By MICHAEL GRAY
Why would the Obama administration propose giving the Federal Reserve additional governmental oversight of the US monetary system?
How can we turn over more of Congress’s responsibility to a private banking concern, which has no responsibility to the American people? The Fed answers only to its shareholders, which are the major money-center banks of the globe.
If Ben Bernanke were a government employee would he be allowed to sit before a congressional panel and tell them he will not answer their questions because it could cause harm to one or more of its shareholders. And that’s OK with the politicians.
The Fed chief and his governors will not raise rates on Wednesday. His shareholders’ balance sheets are thriving on borrowing money at close to zero from the Fed and then depositing the phantom money back into the Fed at higher rates. This is how the Fed controls the velocity of money allegedly to control hyperinflation.
At this time the Fed has an interest rate of less than .25%, yet it is paying its members well above that on money its shareholders are lending back to the Fed.
This is what happens in the midst or the banking crisis. Now Rahm Emanuel – using the pretext of never letting a crisis go without effecting change – wants to consolidate monetary power to the institutions that brought it about.
Why? Because of Bernie Madoff? Because of Allen Stanford? Because of AIG?
No. The Fed does not want to guard against systemic risk, The Fed wants to control systemic risk. They want the ability to choose which of its members have control of an industry.
There’s plenty of money to be had, and the Fed wants to make sure it has the ability to pick which money center bank gets the biggest piece.
Administration officials can come out and say the Securities and Exchange Commission missed the Ponzi schemes of Madoff and Stanford, but the SEC was so neutered it could never find these schemes. And if they did discover it some official would take the file out of general circulation within the department and sweep the whole mess under the rug.
If you pay SEC inspectors a fraction of what a Wall St. trader earns, then how can you expect valuable oversight?
Granting the Fed oversight of the financial markets allows the permanent government, which could also be called: The Illuminati, The Council of Foreign Relations or the US wing of the Bilderberg Group, the additional power they crave and want.
Let’s remember the Federal Reserve is a cash cow for its shareholders. The Fed controls the money supply. Each dollar the Fed creates, it collects interest on that dollar, so it needs to create new dollars to pay its members interest of the dollar it created a second earlier. Then the Fed turns around and pays its shareholders a dividend on the profits.
How can that be?
Is the Fed trying protect the economy from hyperinflation if those funds were let loose into the economy? Is the Fed trying to retard the velocity of the monetary system?
No the Fed is attempting to bolster its shareholders’ balance sheets, despite the rhetoric. The Fed and the administration need to see inflation grow to reduce its debt load.
It’s cheaper for the taxpayer to pay off our massive debt with a weaker, inflated dollar so as to save trillions. But no one can say that publicly and besides there’s no real money in saving the taxpayers money.
Editors note: Although I use the terms Federal Reserve and the Fed in this story, please remember the federal in Federal Reserve is the same as the federal in Federal Express. It is just a name with no federal authority. Its power is derived from its ties to the private banking system and the people who control those institutions.
Why do I keep hearing from people within the markets that there is a very good possibility of a bank holiday this summer? It appears this “holiday” will be needed to reapportion the banking industry.
The usual Friday bank closings, reopening on Monday under new bank name will not work for larger institutions, it is too pedestrian for the larger banks soon to default.
Three Troubled Asset Relief Program financial firms have stopped paying Treasury dividends on the TARP loans. This is a precursor to larger banking institutions defaulting and closing.
The FDIC cannot handle this over a two-day weekend. I don’t think this holiday will be a two- or three-day closure. I think an August week or so will be the timeframe.
August’s low-volume trading will allow the Plunge Protection Team to buoy the markets due to the closure. However, the dollar index should plunge and gold will rocket on this event.
More on this to come.
For more on Wall and Washington and the economy see: http://mgray12.wordpress.com