for the financial community. Even after the big bust! Courtesy of taxpayers.

    So transparency makes them avoid the “LLR” and they fail, who cares? Or, transparency is a valid concern and they suffer a run and fail, who cares. Run the bums out of town. Or toss em in the clink next to Madoff! Turn off the tap.

    Spend the next TARP on capitalizing new banks with clean balance sheets (http://khanexercises.appspot.com/video?v=BdmI14oSe4g). We keep buying into all the fears the current flim-flam artists are selling us: Too Big To Fail; Financial innovation is too complex for regular folks (and apparently flim-flam fools) to understand; The Fed Chairperson, like the Pope, is infallible; Transparency at the Fed cannot be allowed to happen; etc., etc., etc.!

    Come on people! The king is naked! There are no clothes! Bernanke: “Answer Bernie (Sanders)!”

  46. Maybe because they make currencies go up and down and decide what banks get help or not, basically if you know what they know you will make mountains of money.

  47. Depoliticized?

    Does anone out there believe that Bernanke didn’t make promises about interest rates to Obama and top Dem legislators to keep his job?

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