Skip to comments.Central Banks Are On the Defensive [Fed Under Attack; NY Fed Player in Greece, Spain Collapse]
Posted on 02/21/2010 1:59:53 AM PST by BIOCHEMKY
The conclusion of this article I have reprinted here also FIRST:
"For the first time since 1914, the Federal Reserve System is under serious attack. The attackers are not members of the World Affairs Council. The attackers are from the hinterlands. The bailouts angered them in October 2008. The bailouts confirmed Ron Paul's warnings in his Presidential campaign. The Web has made it possible for the troops to get mobilized."
"The FED has never had to deal with anything like this. It does not know how to respond."
***READ THE WHOLE ARTICLE and the next articke that is indicated at the bottom and THEN read the initial information that accompanies a FReeper thread from yesterday:
Somethings up in the Gold market, IMF & the treasury (Saturday, February 20, 2010 3:33:03 PM 39 of 41).
All over the Western world, central banks are under pressure from their governments to inflate. Governments are not satisfied with short-term interest rates at historic lows, such as a federal funds rate of 0% to 0.25% in the United States. Politicians want rapid economic growth, and they are convinced that this is possible after a major recession only with more fiat money.
"ACCOUNTABILITY IS AUTONOMY"
On February 17, the President of the Federal Reserve Bank of Philadelphia gave a speech to the Philadelphia chapter of the World Affairs Council. Whenever an official gives a speech to a WAC chapter, we can be sure that the official regards this as an important speech.
The media do not talk about the World Affairs Council. There may be an occasional report about a speech at a WAC chapter, but there will be nothing said about the WAC: what it is, who belongs, and what influence it possesses.
The WAC has an important social function. It is the single most important membership organization for the nation's senior elite Establishment to communicate the latest perspective to the nation's elite.
According to the brief entry on Wikipedia, the WAC has 535,000 members in 89 separate councils in 39 states. There are 175 million adults in the United States. This means the WAC's membership is a little over three-tenths of one percent of the adult population. I call this an elite.
The WAC was founded in 1918, three years before the Council on Foreign Relations was founded. Like the CFR, the WAC officially is concerned with international affairs. Also like the CFR, the WAC deals with domestic issues as well.
The President of the Philadelphia FED, Charles Plosser, titled his speech, "The Federal Reserve System: Balancing Independence and Accountability." This sounds boring. For those who understand the function of the Federal Reserve and its influence, the speech is not boring to read.
The target of the first half of the speech was Ron Paul. It was a warning against RON PAUL'S BILL in the House of Representatives that would authorize the Government Accountability Office to audit the FED. The House's leadership has kept the bill from coming to the floor for a vote, despite the fact that a majority of the membership has officially supported it, and despite the fact that a majority of the House Financial Services Committee voted for it, 43 to 26, in November 2009.
The FED has consistently opposed this bill. The official explanation is that this would in some way constitute interference with the FED's policy-making. This argument has never been clear. The fact that the General Accountability Office will verify the numbers in no way constitutes interference with FED policy, unless FED policy has been carried on under false numbers.
Nobody at the FED will say what is really at stake: an independent audit of the government's gold holdings, which are officially held for the government by the FED for safekeeping. IF THE GOLD IS GONE, OR IF THERE ARE LEGAL CLAIMS AGAINST IT BY FOREIGN CENTRAL BANKS AS A RESULT OF FED SWAPS, THIS WOUD CONSTUTE FRAUD ON A MASSIVE SCALE.
The real power in the FED has always been the FEDERAL RESERVE BANK OF NEW YORK. In all textbook accounts of the years leading up to the Great Depression, the focus is on Benjamin Strong, the President of the New York FED. He set policy, not the Board of Governors.
The BULK OF THE WORLD'S GOLD HOLDINGS are stored in the vault of the NEW YORK FED. This includes most of the deliverable gold (99.9% fine) owned by the FED as TRUSTEE OF THE U.S. GOVERNMENT's GOLD. The gold at Ft. Knox (PROBABLY coin melt, 90% fine) constitutes a second holding area, said to be 20% of the nation's gold. NO ONE KNOWS. It HAS NOT BEEN AUDITED SINCE the early 1950's, not even by the private accounting firms that audit the FED on an annual rotation basis.
The FED demands secrecy. It proclaims that it pursues transparency, but it does not on any issue of substance [THIS sounds just like Obama, Pelosi, Reid, & Frank].
Bloomberg News in November 2008 SUED(!) the Board of Governors [of the FED] under the Freedom of Information Act to find out which institutions received how much money in the October 2008 bailouts. The Board of Governors REFUSED TO COMPLY on this legal basis: this would expose trade secrets of the recipient banks.
Even though a DISTRICT FEDERAL JUDGE in August 2009 ruled that the NEW YORK FED MUST turn over these records, the FED REFUSED to comply. She gave the FED five days to comply. It DID NOTHING for six months.
Anyone who thinks that the Federal courts have operational authority over the Federal Reserve System is IGNORANT of the last century of American history.
The Board of Governors APPEALED(!) the ruling on January 11, 2010. A ruling will not come down for months. A recent summary of this BIZARRE story appeared in the New York Times. In a rare form of candor, the writer added this observation, deep down in the bowels of his article:
The Federal Reserve has wrapped itself in secrecy since the turn of the 20th century, when a select group of financiers met at the private JEKYLL ISLAND CLUB off the eastern coast of Georgia and, forgoing last names to preserve their anonymity among the staff, drafted legislation to create a central bank. Its secrecy, of course, persists today, with Ben S. Bernanke, the Federal Reserve chairman, refusing to tell EVEN CONGRESS which banks received government money under the bailout.
"SECRECY IS TRANSPARENCY"
Mr. Plosser gave the usual reasons for opposing the audit.
So, our uniquely American form of a central bank strikes a balance between centralization and decentralization; between the public and private sectors; and among Washington, Wall Street, and Main Street. The result is a central bank that achieves a delicate balance: it permits policymakers a good deal of independence when conducting monetary policy but in return requires transparency and accountability to the American people.
WHY does setting monetary policy require this degree of secrecy?
Officially, the FED is rather vague on the answer. It is all about accountability, the FED says. You see, transparency and accountability to the American people REQUIRE SECRECY(!), so that Congress is kept in the dark. You understand this, don't you?
The elite at the World Affairs Council ([WAC] did not bat an eye. "Of course, of course." There was no response comparable to a town hall meeting in a Congressman's district over the bailouts. There were no catcalls. There was polite acceptance.
From the point of view of economic analysis the pursuit of self-interest secrecy by the FED is required because the FED is the administrator of a CARTEL of GOVERNMENT-PROTECTED commercial banks. The government has CREATED BARRIERS to entry, thus creating the cartel. BANKERS do not want the GOVERNMENT to police the CARTEL [ya think?!]. They want THEIR OWN AGENCY to do this. They nominate the Presidents of the 12 Federal Reserve Banks. The big banks want to milk the cartel for all they can. They got the bailout money, and in their view, that ENDED any LEGITIMATE interest Congress may have in pursuing the matter. So, Mr. Plosser said this:
Another frequently mentioned proposal under consideration would politicize the governance of the 12 Reserve Banks by MAKING the chairs of the boards of directors, or the Reserve Bank presidents, POLITICAL appointees. Other legislators have suggested eliminating the votes of Reserve Bank presidents on the Federal Open Market Committee [Who's on this committee?]
As I hope I've explained, such changes would weaken the regional and decentralized structure of the Federal Reserve System and lead to a more centralized and political institution and less effective policy. Were regional Reserve Bank presidents or chairs to become political appointees, THEY MIGHT BE MORE ATTUNED TO THE POLITICAL PROCESS IN WASHINGTON THAT SELECTED THEM, rather than having a public interest in the broad economic health of the nation and the Reserve Districts in which they reside. Politicizing these important positions might also discourage some talented, public-spirited individuals to serve as part of our nation's central bank.
The hearts of World Affairs Council [WAC] members must have swelled with pride. "Yes, yes, we understand. Far be it from us to discourage some talented, PUBLIC-SPIRITED individuals to serve as part of our nation's central bank."
The message was clear: we must keep politics out of the most powerful CARTEL in the country. NO AUDIT! NO CONTROL over WHO GETS TO BE President of a regional FED bank.
Central bank independence means that the central bank can make monetary policy decisions without fear of direct political interference. It does not mean that the central bank is not accountable for its policies. Allow me to summarize:
Autonomy is accountability. Secrecy is transparency.
George Orwell saw it coming. Newspeak is alive and well inside the FED.
For the first time since 1914, the Federal Reserve System is under serious attack. The attackers are not members of the World Affairs Council. The attackers are from the hinterlands. The bailouts angered them in October 2008. The bailouts confirmed Ron Paul's warnings in his Presidential campaign. The Web has made it possible for the troops to get mobilized.
The FED has never had to deal with anything like this. It does not know how to respond. Mr. Plosser's speech is an indication of just how little the FED understands public relations. A minority of critics have seen through the Wizard of Oz's smoke and mirrors. The Web has given these people access to information that could be concealed before.
The genie will not go back into the bottle. Opposition to the FED will spread, no matter how many speeches that high-level FED officials deliver to local chapters of the World Affairs Council.
"Newly-named Greek Speculators Have Strong Ties to Goldman, New York Fed"
...Greeces National INTELLIGENCE SERVICE has named several other investors who are shorting Greek debt: Brevan Howard, Fidelity International, and Moore Capital, in addition to PAULSON & Co. The Greek daily EYP is also reporting that the agency named PIMCO, as well.
...the complete lack of transparency in this free market forces us to rely on a *GOVERNMENT SPY AGENCY* for information about who is making these trades. Brevan Howard, PAULSON, and Moore were accused by Spains INTELLIGENCE AGENCY last week. How bizarre.
The alleged speculators share some fascinating connections, including strong ties to Goldman Sachs and the New York Fed.
Moore Capital, the hedge fund of Louis Moore Bacon, has hired at least three executives straight from Goldman Sachs in the past three months: David Jasper, a macro trader, Garth Appelt, who worked for Jasper, and Amna Karim, former head of Nordic sales for Goldman Sachs Asset Management. Additionally, former Enron and Goldman Sachs executive Aaron Armstrong joined Moore from Deutsche Bank early this year.
Furthermore, two Brevan Howard executives have moved to Moore Capital in recent months. Jean Phillippe Blochet, a co-founder of Brevan and the B in its name, joined Moore Capital last year. Trader Luke Sandrian made the same move late last year.
The firms also have strong ties to the New York Fed. Three of the nine industry representatives on the New York Feds Investor Advisory Committee are affiliated with the speculators named by the Greek government: Louis Bacon of Moore Capital, Alan Howard of Brevan Howard, and Mohamed El-Erian of PIMCO. The New York Fed was also a client of PIMCO until recently.
Banks rank right up there with the IRS in stealing your money. The difference is we know thats what the IRS is supposed to do.
Hey now, Mr. Blankfein and the boys at GS are just “doing god’s work”, as he said in a recent interview.
By the way, FR is letting you post stuff from LewRockwell.com again? I sure hope so, it’s an excellent source.
Interesting post if it lasts...
Happy happy joy joy
Many Americans also don’t realize that the Federal Reserve is not government owned, it’s privately owned, they lend money to the US government who in turn spends it and pays interest on it.
I always thought if Americans knew that there would be an armed uprising the next day.
Greece may just be the world financiers and speculators Waterloo..
If the Greek Government regardless of the cost smashes the EU by revealing the EURO as the FIAT Money Fraud it is.. If Greece Survives the International Financiers wrath..
I think the Internationalists will have no choice from their point of view than to deliberately plunge the world into a severe and extended economic crisis to try and regain their power otherwise other nations will follow Greece’s example.
Thank you for the deep perspective on Greece, especially the info on the Euro being fiat money. I “get” that.
What is REALLY happening in America?
Take a look at the pieces of information cited below. Together they put the full face on the situation.
Obama, the Black Panther Party (BPP), Black Liberation Army (BLA), Weather Underground (WU), global Muslim Brotherhood (MB) network, Al Qaeda, and Kenyan and American Politics are All Interconnected
Why Obamas Purpose is to Fail America
Is Obama a Marxist, Maoist, Leninist, Stalinist, or Just a Run of the Mill Communist? A Timeline
Check out the initial information provided on the following thread, it relates to abuse of FED gold (possible theft of it) by Obama in cahouts with Wall Street investment bakers (certain firms), the International Monetary Fund (IMF), Treasury Bills, and China. There’s either theft or a swap going on.
Thanks for the ping what’s up with that anyway I take information where ever I find it.