Americanly Yours

H.R. 1207 is the Audit the Fed bill that I wrote about earlier.  I wanted to give a quick update on the status of the bill.  This bill now has 165 cosponsors in the House of Representatives, plus the support of its author, Congressman Ron Paul.

If the bill gets 218 cosponsors, it will undoubtedly pass the House, as 218 is over half of the total House members.  Support for this bill is rising.  Please call or email your Congressman to tell them to support this bill.

Senator Bernie Sanders, a self described socialist from Vermont is the sponsor of the Senate version of this bill.  This bill has such a  diverse group of supporters, from the ardently free market capitalist Ron Paul, to the socialist Bernie Sanders.  This bill is a common sense effort at transparency for our central bank.  Our national bank, which has been given the power to print money and set interst rate and banking policies has never been audited in over 95 years of existance.  I see no reason whatsoever to oppose this bill.

Americanly Yours,

Phred Barnet

Please help me promote my site:

Share on Facebook

Become a fan on Facebook

Congressman Ron Paul has proposed an interesting bill in the House of Representatives.  No, it isnt another “crazy” proposal from the Congressman, but rather a very sensible one.

If passed, this bill would require that an audit of the Federal Reserve take place before December of 2010.

The Federal Reserve was established in 1913 and has never been subjected to a government or independent audit.   The Federal Reserve controls the Nation’s money supply and has the power to print new money as it sees fit.  It also controls interest rates, and therefore has a great deal of influence (to say the least) on our economy.

It is also a private corporation, owned by its members–the same large banks who are being blamed for the current financial crisis.

Requiring an audit of this institution is just plain common sense.

I do not see how any sensible, reasonable person could oppose this on any grounds.

This bill now has 112 cosponsors in the House.  The number is growing every day.  This bill is also getting bipartisan support.  One of the cosponsors is California Representative Lynn Woolsey.  She is vice-chairman of the Congressional Progressive Caucus and was the first House of Representatives member to call for withdrawal from Iraq.  Georgia Representative Tom Price, a staunch conservative is also a cosponsor.  This bill also has the support of plenty of other prominent Democrats and Republicans.

I would not be surprised if President Obama threw his support behind this bill.  The President claims to be a very big proponent of transparency.  Supporting this bill would be a great way to prove it.

From Congressman Paul: “Since its inception, the Federal Reserve has operated without sufficient transparency or accountability to the American people. In fact, current law specifically excludes the Fed from audit or real congressional oversight. No government agency has such an utter lack of sunshine.

There is a similar bill now being proposed in the Senate.

Please click here to email and/or call your Senator, Representative, President, and/or Vice President.

With your help, an audit of the Federal Reserve will soon take place.

Americanly Yours,

Phred Barnet

Please help me promote my site:

Share on Facebook

Become a fan on Facebook

I wanted to post this article.  It is a wonderful analysis of what is going on now and where we are going.  It is a very long analysis, complete with charts and graphs.  It was written Wednesday, and warned that the Federal Reserve was going to end up deciding to print money to solve this crisis.  This was somewhat prophetic, because the FED made that exact move later in the day.  However, I suggest that you read it in its entirety–there are great pieces of information and analysis throughout the piece, and especially near the end.

Well, that very day, the federal reserve did this.  The British call this type of action “quantitative easing.”  In plain English, this translates to “expanding the money supply,” or “printing money.”  This move was effectively the FED printing $300 billion.  The article above correctly predicted what would happen–the Fed’s move caused the yield on a 10 year government bond to drop by over .5% (the largest single day drop since 1962) and the value of the US dollar to sink by 3.3% against the Euro.  Of course stocks rose, but they only rose by 2.1%–much less than the drop in the value of the dollar, meaning that investors actually lost purchasing power–even though the markets rallied.

Americanly Yours,

Phred Barnet

Please help me promote my site:

Share on Facebook

Become a fan on Facebook

A few weeks back, several of my friends and I exchanged arguments over email.  I wanted to pull a quote from a response of one of my friends and use it to talk about interest rates.

“. . . TBILLS at the lowest rates ever!  We can print money for nearly no intrest [sic]. . .”

I think that this is a common misconception among people.  Yes, the FED has a target rate of 0-1/4% for the Federal Funds Rate, but this rate is only the rate that banks charge each other for overnight loans.  This is not the rate for US Government bonds which are issued to fund government debt.  In fact, US government bonds have a much higher interest rate than the overnight fed funds rate.  Government bonds are largely traded on the open market which means that they are priced through supply and demand.  The current rate on a 10 year bond (about 3%) can be found here.

We have a large national debt that is growing every day.  Of the money that we owe, our debt to China is over $1,000,000,000,000 [$1 trillion].  To continue to fund ambitious “stimulus” bills, government bailouts, and large social welfare programs like medicare and the coming socialized health care scheme, we will have to continue to borrow funds from American citizens and foreign nations.

As we increase our money supply, our money becomes worth less.  As we increase our borrowing, we have to pay higher interest rates in order to entice countries and private citizens to loan money to us.  Both of these things are happening at the same time, and happening during a global recession.  This leads me to believe that interest rates on government bonds will be rising (if no one wants to loan us money and we want to keep running a deficit, we have to raise interest rates).

We have more than doubled our money supply in the last year!  If you dont believe me, see the chart below, or click here.

But, things dont end there.  China’s Premier, Wen Jiabao recently expressed worry about the value of the dollar.  He said “Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried.”  Apparently, there is even debate within China about whether or not to continue to invest so heavily in American bonds. And of course, this is coming at a time when China is dealing with their own economic problems.  China needs to have high levels of annual economic growth in order to pacify their increasingly restless (and violent) rural populations.

China just announced a stimulus of their own totaling over $500 billion.  The money being spent on that stimulus is money that cannot be loaned to the American government.

One thing that very few people are aware of is that President Obama’s anticipated budgets for his 8 years as president (assuming that he wins a second term) have the national debt doubling to over $20,000,000,000,000 [$20 trillion]!  In order to finance these massive budget deficits, we have to borrow this money from someone.  If China turns off the loans, it is going to be very hard to find the money to continue to fund massive national programs, while fighting two wars and bailing out American industries.  China has us right where they want us… and they know it.

Americanly Yours,

Phred Barnet

Please help me promote my site:

Share on Facebook

Become a fan on Facebook