Tag Archive for ‘Federal Reserve’
The decades-long campaign of Ron Paul to have the Government Accountability Office do a full audit of the Federal Reserve now has 313 sponsors in the House.
Sometimes perseverance does pay off.
The Federal Reserve is handing out money to banks deemed “too large to fail” without knowing how much funding will be required and how long it will take for them to be restored (or to fail). The regulators would be wise to consider the experience of the state of Texas, which went through a very severe recession, accompanied by a collapse of banking, in the 1980’s.
Thomas Jefferson has left us an account of a supper-table conversation in the very earliest days of the U.S. government. Vice President John Adams declaimed at length about the virtues of the British government, which, he said, if purged of its corruption, would be perfection. Secretary of the Treasury Alexander Hamilton differed sharply. It was its corruption, he avowed, that gave the British government its great stability and power. Add in Jefferson’s views, which agreed with neither, and you anticipate almost the whole history of American political economy.
The Federal Reserve says that its purchase of $1 trillion in existing bonds is part of its plan to revive the economy. Another way to view the Fed’s announcement is to see it as a pre-emptive rescue. Is the Fed rescuing banks from their bond portfolios prior to the destruction of bond prices by inflation?