Category Archives: Alan Greenspan

09.14.13
by

Silver Bear Cafe: The Truth of the Federal Reserve System – The biggest financial crime in the history of the United States

In this short article I will discuss the basic mechanics of the biggest financial crime        in the history of the United States and some elements of how this crime, conducted by the        Federal Reserve System, is cheating all Americans every day out of the wages which they        receive for their labor. A future article will discuss how the savings which Americans are        putting aside for their future are being slowly and steadily stolen by this same group.        But there is first a even more important question to ask : While you have recently seen        the media discuss the financial scandal regarding the Enron corporation why haven’t you        heard one word about what I am about to discuss which in size makes Enron look like a ant        compared to Mount Everest?

From the beginnings of our nation there was a great debate and battle over many years        regarding a basic question of how the nation will function : Who shall issue the money of        the nation? The answer to the question of who shall issue ( make ) the money of the nation        boiled down to 2 possibilities –

  1. The government shall use the sovereign powers granted to it via the Constitution to          issue money.
  2. A private corporation, established via legislation, shall take over the function of          issuing money.

While a fuller understanding of the history of the battles over this issue can be found        at the various forums and websites to which we will refer you to for greater information        the quickest summation of the answer to the problem is that :

  1. Government issue of money is constitutionally, monetarily, and financially the soundest          policy for the prosperity of the nation.
  2. The issuance of the money of the nation by a private corporation leads to the draining          of the resources of the nation to the private corporation which controls the issuance of          money.

The summated result of this action is that the private corporation, unaccountable to        the people of the nation, controls the nation as it controls the flow of money within the        nation. As part of a mountain of evidence that the private corporation controls the nation        I refer you now to the following website : http://www.algaoaktree.com/MoneyMenu.htm

You will be taken to a website which has the best explanation of the money situation  that I know of and it is here where you will learn of the total corruption of the Federal  Reserve System, the private corporation which currently controls the issuance of money  within our nation.

Please take your time and read the many extremely well written articles at this site        completely. After reading the articles on this site you may ask one of the questions which        I did upon learning the truth of our monetary system : Even though the subject of money is        a somewhat technical one, why isn’t the information found on this site more well known to        the citizens of our nation?

——

Click below for the full article.

http://www.silverbearcafe.com/private/09.13/criminalfed.html

08.25.13
by

Reason.com: Delete the Fed

Who should run the Federal Reserve System when chairman Ben Bernanke’s term expires next year: Vice Chair Janet Yellen or former Obama adviser Lawrence Summers?

Neither.

Who then?

No one.

The fact is, we need the Federal Reserve like we need a hole in the head. Contrary to folklore, the Fed is not needed to stabilize the economy or to prevent unemployment. As the Fed heads into its second century, we ought to realize that its record is terrible. Even if we don’t count the interwar period (which some economists call the new Fed’s practice round), America’s central bank is a flop. Monetary economists George A. Selgin, William D. Lastrapes, and Lawrence H. White wrote in “Has the Fed Been a Failure?”:

Drawing on a wide range of recent empirical research, we find the following: (1) The Fed’s full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed’s establishment. (2) While the Fed’s performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I.

The authors support that generalization with details. On inflation: “Far from achieving long-run price stability, [the Fed] has allowed the purchasing power of the U.S. dollar, which was hardly different on the eve of the Fed‘s creation from what it had been at the time of the dollar’s establishment as the official U.S. monetary unit, to fall dramatically” — by 95 percent.

Selgin, Lastrapes, and White also show that the central bank has given us longer recessions and slower recoveries.

But without the Fed, who would set interest rates to guide the economy? The first answer is that government policy and Fed manipulations can create the very recessions that the Fed then tries to reverse. If the politicians and their court economists would get over their hubristic belief that they are stewards of the economy, macroeconomic crises would disappear.

Besides, the Fed cannot set interest rates, not even its narrow federal-funds rate for overnight interbank loans. At most, it targets that rate by buying and selling government securities, but it doesn’t always hit its target. The idea that the Fed can even heavily influence mortgage and other interest rates ignores important facts.

First, the Fed’s operations are small compared to the complex U.S. and world economies. Writes monetary economist Richard Timberlake,

Traditional economics properly teaches that many complex market forces — countless investment and savings decisions not dependent on monetary factors — are essential in determining interest rates. The Fed funds rate that Fed policy can influence through its monopoly over the quantity of money is inconsequential in shaping most short-term and long-term rates in capital markets, unless that moneymaking power subsequently promotes a pervasive price inflation. [Emphasis added.]

Second, the Fed can’t lower rates through monetary inflation beyond the very short run. Why not? Because lenders will respond by raising their rates to avoid being screwed by price inflation –unless the Fed prevents the inflation, as it’s been doing, by effectively borrowing back the new money from the banks at interest.

Moreover, as monetary economist Jeffrey Rogers Hummel points out,

Globalization, with the corresponding relaxation of exchange controls in all major countries, allows [investors] easily to flee to foreign currencies, with the result that changes in central-bank policy are almost immediately priced by exchange rates and interest rates. Add to this the ability to purchase from many governments securities that are indexed to inflation, and it becomes highly unlikely investors will be caught off guard by anything less than sudden, catastrophic hyperinflation (defined as more than 50% per month) — and maybe even not then.

While inflation is not the threat it once was, the Fed is not harmless. “Bernanke has so expanded the Fed’s discretionary actions beyond merely controlling the money stock that it has become a gigantic, financial central planner,” Hummel writes.

No one should have such power.

—–

Click below for the full article.

http://reason.com/archives/2013/08/25/delete-the-fed

 

07.17.13
by

Marketwatch: Bernanke says tapering not on ‘pre-set’ course

The Federal Reserve’s proposed timetable for tapering its bond-buying program is not set in stone, said Federal Reserve Chairman Ben Bernanke on Wednesday. “I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” Bernanke said in remarks prepared for delivery to the House Financial Services Committee. Bernanke repeated his guidance from mid-June that the Fed anticipates it will be appropriate to begin to moderate the pace of purchases “later this year,” and end them “around midyear.” The Fed chairman said the central bank would react to developments. If economic conditions were to improve faster that expected, the pace of asset purchases could be reduced “somewhat more quickly.” But if the outlook were to become relatively less favorable, or if financial conditions were seen as too tight, “the current pace of purchases  could be maintained for longer,” Bernanke said. The chairman’s prepared remarks were fairly dovish. He said the economy remained vulnerable to shocks and there was a risk that a dispute in Congress over the debt ceiling could hamper the recovery.

——

Click below for the full article.

http://www.marketwatch.com/story/berrnanke-says-tapering-not-on-pre-set-course-2013-07-17?siteid=yhoof2

05.06.13
by

Business 2 Community: U.S. Dollar to Become the Next Yen?

In its latest meeting minutes, the Federal Reserve said it will continue with quantitative easing, creating $85.0 billion in new money monthly, in order to bring economic growth to the U.S. economy. (Source: Federal Reserve, May 1, 2013.)

The Federal Reserve, once again, didn’t provide any clear indication as to when it will end the quantitative easing; rather, the central bank stated it will continue to do the same “until the outlook for the labor market has improved substantially in context of price stability.” (Source: Ibid.)

The Federal Reserve has already increased its balance sheet to over $3.0 trillion, and if it continues its quantitative easing at this pace, its balance sheet will balloon even more, possibly even reaching $4.0 trillion—or even $5.0 trillion—in a very short period of time.

This is troublesome news, dear reader. The more money created out of thin air via quantitative easing, the more the fundamentals of the reserve currency, the U.S. dollar, deteriorate.

As I have mentioned in these pages before, we only need to look at the Japanese economy to see quantitative easing is not a viable option for us.

The Japanese currency has plummeted since the Bank of Japan revved up its quantitative easing. Just look at the chart below of the Japanese yen compared to other major currencies in the global economy; it seems as if the currency has fallen off a cliff. If we keep up with all this money printing, the U.S. dollar may eventually look the same!

U.S. Dollar to Become the Next Yen? image xjy japanese yen philadelphia index1

Chart courtesy of www.StockCharts.com

A falling U.S. dollar will drag down the buying power of Americans even further, as they are already struggling to keep up with their expenses. What we could purchase for $1.00 in the year 2000 now costs us $1.35. (Source: Bureau of Labor Statistics, last accessed May 3, 2013.)

I have yet to see any real economic growth in the U.S. economy as it was promised when quantitative easing was first introduced after the financial crisis. Quantitative easing is working to make big bank balance sheets strong and to create inflation, but I don’t see any economic growth being created by it.

I am looking at the Japanese economy as the best example of a country failing with long-term quantitative easing and what might be next for the U.S. economy and the dollar due to all this newly created money.

—-

Click below for the full article.

http://www.business2community.com/finance/u-s-dollar-to-become-the-next-yen-0486009

04.23.13
by

Marketwatch: The slowdown is more than a soft patch, Goldman Sachs got it wrong before they got it right

For months, economists and the media have proclaimed that we are in full-recovery mode. While the markets were at record highs, unemployment had not improved, economic growth was stagnant and most corporate earnings had little to do with an increase in sales and revenue and were based on moves like laying-off thousands of people and shedding non-performing assets.

Last week, Goldman Sachs Group Inc. — one of those bullish outfits projecting enthusiasm — reversed its earlier upbeat message, saying that consumer spending is slowing down, which will likely have a negative impact on future growth. The significance is that most analysts and economists are coming to grips with the fact that the economic data doesn’t support stock-market valuations at these levels.

What economists and analysts failed to connect is the contrast between reality and the stock market — the low consumer spending, paltry economic growth, weak hiring by companies and reckless quantitative easing by the Federal Reserve while the stock market soared.

So, let’s look at everything Goldman Sachs (and many others) missed, and the chain of economic events.

The importance of consumption on the overall economy should not be overlooked. While in the economic cycle, it is production that comes first, as it provides the income necessary for individuals to consume, it is ultimately consumption that completes the cycle by creating the demand.

Despite repeated bailouts, programs, and interventions, economic growth remains mired at sub-par rates as consumers struggle in a low growth/high unemployment economy. Businesses, which have been pressured by poor sales, higher taxes and increased government regulations, have learned to do more with less. Higher productivity has led to less employment and higher levels of profits.

The dark side of that equation is that less employment means higher competition for jobs which suppresses wage growth. Lower wage growth and incomes means less consumption, which reduces the aggregate end demand. In turn, lower demand for products and services puts businesses on the defensive to “do more with less” in order to protect profit margins. Wash, rinse and repeat. This is why deflationary economic environments are so greatly feared by the Fed as that relationship between production and consumption is incredibly difficult to break.

I don’t believe that the current slowdown is just a “soft patch,” but is instead the end of the expansionary cycle that began in 2009. That belief is simply based on the fact that economies do not grow indefinitely but cycle between expansions and contractions.

In the current economic environment, where the consumer is caught in a balance sheet deleveraging cycle, economic contractions occur more frequently than they do under more normal economic conditions. This is not an indictment of fiscal or monetary policies, but simply a statement about the cycles of an economy.

So where does that leave us now and the remainder of 2013?

At some point, despite the ongoing interventions by the Federal Reserve, the stock market will revert to the underlying fundamental story which has been slowly deteriorating over time. The question that remains to be answered is simply how long can the Fed’s artificial intervention programs continue to elevate asset prices?

—

Click below for the full article.

http://www.marketwatch.com/story/the-current-slowdown-is-more-than-a-soft-patch-2013-04-23?siteid=yhoof2

04.21.13
by

Motley Fool: Gold Fell to $1,400? Welcome to the New Gold Rush!

With everyone talking about how the great gold boom is over, that with the price of gold tumbling to $1,400 an ounce the back of the yellow metal as a safe-haven investment  has been broken, you might be surprised to learn there’s actually a new gold rush going on. With every drop in the price of gold (and silver, too), individuals are buying as much of the precious metal as they can.

According to the former assistant secretary of the Treasury under President Reagan, Dr. Paul Craig Roberts, the price collapse was an orchestrated attack on gold and silver coordinated by the Federal Reserve. The assault saw prices plunge an unprecedented 10% in one day at one point.  SPDR Gold Shares  (NYSEMKT: GLD  )  is now 12% lower from where it started April, while the iShares Silver Trust  (NYSEMKT: SLV  )  is down 18%.

For the tinfoil hat brigade, the collapse, coming as it did just days after President Obama met with the heads of Goldman Sachs, JPMorgan Chase, and Bank of America, was enough of a nexus to indicate that this was a response to the threats posed by gold (and even Bitcoin) to the Federal Reserve system.

Gold Price in US Dollars Chart

Gold Price in US Dollars data by YCharts, Shaded area represents U.S. recession.

While I’m not sure I buy into conspiracy theories like that, I do know that if it’s true, then the Law of Unintended Consequences must surely be at play. There’s anecdotal evidence everywhere that despite the dumping of tons of paper gold assets on the market, demand for physical gold and silver has never been greater.

The new gold rush Bullion dealers are reporting they’re seeing individual purchases every bit as strong as occurred back in 2008. My bullion and coin dealer, JM Bullion, has upwards of a three-week delay in shipping American Silver Eagles, yet dealers everywhere are finding it increasingly difficult to get supply. Buyers from India to China are also racing to scoop up gold, with the China Gold Association reporting retail sales tripling in the country between April 15 and April 16, while Hong Kong and Macau have reported volume surges of as much as 150%.

Click below for the full article.

http://www.fool.com/investing/general/2013/04/21/gold-fell-to-1400-welcome-to-the-new-gold-rush.aspx

04.15.13
by

Peter Schiff on CNBC About Gold Drop: We’re Headed To A Currency Crisis One Way Or Another

Video of Peter Schiff talking about potential currency crisis and his belief in Gold. Also below that is an older video of Peter Schiff on MSNBC debating policies of the FED as part of a panel. One thing to think about is the role of the Federal Reserve and whether it is good policy to inflate currency and print money out of thin air?