Is the Federal Reserve Bank more powerful than the US government?

By Vincent Gioia

Much has been written (especially here) about the Federal Reserve Bank but nothing previously revealed about the Fed comes close to the outrageous arrogance as displayed when they thumb their nose at the government in response to a simple legitimate request for information.

The Federal Reserve Board has rejected a request by U.S. Treasury Secretary Timothy Geithner for a public review of the central bank’s structure and governance. Let us also remember that the Fed has never been audited by the government since 1913 when this abomination was created at the urging of powerful domestic and international bankers.

The Obama administration, to the surprise of many of us, proposed on June 17 a financial- regulatory overhaul including a “comprehensive review” of the Fed’s “ability to accomplish its existing and proposed functions” and the role of its regional banks. The Fed was to lead the study and enlist the Treasury and “a wide range of external experts.”

But after agreeing to the review, the Fed leadership saw a potential threat to Fed independence after the Treasury released the proposal. The Obama plan said the Treasury would consider recommendations from the review and “propose any changes to the Fed’s governance and structure.”

“It is not obvious at all why that is a Treasury responsibility or even appropriate why the Treasury would undertake that kind of study,” said Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey, and a former Atlanta Fed research director. “The Fed was created by Congress and it is not part of the executive branch.”

Indeed, the Fed considers itself above the government! So independent it regards itself that the Fed need not respond to requests by the President of the United States – what hubris!

Derivatives Could Cause Another Meltdown: Mobius

Posted: 22 Sep 2009 02:15 PM PDT

In Financial Armageddon, I wrote about “four impending catastrophes”: debt, government guarantees, the retirement system, and derivatives. But well before the first pages of my manuscript saw the light of day, I was particularly concerned about the latter aspect.

In fact, I’ll let you in on a little secret: the article I published in November 2005, “The Coming Disaster in the Derivatives Market,” was actually derived from material in my original book proposal, tentatively entitled FWMDs: Financial Weapons of Mass Destruction, after Warren Buffett‘s famous remarks on the subject in Berkshire Hathaway‘s 2002 annual report.

Eventually, the publisher and I decided that there was a bigger story there, which proved to be far more accurate than anybody (including me) realized at the time, and I set forth my vision of how the derivatives menace would come to interact with the various other threats I saw lurking in the shadows.

Staff in carbon footprint trial face £100 fines for high emissions

Britain’s first employee carbon rationing scheme is about to be extended, after the trial demonstrated the effectiveness of fining people for exceeding their personal emissions target. Unlike the energy-saving schemes adopted by thousands of companies, the rationing scheme monitors employees’ personal emissions, including home energy bills, petrol purchases and holiday flights.

Workers who take a long-haul flight are likely to be fined for exceeding their annual ration unless they take drastic action in other areas, such as switching off the central heating or cutting out almost all car journeys. Employees are required to submit quarterly reports detailing their consumption. They are also set a target, which reduces each year, for the amount of carbon they can emit.

Those who exceed their ration pay a fine for every kilogram they emit over the limit. The money is deducted from their pay and the level of the fine is printed on payslips. Those who consume less than their ration are rewarded at the same rate per kilogram.

The maximum that an employee can earn or be fined has been capped at £100, but is likely to rise once staff have grown accustomed to the idea.

WSP, the global engineering consultancy, has been conducting the rationing scheme among 80 of its British employees for almost two years. In the first year the overall carbon footprint of participants fell by 10 per cent. The company is discussing its scheme with several FTSE 100 companies.

Socialism has been tried here before, and failed

By Vincent Gioia

The memoirs of Plymouth governor William Bradford describe the first attempt of socialism in North America; unfortunately if President Obama follows through with his campaign slogans we will experience this again, and with the same result.

Bradford’s historical accounts describe failed economic practices that are similar to the “spread the wealth” idea expressed by Obama. The members of the Plymouth colony arrived in the New World with a plan for collective property ownership which reflected the views of the aristocratic class in the 1620s, similar to today’s elitists. The Plymouth charter called for farmland to be worked communally and for the harvests to be shared. “The strong, or man of parts, had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice.”

American free marketers will probably not be surprised that the colonists starved. Men were unwilling to work to feed someone else’s children. Women were unwilling to cook for other women’s husbands. Fields lay largely untilled and unplanted. “And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it.”

A Constitutional Convention – There are no Limitations (………………………………Part Two)

“A trillion here, a trillion there, pretty soon it adds up to real money.”

By Vincent Gioia

It used to be that a billion dollars was a lot of money. Senator Everett Dirksen, a senator back in the age of reason once said “A billion here, a billion there, pretty soon it adds up to real money.” I wonder what the good senator would say now.

We have gone well beyond the idea that a billion dollars is “real money.” Today as we approach the age of socialism real money is measured in trillions of dollars. Of course socialists don’t talk about trillions of dollars; like in everything else they do, success is achieved by “incrementalism” (my word). Incrementalism, when it comes to money, is the Dirksen idea about real money except socialists no longer think in terms of millions, that’s chump change by government standards; no, congress and the president (including the president-elect) talk of the need to spend merely billions of dollars at a time but simpletons like me can add the billions and billions and come up with trillions of dollars the government wants to hand out.

It used to be, before the age of reason expired, that government spending was more or less in line with government income. Since most people paid taxes back then, the idea of raising their taxes was not popular. Today however when not all people pay taxes, the idea of raising taxes sounds pretty good to a large number of voters, citizens or not, because they are on the receiving end of government handouts. Actual working folks who pay most taxes to the government are in the voting minority so it becomes easier to get a majority of voters to be indifferent to increasing taxes or actually proponents of tax increases – that’s how it is in the dawning of the age of socialism.

First Cars, Then Houses? …

Posted: 20 Sep 2009 04:59 PM PDT

9/11 Truth. An American Enigma A Message to Truth Activists…

Global Research, September 20, 2009

9/11 has become an American enigma. For many, 9/11 remains a puzzling, inexplicable, phenomenon that defies understanding in its complexities and misinformation. Most people doubt the full truth of the 9/11 Commission’s report, but are unable to accept that people inside the government could be so evil as to allow the deaths of 3000 Americans.

In a study published in the journal Sociological Inquiry, sociologists from four major research institutions focused on one of the most curious aspects of the 2004 presidential election: the strength and resilience of the belief among many Americans that Saddam Hussein was linked to the terrorist attacks of 9/11. The study calls such unsubstantiated beliefs “a serious challenge to democratic theory and practice” and considers how and why so many people linked Hussein to 9/11. Co-author Steven Hoffman, Ph.D., from University at Buffalo, says, “Our data shows substantial support for a cognitive theory known as ‘motivated reasoning,’ which suggests that rather than search rationally for information that either confirms or disconfirms a particular belief, people actually seek out information that confirms what they already believe.

Obamacare H.R. 3200 – a study in obfuscation and plausible deniability

By Vincent Gioia

Ultra liberals in the House and Senate, who were thwarted for many years, finally achieved the perfect storm of politics with them in charge of congress and an ultra liberal president in the White House. This deadly combination managed to have the government take over the auto industry, the banking system, and now has set the stage to extend control to Wall St., energy (with “cap and trade”) and the health care industry.

The auto industry and the banking system were easy. After declaring crises early in the Obama term take over was simple; the public and congress were persuaded only government, with the aid of the Federal Reserve Bank, could “fix” things. Large businesses and banks were too large to fail so with the printing presses rolling money was created to “bail them out.” When it came time to take over health care, the public became better informed and opposition to government’s control grew.

It’s not easy to learn exactly how the government will take over health care because Obama and his henchmen (and henchwomen) in congress tried hard to obfuscate their take over plans. How else can you describe writing a 1,017 page bill full of legalese and convoluted provisions (H.R. 3200) than obfuscation? Unfortunately for them many people actually read the bill, even if congressmen didn’t, and the health care hoax, called “Obamacare,” angered the populace as its provisions became known.

Don’t sink any money into a traditional 401k. It’s all BS.

If offended by language don’t watch..