Thursday, October 14, 2010

For Orderly Dissolution Of The Fed, Before It Does Us Even More Harm

The Federal Reserve Board was established by Congress but operates independently and answers to no one. Attempts by members of Congress to get a vote on HR 1207, a bill to audit the Fed, have been blocked by the Democrat leadership.

Through control of our currency and the printing presses, the Fed has immense power over the value of our dollar. The Fed issues IOU s to buy US Treasuries, a ponzi scheme you and I would be jailed for. All this contributes to inflation and the value of the dollar on the world market. It is called the "hidden" taxation.

This article in Investors Business Daily summarizes some of the disastrous effects of some of the Fed's policies. Following the excerpt, I have included an interview Judge Napolitano had with Jim DeMint and another video of Ron Paul's statement in the House.

Word is that the Federal Reserve is getting new suggestions to again consider targeting interest rates.

Whatever the merits of the suggestions, they highlight an amazing fact: The Fed was established 97 years ago, and Fed officials were given considerable power over the economy as if they knew what they were doing, but they didn't. They're still winging it today.

As late as May 17, 2007, Chairman Bernanke said: "We believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."

Intended to save our economy, the Fed has turned out to be perhaps the biggest single source of economic instability. It's the big pig at the trough, and it's unpredictable. It doesn't follow any rules consistently. When it moves, everyone else can be badly knocked around.

The very unpredictability of the Fed causes uncertainty that discourages investors and employers from making commitments for the future — an important reason why we're experiencing a sluggish, jobless recovery now.

Theoretically, the Fed might be able to work if there were perfect people, but there don't seem to be any of those around. After almost a century of the Fed's often violent roller-coaster rides, it's hard to see what might be accomplished with one more bit of tinkering such as with interest-rate targets.

It's time to begin planning for an orderly dissolution of the Fed before it does us any more harm.

Read Investors Business Daily article here.

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