Friday, July 31, 2009
"To the conspiracy theorists, the [Fed] is a dangerous, shadowy and unaccountable organisation--like the [UN] or CIA but without the black helicopters. For more than 200 years, [sic, the Fed was founded in 1913] critics of the central bank have railed against an alleged lack of transparenncy, a threat to the fabric of the US by unelected moneymen. ... Defenders of free-market capitalism worry about the actions of Ben Bernanke, Fed chairman, who is alleged to have coerced Bank of America into completing its acquisition of Merrill Lynch in spite of mounting losses. ... There are fears of global skullduggery that Mr. [Ron] Paul outlined as he cross-examined Donald Kohn, vice-chairman of the Fed, last week. 'You say it's the public's interest, I don't that [that] reassures a lot of people, because all of a sudden we think, "What are you doing? Are you protecting the bankers' interests?"' ... Defenders of the Fed--including Tim Geithner, the former New York Fed chairman who is now Treasury secretary, and Barney Frank, the House financial services committee chairman--are trapped. ... The Fed does not believe that the sky will fall in if it faces more audits from the Government Accountability Office, as Mr. Paul's bill proposes, but it is concerned about the movement towards increased congressional oversight and the potentially chilling effects of its board discussions", Tom Braithwaite at the FT, 15 July 2009.
The move toward more Fed transparency is laughable. To effect monetary policy, the Fed must mislead the market. Think about it. Kill the Fed. Now! I don't ask if the Fed protects bankers. That's one of its jobs!