Posted on 11/27/2009 11:14:14 PM PST by rabscuttle385
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I am concerned, however, that a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions. Notably, some leading proposals in the Senate would strip the Fed of all its bank regulatory powers. And a House committee recently voted to repeal a 1978 provision that was intended to protect monetary policy from short-term political influence. These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States. The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation.
The proposed measures are at least in part the product of public anger over the financial crisis and the government's response, particularly the rescues of some individual financial firms. The government's actions to avoid financial collapse last fall -- as distasteful and unfair as some undoubtedly were -- were unfortunately necessary to prevent a global economic catastrophe that could have rivaled the Great Depression in length and severity, with profound consequences for our economy and society. (I know something about this, having spent my career prior to public service studying these issues.) My colleagues at the Federal Reserve and I were determined not to allow that to happen.
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(Excerpt) Read more at washingtonpost.com ...
Regarding a supranational reserve currency, or even a national reserve currency, any such animal will likely need a nominal gold tie in order to establish credibility...which is why we remarked to a friend (some time ago) that gold is to be owned at all costs, even if it sells down to $5, in which case an opportunity to reduce its average cost would be present.
Related threat
Audit would hurt economic prospects: Bernanke
http://www.reuters.com/article/newsOne/idUSTRE5AR03X20091128
Bernanke is the poster boy for fatal conceit.
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