Federal Reserve

Did I not say the Fed would be the buyer of all these new Treasury Issuances??

If you are in the bond markets, why?

Get safe while you can. This can end only one way. Dollar Deadpool.

Fed Extends Bond Purchases Until October But Not Amount

(Reuters) – The US Federal Reserve said Wednesday the economy was showing signs of leveling out after 20 months of recession and it will extend the duration but not the size of a program to buy long-term government securities to minimize any disruptions from completing it.

The U.S. central bank also kept its benchmark short-term interest rate steady near zero and said it would likely stay there for an extended period.

“To promote a smooth transition in markets as these purchases of Treasury securities are completed, the committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October,” the Fed said in a statement at the conclusion of its policy-setting meeting.

* (Click here to read the statement.) http://www.cnbc.com/id/32390276/

The Fed launched the debt buying program in March when it had already chopped interest rates to zero but wanted to open the money taps even wider to support the struggling economy.

Treasury purchases were previously scheduled to expire in September. “They see the worst with the economy is behind us but they don’t want to jump the gun and pull back quickly,” said Craig Thomas, a senior economist at PNC Financial Services in Pittsburgh.

US Treasury prices tumbled fell after the Fed statement in apparent disappointment that the Fed did not increase the amount of debt that it plans to buy but subsequently regained some ground.

However, major U.S. stock indexes extended gains and the dollar rose against the yen.

The Fed slashed interest rates to a range of between zero and 0.25 percent in December and has pumped hundreds of billions of dollars into financial markets to stimulate economic activity in the worst recession in decades.

The economy has shown signs it is coming out of its swoon and job losses, which have already topped 6 million, may be moderating.

The Fed gave its clearest statement to date that it sees the recession nearing an end and that shattered financial markets are healing.

“Information since the Federal Open Market Committee met in June suggests economic activity is leveling out,” the Fed said.

“Conditions in financial markets have improved in recent weeks.” It is the first time since August 2008 the panel’s statement has not characterized the economy as contracting, weakening or slowing.

The Fed in July forecast that growth would return in the second half of the year after contraction in five out of the last six quarters, but cautioned that unemployment should stay high well into 2011.

In its statement, the Fed renewed its warning that economic activity is likely to stay soft for “a time.” Household spending, while stabilizing, is still weak as a result of the grim labor market and tight credit, the Fed said.

The Fed renewed its pledge to keep rates exceptionally low for an extended period.

To quell worries the Fed’s bloated balance sheet may sow the seeds of dangerous inflation once the recovery gains traction, Fed Chairman Ben Bernanke has taken pains to explain the Fed’s tools to pull money out of the financial system to prevent price pressures from rising.

Original Article

Unjust weights and Measures are an abomination unto the Lord.

The Lord delights in just weights, all the weights in the bag are his.

It took me a long time to figure out that last part. Do you realize that out of the thousands of various types of paper currencies to paper derivatives of every imaginable stripe and color, that only gold and silver were here before man?

Traders Profit With Computers Set at High Speed

July 24, 2009, 4:10 am

It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices. It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets, writes Charles Duhigg in The New York Times.

Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense.

These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk.

Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer.

And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes — software that a federal prosecutor said could “manipulate markets in unfair ways” — it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.

Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors. The Securities and Exchange Commission says it is examining certain aspects of the strategy.

“This is where all the money is getting made,” William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund, told The Times. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”

For most of Wall Street’s history, stock trading was fairly straightforward: buyers and sellers gathered on exchange floors and dickered until they struck a deal. Then, in 1998, the Securities and Exchange Commission authorized electronic exchanges to compete with marketplaces like the New York Stock Exchange. The intent was to open markets to anyone with a desktop computer and a fresh idea.

But as new marketplaces have emerged, PCs have been unable to compete with Wall Street’s computers. Powerful algorithms — “algos,” in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.

High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.

High-frequency traders also benefit from competition among the various exchanges, which pay small fees that are often collected by the biggest and most active traders — typically a quarter of a cent per share to whoever arrives first. Those small payments, spread over millions of shares, help high-speed investors profit simply by trading enormous numbers of shares, even if they buy or sell at a modest loss.

“It’s become a technological arms race, and what separates winners and losers is how fast they can move,” said Joseph M. Mecane of NYSE Euronext, which operates the New York Stock Exchange. “Markets need liquidity, and high-frequency traders provide opportunities for other investors to buy and sell.”

The rise of high-frequency trading helps explain why activity on the nation’s stock exchanges has exploded. Average daily volume has soared by 164 percent since 2005, according to data from NYSE. Although precise figures are elusive, stock exchanges say that a handful of high-frequency traders now account for a more than half of all trades. To understand this high-speed world, consider what happened when slow-moving traders went up against high-frequency robots earlier this month, and ended up handing spoils to lightning-fast computers.

It was July 15, and Intel, the computer chip giant, had reporting robust earnings the night before. Some investors, smelling opportunity, set out to buy shares in the semiconductor company Broadcom. (Their activities were described by an investor at a major Wall Street firm who spoke on the condition of anonymity to protect his job.) The slower traders faced a quandary: If they sought to buy a large number of shares at once, they would tip their hand and risk driving up Broadcom’s price. So, as is often the case on Wall Street, they divided their orders into dozens of small batches, hoping to cover their tracks. One second after the market opened, shares of Broadcom started changing hands at $26.20.

The slower traders began issuing buy orders. But rather than being shown to all potential sellers at the same time, some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — in what are known as flash orders. While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.

In less than half a second, high-frequency traders gained a valuable insight: the hunger for Broadcom was growing. Their computers began buying up Broadcom shares and then reselling them to the slower investors at higher prices. The overall price of Broadcom began to rise.

Soon, thousands of orders began flooding the markets as high-frequency software went into high gear. Automatic programs began issuing and canceling tiny orders within milliseconds to determine how much the slower traders were willing to pay. The high-frequency computers quickly determined that some investors’ upper limit was $26.40. The price shot to $26.39, and high-frequency programs began offering to sell hundreds of thousands of shares.

The result is that the slower-moving investors paid $1.4 million for about 56,000 shares, or $7,800 more than if they had been able to move as quickly as the high-frequency traders.

Multiply such trades across thousands of stocks a day, and the profits are substantial. High-frequency traders generated about $21 billion in profits last year, the Tabb Group, a research firm, estimates.

“You want to encourage innovation, and you want to reward companies that have invested in technology and ideas that make the markets more efficient,” said Andrew M. Brooks, head of United States equity trading at T. Rowe Price, a mutual fund and investment company that often competes with and uses high-frequency techniques. “But we’re moving toward a two-tiered marketplace of the high-frequency arbitrage guys, and everyone else. People want to know they have a legitimate shot at getting a fair deal. Otherwise, the markets lose their integrity.”

http://dealbook.blogs.nytimes.com/2009/07/24/traders-profit-with-computers-set-at-high-speed/

I can already hear the argument versus gold and silver as money starting up..the barbarous relic theme…instead of addressing this argument which has gone on for as long as man has wanted to control issuance of currency, let me just point out one simple fact: you cannot build a stable house with a measurement of value that changes all of the time. If the inches on a slide rule a carpenter used changed its size constantly, the house would be a catastrophe waiting to happen. That is precisely what the US Dollar is, a measure that changes value constantly. It would take you almost $100 to buy in raw goods what $1 would buy you 100 years ago. These are simple, indisputable facts, and have nothing to do with the idea that people do not want gold coins clinking around in their pocket. The point is money must have a stable measure or it cannot be the foundation a financial house is built upon.

Evidence of this is pretty obvious and widespread in today’s economy.

The US government literally borrows money from the Fed then taxes US citizens to pay the interest, then the Fed, which is a private bank, then uses your tax dollars to buy garbage out of the market and off the books of financial firms, cleaning their books and padding everyone’s pockets in the process, once again at the cost of the american taxpayer.

Lets be clear here: I am not trying to get you mad at the government, I am trying to point out that you can either trust the paper system with your money, or you can put your money in gold. History proves that parabolic debasement of the money supply that is occurring now, has led to the demonitization of that particular form of money, every time.

Get safe. Gold is the Money of Kings.

***

Wall Street profits from trades with Fed

By Henny Sender in New York

Published: August 2 2009 23:04 | Last updated: August 2 2009 23:04

Wall Street banks are reaping outsized profits by trading with the Federal Reserve, raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties, officials and industry executives say.

The Fed has emerged as one of Wall Street’s biggest customers during the financial crisis, buying massive amounts of securities to help stabilise the markets. In some cases, such as the market for mortgage-backed securities, the Fed buys more bonds than any other party.

However, the Fed is not a typical market player. In the interests of transparency, it often announces its intention to buy particular securities in advance. A former Fed official said this strategy enables banks to sell these securities to the Fed at an inflated price.

The resulting profits represent a relatively hidden form of support for banks, and Wall Street has geared up to take advantage. Barclays, for example, e-mails clients with news on the Fed’s balance sheet, detailing the share of the market in particular securities held by the Fed.

“You can make big money trading with the government,” said an executive at one leading investment management firm. “The government is a huge buyer and seller and Wall Street has all the pricing power.”

A former official of the US Treasury and the Fed said the situation had reached the point that “everyone games them. Their transparency hurts them. Everyone picks their pocket.”

The central bank’s approach to securities purchases was defended by William Dudley, president of the New York Fed, which is responsible for market operations. “We believe that opting for transparency is a greater good,” he said. “If we didn’t have transparency, we’d be criticised on other grounds.”

However, another official familiar with the matter said the central bank “has heard that dealers load up on securities to sell to the Fed. There is concern, but policy goals override other considerations.”

Barney Frank, chairman of the House financial services committee, said the potential profiteering may be part of the price for stabilising the financial system.

“You can’t rescue the credit system without benefiting some of the people in it.” Still, Mr Frank said Congress would be watching. “We don’t want the Fed to drive the hardest possible bargain, but we don’t want them to get ripped off.”

The growing Fed activity has coincided with a general widening of market spreads – the difference between bid and offer prices – as the number of market participants declines. Wider spreads enable banks, in their capacity as market-makers, to make more profit.

Larry Fink, chief executive of money manager BlackRock, has described Wall Street’s trading profits as “luxurious”, reflecting the banks’ ability to take advantage of diminished competition.

“Bid-offer spreads have remained unusually wide, notwithstanding the normalisation of financial markets,” said Mohamed El-Erian, chief executive of fund manager Pimco in Newport Beach, California.

Spreads narrowed dramatically during the years of the credit bubble.

Brad Hintz, an analyst at AllianceBernstein, said he doubted that spreads would ever return to those levels, a development that could be pleasing to the Fed.

“They want to help Wall Street make money,” he said.

Additional reporting by Brooke Masters in Washington

Original Article

There is an ancient saying of ‘He who has the gold, makes the rules’. This isnt just a cliche, but rather proven out by historical evidence. Wherever the largest stocks of gold were, the nations who have held it were usually the most influential nations of their time period.

Egypt, Rome, Byzantium, Western Europe and England, then the USA.

The US gold stocks have not been audited since the 50’s, and many analysts believe that what is claimed to be there is alot more than what is actually there.

China is still making strong strides to make the Yuan a fully convertible currency. When the veil spun by the mass media comes off, people will run to whats ultimately safe, which is gold and silver.

China May Overtake India in Gold Demand, Council Says

By Sophie Leung

July 24 (Bloomberg) — China may overtake India to become the world’s top gold consumer this year, the World Gold Council said, as the nation became the first of the major economies to rebound from the global recession.

Jewelry demand in China expanded in the first quarter while dropping in India, Marcus Grubb, a managing director at the London-based council, said today at a conference in Hong Kong. Chinese gold demand will keep rising, he said.

China’s economy grew 7.9 percent in the second quarter after a 4 trillion yuan ($586 billion) stimulus package spurred record lending and consumption. India’s gold purchases slumped 54 percent in the six months ended June after a decline in the rupee pushed up the cost of owning bullion, cooling demand from housewives and jewelers, the Bombay Bullion Association said.

“There is a possibility that China might overtake India as the world’s largest gold consumer this year,” Hou Huimin, deputy head of the China Gold Association, said by phone from Beijing today. “India’s gold consumption is reportedly dropping this year due to the financial crisis.”

Total demand from India in the first quarter fell 83 percent to 17.7 metric tons, from 107.2 tons a year earlier, according to figures from the World Gold Council. Purchases in China rose 1.8 percent to 105.2 tons from 103.3 tons. Total Chinese demand for gold was six times that of India in the first quarter, the council said in May.

‘Consumption Growing’

“China’s consumption is growing and this year’s will surely be more than last year’s,” Hou said.

China consumed nearly 400 metric tons of gold last year, while demand in India was more than 650 tons, according to council data, which cited statistics from GFMS Ltd. Global demand rose 3.8 percent to 3,658.6 tons, or $101.8 billion, the council said Feb. 18.

Bullion prices have gained 7.6 percent this year as the global recession spurred demand for safe haven assets. Gold for immediate delivery was little changed at $949.65 an ounce at 5:39 p.m. in Hong Kong.

China, the world’s biggest gold producer, has increased reserves by 76 percent to 1,054 tons since 2003 and has the world’s fifth-biggest holdings by country, Hu Xiaolian, head of the State Administration of Foreign Exchange, said in April.

Growing demand in China won’t necessarily boost imports of the metal as rising production may be able to satisfy additional consumption, said the World Gold Council’s Grubb. China’s production of gold has risen at rate of 7 percent to 8 percent annually over the past five to six years, he said.

Imports

“It depends if the demand is rising faster than production,” Grubb said in an interview. “At the moment, they are roughly in balance.” China will seek to boost gold output to 290 tons this year from 282 tons in 2008, the Ministry of Industry and Information Technology said on March 20.

Gold imports by India in the six months ended June 30 plunged to 63.8 tons from 139 tons a year earlier, the Bombay Bullion Association said July 13. Imports may fall further after the government doubled the import duty this month, it said.

“India’s gold demand as reflected in imports have fallen drastically in the first six months,” Harmesh Arora, vice president of the Indian association said today in a phone interview from Mumbai. “There are still no signs of demand picking up as global prices are moving higher,” said Arora, who also believes China could overtake India in gold consumption.

Still, India meets most of its demand from imports, some of which are brought in through unofficial channels and are not represented in official data, said Mukul Sonawale, partner of Mumbai-based Narrondass Manordass Co. and a past president of the Bombay Bullion Association.

“China can emerge as the world’s biggest consumer only on paper,” he said. “The official figures of imports will be quite deceiving as they don’t capture all the imports. With India doubling the import duty on gold, the unofficial channel is bound to increase.”

Original Article

Talk to and inteview the guys who built the technology behind the Dark Pools. Its an eye opener.

Solution: Protect wealth using gold and silver

By Jonathan Spicer

NEW YORK, July 24 (Reuters) – U.S. Senator Charles Schumer warned a top regulator on Friday that if she does not ban so-called “flashes” — orders that stock exchanges send to a select group of traders before revealing them to the wider market — he will introduce legislation that does.

In a letter dated Friday to Mary Schapiro, chairman of the U.S. Securities and Exchange Commission, Schumer said this type of order “seriously compromises the integrity of our markets and creates a two-tiered system where a privileged group of insiders receives preferential treatment.

“If allowed to continue, these practices will undermine the confidence of ordinary investors and drive them away from our capital markets,” Schumer, a senior Democrat on the Senate Banking panel, said in the letter obtained by Reuters and verified by an aide.

“If the SEC fails to curb this practice, I plan to introduce legislation in the U.S. Senate to prohibit the use of flash orders,” the letter said.

At issue are buy and sell orders that the Nasdaq Stock Market and BATS Exchange began “flashing” early last month to market members, including the big broker-dealers, before they are routed elsewhere to all participants.

The flashes — which last for fractions of a second, allowing computer programs to respond — are also available in some anonymous trading venues, known as “dark pools.” Some describe them as exchange-run dark pools.

The new services at Nasdaq and BATS resemble one long offered by fast-growing trading venue Direct Edge, and amplified an ongoing debate over fair market access, prices, and the way orders circulate through the dozens of electronic trading venues in the United States.

Schapiro has not specifically mentioned flash orders publicly. But in a speech last month she raised concerns about the growth of dark pools, warning that the SEC may take action to protect market integrity and fair price discovery.

An SEC spokesman said he couldn’t confirm or comment on letters the market watchdog receives.

The SEC has received at least five letters on flashes since May, when New York Stock Exchange parent NYSE Euronext (NYX.N) urged it to reject the flash applications from Nasdaq OMX (NDAQ.O) and BATS on the grounds the order type “impedes a free and open market system and harms the investing public.”

The Securities Industry and Financial Markets Association (FINRA), Morgan Stanley (MS.N), and high-frequency trading firm GETCO also raised concerns with flashes in letters to the SEC.

Schumer’s letter — which named Direct Edge, Nasdaq and BATS — said the flashes allow exchange members to use “rapid trading programs to trade ahead of those orders and profit from advanced knowledge of buying and selling activity.”

Defenders note that customers can opt out of having their orders flashed, and that the phenomenon is part of overall innovation in increasingly electronic markets where venues battle for market share.

Indeed, the NYSE told the SEC that if it does not clamp down on flashes, the exchange may have to offer a similar service so not to forfeit too much volume to rivals.

William O’Brien, CEO of Direct Edge, said in an interview flashes provide individual traders access to the liquidity they wouldn’t have had in the bygone floor-trading era.

“Dark pools have always existed, whether it was a floor broker’s pad, a specialist’s book, or upstairs trading desk — they’ve just become more automated now,” O’Brien said.

“If you have Congress intervening in micro market structure issues on a discrete basis … that’s going to set a very bad precedent.” (Reporting by Jonathan Spicer; Additional reporting by Thomas Ferraro and John Poirier in Washington; Editing by Andre Grenon, Gary Hill)

Do you trust Wall Street?

Congressman Alan Gray discusses the Federal Reserve lending to foreign countries in the last year with Chairman Bernanke.

The reason people are running to gold is because it isnt paper…it doesnt depend on a bank or a government for it to have value.

There is a reason gold and silver have been money for almost 6000 years of recorded human history. Is it really possible that mankind has become so enlightened in the last 200 years that the accumulated wisdom and experience from the prior 5800 years has become obsolete?

Or maybe is this just hubris?

Here is a little global economy roundup:

Many still think the economy is on the verge of recovery. While the rest of the developing world continues to steam ahead plowing through obstacles, the western world continues to spiral downward. This still does not take into consideration ALT-A and ARM loan resets through 2011.

July 9 (Bloomberg) — The $3.5 trillion commercial real estate market is a ticking “time bomb” that may lead to a second wave of losses at large U.S. banks, congressional Joint Economic Committee Chairwoman Carolyn Maloney said.

About $700 billion in commercial mortgages will need to be refinanced before the end of 2010 and “doing nothing is not an option,” Maloney, a New York Democrat, said at a committee hearing today. This “looming crisis” may lead to significant losses for banks, force shopping center and hotel owners into bankruptcy, and impede economic recovery, she said.

Meanwhile, the rest of the world forges onward.

The IMF  claims Asia cannot decouple from the western world economies and will not continue to grow until the west recovers…this article doesn’t agree. Also….has the head economist of the IMF forgotten that China has almost $2 Trillion in savings that it can spend?

SAN FRANCISCO (MarketWatch) – China wrestled the new-car sales crown from the U.S. through the first half of the year, topping 6 million cars and trucks at a time when the long-time global sales leader grapples with historic declines.

Do you really think the worlds leaders believe all this BS about green shoots? If they did, would they be plowing money into commodities like this? Or maybe is it, that they know that if you print $13.5 Trillion (and growing) you will see massive inflation of real prices, so they are buying while its cheap and using lip service to keep the dollar value from dropping to preserve as much buying power as possible?

BEIJING, July 10 (Reuters) – China’s imports of unwrought copper and semi-finished copper products in June hit an all-time record for a fifth straight month of 475,999 tonnes, from May’s record 422,666 tonnes, data from the General Administration of Customs showed on Friday.

Rats from a sinking ship

More Diversification out of Dollar…Japan has always been one of the biggest supporters of the USD…and now there is public discussion of diversifying out of it…this is very bearish for the USD (and very bullish for gold)…this may be a prelude to a new ‘basket of currencies’ as an index to a new global exchange currency

July 13 (Bloomberg) — Japan’s opposition party, leading in polls ahead of next month’s election, said the nation should consider shifting its $1 trillion of foreign reserves away from the dollar and buying International Monetary Fund bonds.

The next world reserve currency

President Medvedev has called for a gold backed currency over and over. This time, he isnt just calling for it, he is producing examples of it. He handed coins to the leaders of G8 delegations, a proto-type of a potential new global currency…and these coins were pure gold. Any move in this direction would be extremely bullish for gold. Read an article I wrote regarding shifting to a gold back currency to understand why.

July 10 (Bloomberg) — Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”

My colleagues have been right so far, having called the current economic crisis over a decade ago. This video proves it: Millennium Money as it was produced in the mid 90’s.

Our portfolios also reflect the fact that those who listened to us over the last few years are doing quite well right now. Those who did not…maybe not so much.

I will be sending out a ‘Rapid Trends Insider’ email later today with an exclusive chance to listen in on a recent round-table discussion with my colleagues regarding the global supply / demand situation, as well as an interview we did with David Morgan, one of the worlds top recognized silver analysts.

You can join our newsletter here: Rapid Trends Insider

In this article, Mr. Kim goes back through Greenspans famous essay and shows clearly why gold is the only means of counterbalancing what governmental and banking oligarchies do with fiat currency systems.

An excerpt:

Today, due to the proliferation of fragile and confusing financial instruments called derivatives and the fraudulent nature of our fractional reserve banking system, hundreds of billions, and more likely, trillions of more dollars exist than claims on real assets and goods.

The comparable analogy would be if, as an Apple (AAPL) store owner, I sold the same 100 Apple desktop computers to 10,000 clients. As long as no more than 10 of my customers required delivery in any given year, then my business could operate for many years without this fraudulent scheme ever being exposed. However, the instant my clients collectively decided they wanted to take delivery of all 10,000 computers in the same month, my ruse would be exposed and my business sentenced to a fate of bankruptcy.

Almost all of us would agree that this would be an insane way to run a business, yet we readily accept the fact that all major banks in every modern, developed nation run their businesses in this very manner. However, the development of such a situation would be next to impossible with the institution of a true gold standard and this is why Alan Greenspan once made the timeless statement that economic freedom and gold are inseparable.

The full article is here: Gold is the balance to fiat currency

The proper oversight of systems lies with the people themselves not a private banking institution, let alone a private banking institution owned by private interests who benefit from the debasement of a currency supply.

This is exactly the kind of thing that got us into this mess in the first place.

“Some [most] people think the Federal Reserve Banks are U.S. government institutions. They are not … they are private credit monopolies which prey upon the people of the U.S. for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money lenders. The sack of the United States by the Fed is the greatest crime in history. Every effort has been made by the Fed to conceal its powers, but the truth is the Fed has usurped the government. ”

—Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932

Can anyone who has studied this subject say that the SEC and the Fed have actually done a good job at regulating fraud and crime? Ever?

Do you realize that the books of the Federal Reserve have never been audited? The Federal Reserve is essentially above the law as it does not answer to the United States Congress, nor have to report its activities or allow its books to be audited.

Did you know that when asked for information by various members of Congress, duly authorized by the people to do so, that representatives of the Federal Reserve to include Ben Bernanke have simply said “no”, and its perfectly legal for them to do so?

The Feds very existence defies the US Constitution, but the legislation it is written under allows it to operate with total secrecy, even from the people of the United States. Can you imagine what would happen to our banking system if these people were allowed full authority over the core of the banking system, completely above the law, in total secrecy?

“The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”

—The Rothschild brothers of London writing to associates in New York, 1863, laying the groundwork for the eventual passage of their catastrophic Federal Reserve Act on December 23, 1913

This proposal is like searching the prison for the most despicable serial rapist one can find, and then making that person in charge of protecting people from being raped.

The “Federal Reserve” is neither Federal nor does it have reserves. It is not a government institution, and it simply creates money when it needs it. Its very name is a fraud.

If you want proof of this, there are numerous works available publicly by credible sources that shed further light on this. Check out Creature from Jekyll Island by G. Edward Griffin, or google Edwin Vieira. Anyone who has studied this subject in detail already knows this, but if you are just starting your journey into the subject of “how the world REALLY works” then understanding the Fed is a critical piece of the puzzle.

In times of fear people let the government do all sorts of stupid things. People are scared, and I dont imagine we will see anyone trying to stop this, except maybe Ron Paul.

If people fear failure of systems, they will let them get away with this. If you are one who allows it to occur without at least trying to understand it, speaking about it and educating your fellow man, then remember that ultimately people do not get the government they want, they get the government they deserve.

“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

—Henry Ford inventor and founder of the Ford Motor Company.

You have heard me harp on this before, if you dont own gold and silver as this unfolds, you may be very sorry before this is all over.

The article is below. Oh by the way, this news release was put out via Associated Press.

You may find it interesting to know, as I did,  that The House of Rothschild bought Reuters news service in the 1800’s. Within the last 20 years, Reuters bought the Associated Press.

No conflict of interest there, and you can expect completely unbiased reporting with absolutely no agenda. I also have a bridge to sell you, cheap.

***

By ANNE FLAHERTY, Associated Press Writer Anne Flaherty, Associated Press Writer   – 2 hrs 11 mins ago

WASHINGTON – The Federal Reserve could become the supercop for “too big to fail” companies capable of causing another financial meltdown under a proposal being seriously considered by the White House.

The Obama administration told industry officials on Friday that it was leaning toward making such a recommendation, according to officials who attended a private one-hour meeting between President Barack Obama’s economic advisers and representatives from about a dozen banks, hedge funds and other financial groups.

Treasury Secretary Timothy Geithner and other officials made it clear they were not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators. Geithner told the group that one organization needs to be held responsible for monitoring systemwide risk.

“Committees don’t make decisions,” said Geithner, according to one participant.

Officials from the Treasury Department and National Economic Council, which hosted the meeting, told participants that the Fed was considered the most likely candidate for the job, according to several officials who attended or were briefed on the discussions.

The administration officials said a legislative proposal would likely be sent to Capitol Hill in June with the expectation the House Financial Services Committee, led by Rep. Barney Frank, D-Mass., would consider the measure before the Independence Day recess.

The officials requested anonymity because the meeting had not been publicly announced and they were not authorized to discuss it.

A Treasury Department statement provided to The Associated Press on Friday confirmed Geithner’s position that he wants a “single independent regulator with responsibility for systemically important firms and critical payment and settlement systems.”

A spokesman said Geithner also is open to creating a council to “coordinate among the various regulators, including the systemic risk regulator.”

The Fed itself hasn’t taken a position on whether it should have the job, although Chairman Ben Bernanke has said the Fed would have to be involved in any effort to identify and resolve systemwide risk.

Original Article

In this report I cover the current push for a new currency to settle global trade in.

An excerpt:

The worlds governments are scared, confused, and are reluctant to give up their control of your wealth

It is a normal human reaction, when faced with the decline in purchasing power of a fiat currency, to seek a way to stop that buying power from dis-appearing.

There is nothing wrong with this, and it is a completely reasonable reaction. The challenge occurs when someone who is in a decision making role either doesn’t truly understand why the currency is devaluing in the first place, or if they have a motive to continue to devalue it.

Russia and China have proposed to create a global currency linked to a basket of currencies, or the Special Drawing Rights of the IMF.

Hugo Chavez has just floated a proposal to create an international reserve currency linked to the price of oil.

Venezuelan President Hugo Chavez tried Tuesday to court Arab support for another swipe at America as its economy stumbles: a proposal for a new, oil-backed currency to challenge the global prominence of the dollar.
– Associated Press – Tue Mar 31, 2:59 pm ET

World leaders are floundering around in desperate attempts to salvage a global trade system based on fiat currency, and so far they are all terribly wrong.

Out of the Frying Pan and into the Fire

The US Dollar, as the reserve currency of the world, is facing massive devaluation. This isn’t a guess, it’s not a theory, it’s a mathematical equation that any 10 year old can calculate.

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All the best for your health, wealth, and future prosperity,
Alex