Change of Heart Over Stimulus and FED

In a grand turn of event's Telegraph reporter Ambrose Evans-Pritchard has reversed his pro-Fed, pro-stimulus position, issued an apology, and is now calling for an end to the central bank. This marks an important milestone for those of us who call for a return to sound money. People are starting to realize that the emperor has no clothes when it comes to fiat currency and interventionist fiscal policy and are waking up from their state-induced dream. Let us welcome these new converts as they join the battle against Leviathan's central banking and fiat currency system. 

My favorite line from Ambrose reads, "My apologies. Mercy, for I have sinned against sound money, and therefore against sound politics."

 I encourage you to read the whole piece. It begins:

I apologise to readers around the world for having defended the emergency stimulus policies of the US Federal Reserve, and for arguing like an imbecile naif that the Fed would not succumb to drug addiction, political abuse, and mad intoxicated debauchery, once it began taking its first shots of quantitative easing.

My pathetic assumption was that Ben Bernanke would deploy further QE only to stave off DEFLATION, not to create INFLATION. If the Federal Open Market Committee cannot see the difference, God help America.

We now learn from last week’s minutes that the Fed is willing “to provide additional accommodation if needed to … return inflation, over time, to levels consistent with its mandate.”

NO, NO, NO, this cannot possibly be true. (Read the rest here.)

America Owns a Hotel Chain?!?!--Thanks to the Federal Reserve

Here is a must-watch presentation on the House floor in which Alan Grayson (D-Florida) lays out why we own the Red Roof Inn thanks to the Federal Reserve. Clearly, we need an Audit (and ending) of the FED!!!!



Hat Tip: The Daily Paul

Goldman Sachs is a Scapegoat for Uncle Sam

Over the past few days I have witnessed behavior in the halls of Congress that makes me sick to my stomach. The Goldman Sachs hearings are nothing short of a crucifixion. Without question the financial giant deserves both scorn and punishment, but this should come at the hands of wronged clients--not government minions. Even former President Clinton noted that while there was no perceived merit in Goldman's behavior, he was "not at all sure they violated the law." So how do we explain the actions of Congress?

What makes the harsh words and congressional ridicule levied at Goldman Sachs so upsetting is the misplaced blame across the board. Listening to the congressional hearings, one would think that the financial giant single-handedly caused the economic collapse. Apparently, Goldman has d-bags working for them; this fuel poor investment; that led to our economic ruin; and now we need to strictly regulate financial markets.

I'm sorry to sound like an apologist for the financial institutions, but their actions were mere symptoms of a greater evil, not the problem itself. Sure malinvestment was to blame, and that malinvestment was fueled by the government.

By continually betraying free-market principles and wedding the actions of these giants of Wall Street with those of the federal government, an atmosphere of poor business practice was created and rewarded. When failed policies are rewarded through bailouts, grants, loans, and unrealistic interest rates, there is little incentive for responsible business practice. And, of course, our old friend the Federal Reserve was the chief actor in causing the the economic turmoil we now face. It kept interest rates at ridiculously low levels, fueled malinvestment, and encouraged poor behavior.

So what is the solution proposed by Congress in the financial reform package before the Senate? More bailouts, more government intervention, and more power to the FED. Such would be a grave mistake!

Michele Bachman comments:

Sen. Reid thinks he can paint Republicans as in the pocket of Wall Street, but that’s not going to cut it because it’s flat out wrong. This bill is seriously flawed and only perpetuates a “too big to fail” mentality through permanent bailouts of Wall Street, with or without the $50 billion reserve fund. Sen. Reid has painted himself into a corner, and I think he is drastically overestimating the American people's support for his approach to financial reform. There are better ways to go about it like those proposed by Republicans that will stop the Democrats’ permanent bailouts, protect taxpayers and create jobs, address Fannie Mae and Freddie Mac reform, and rein in the out-of-control Federal Reserve.

Back to the Goldman Sachs hearings, it is obvious that the timing is a tool to stir up emotional support for the Democrat's reform package. People should be upset at the matter, but they should be upset across the board without letting emotion driving bad policy. Even President Clinton notes the timing of the Goldman Sachs suit is "suspect." He is right, and the approach of those behind this financial reform package is definitely suspect.

Once again we face misdiagnosis of the problem, a bad subscription, and another attempt for a Washington power grab by our "leadership."  

Bernanke Re-confirmation Met with Opposition

If you haven't already heard, FED Chairman Ben Bernanke was re-confirmed by a vote of 70-30 yesterday afternoon. In this two clear signals were sent: 1. Failure will continue to be rewarded in DC. 2. Some are ready to stand up to the FED chairman.

The vote did not go along party lines with the failed chairman of the currency debasing giant finding support on both sides of the aisle. Sadly, both of my Republican senators (Alexander and Corker) gave their support, but that was to be expected. Each are statist in make-up, moderates at best, and completely ignorant in the field of fiscal policy. Major supporter of the FED Sen. Bob Corker even went as far as to say:

“We need to mature a little bit. ... If we continue constant witch hunts, which is what happens here on a daily basis, no one in leadership is ever going to make a bold decision. You’re going to reduce people to just not taking leadership.”

This is a severely misguided statement. First, it assumes that Bernanke has made bold decisions. Keeping interest rates extremely artificially low and injecting volumes of paper money into a hungry system is not bold. Rather, it is politically expedient. Second, Corker assumes that bold equals correct. And even if Bernanke was being bold-he wasn't-he sure wasn't acting rightly. Moreover, Mr. Corker this is not a matter of immaturity by the FED chairman's opponents. In fact, immaturity has shown forth quiet brightly in statements you have made over the last year involving the FED, fiscal policy, and basic economic theory. Perhaps the finger needs to be pointed back at you.

There is an upside to the recent re-confirmation process, however. Some are upset with the FED, its chair, and our current fiscal policy. The speeches made on the senate floor and the 70-30 margin are proof of this.

The senate usually skates through these confirmations. Not this time. A record 30 senators voted against him, which is a very good sign. I can't help but see this as a major victory for Texas Congressman Ron Paul. He has single handedly brought the FED issue to national prominence and led his colleges on a crusade for FED transparency.

May this opposition continue to grow and lead to good things down the road. If you haven't already checked out the effort to audit the FED through legislation going through the House and Senate, please do.

Ron Paul on a Whole Slew of Issues

From Hatti to the FED...