|The central bank of the United States, the Federal Reserve.|
"The mandate of any central bank isn't
tied to specific government programs.
Her goal isn't economic growth. The
only goal of a central bank is price
stability ... there's nothing more."
- Mexican Central Banker, 1993
The above quote was part of a series of interviews I did at the Banco de Mexico in 1993 for a journal article that I co-wrote 20 years ago. The article ("The Bank of Mexico and Monetary Policy: The Struggle for Independence and Monetary Stability") took a look at the financial culture of central banks in Germany and Mexico, and focused on what central banks across the world are supposed to do: Protect the integrity of a nation's currency.
If you know nothing else about central banks, know that protecting the integrity of the currency is supposed to be its #1 priority.
|Mexico's central bank, the Banco de Mexico, in Mexico City.|
If only our nation's central bank, the Federal Reserve, could say the same thing. But it can't.
To date, with the approval and support of the Federal Reserve we have created and spent well over $4 trillion on Wall Street's recklessness, and have committed an estimated $14 trillion in Fed approved (but ultimately taxpayer backed) funds for the next market bailout.
Yeah, that's right. About $14 trillion is already baked into the next market collapse.
Today, the Federal Reserve is showing the world that it's little more than a financial hammock for America's largest financial institutions. If the past 7 years is any indication - and it is - the Federal Reserve has made it clear that it is not independent, and that it doesn't really have an interest in guarding the integrity of the dollar.
Their top priority is to keep our largest financial institutions afloat (so they can privatize the profits), which is why we now live in an era of Too Big To Fail (where we get to socialize the losses).
It's also one of the reasons that the Chair of the Federal Reserve, Janet Yellen, expressed her concern recently that the U.S. Congress might act on Kentucky Senator Rand Paul's bill to "Audit the Fed." Courtesy of Zero Hedge, we get the first 10 of 100 reasons why Janet Yellen should be concerned if the U.S. Congress decides to audit the Fed.
#1 We like to think that we have a government “of the people, by the people, for the people”, but the truth is that an unelected, unaccountable group of central planners has far more power over our economy than anyone else in our society does.
#2 The Federal Reserve is actually “independent” of the government. In fact, the Federal Reserve has argued vehemently in federal court that it is “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.
#3 The Federal Reserve openly admits that the 12 regional Federal Reserve banks are organized “much like private corporations“.
#4 The regional Federal Reserve banks issue shares of stock to the “member banks” that own them.
#5 100% of the shareholders of the Federal Reserve areprivate banks. The U.S. government owns zero shares.
#6 The Federal Reserve is not an agency of the federal government, but it has been given power to regulate our banks and financial institutions. This should not be happening.
#7 According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”. So why is the Federal Reserve doing it?
#8 If you look at a “U.S. dollar”, it actually says “Federal Reserve note” at the top. In the financial world, a “note” is an instrument of debt.
#9 In 1963, President John F. Kennedy issued Executive Order 11110 which authorized the U.S. Treasury to issue “United States notes” which were created by the U.S. government directly and not by the Federal Reserve. He was assassinated shortly thereafter.
#10 Many of the debt-free United States notes issued under President Kennedy are still in circulation today.
If you can, read the remaining 90 reasons here from Zero Hedge. They point us towards the right issues and questions that need to be addressed.
Truth be told, if we had a Congress that knew what it was doing Yellen's concerns might be more of a panic. Seriously.
I personally (1) don't see an audit happening because most members of Congress are pretty much working for the financial institutions already, and (2) I can't see this Congress getting the audit right (Have you ever watched Republicans on C-SPAN ask bankers any questions? They might as well be blowing kisses at them).
Audit the Fed? I hope so ... but don't hold your breath on it.