Big Ben is no Hero

I have to say I don't really like him, I think he's doing way more harm than good.

Roy when writing this article, it came several times in my mind to write Obama Sin Laden. Probably unintentionally, but close to reality about what is happening now. Skyscrapers as the world trade center flown down with three thousands dead, or this fake recovery because of irresponsible manipulations bringing hundreds of millions of people in despair. Very bad or even worse indeed! I'm baffled that's why I keep writing about today's economic happenings.

Justified and serene feeling amyjudd. I would like that many more people would have such a bright intuition:).

Roy mentioned a site to me where I read the following correct comment:

"What this country needs is a Fed Chairman that is immensely unpopular, backed by a courageous President. Under Paul Volcker and Ronald Reagan, this model proved effective at avoiding a complete economic collapse in the early 1980's. In case posterity's resounding approval has clouded anyone's memory, Volcker was vilified and threatened with impeachment at the height of that crisis. Reagan's decision to stand behind Volcker allowed the Chairman to persevere. It has never been popular to be responsible. Only after the markets settled and the country experienced twenty years of prosperity was history's final judgment made about Volcker."

The Federal Reserve has made a $14 billion profit on loan programmes that have provided hundreds of billions of dollars in liquidity to the financial system since the start of the crisis two years ago, according to FED officials. The internal estimate is based on the difference between the fees and interest on the lending facilities and the interest the FED would have earned had it invested the funds in three-month Treasury bills.

The central bank earned about $19 billion in income from charging interest and fees to financial institutions and investors that tapped the new facilities to obtain much-needed funds during the turmoil. The interest the FED would have earned by investing the same amount in T-bills was an estimated $5 billion, leaving a $14 billion gain since August 2007.

Critics have warned the central bank might lose money on its vast efforts to avoid financial collapse and ease financing conditions for the economy as a whole. But the internal estimates suggest that the FED might well make a cash profit on the crisis. They show that the fees earned on the loans were high enough to more than cover defaults to date – leaving a sizeable cushion against future losses on these loans and other parts of the FED portfolio.

Some politicians have criticized the FED for using billions of dollars of public funds to support the market and stricken groups such as AIG and Bear Stearns. The FED’s balance sheet has ballooned from $800 billion in 2007 to about $2 trillion.

The Federal Reserve Chairman, currently Ben Bernanke, controls the money supply for the entire world. President Obama disagrees. As such, he wants to give the FED even more power.

news.yahoo.com (2009/05/09): The Federal Reserve could become the super cop 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 system wide risk.

So, now not only does the FED control the WORLD'S MONEY SUPPLY, but it will be there to measure "systemic risk" of the entire financial system (this is on top of their duties of regulating the banking industry). Keep in mind that the Federal Reserve chairperson is SELECTED not ELECTED, and as such, the chairperson is answerable only to the President. Of course, since most Presidents aren't nearly as financially astute as the FED Chairmen, in reality, they are answerable to no one.