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Strange Famous Forum > Social stuff. Political stuff. KNOWMORE

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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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3flip wrote:
Joshua Kane wrote:
redball wrote:
I'm not trying to knock Ron [right now], and I'm still very much for this bill. I'm only saying that there is a very political reason for it to be pushed right now. I think therein lies the answer to the question of why Barney Frank is sitting on it, as well. He probably wants it to pass but at a time when it makes more political sense for him and his party. I think that politicians will take this bill that probably had good intentions and play a lot of politics with it.

It's more food for thought than criticism.


Agreed. Given the current state of lobbying, I wonder if endowing the 'democratically elected' congress with more power over the Fed is even smart?


you say that as if the congress has any power over the fed.


Nah, I'm just saying by allowing the GAO the transparency required to audit the Fed, congress (through the GAO report) will have been given the power of information, which would likely lead to debates over actual authority. Plus, Obama's plan already delegates extra monitoring authorities of the Fed to the Treasury Department. Its all a slippery slope I suppose, but a slope I think worth navigating.
Post Tue Jul 07, 2009 4:19 pm
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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The Fed is pushing back against transparency (unsurprisingly):

Kohn Warns Against Political Interference in Fed
By Alister Bull and Emily Kaiser
Reuters
Thursday, July 9, 2009
http://www.reuters.com/article/companyNewsAndPR/idUSN0945907120090709

WASHINGTON -- Federal Reserve Vice Chairman Donald Kohn on Thursday launched a robust defense of the U.S. central bank's independence and warned that efforts to put monetary policy under political sway would hurt the economy.
Curbing the Fed's independence could both result in higher long-term interest rates and hurt the United States' credit rating, Kohn said.
"Any substantial erosion of the Federal Reserve's monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation," Kohn said in remarks prepared for delivery before a congressional committee.
Kohn is due to testify later on Thursday. A copy of his remarks was released before the hearing.
Kohn's testimony comes as Congress debates President Barack Obama's plan for regulatory reform, which envisions the Fed taking on the role of systemic risk regulator, in a bid to fix a system that failed to prevent a financial crisis last year.
The proposal to expand the Fed's powers has increased calls for accountability at the central bank, and a bill put forward by Republican Congressman Ron Paul to expose it to a full audit by a government watchdog has won support from a majority in the House of Representatives.
Kohn said such a move could be highly detrimental.
"The bond rating agencies view operational independence of a country's central bank as an important factor in determining sovereign credit ratings, suggesting that a threat to the Federal Reserve's independence could lower the Treasury's debt rating and thus raise its cost of borrowing," he said.
Kohn said allowing that the Government Accountability Office to audit Fed monetary policy would be a bad mistake.
"The Federal Reserve strongly believes that removing the statutory limits on GAO audits of monetary policy matters would be contrary to the public interest by tending to undermine the independence and efficacy of monetary policy," he said.
Post Thu Jul 09, 2009 12:27 pm
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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Latest on proposed audit of Fed. This is seeming more and more likely! http://www.marketwatch.com/story/capitol-hill-efforts-to-scrutinize-fed-expand
Post Fri Jul 10, 2009 1:22 pm
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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Economists, unsurprisingly, are rallying around the Fed:
http://online.wsj.com/article/SB124767659527946239.html#mod=djemalertNEWS
Post Wed Jul 15, 2009 1:48 pm
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Alan Hague



Joined: 05 Sep 2008
Posts: 621
Location: http://askthedead.bandcamp.com
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So we have here a system in which transparency (which one would assume would then lead to accountability) is viewed as a bad thing, because it would raise interest rates and hurt the economy?

Keeping the public informed of the actions of a gigantic financial entity that holds sway over the lives of hundreds of millions of people - is bad for the economy?

Maybe it's the system that needs to go then.
Post Sat Jul 18, 2009 12:53 am
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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Alan Hague wrote:
So we have here a system in which transparency (which one would assume would then lead to accountability) is viewed as a bad thing, because it would raise interest rates and hurt the economy?

Keeping the public informed of the actions of a gigantic financial entity that holds sway over the lives of hundreds of millions of people - is bad for the economy?

Maybe it's the system that needs to go then.


Well said.
Post Sun Jul 19, 2009 10:07 am
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3flip



Joined: 30 Dec 2003
Posts: 2201
Location: Minneapolis
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ya fed is threatening to raise interest rates if this keeps moving forward. extortion
Post Sun Jul 19, 2009 11:08 am
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redball



Joined: 12 May 2006
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It'd be funny if raising the rates backfired because that sort of action is exactly why we need to audit them.
Post Sun Jul 19, 2009 5:57 pm
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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75% of the public support auditing the Fed. Train leaving station?
http://www.huffingtonpost.com/2009/07/30/fed-audit-supported-by-75_n_247765.html
Post Thu Jul 30, 2009 12:38 pm
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redball



Joined: 12 May 2006
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Location: Northern New Jersey
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If only we could count on that.
Post Thu Jul 30, 2009 1:17 pm
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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redball wrote:
If only we could count on that.


Yeah, i hear ya. The Fed is going to fight hard to maintain its independence. During the TARP debate I posted that the main reason Bernanke chose to go the TARP route was to shift responsibility away from the Fed in order to protect Fed independence in the future.

The Fed has / had all the tools it needed to bail out the banking system without Congress ever getting involved, but the bailout figures were getting so huge, that if the bailout failed and the Fed was seen as solely responsible, the Fed, as Bernanke knows it, would have been destroyed.

Why revisit said notion now? Well, there is little doubt in my mind that the Fed will seek to drag its feet on this audit. If the fed can drag its feet long enough so that the bailout looks like it has worked, then the Fed can fight for its independence from much stronger ground.

So whether the audit actually happens now depends on two issues (I would say) - 1) Whether the bailout works and the economy recovers (won't be known for at least another year or so) 2) How quickly can Congress get an effective bill passed.

Personally, I don't think our economic nightmare will be over until Gov Sachs has been cut down to size, high frequency trading and similar IT-based market manipulation has been banned, and the Fed has been reformed. There will be moments of light, but the dark will come again.
Post Thu Jul 30, 2009 1:35 pm
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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Latest on this, hearings begin 9/25:

http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_v...

U.S. Rep. Ron Paul informed Campaign for Liberty today that House Financial Services Committee Chairman Barney Frank will hold hearings on H.R. 1207, Paul's bill to audit the Federal Reserve. The hearings are tentatively set to take place Friday, September 25, 9 a.m.

"The Federal Reserve wields tremendous power and is at the center of our current economic storm of deficits, debt, and bailouts. Congressman Barney Frank should be commended for his willingness to hold hearings on Fed transparency," Campaign for Liberty President John Tate said.

"A full and thorough audit of the Federal Reserve is now supported by over 75 percent of the American people, and nearly the same percent of congressmen, and these hearing are a major step toward that critical goal. Campaign for Liberty will continue to push for a clean vote and ultimate passage of H.R. 1207.

"However, it is important that the bill to audit the Fed not be attached to any other bill that seeks to 'reform' the Fed by increasing its power. That would be a betrayal of the intent and spirit of H.R. 1207, and would be vigorously opposed by Campaign for Liberty," Tate cautioned.

H.R 1207's 282 cosponsors includes every House Republican, as well as 104 Democrats, and encompasses representatives from a variety of ideological backgrounds, including conservatives, liberals, libertarians, moderates, and "Blue Dogs."

Campaign for Liberty has made H.R. 1207 its No. 1 legislative priority this session. Working though its 200,000-strong national grassroots activist network, Campaign for Liberty has generated countless phone calls, petitions, and letters to leaders on Capitol Hill.

H.R. 1207 would open up the Fed's funding facilities, such as the Primary Dealer Credit Facility, Term Securities Lending Facility, and Term Asset-Backed Securities Lending Facility, to congressional oversight and an audit by the non-partisan Government Accountability Office. Additionally, audits could include discount window operations, open market operations, and agreements with foreign central banks, such as ongoing dollar swap operations with European central banks.
Post Fri Sep 11, 2009 9:07 am
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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The Fed is circling the wagons, rejecting a Treasury Review of organizational structure (which it had assented to prior to the Paul bill getting traction):

http://www.bloomberg.com/apps/news?pid=20601109&sid=adjvXg1zP.zY
Post Mon Sep 21, 2009 11:06 am
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Joshua Kane



Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA
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Fed lawyer asserts: Audit of Fed would likely to lead to higher interest rates, as Fed independence and inflation fighting role would come into question.

http://www.bloomberg.com/apps/news?pid=20601087&sid=adDANopNzewM
Post Mon Sep 28, 2009 3:43 pm
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Travadone



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Post Mon Oct 05, 2009 8:56 pm
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