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European Central Bank (ECB) chief Mario Draghi has urged eurozone leaders to come up with a 10-year target for the common currency, saying they should accept more transfer of powers if they truly want a fiscal union. Held exceptionally in Barcelona instead of the ECB headquarters in Frankfurt, the monthly meeting of eurozone's central bank governing council on Thursday (3 May) was an opportunity for Draghi to explain what he meant last week when he said a "growth compact" is needed along with the deficit-cutting measures taken by most governments. "There is absolutely no contradiction between a growth compact and...

Spain will restore border controls to France on Saturday, during a summit of European Central Bank (ECB) to be held on 3 May in Barcelona, said Monday the Ministry of Interior. The measure, which will run until next May 4, will involve the temporary suspension of the Schengen Agreement on free movement of citizens among the 27 European Union countries. According to the conservative government of Mariano Rajoy, the land boundaries with France will be reinforced at the border of La Jonquera, Port Bou, Puigcerdá, Camprodon, Les and Canfranc and air borders of Girona and Barcelona airports. The Schengen Agreement...

Suppose on some sunny afternoon in a large city somewhere in the western world, a man discovers on awaking from a two-hour nap that several hundred car accidents had occurred in the city while he slept. He wonders why. First he considers the possibility that the weather was the cause, but the gorgeous afternoon sun pushes that thought aside. The odds of many hundreds of cars having simultaneous mechanical problems seems infinitesimally small, so he rules that out as well. He ponders the question further and eventually asks himself whether the drivers in that fair city just had a...

The market is off to a scintillating start in 2012 and many of last year's worst performers are leading the charge. Europe debt worries seem to be dissipating a bit, helping the the euro bounce back. And investors are dumping stodgy Treasury bonds, pushing yields higher in the process. Risk is back. So why is gold, the quintessential safe haven/fear trade, up about 7% in 2012 too? That's about the same as the Nasdaq. You can probably thank the world's central bankers for helping fuel a gold rush. The funny thing about gold is that it often rallies when investors...

Debt Crisis: Led by the Fed, top central banks added dollars to the global financial system on Wednesday as Europe's crisis deepened. We hate to rain on anyone's parade, but this won't solve the EU's problems. The central banks' bold action, though met with wild enthusiasm by financial markets, amounts to little more than a multibillion dollar Band-Aid on a deep, dangerous wound. It also turns the U.S. Federal Reserve into Europe's lender of last resort — a dangerous precedent, and something we don't recall American voters approving, though they'll certainly pay up if it fails. Obviously the Fed, worried...

All the world's central banks have just announced a big coordinated intervention to lower swap rates. What does that mean? Basically this: European banks have been parched for liquidity, and need access to dollars. The ECB can't supply them dollars unless it borrows them from the Fed. Essentially today's action makes it easier for the ECB and thus European banks to borrow dollars. It's not a solution to the euro crisis by any means; it just means that the most acute liquidity problems will be mitigated for now. The market is loving the news. US markets had been down by...

Should the Federal Reserve be abolished as Rep. Ron Paul and others have demanded? The Republican presidential candidates have agreed that they would like to replace Ben S. Bernanke as chairman of the Fed, and many have been equally critical of former Fed Chairman Alan Greenspan. The view that both Mr. Bernanke and Mr. Greenspan have done poor jobs is also shared by many economists and financial writers. But, if not Mr. Bernanke, who? And if not the Fed, what? One of the criticisms of the Fed and other central banks is that they were engaged in inflation targeting -...

Worried that a mounting debt crisis in Europe could trip up the global economy, the Federal Reserve opened its vault Thursday to the central banks of other countries in an effort to head off a crippling shortage of dollars. The main recipient of the Fed’s money is the European Central Bank, which will in turn extend dollar loans to banks in the nations that use the euro currency. Those banks do significant business in dollars, for instance making loans to customers operating around the world, and have been finding it harder to raise dollars from anxious investors. The initiative, which...

The half-brother of Afghan President Hamid Karzai has been killed in an assassination attempt, officials say. Ahmad Wali Karzai, the younger half-brother of the Afghan president and leader of the Kandahar Provincial Council, was shot dead, presidential spokesmen Waheed Omar told the BBC. Initial reports suggest he was shot by his bodyguard in his house in Kandahar. A controversial politician, some saw him as a defender of Pashtun rights. Critics said he was a warlord mired in corruption who was openly involved in the drugs trade and had a personal militia at his disposal. The president repeatedly defended him, denouncing...

I like to understand what goes on around me to the extent possible.  For the last several weeks I'd been wondering about the situation in libya and I was drawing a near total blank;  within the last few days however an article by Ellen Brown, the lady I view as the world's ultimate banking/money-policy guru, and one particular comment on the topic on the FreeRepublic forum have brought the picture into sharp focus. Ellen Brown's article: http://www.zerohedge.com/article/libya-all-about-oil-or-all-about-banking and the FR comment: http://www.freerepublic.com/focus/news/2705063/posts?page=12#12 You are right, Libya is also not about oil, but methinks it is more than just banking:Other...

The Russian central bank has put into effect its latest moves in the fight against inflation with some style. After raising interest rates on Monday for the first time since 2008, the authorities late on Tuesday widened the trading band for the rouble – and were happy to see the currency rise sharply on Wednesday, by a full 1 per cent against a US dollar/euro basket. As well as gaining some ground in the anti-inflation front, the central bank can claim another modest advance towards its aim of liberalising the rouble. Governor Sergei Ignatiev should be pleased with this week’s...

If the U.S. dollar is being devalued so rapidly, then why does it sometimes increase in value against other global currencies? Well, it is because everybody is recklessly printing money now. The 6 charts which you are about to see below prove this. The truth is that it is not just the U.S. Federal Reserve which has been printing money like there is no tomorrow. Out of control money printing has also been happening in the UK, in the EU, in Japan, in China and in India. There are times when one particular global currency will fall faster than the...

(Reuters) - The U.S. Federal Reserve's journey to the outer limits of monetary policy is raising concerns about how hard it will be to withdraw trillions of dollars in stimulus from the banking system when the time is right. While that day seems distant now, some economists and market analysts have even begun pondering the unthinkable: could the vaunted Fed, the world's most powerful central bank, become insolvent? Almost by definition, the answer is no. As the monetary authority, the central bank is the master of the printing press. It can literally conjure up money at will, and arguably did...

Rep. Ron Paul, the Texas Republican who has passionately called for dismantling the Federal Reserve, will be running the panel that oversees the central bank when Republicans take the House majority next year. Mr. Paul has introduced legislation to abolish the Fed, wrote the book, “End the Fed,” and rallied support for eliminating it. Rep. Spencer Bachus (R., Ala.), who will take over the House Financial Services Committee from Rep. Barney Frank (D., Mass.), announced today that Mr. Paul, a libertarian who won a fervent following when he ran for president in 2008, will head the Domestic Monetary Policy Subcommittee....

Republican Congressman Ron Paul may be Julian Assange’s most loyal supporter in Congress. Visiting Fox Business’ Freedom Watch– a program on which Assange has been welcome several times– Rep. Paul went to bat for the Wikileaker in the middle of condemning the secrecy of the Federal Reserve, and made a little request of his own: “every conversation of the last ten years with the Federal Reserve people.” Chop, chop, Assange! Rep. Paul, who is also a regular guest on the program, chatted for some time with the injustices of having a “secret government” like the Federal Reserve with Judge Andrew...

The financial crisis of not long ago has not surprisingly generated a great deal of anguish within the electorate. Americans were and continue to be a skeptical lot when it comes to the competence of the various federal bureaucracies which dot the Washington, DC landscape. Despite their skepticism about the competence of regulators, they were still disappointed when those empowered to oversee our financial system were seemingly caught unware by a banking collapse. Rightly or wrongly, the US Federal Reserve has become one of the biggest targets within the financial bureaucracy when it comes to public distrust, and as a...

Ultra-loose monetary policies by the Federal Reserve and the European Central Bank are throwing the world into "chaos" rather than helping the global economic recovery, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday. A "flood of liquidity" from the Fed and the ECB is bringing instability to foreign-exchange markets, forcing countries such as Japan and Brazil to defend its exporters... "The irony is that the Fed is creating all this liquidity with the hope that it will revive the American economy," Stiglitz said. "It's doing nothing for the American economy, but it's causing chaos over the rest of the world....

Rumors have circulated in China that People’s Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBC, including Zhou. Although Ming Pao on Aug. 30 published a report on its website indicating that the prior report was fabricated by a mainland news site that had attributed the false information to Ming Pao, rumors of Zhou’s...

As the Wall Street Journal points out, the Federal Reserve might open up its "swap lines" again to bail out the Europeans: The Fed is considering whether to reopen a lending program put in place during the financial crisis in which it shipped dollars overseas through foreign central banks like the European Central Bank, Swiss National Bank and Bank of England. The central banks, in turn, lent the dollars out to banks in their home countries in need of dollar funding. It was aimed at preventing further financial contagion.The Fed has felt that it is premature to reopen this program...

WASHINGTON—Senate legislation aimed at overhauling regulation of finance would cost large banks billions of dollars, prevent them from taking certain risks and create a new regulatory infrastructure to oversee their activities. The draft bill introduced Monday by Senate Banking Chairman Sen. Christopher Dodd of Connecticut is tougher on financial companies than was expected just a few weeks ago. Mr. Dodd's bill would allow the Fed to examine any bank-holding company with more than $50 billion in assets, and large financial companies that aren't banks could be lassoed into the Fed's supervisory orbit. One of the most controversial aspects of the...

Argentina’s new central bank head on Thursday promised to maintain current monetary policy as she sought to calm market fears that her appointment would damage the bank’s independence. Mercedes Marcó del Pont has close links to the government and was appointed this week by Cristina Fernández, Argentina’s president, after a bitter political battle to remove the former chief for failing to hand over reserves to pay off debt. “I want to transmit calm,” Ms Marcó del Pont said. “We’re planning policies that maintain current monetary and exchange rate policies, and that of the administered exchange rate.”

Australia’s central bank kept interest rates on hold today in a move that confounded economists and send the country's currency tumbling. The decision by the Reserve Bank of Australia to keep its benchmark interest rate at 3.75pc comes after three consecutive increases by the bank. All of Sydney's top economists surveyed by Bloomberg News had expected an increase to 4pc, as had financial markets. Glenn Stevens, the head of the Reserve Bank, said interest rates were kept on hold because information about the impact on the economy of earlier rises is "still limited." Australia was the first country in the...

BUENOS AIRES, Argentina (AP) -- Argentina's Central Bank chief resigned Friday, saying he could do no more to protect the nominally independent institution from the president's efforts to control its dollar reserves. Martin Redrado claimed credit for bringing Argentina monetary stability for the first time in 30 years, but said President Cristina Fernandez had disregarded this achievement while unconstitutionally ordering his removal. "I went through all the institutional steps," he said. "Unfortunately, the government didn't do the same and disregarded the independence of the Central Bank." The president ordered Redrado fired this month after he refused her decree to make...

BUENOS AIRES, Argentina (AP) - Argentine Central Bank chief resigns...

Abu Dhabi police have arrested seven men for plotting to defraud the UAE central bank of 7.2 billion euros ($10.17 billion) using false documents, the state news agency WAM said on Saturday. It said the suspects, three Europeans and four Asians, had presented forged documents from a commercial bank in Europe purporting that the central bank of the United Arab Emirates owed the funds representing the family investments of the gang's leader. "The documents presented by the suspects were fake and meant for attempted fraud targeting the central bank," WAM quoted Colonel Hammad al-Hammadi, director of the police's Criminal Investigation...

BUENOS AIRES – A group representing retirees and the unemployed occupied the headquarters of Argentina’s central bank and state-owned Banco Nacion on Friday to demand increases in pensions and jobless benefits. The protest was mounted by members of the Independent Movement of Retirees and Unemployed People, or MIJD. MIJD leader Raul Castells and his wife, Nina Pelozo, were arrested as police evicted the demonstrators from Banco Nacion.

In a recent 60 Minutes interview, Obama blamed "fat cat bankers" for causing the crisis, putting America through its "worst economic year...in decades." He went on to chide Wall Street banks for "fighting tooth and nail" the new regulations he believes would be vital in preventing future crises. A deeper examination, however, reveals that this is neither a housing crisis nor a Wall Street banking crisis. This is a monetary crisis, rooted in the lending of money created out of thin air. This is what leads to economic booms and busts.

The central bank doesn't need more political interference as it decides when to move against inflation. BY ANIL K. KASHYAP and FREDERIC S. MISHKIN Under the banner of increasing Federal Reserve transparency, Congressman Ron Paul has sponsored a bill that would subject the Fed's monetary policies to an audit by the Government Accountability Office (GAO). The bill is a veiled attempt to undermine the Fed's independence. If it passes, it will cripple policy making—particularly when it comes to inflation. It is completely appropriate to hold the Fed accountable for its decisions. But the Paul bill, H.R. 1207, will only produce...

CBs And Other "Real Money" Had Enough? Oh oh...... From the forum, wire from Reuters claimed original source: 21. There apparently is a new wrinkle to the intermediation trade between buying from Treasury to sell to the Fed with real money, including central banks, now in on the act. Indeed, several Street sources relay central banks were aggressive offers into this morning's coupon pass, with one letting go of a large block of old 5-years. Other offers too are coming in from embedded Asian real money longs -- in the higher coupons -- also looking to sell size without unduly...

First understand the FDIC, the NCUA, and the nature of the banking system. Here's the fastest lesson I can manage. Try my other writings or just search the net for more information. (Photo courtesy Luc Viator) In brief, the FDIC (Federal Deposit Insurance Corporation) is a relic of the Great Depression designed to give depositors psychological assurance that the government will bail them out if the bank fails. It is funded by small fees on all deposits its 8,305 member banks hold. The FDIC started 2008 with about $53 billion in reserves and ended the year with $18.9 billion. Based...

AugustReview.com [Editor's note: members of the Trilateral Commission and companies with Commission representation appear in bold type.] Since 1973, this writer has made inquiry as to the location and ownership of the vast stores of monetary gold (400 oz., .999 pure bars) in the world. There has not been a formal audit on Fort Knox, for instance, since the Eisenhower administration. Official statistics on gold holdings are often contradictory. Getting plain answers from any Central Bank in the world, including the Fed, is virtually impossible. This paper points out a pattern of manipulation that has been clearly observed by many...

Thousands of Icelanders marked the 90th anniversary of their nation's sovereignty with angry protest Monday, and several hundred stormed the central bank to demand the ouster of bankers they blame for the country's spectacular economic meltdown. Tiny Iceland has seen its banks and currency collapse in just a few weeks while prices and unemployment soar — leaving a country regarded as a model of Scandinavian prosperity in a state of shock. "The government played roulette and the whole nation has lost," writer Einar Mar Gudmundsson told a noisy but peaceful anti-government rally of several thousand people in downtown Reykjavik. After...

The Brazilian Central Bank is negotiating possible loans from the U.S. Federal Reserve with the intention of using the money to help stabilize the local foreign exchange market, local newspaper Folha de S. Paulo reported Thursday. The newspaper did not reveal its sources. Contacted by Dow Jones Newswires, central bank officials were not immediately available for comment. According to the newspaper, the intention of the central bank is to use loan dollars provided by the Fed in order to inject dollars into the local forex market, and thereby preserve Brazil's foreign currency reserves. Brazil's foreign currency reserves totaled $201.5 billion...

As the financial crisis continues, the Bush administration, led by Treasury Secretary Henry Paulson, is moving ahead to enact the unconstitutional and socialistic measures contained in the recently passed and misleadingly nicknamed "bailout bill" — misleading not because it's not a bailout, but because it's much more than that. This bill — officially the Emergency Economic Stabilization Act of 2008 — is, along with the Treasury Department's "Blueprint for a Modernized Financial Regulatory Structure," about nationalizing the entire United States financial system, a truly radical act that will hasten the United States of America along the road to total socialism....

European central banks have cut their sales of gold to the lowest level in almost a decade, reversing the practice of recent years when hefty sales helped depress prices. Institutions bound by the Central Bank Gold Agreement – the banks of the eurozone plus Sweden and Switzerland – sold about 343 tonnes of gold in the year that expired on Friday, the lowest amount since the first CBGA was signed in 1999. This compares with 475.8 tonnes in the year to the end of September 2007. Under the agreement, the banks are allowed to sell up to 500 tonnes of...

Central banks aim to boost liquidity Fed boosts swap facilities as short-term money markets freeze By William L. Watts, MarketWatch Last update: 6:52 a.m. EDT Sept. 18, 2008 Comments: 101 LONDON (MarketWatch) -- The world's biggest central banks said Thursday they would inject massive amounts of liquidity into the financial system in a bid to alleviate extreme distress in short-term money markets. The Fed, in a statement, said it would use swap lines to provide other central banks with an additional $180 billion in dollars, which can be injected into money markets through overnight and term loans. "I think this...

Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in US dollar short-term funding markets. These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks will continue to work together closely and will take appropriate steps to address the ongoing pressures. Bank of England action The Bank of England will offer...

Barack Obama's tax advisers recently posted a piece in the Wall Street Journal about their candidate's tax plans. Their article was designed to triangulate, painting their candidate as a tax cutter and the Republican opposition as a secret tax raiser. It was well written and well argued — not that you can really trust anything you read about what candidates will or will not do once in office. In any case, I was discussing the piece with a person whose politics are certainly left of center. She said to me something along the following lines: I'm really not sure I...

Call for central bank harmony in crises By Ralph Atkins and Haig Simonian in Zurich Published: August 18 2008 23:33 | Last updated: August 18 2008 23:33 Emergency help provided by the world’s central banks should be better harmonised to stop large financial groups shopping around in future for the best deal, the head of Switzerland’s central bank has urged. The possibility that greater integration of financial markets could one day lead to bigger banks going outside their home country for financial assistance when they are in trouble was raised by Jean-Pierre Roth, chairman of the Swiss National Bank, in...

BERLIN (Reuters) - Germany's Finance Ministry said on Saturday a magazine report that the government wants the Bundesbank to sell some of its gold reserves to help ease pressure on the federal budget was untrue. Der Spiegel magazine reported in a preview of its latest edition that Finance Ministry State Secretary Werner Gatzer had proposed selling part of the central bank's gold reserves, currently worth around 65 billion euros ($103 billion). According to the plan, the proceeds could then be either invested to earn interest or debt could be paid off freeing up cash that would have been used to...

WASHINGTON — The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system. The proposal is part of a sweeping blueprint to overhaul the nation’s hodgepodge of financial regulatory agencies, which many experts say failed to recognize rampant excesses in mortgage lending until after they set off what is now the worst financial calamity in decades.

Central banks on both sides of the Atlantic are actively engaged in discussions about the feasibility of mass purchases of mortgage-backed securities as a possible solution to the credit crisis. Such a move would involve the use of public funds to shore up the market in a key financial instrument and restore confidence by ending the current vicious circle of forced sales, falling prices and weakening balance sheets. The conversations, part of a broader exchange as to possible future steps in battling financial turmoil, are at an early stage. However, the fact that such a move is being discussed at...

Central banks on both sides of the Atlantic are actively engaged in discussions about the feasibility of mass purchases of mortgage-backed securities as a possible solution to the credit crisis. Such a move would involve the use of public funds to shore up the market in a key financial instrument and restore confidence by ending the current vicious circle of forced sales, falling prices and weakening balance sheets. -snip-

Central banks on both sides of the Atlantic are actively engaged in discussions about the feasibility of mass purchases of mortgage-backed securities as a possible solution to the credit crisis. Such a move would involve the use of public funds to shore up the market in a key financial instrument and restore confidence by ending the current vicious circle of forced sales, falling prices and weakening balance sheets.

The Gulf states' dollar pegs restrict their ability to draw out monetary policy suiting domestic economic condition, independent of the US policy stance, the former FOMC Chairman Alan Greenspan said Monday in Jeddah, Saudi Arabia. Most gulf states are experiencing record high of inflation, with Qatar reporting a 14% surge last year, followed by the UAE, Kuwait and other countries. Saudi Arabia's inflation hit a twenty seven year high of 7% in January, while UAE's inflation topped 9.3% in nineteen years during the month. The regional inflation average hit 6.3% in 2007, compared to 0.3% in 2001, according to Merrill...

US considers sanctions against Iran central bank - report WASHINGTON Thomson Financial - The US Treasury Department is considering sanctions against Iran's central bank, which it suspects of helping other Iranian institutions evade earlier US economic sanctions, The Wall Street Journal reported. Citing unnamed financial and intelligence officials from three countries, the newspaper said the impact of such a measure would depend in large measure on the extent to which US allies backed the effort. The nature of the sanctions under consideration has not been described. But The Journal pointed out that sanctions, particularly if supported by US allies in...

BEIJING (Reuters) - China's central bank on Sunday poured cold water on the idea that the country's economy can decouple from the United States. China's exports will be badly hit if U.S. consumption weakens, Zhang Tao, deputy head of the international department of the People's Bank of China, told a financial forum. Figures due this week are expected to show that China's gross domestic product grew more than 11 percent in the fourth quarter of 2007 from a year earlier, despite a deepening U.S. credit crunch. But Zhang said he saw mounting risks to U.S. consumer demand. He noted that...

The Federal Reserve, working to combat the effects of a severe credit crunch, announced Friday it had auctioned another $20 billion in funds to commercial banks at an interest rate of 4.67 percent. Fed officials pledged to continue with the auctions "for as long as necessary." The central bank said it had received bids for $57.7 billion worth of loans, nearly three times the amount being offered, indicating continued strong interest in the Fed's new approach to providing money to cash-strapped banks. It was the second of four scheduled auctions. The first auction, on Monday, of $20 billion resulted in...

Panama Has No Central Bank By David Saied Posted on 4/26/2007 In this modern, post-–Bretton Woods world of "monetary order" and coordinated central-bank inflation, many who are otherwise sympathetic to the arguments against central banks believe that the elimination of central banking is an unattainable, utopian dream. For a real-world example of how a system of market-chosen monetary policy would work in the absence of a central bank, one need not look to the past; the example exists in present-day Central America, in the Republic of Panama, a country that has lived without a central bank since its independence, with...

MEXICO CITY (Reuters) - Mexican central bank governor Guillermo Ortiz on Wednesday urged the government and food companies to renew price caps for tortillas that have acted as a buffer against inflation. Tortillas, thin corn patties, are a staple of the Mexican diet. After a price rise began fueling inflation toward the end of 2006, the government pressured food producers and retailers to limit prices for corn flour and tortillas. "For consumers, the price containment so far has been a success, and from my point of view it is important that this containment continues," Ortiz told reporters, according to a...