Comments on: Ben Bernanke's Greatest Challenge

Fed Chairman Discusses Recession, Financial Rescues And Recovery In Wide-Ranging 60 Minutes Interview

[rook17]

Let me clear some things about the Fed. The Federal Reserve is a NON-PROFIT GOVERNMENT ENTITY. The reason that companies like AIG are allowed to be so big is because there are NO REGULATIONS to stop them. From this it is possible to see how GOVERNMENT REGULATION AND INTERVENTION must occur in order to stop companies like AIG from becoming such monumental giants that our economy is so dependent upon. It is true that the Fed is partly responsible for this crisis by keeping interest rates too low for a period of time. These low rates caused more people to go out and borrow lots of money when they shouldn't have been. BUT IT IS NOT CORRECT, OR LOGICAL, TO SAY IT IS ENTIRELY THE FED'S FAULT. It is the fault of many contributing factors. Private companies and banks made out SUBPRIME LOANS (loans to people that WERE NOT QUALIFIED FOR THE LOANS, hence the term "subprime") when they should not have made the loans, and it resulted in an enormous crash that we are witnessing today. I hope this helps clear up a few questions some people may be having trouble understanding.

[Ludwig_Von_Mises]

For those of you who are unfamiliar with terms like "hard money", "high-time preference", "Business Cycle Theory", I suggest you visit my website: www.Mises.org - There you can read my books "Human Action" and "Theory of Money & Credit" among others.

The website offers a university quality education in economics from many of the finest scholars in the field. There are archived seminars, speeches, papers and commentary all designed to help both the layperson and the professional gain a better understanding of this vital area of knowledge.

[t_barr]

I can't wait to see the FED audited as soon as H.R. 1207 is passed.
www.govtrack.us/congress/billtext.xpd?bill=h111-1207

H. R. 1207 will remove the following Audit restrictions;
Audits of the Federal Reserve Board and Federal reserve banks may not include-
(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection.

That's right, Congress is not authorized to Audit any of the Above.
Contact Your Representative and demand they pass H. R. 1207!

[ubrew12]

In this crisis the central bank has so far flooded credit markets and financial institutions with trillions of dollars in new liquidity and loan guarantees, which may help to stabilize credit markets. But the Fed has been unable to engineer what the economy desperately needs--renewed lending to companies and consumers that can finance renewed growth. The confused purpose of monetary policy stands in the way. The Fed could not restrain credit expansion when it was exploding, and now it cannot stimulate credit expansion when it is frozen: even though this is the original purpose of the Fed.

The Federal Reserve has failed in its most essential function: to serve as the balance wheel that keeps economic cycles from going too far. It is supposed to be a moderating force in American capitalism on the upside AND on the downside, the role popularly described as 'leaning against the wind.' The Fed's job, a former chairman once joked, is 'to take away the punch bowl just when the party gets going.'

The Fed needs to first purchase a variety of sound financial instruments from the lending institutions and create an interest-free account that would be posted as a 'liability' on the institutions' balance sheets--an obligation owed to the Fed. In order to balance this liability against the loss of income-earning assets on their books, the banks and other firms would have to use the Fed-injected money to make new loans to companies and consumers or to other banks. Either way, the Fed injection would spur lending and help unlock the paralysis in credit markets.

In this arrangement, the Fed would remain in control, because all these transactions would be covered by a repurchase agreement requiring the bank to buy back what it sold to the Fed, on a fixed date and at the same price. The Fed could demand its money back or renew the repurchase contract at its choosing (a standard practice in Fed open-market operations). Thus, if the bank does nothing with its newly injected funds to create loans and generate more income, it will be in trouble when the repurchase contract comes due. The Fed is likewise inhibited from buying worthless junk from banks because that would ruin its balance sheet, the base for the money supply. Instead of earning risk-free income by holding idle reserves, the banking industry would abruptly feel the lash of the central bank's policy decisions--open up your wallets and start lending to more borrowers, or face consequences down the road.

[sndkzyaa]

why is that you have not paid any attention at all to what these people have said? Why do you choose to pay attention to frauds like Krugman and Romer who are now surprised by what has happened when others were frantically warning you of what was ahead? Posted by Ludwig_Von_Mises at 8:06 PM : Mar 15, 2009

Now that I've been on this planet for almost half a century, I have observed one thing over and over again.

It's that those who sound the alarm are generally dismissed as alarmists.

And even when they turn out to be absolutely correct, still nobody listens to them.

The wold loves somebody who tells them to spend all their money on beer, cigarettes, and gambling, and don't give a thought for tomorrow.

People like Greenspan and Bernanke don't get where they are by being stupid.

But they know when it's better to get there by pretending to be stupid.

It's all show business to them. They build their fortress, then they take the wrecking ball to the rest of the world when it suits their career ambitions.

[khiquita]

What kind of Joke is 60 Minutes trying to pull on the American public....
We are sick and tired of being fed this kind of misinformation. Ben Bernanke is a fraud, and so is the so called "federal serve banks, system, and act"

The Federal Reserve is A Privately Held Corporation. And guess who owns 60% stock...Great Britian!
ARTICLE 1, SECTION 8 OF THE CONSTITUTION STATES THAT CONGRESS SHALL HAVE THE POWER TO COIN (CREATE) MONEY AND REGULATE THE VALUE THEREOF.
IN 1935 THE SUPREME COURT RULED THAT CONGRESS CANNOT CONSTITUTIONALLY DELEGATE ITS POWER TO ANOTHER GROUP. (Reference 22, P. 168)
Rothschild, a London Banker, wrote a letter saying "It (Central Bank ) gives the National Bank almost complete control of national finance. The few who understand the system will either be so interested in its profits, or so dependent on its favours, that there will be no opposition from that class... The great body of the people, mentally incapable of comprehending, will bear its burden without complaint, and perhaps without even suspecting that the system is inimical (contrary) to their interests." [The bankers created the legislation for the FED]
In 1913, before the Senate Banking and Currency Committee, Mr. Alexander stated: "But the whole scheme of a Federal Reserve Bank with its commercial-paper basis is an impractical, cumbersome machinery, is simply a cover, to find a way to secure the privilege of issuing money and to evade payment of as much tax upon circulation as possible, and then control the issue and maintain, instead of reduce, interest rates. It is a system that, if inaugurated, will prove to the advantage of the few and the detriment of the people of the United States. It will mean continued shortage of actual money and further extension of credits; for when there is a lack of real money people have to borrow credit to their cost."
Dear American:
Pursuant to your request, I will attempt to clear up questions you have about the Federal Reserve Bank (FED). I spent much time researching the FED and these are the shocking and revealing conclusions.
THE FEDERAL RESERVE BANK IS A PRIVATE COMPANY.
Article 1, Section 8 of the Constitution states that Congress shall have the power to coin (create) money and regulate the value thereof. Today however, the FED, which is a privately owned company, controls and profits by printing money through the Treasury, and regulating its value.
How did it happen? After previous attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President. He had committed to sign this act. In 1913, a Senator, Nelson Aldrich, maternal grandfather to the Rockefellers, pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation (Reference 3, 4, 5). When elected, Wilson passed the FED. Later, Wilson remorsefully replied (referring to the FED), "I have unwittingly ruined my country" (Reference 17, P. 31).
Educated yourself 60 minutes..you have been completely irresponsbile in reporting a lie.

[jt_lancer]

Pay no attention to that man behind the curtain!

[jbrider]

http://video.google.com/videoplay?docid=7886780711843120756

[sndkzyaa]

I'm sure Greenspan saw the snowball coming and that is why he decided to get out of the way, I meant retire.
Posted by Spanish-Springs at 8:00 PM : Mar 15, 2009

Yes, and then he gave us all the finger with his "I didn't understand how the world works" speech.

[cat2u]

What a sad quote, and now we are reaping the results of President Wilson's folly.