The Markets Are Failing

And, of course, the sole reason is that our Federal Reserve and other central banks aren't printing enough money. Or that governments won't help the big banks. Or both. Probably both. As a NYTimes article says:

"It is the fear that governments may not ride to the rescue that seems to have unnerved markets."

Ah, so now we have it. The government is no longer forming a (nearly nonexistent) safety net for the banks - the same banks that make risky investments on purpose, overextending themselves and keeping little money actually in hand so they can make more money, and then depend on the taxpayer when they inevitably begin to fail.

The fact is that, if banks would make better business decisions, they would have nothing to worry about. If they would just learn to say "no" when a risky investor came along, they would get into far less trouble. Sadly, the profit motive is too much of...well, a motive. But I see no reason why they shouldn't pay the price.

Competing Currencies?

An act proposed by Senator Ron Paul (R-Texas) would "legalize competing currencies."

I agree with Senator Paul on many issues, including his stance on the Federal Reserve. But this time...well, I just don't see how this would do us any good.

For one, it seems unconstitutional to me. Congress is supposed to print money, and regulate it. So Congress needs to take up their duties like they ought, buck up, and be men. Also, I think it would just create a lot more chaos than we have now. What happens if you go into Walmart, and they use Fed bills, but you use a different currency? What then? How do we determine exchange rates? That was one of the reasons the 'money clause' was put into the Constitution. States were making their own money, and it was causing tons of havoc.

I also think with this bill, we're asking for trouble because people will start counterfeiting, further inflating our money supply, and using this bill to justify it. We'll shoot ourselves in the foot with this thing, IMO. Letting people 'mint private money'...um, yeah, we're just asking for trouble. That would cause inflation as well, I would think. With gold, there's also the problem of exchange rates. How do we set a rate? How do we know what a certain bit of gold is worth?

I think a better, more permanent solution would be for a) Congress to do their job and start printing money- US legal tender- as they ought. b) This money should be available for exchange at any bank. This exchange would work by people bringing in their Fed bills and receiving an equal amount of USLT. (An exchange rate would have to be worked out. Right at the beginning, perhaps one for one.) Alternately, we could also just start issuing USLT, and let the Fed bills work their way out of the system, but that might also cause more problems than good

So there's just my thoughts on that. Anyone else?

Audit the Fed

Is anyone familiar with the Audit the Fed bill? I copied the House version as it is the original one.

Audit and Report of the Federal Reserve System-
‘(1) IN GENERAL- The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.
‘(2) REPORT-
‘(A) REQUIRED- A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.
‘(B) CONTENTS- The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.’."

(I like the Senate's title though- 'The Federal Reserve Sunshine Act.' Isn't that just cute? XD)

Once we get past all the legal mumbo-jumbo of this bill, we see that the intent of this bill is to make sure the Federal Reserve is being honest- something that has been needing doing for the past several years.

I think that, if this bill were to get passed, it would be a step in the right direction. Of course, it probably won't get passed, since Bernanke has already practically threatened Congress with economic collapse if the bill gets passed.



In this video, he says- and I quote- "My concern about the legislation is that if the GAO is auditing not only the operational aspects of our programs and the details of the programs, but is making judgements about our policy decisions, that would effectively be a takeover of monetary policy by the Congress, a repudiation of the independence of the Federal Reserve, which would be highly destructive to the stability of the financial system, the dollar, and our national economic situation."

I quote from the Constitution- "[The Congress shall have Power To] borrow money on the credit of the United States; To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States; To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;"

First of all, I want to know why Congress doing their job would be 'highly destructive' to our financial system. Is there something you need to hide, Mr. Bernanke?

Secondly, I want to know why our monetary system is in the hands of a private bank, and private bankers in the first place. The passage quoted above clearly states that it is Congress' responsibility to deal with money matters- not that they delegate it to a private bank.