By Bill Bonner
London, England
Edward Gibbon described the happiest age of mankind as the period of the “five good emperors” between AD98 and AD180, when Marcus Aurelius died.
What was America’s Golden Age?
It is much too soon to write the history of America’s decline and fall. Still, that doesn’t stop us from guessing.
We would name the period between the fall of the Berlin Wall and the fall of Lehman Bros – a period of only 19 years – as the peak of US power and wealth. Of course, Americans were dreaming during those years. The dreams were the usual imperial sort – that the US Empire was such a benefit to the rest of the world that the foreigners would support it indefinitely. Rome didn’t take any chances; it forced its conquered nations to render tribute…slaves…gold…and wheat. The American empire depended on trade…and the dollar. As long as the United States had a commercial advantage, the empire was profitable. But as the 20th century aged, so did the US economy. Its competitors – notably Germany and Japan – had a big advantage. They had been bombed out in the ’40s. They could build anew. America’s trade advantage slipped away…and then its trade balance went negative in the mid-’80s. It has been getting more negative almost every year.
The trade losses shrank after the fall of the House of Lehman. Americans cut back. But today we get news that the trade deficit has just grown more than in any month in the last 10 years. Have Americans suddenly become big spenders again? Probably not. But we’ll have to wait for another explanation; we don’t have one.
No account of America’s glory years – roughly the period between the reign of George Bush I and that of his son, George Bush II – would be complete without mention of the events that happened on this day eight years ago. A small group of terrorists pulled off an amazing coup – bringing down two of America’s iconic buildings, right in the heart of New York City…and on primetime TV! Historians might be tempted to use this event as a milestone, marking the end of the period of maximum happiness in the United States of America. We caution against it. It was only later that it became apparent that the US reaction to the terrorist incident was suicidal. The nation desperately needed to bring its ambitions back in line with its means. It needed to save and invest in new factories and new infrastructure. Instead, it wasted trillions fighting phantoms and nobodies. But as far as anyone knew, US influence, prestige and power remained near its zenith throughout the wars on terror and Iraq.
The fall of Lehman changed things. Then it was obvious that not only was America vulnerable, she was an enemy to herself. She had diddle-daddled during the glory years, dawdling with the lion cubs that would grow up and maul her. Now, in the period we are living through, she attempts to go back to sleep and rerun her balmy dreams. That is what “recovery” is all about – a return to the land of nod and nonsense…in which people think they can actually become wealthier by squandering money they don’t have on things they don’t need.
Fortunately, as near as we can tell, most private citizens are now awake. A report at the beginning of this week showed that they repaid debt at a rate four times faster than economists projected. Savings rates are rising. Spending is falling. People are doing what they should do – they’re cutting back.
But the feds continue their efforts to sabotage the correction and destroy the empire. They have already blown-up the budget – with $9 trillion in deficits expected over the next 10 years. Now, they’re working on the dollar.
Yesterday, the dollar fell to $1.45 per euro. Gold remained just below the $1,000 an ounce mark. And the Dow rose 80 points.
Stock market investors seem to be looking forward to another big bull market. But with the economy deteriorating, they are probably just dreaming, too. Median household income fell 3.6% over the last 12 months. Of course, that’s just what you’d expect in a correction. But it’s not what the feds were hoping for. So, they’re pulling out all the stops to try to turn it around. Most important, they’re pulling out the stop that keeps the dollar from rolling down the hill.
The empire sinks into the mud. Yes, this is the downhill period…the slide into corruption…the period in which Juvenal complained that Romans were only interested in ‘bread and circuses.’
When you are on the board of a decent corporation, for example, if you have a direct financial interest in a matter under consideration you’re expected to ‘declare an interest’ and absent yourself from the vote. But in a mature democracy, the most self-interested citizens are those most likely to vote. Currently, about 20 million people work for government. About 45 million receive Social Security benefits. About 34 million depend on food stamps.
(People who count on the government to feed them, warned Jefferson, “will soon want bread.” That doesn’t seem to worry many people. But at least the state of Maryland has an Orwellian sense of humor about it. People who depend on government for food are given “Independence” cards.)
That’s 99 million people who have a direct interest in expanding government outlays…with some overlap, of course. And it doesn’t mean that every person receiving a Social Security check is going to back the feds. But it doesn’t count all the millions more who get subsidies, bailouts, welfare payments (often masquerading as tax credits), government contracts, and so forth, either.
Well, how many people does it take to win a national election? Obama won with 63 million votes.
The dollar’s weakness hasn’t been missed by it biggest foreign holder – China.
Reported earlier this week in the Telegraph:
“‘We hope there will be a change in monetary policy as soon as they have positive growth again,’ said Cheng Siwei…talking about America.
“‘If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies,’ he said.
“China’s reserves are more than – $2 trillion, the world’s largest.
“Mr. Siwei continued: ‘Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets,’ he added.”
Then, two days ago, in came a report that China is going to issue bonds of its own – in yuan.
This news is a shot across the bow of America’s imperial currency. It signals that China is moving into position to eventually challenge the greenback. Investors will have another alternative to the dollar…another bond issued by another government and backed by another economy…maybe one that is on the way up, rather than on the way down.
Meanwhile, Americans grow poorer. Bloomberg reports:
“‘The decline in incomes we’re seeing certainly has implications for consumer spending, particularly post-housing bubble when families can’t tap into home equity through loans,’ said Heather Boushey, a senior economist at the Center for American Progress, a research organization headed by John Podesta, a leader of the Obama administration transition team.
“The poverty rate is likely to keep rising through 2012, even after the recession ends, adding to pressure on the Obama administration to enact a second economic stimulus package, said Isabel Sawhill, a senior fellow at the Brookings Institution in Washington, a policy research group.
“‘We will likely have not only a jobless recovery but also a poverty-ridden recovery,’ Sawhill said. ‘The stimulus money is going to go away long before the poverty rate peaks.’”
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed and internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning .
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Showing posts with label Federal Reserve Transparency Act of 2009. Show all posts
Showing posts with label Federal Reserve Transparency Act of 2009. Show all posts
Friday, September 11, 2009
Sunday, August 30, 2009
Federal Reserve Board fights to keep its secrets
Warns disclosing where money went would cause 'irreparable harm'
By Drew Zahn
© 2009 WorldNetDaily
The Federal Reserve Board, despite being ordered to disclose to whom it awarded roughly $2 trillion in discount "stimulus" loans, is fighting to keep the information under wraps as a protected "trade secret."
Earlier this week, a U.S. district court judge rejected the Fed's argument that the names of borrowers are exempt from disclosure under the Freedom of Information Act and ordered the board to release the information by Monday, Aug. 31.
The Fed's board of governors, however, has now filed a motion asking the judge to delay enforcement of the order, seeking time to appeal and arguing that disclosing which banks borrowed the funds could lead to a backlash from the banks' customers and stockholders.
Demand the money managers come clean by signing the petition in support of an audit of the Federal Reserve now!
"The immediate release of these documents will destroy the board's claims of exemption and right of appellate review," the motion said. "The institutions whose names and information would be disclosed will also suffer irreparable harm."
Bloomberg LP, which sued the Fed on behalf of its Bloomberg News unit for not complying with a FOIA request last year, disagrees.
"Our argument is that the public interest in disclosure outweighs the banks' interest in secrecy," said Thomas Golden, a lawyer who represents Bloomberg.
"What has the Fed got to hide?" said Vermont's Sen. Bernie Sanders in an email reported by Bloomberg. "The time has come for the Fed to stop stonewalling and hand this information over to the public."
When the banking system threatened collapse last year, the Fed invoked its emergency lending powers to make discount loans to banks that now total into the trillions of dollars with the intent of stimulating the economy and preventing further financial meltdown. The names of the borrowing institutions were kept anonymous.
Bloomberg reporter Mark Pittman then filed a FOIA request in an attempt to get the Fed to disclose the borrowing banks and to identify the assets it accepted as collateral.
In return, Federal Reserve Board Secretary Jennifer Johnson sent Pittman a five-page response, telling him the Fed was withholding over 2,000 pages of information deemed protected against disclosure as "trade secrets" and "inter-agency or intra-agency memorandums or letters."
On Nov. 7, 2008, Bloomberg filed a suit seeking full disclosure, and earlier this week, Judge Loretta A. Preska of the U.S. District Court, Southern District of New York, ruled the Fed had until Monday to release the information.
The Fed's motion to delay enforcement of Preska's order argues the board's "ability to effectively manage the current, and any future, financial crisis" would be impaired by releasing the information and "significant harms" could befall the U.S. economy, as disclosure might unsettle shareholders and set off a run on the borrowing banks by worried depositors.
As WND has reported, a majority within the U.S. House called for greater transparency of the Fed by cosigning onto H.R. 1207, the Federal Reserve Transparency Act of 2009. The Act demands an audit of the Fed, a private institution that virtually controls U.S. interest rates, money supply and other economic influences.
U.S. Rep. Ron Paul, R-Texas
"To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have," wrote the bill's sponsor, U.S. Rep. Ron Paul, R-Texas, in a recent Straight Talk commentary. "They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability."
"The tremendous grass-roots and bipartisan support in Congress for H.R. 1207 is an indicator of how mainstream America is fed up with Fed secrecy," said Paul. "I look forward to this issue receiving greater public exposure."
Sen. Jim DeMint, R-S.C., has also pushed in the Senate for greater transparency at the Fed.
"The Federal Reserve will create and disburse trillions of dollars in response to our current financial crisis," DeMint said. "Americans across the nation, regardless of their opinion on the bailout, want to know where the money has gone.
"Allowing the Fed to operate our nation's monetary system in almost complete secrecy leads to abuse, inflation and a lower quality of life," he said, according to Reuters.
By Drew Zahn
© 2009 WorldNetDaily
The Federal Reserve Board, despite being ordered to disclose to whom it awarded roughly $2 trillion in discount "stimulus" loans, is fighting to keep the information under wraps as a protected "trade secret."
Earlier this week, a U.S. district court judge rejected the Fed's argument that the names of borrowers are exempt from disclosure under the Freedom of Information Act and ordered the board to release the information by Monday, Aug. 31.
The Fed's board of governors, however, has now filed a motion asking the judge to delay enforcement of the order, seeking time to appeal and arguing that disclosing which banks borrowed the funds could lead to a backlash from the banks' customers and stockholders.
Demand the money managers come clean by signing the petition in support of an audit of the Federal Reserve now!
"The immediate release of these documents will destroy the board's claims of exemption and right of appellate review," the motion said. "The institutions whose names and information would be disclosed will also suffer irreparable harm."
Bloomberg LP, which sued the Fed on behalf of its Bloomberg News unit for not complying with a FOIA request last year, disagrees.
"Our argument is that the public interest in disclosure outweighs the banks' interest in secrecy," said Thomas Golden, a lawyer who represents Bloomberg.
"What has the Fed got to hide?" said Vermont's Sen. Bernie Sanders in an email reported by Bloomberg. "The time has come for the Fed to stop stonewalling and hand this information over to the public."
When the banking system threatened collapse last year, the Fed invoked its emergency lending powers to make discount loans to banks that now total into the trillions of dollars with the intent of stimulating the economy and preventing further financial meltdown. The names of the borrowing institutions were kept anonymous.
Bloomberg reporter Mark Pittman then filed a FOIA request in an attempt to get the Fed to disclose the borrowing banks and to identify the assets it accepted as collateral.
In return, Federal Reserve Board Secretary Jennifer Johnson sent Pittman a five-page response, telling him the Fed was withholding over 2,000 pages of information deemed protected against disclosure as "trade secrets" and "inter-agency or intra-agency memorandums or letters."
On Nov. 7, 2008, Bloomberg filed a suit seeking full disclosure, and earlier this week, Judge Loretta A. Preska of the U.S. District Court, Southern District of New York, ruled the Fed had until Monday to release the information.
The Fed's motion to delay enforcement of Preska's order argues the board's "ability to effectively manage the current, and any future, financial crisis" would be impaired by releasing the information and "significant harms" could befall the U.S. economy, as disclosure might unsettle shareholders and set off a run on the borrowing banks by worried depositors.
As WND has reported, a majority within the U.S. House called for greater transparency of the Fed by cosigning onto H.R. 1207, the Federal Reserve Transparency Act of 2009. The Act demands an audit of the Fed, a private institution that virtually controls U.S. interest rates, money supply and other economic influences.
U.S. Rep. Ron Paul, R-Texas
"To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have," wrote the bill's sponsor, U.S. Rep. Ron Paul, R-Texas, in a recent Straight Talk commentary. "They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability."
"The tremendous grass-roots and bipartisan support in Congress for H.R. 1207 is an indicator of how mainstream America is fed up with Fed secrecy," said Paul. "I look forward to this issue receiving greater public exposure."
Sen. Jim DeMint, R-S.C., has also pushed in the Senate for greater transparency at the Fed.
"The Federal Reserve will create and disburse trillions of dollars in response to our current financial crisis," DeMint said. "Americans across the nation, regardless of their opinion on the bailout, want to know where the money has gone.
"Allowing the Fed to operate our nation's monetary system in almost complete secrecy leads to abuse, inflation and a lower quality of life," he said, according to Reuters.
Thursday, June 11, 2009
Audit of Federal Reserve nearing critical mass
Rep. Paul plan has 213 co-sponsors in 435-member U.S. House
By Bob Unruh
© 2009 WorldNetDaily
 U.S. Rep. Ron Paul, R-Texas |
A plan by U.S. Rep. Ron Paul, R-Texas, to audit the Federal Reserve today lacks only a handful of signatures on a list of co-sponsors to hold a majority in the U.S. House.
Officials with Paul's office have confirmed to WND there now are 213 cosponsors signed onto H.R. 1207, the Federal Reserve Transparency Act of 2009 that demands an audit of the organization.
Paul long has opposed the power held by the Federal Reserve and its ability to manipulate the nation's economy and over the years has launched multiple proposals to get rid of the quasi-governmental agency, without significant support.
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