Tag Archives: Topic: Monetary Policy

Zero Hedge: As the NYT reports, in just the past two years, the numbers of Greeks engaging in prostitution as a last course source of income has more than doubled: according to the National Center for Social Research, the number of people selling sex has surged 150 percent in the last two years.

“The Freedom From Religion Foundation (FFRF), along with 19 other plaintiffs is suing the U.S. treasury for stamping “In God We Trust” on currency. Honorary FFRF board member, Mike Newdow, is acting as legal counsel in the suit, which was filed in the U.S. District Court for the Southern District of New York on February 1, 2013.”

Rasmussen: Fifty-nine percent (59%), though, say that is no longer possible, up from 55% in late January and the highest level of pessimism in over four years of surveying.

NCPA Policy Digest: A new Reason-Rupe poll reveals Americans’ attitudes about federal spending and the gun debate, among other issues.
The poll finds that 79 percent of Americans believe that government spending has reduced their quality of life (QoL) or made no impact on their quality of life since 1992. Forty percent say QoL has been reduced, 39 percent say government spending has had no impact and just 17 percent feel that federal spending has improved their lives.

Chicago CBS Local: Chicago Mayor Rahm Emanuel is putting more pressure on gun makers to get behind his push for an assault weapons ban and criminal background checks for gun purchasers.

The HIll: The House on Wednesday put new pressure on the Senate to pass its first budget in nearly four years, by approving a bill that threatens to withhold senators’ pay until that work is done.

Ron Paul at The Free Foundation: If governments or central banks really can create wealth simply by creating money, why does poverty exist anywhere on earth?

Law360.com: The federal government has asked the U.S. Supreme Court to weigh in on a Federal Circuit en banc ruling that found congressional efforts to withhold judicial salary adjustments violated the compensation clause of Article III of the U.S. Constitution.

AP: A penny costs more than two cents and a nickel costs more than 11 cents to make and distribute.

CNSNews: House Minority Whip Steny Hoyer (D-Md.) said Tuesday that the debt limit is “not real” and should not be part of any negotiations to avert the fiscal cliff.

NCPA Policy Digest: Brazil, Russia, India, China and South Africa (BRICS) have started to plan their own development bank, as well as a bailout fund to help many countries around the world. This is done in response to the growing dissatisfaction of Western banking institutions like the World Bank and the International Monetary Fund (IMF), says The Diplomat.

Chris Cox and Bill Archer at the Wall Street Journal‘: As Washington wrestles with the roughly $600 billion “fiscal cliff” and the 2013 budget, the far greater fiscal challenge of the U.S. government’s unfunded pension and health-care liabilities remains offstage. The truly important figures would appear on the federal balance sheet—if the government prepared an accurate one. But it hasn’t.

AP: Argentine President Cristina Fernandez faced a nationwide strike on Tuesday, led by the union bosses who used to be her most steadfast supporters.

CNSNews: Treasury Secretary Timothy Geithner said Friday that Congress should stop placing legal limits on the amount of money the government can borrow and effectively lift the debt limit to infinity.

AP: Prosecutors are trying to get God off of Brazilian banknotes.

CNSNews: Senate Majority Leader Harry Reid (D-Nev.) said on Wednesday that if the $16.394 current legal limit on the federal government’s debt must be raised in the next few months by another $2.4 trillion, “We’ll raise it.”

Wall Street Journal: In the final televised presidential debate, Mitt Romney promised that if he is elected on Nov. 6 he will “label China a currency manipulator” on “day one” of his presidency. He also pledged to pay more attention to trade with Latin America, noting that the region’s “economy is almost as big as the economy of China.” To be consistent, Mr. Romney should call out the Federal Reserve on day two for engaging in its own currency manipulation by way of “quantitative easing,” which undermines the value of the dollar relative to Latin American currencies.

NY Times: His name is Bernard von NotHaus, and he is a professed “monetary architect” and a maker of custom coins found guilty last spring of counterfeiting charges for minting and distributing a form of private money called the Liberty Dollar.

AP: Here’s a glance at Europe’s debt levels as a proportion of gross domestic product.

CNBC: “I’ve been in this business a long time and believe me there is essentially no difference from one administration to another no matter what the platforms,” said Paul, a former hopeful for the GOP nomination. “The foreign policy stays the same, the monetary policy stays the same, there’s no proposal for any real cuts and both parties support it.”

AP: The government borrowed about 31 cents of every dollar it spent in 2012. The string of $1 trillion-plus deficits has driven the national debt above $16 trillion. The magnitude of that figure has intensified debate in Congress over spending and taxes but little movement toward compromise.

Bloomberg: The International Monetary Fund cut its global growth forecasts as the euro area’s debt crisis intensifies and warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies.

NY Times: The first outbreak of public anger over Iran’s collapsing currency and other economic maladies jolted the heart of the capital on Wednesday, with the riot police violently clamping down on black-market money changers, hundreds of citizens marching to demand relief and merchants in the sprawling bazaar closing their shops in protest.

Forbes: It doesn’t matter who is elected president in November, the Federal Reserve effectively runs the economy and surely is in charge of the dollar. With QE3 already in the works and some even asking whether or not a QE4 will be needed, one thing is certain: read my lips, there is more dollar weakness ahead and neither Mitt Romney or President Barack Obama can change that.

CNSNews: That was more than all the debt the federal government accumulated between July 4, 1776 when the United States declared independence from England and sometime in October 1942, which was ten months after the Japanese attacked Pearl Harbor and the United States entered World War II.

John Hayward at Human Events: This argument about saving the Fed from “politicization” is made whenever the topic of congressional oversight is broached. Some of Bernanke’s argument sounds self-refuting. If the Fed’s monetary policy is now the only thing saving us from even worse unemployment, how can we continue to treat it as an inscrutable “black box” forever insulated from the people and their representatives? We’re being told that an awfully large component of our economic engine cannot be opened by the end users, without voiding the warranty. As for Bernanke’s argument about low interest rates keeping the deficit down, the thing to remember is that he’s on the verge of losing control over those interest rates, precisely because the world’s investors (and the credit rating agencies they respect) have grown tired of watching American monetary policy used as a straitjacket to contain our insane spending habits.

CNSNews: U.S. government employees and their families have thus far contributed $396,550 to President Barack Obama’s reelection campaign, making them one of the top five sources of cash for the campaign to reelect the president, according to Opensecrets.org.

CNBC: The latest round of extraordinary Federal Reserve stimulus is risky and leaves little room to maneuver should another crisis hit, economist Lawrence Lindsey told CNBC’s “Squawk Box” on Wednesday.

Sean Fieler at the WSJ (via Google): The more than five-fold increase in the median income of the American household since 1971, to $50,000 from $9,000, certainly provides the clear appearance of progress. But after the dollar’s 82% loss of purchasing power over the same period is factored in, the median household income rose just 12%. This much more modest increase is largely the result of the growing prevalence of two-income households . . . The median real income for working men over the same 40-year period rose just 8%. And that improvement only accrued to the ever-shrinking percentage of men fortunate enough to still have full-time jobs—just 67%, according to the latest data from the Bureau of Labor Statistics, within a percentage point of the lowest level on record since the figure was first recorded in 1948.

Wall Street Journal (via Google): Chinese and South Korean central-bank officials criticized the U.S. Federal Reserve’s latest easing efforts and advocated reducing Asia’s dependence on the U.S. dollar. The comments Thursday, at a joint seminar in Beijing by the two central banks, are the clearest indication yet of a rising backlash in Asia against U.S. monetary policy, suggesting it could speed up the search for alternatives to the dollar as the main global currency.

Sun Times: Low-wage workers in Chicago are better educated, older and rely more on that income these days to meet basic needs than 10 years ago.

Ron Paul: Because the interest rate is the price of money, manipulation of interest rates has the same effect in the market for loanable funds as price controls have in markets for goods and services.

NCPA Policy Digest: In the face of slow growth, the Federal Reserve has pursued another round of quantitative easing to help alleviate economic concerns. However, the Fed’s policy is simply a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy, according to Anthony Randazzo, director of economic research at the Reason Foundation.

The Hill: Federal Reserve Chairman Ben Bernanke underlined his concerns about the fiscal cliff in a closed-door meeting with senators Wednesday. The head of the nation’s central bank met privately with members of the Senate Finance Committee, as he continued to make his case to lawmakers that they must adjust policy before the end of the year to avert a fiscal cliff of tax hikes and spending cuts that economists argue could thrust the nation back into a recession.

NCPA Policy Digest: As Americans continue to deal with one of the worst recessions in history, many people are opting out of using banks and instead relying on check cashers and payday lenders. This is problematic because most Americans turn away from banks because they don’t have funds to justify the cost of keeping an account, but the alternative can result in high fees and interest rates, says the Washington Post. A study released this month had several findings about the interactions between people and their banks (or lack thereof).

The Daily Caller reports and embeds video from ABC’s This Week.

CNBC: Ratings firm Egan-Jones cut its credit rating on the U.S. government to “AA-” from “AA,” citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country’s credit quality.

George Will at Human Events: Fortunately, not everything is up to date in Kansas City. Esther George, president of the regional Federal Reserve Bank here, is refreshingly retrograde regarding what less-circumspect people welcome as the modernizing of the nation’s central bank into a central economic planner. She has concerns, both prudential and philosophical, about the transformation of the Fed in ways that erase the distinction between monetary policy, which is the Fed’s proper business, and fiscal policy, which is inherently political.

Human Events: Now the spigot is open — wide open. QE III is here. And the Fed is about to become a campaign issue, whether it likes it or not. Chairman Ben Bernanke announced Thursday that the Fed would spend $40 billion a month on mortgage-backed securities with no set date to end those purchases.

Reuters: The Federal Reserve launched another aggressive stimulus program on Thursday, saying it will buy $40 billion of mortgage-related debt per month until the outlook for jobs improves substantially as long as inflation remains contained.

NY Times: The European Central Bank on Thursday announced a sweeping program for buying the bonds of troubled euro zone countries, giving the bank potentially unprecedented power.

FoxNews (includes video): Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. China, it turns out, holds less than 8 percent of the money our government has borrowed over the years.

Ron Paul: Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency with no restraints placed on it– not even a pretense of gold convertibility! Realizing the world was embarking on something new and mind-boggling, elite money managers, with especially strong support from U.S. authorities, struck an agreement with OPEC in the 1970s to price oil in U.S. dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence backed the dollar with oil. In return, the U.S. promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup. This arrangement helped ignite radical Islamic movements among those who resented our influence in the region.

AP: Many analysts think a third round of bond purchases – QE3 – would include both Treasurys and mortgage-backed securities.

Seth Lipsky at the Wall Street Journal (via Google): In the ferment within today’s Republican Party, there’s a growing realization that America’s system of fiat money is part of the economic problem

NCPA Policy Digest: The persistent inability of the Fed to stimulate aggregate demand makes it difficult to escape the reality that the U.S. economy is stuck in a liquidity trap.

Financial Times: Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar and gold.

The Hill: The Pew Research Center found that median income for the middle class dropped by 5 percent, in the first decade since World War II where family incomes declined across the board. In a decade that saw both recession and a financial crisis, median wealth for the middle class dropped even more sharply, by some 28 percent.

David Skeel at the Wall Street Journal (via Google): No one doubts that the coming election will be the most important referendum on the size and nature of government in a generation. But another issue is nearly as important and has gotten far less attention: our crumbling commitment to the rule of law.

Daily Report Online: Federal Circuit to hear case claiming Congress unconstitutionally withholds judges’ cost-of-living pay adjustments

CNSNews: The money the U.S. government owes to foreign entities rose to a record $5.2923 trillion in June, according to data released by the U.S. Treasury Wednesday afternoon.

AP: A voting member of the Federal Reserve’s policy committee is cautioning that the Fed’s power to fix the U.S. economy is limited now. Jeffrey Lacke . . .

Cong. Ron Paul: As Austrian economist Ludwig von Mises explained, sound money is an instrument that protects our civil liberties against despotic government. Our current monetary system is indeed despotic, and the surest way to correct things simply is to legalize competing currencies.

Daily Caller: Emails obtained by The Daily Caller show that the U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company.

Reuters: Legislation to subject the Federal Reserve’s monetary policy to audits sailed through the U.S. House of Representatives on Wednesday although the measure is expected to die in the Democrat-controlled Senate.

Washington Times: The overwhelming 327-98 vote sends the bill to the Senate where Majority Leader Harry Reid, Nevada Democrat, has previously expressed support for an audit — though it’s unclear he’ll carve out time for the legislation this year.

Newsmax: “It’s the policy of the fed, the destruction of money, the intervention. It’s a system that is very biased against the middle class. It’s been well known that if you destroy a currency, there is a natural transfer of wealth from the middle class to the very wealthy.”

The Hill: Federal Reserve Chairman Ben Bernanke warned Wednesday that an audit bill pushed by Rep. Ron Paul (R-Texas) could create a “nightmare scenario” for the central bank.

Cong. Ron Paul: The true evil of inflation is that newly created money benefits politically favored financial interests, especially banks, on the front end. Over time, however, the net result of monetary inflation is always the devaluation of savings and purchasing power. This devaluation discourages saving, which is the key to capital accumulation and investment in a healthy economy. Inflation also tends to hurt seniors and those living on fixed incomes the most.

Al Arabiya News: Leading executives at global institution Standard Chartered say that Shariah-compliant banks are on track to boast around half of the region’s banking assets by 2020 – on the back of surging growth which has seen the industry expand by 30 per cent in the region in just two years, according to a report on Tuesday.

Religion Clause Blog: As reported by BNA Securities Law Daily [subscription required], the Senate on Thursday passed H.R. 33, the Church Plan Investment Clarification Act (full text).

NY Post: How bad is the US problem? Former Treasury official Lawrence Goodman recently pointed out that investors are shunning US bonds and notes; the lack of other buyers forced the Federal Reserve to buy “a stunning . . . 61 percent of the total net issuance of US government debt” last year.

Washington Times: The yuan and the yen — the currencies of Asia’s two biggest economies — started direct trading Friday in Tokyo and Shanghai. …

CNBC: US and European regulators are essentially forcing banks to buy up their own government’s debt—a move that could end up making the debt crisis even worse, a Citigroup analysis says.

Wall Street Journal (subscription required): With the swearing in of a seventh Federal Reserve board member, the panel is operating at full strength for the first time since 2006, amplifying the activist stamp of President Barack Obama.

Reuters: China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

Washington Post: Dutch lawmaker Geert Wilders says he will file a lawsuit to block the Netherlands from ratifying the permanent European bailout fund.

The Hill: President Obama and House Speaker John Boehner (R-Ohio) clashed during a White House meeting on Wednesday, with the Speaker telling the president that he was “not going to allow a debt ceiling increase without doing something serious about the debt,” Boehner’s office said.

The AP reports.

National Review: The Byzantine Empire’s long run — 1,100 years — may seem remote from the 21st century, but a reading of its history offers at least three timeless lessons. Understanding some of the fatal weaknesses in the Eastern Roman Empire may help clarify the political and economic problems that America faces today and the choices we have in responding to them.

AP: Lawmakers on both sides of the aisle agree: It would be a mistake to let interest rates on student loans double in July. Especially if they’re going to be blamed for it in an election year.

The Hill (video): Krugman, meanwhile, described Paul as “living in the world that was 150 years ago.” “History tells us that in fact a completely unmanaged economy is subject to extreme volatility, subject to extreme downturns. I know this legend that some people like that the Great Depression was somehow caused by the government or the Federal Reserve, but that’s not true. The reality is it was a market economy run amok, which happens repeatedly,” the Nobel Prize winning economist said. That prompted Paul to one-up Krugman, saying the Times columnist “wants to go back 1,000 years or 2,000 years just as the Romans and the Greeks and all other countries debased their currency.”

Daily Campus: In fact, notes Williams, if the annual inflation rate were calculated using the same method with which it was calculated in 1980, it would currently be over 10 percent. Furthermore, I fear inflation may worsen dramatically in the next few years.

CNSNews: Three corporations together received 44 percent of the Export-Import Bank’s $32.7 billion in assistance in 2011 – a total of $13.5 billion in federal financial aid.

Irish Times: With the rate of payment of the charge at about 50 per cent local authorities are facing an unprecedented gap in funding.

BBC: Thousands at Dublin household charge protest