Most of my classes in school I was able to stay awake in. I may not have learned anything, I may not have paid attention, but I stayed awake. The exception to the rule was economics. Sadly most Americans seem to have snoozed through economics and if I was a conspiracy theorist I might see some black helicopters behind this. No one who understands economics could be tricked into supporting socialism or wealth redistribution as answers to the problems of society. If knowledge is power most of us are pretty weak when it comes to defending capitalism, let alone understanding the financial system and how the Federal Reserve system works. Perhaps of all the appointments that a president must make the chairman of the Federal Reserve is among the most important.
Here is a link to read the Feral Reserve act of 12/23/13 : http://www.historycentral.com/documents/federalreserve.html
I have read it and am somewhat more educated yet to be honest I am still no expert. Here is a summary that fits my understanding or the purpose of the FED:
The primary motivation for creating the Federal Reserve System was to address banking panics.[3] Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States United States
§ To strike a balance between private interests of banks and the centralized responsibility of government
§ To supervise and regulate banking institutions
§ To protect the credit rights of consumers
§ To manage the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of
§ maximum employment
§ moderate long-term interest rates
§ To provide financial services to depository institutions, the U.S.
§ To facilitate the exchange of payments among regions
§ To respond to local liquidity needs
§ To strengthen U.S.
Originally the power of the Reserve was somewhat limited at least in the role of expanding and contracting the money supply as we were on a precious medal standard, which has been first fractionalized and finally done away with all together in 1970 by the Nixon administration. Therefore to oversimplify an extremely complex issue the job of the Federal Reserve is to protect the stability of the currency. In the end an American dollar is only as valuable as the monetary policy that prints it. Under the current print and spend policies the paper dollar is literally destined to become less valuable than the paper upon which it is printed. All of the Republican candidates share a disagreement with how the Obama- Bermake policy is de-valuing our currency. Here are some of their views.
Newt Gingrich:.
Let's start with the Federal Reserve.
The
operations of the Federal Reserve have an extraordinary impact over our everyday lives.
The Fed influences how much money is circulating in the economy, the value of the dollar, and what we pay to borrow from banks in the form of interest rates.
Since the enactment of legislation in 1978 known as the Humphrey-Hawkins Act, the Fed has had a dual mandate: maximum employment and stable prices. These two goals are incompatible.
As a part of a thorough reappraisal of the role of the Federal Reserve System, Congress should immediately narrow the focus of the Fed to the sole goal of stable prices.
Senator Bob Corker may have said it best when he described the Fed as having today a “bipolar mandate.”
This means that the same policies that the Fed uses to encourage job and economic growth are also the mechanisms that most dangerously weaken the value of the dollar by promoting inflation.
For example, the Fed might increase the money supply substantially in the belief that such monetary expansion will spark economic growth.
But a Fed that floods the economy with new dollars in an attempt to stimulate economic growth and new jobs is a Fed that decreases the value of every dollar in every American’s pocket through higher inflation, making every American poorer.
Look at what has already happened. Today we have a dollar that is stunningly weaker than it used to be, and the price of everything from gasoline to groceries is steadily drifting upward.
A dollar in 2011 only buys what 76 cents did in 2000. The Euro and Dollar were at parity in January 2000 – today, the Dollar only buys 70 Euro cents. That’s right: Even as the Greek economy crumbles, threatening a domino effect across southern Europe , the Euro is still worth nearly 150 percent of the dollar.
Historically low interest rates made possible by Fed policies over the past decade fueled an inflationary housing bubble. Home prices exploded due in part to the availability of cheap credit only to collapse disastrously in 2006 and 2007.
As a result, the average American’s home is worth no more than it was a decade ago.
The Fed’s dual mandate also negatively affects job creation. To put it briefly, we will never be able to achieve sustainable long-term job creation in this country if the Fed continues to artificially affect the level of interest rates.
Artificial interest rates distort investment decisions all across the economy, resulting in a misallocation of productive resources that cannot be sustained over the long term. Eventually, artificially low rates lead to an economic bust and widespread job losses. Only when interest rates are no longer manipulated can businesses and entrepreneurs determine the right investments that can in turn lead to sustainable job creation throughout the economy.
*****
During the 2008 financial crisis, the powers of the Federal Reserve took center stage.
In the heat of the crisis, the Fed made thousands of emergency loans to banks and other large institutions for reasons that are not entirely clear. These loans totaled at least three trillion dollars.
At the time, all of this money was lent out with complete secrecy, with no oversight from our elected representatives in Congress.
We are only beginning to learn about the true nature and scope of the lending. What we are discovering is shocking and infuriating.
If that were not bad enough, Federal Reserve Chairman Bernanke then spent the next two years fighting to make sure the American people did not know who actually received any of this money.
Now, thanks in part to a tenacious effort by Bloomberg and the Fox Business Channel, along with committed legislators, the Fed has begrudgingly made two rounds of disclosures about who got the money and how much between 2007 and 2010.
The truth is shocking.
For example, between 2008 and 2010, the Fed extended dozens of loans, totaling at least five billion dollars, to the Arab Banking Corporation.
A major shareholder of the Arab Banking Corporation is the Central Bank of Libya
Other examples show that while the Treasury was bailing out the American auto industry, the Fed was busy purchasing securities from foreign competitors, including German firms BMW and Volkswagen, and Japanese firms Toyota
It is a fact that the Fed also purchased hundreds of billions of dollars worth of securities from foreign banks, including Germany Switzerland
And during this time the Fed extended billions of dollars in commercial credit to American corporate giants, such as General Electric, Verizon, Caterpillar, and McDonalds, in late 2008 and early 2009.
With so much activity going on behind the closed doors of the Federal Reserve in Washington New York
We should never again have to go to court and beg to find out what actions the politicians and bureaucrats are doing that risk depreciating the dollar and exposing the taxpayer to enormous losses.
It is our right to know now who got the money and why.
A few bold measures by Congress and media outlets have begun to shed light on exactly what happened during the crisis, but we deserve the whole story.
A comprehensive audit of the Federal Reserve and a narrowing of its statutory mandate should only be the beginning of reassessing the role of the Federal Reserve.
Decisions by unelected and largely unaccountable Federal Reserve bureaucrats naturally leave Americans feeling outraged and helpless, especially when these decisions have as a consequence the debasing of our currency and the bailing out of favored interests.
Unfortunately, this idea that we would want a dramatically more limited Federal Reserve is not very popular in Washington
And let me say in this regard that there is no elected official who has done a greater job of bringing to public attention the very serious problems raised by the operations of the Federal Reserve than Texas Congressman and presidential candidate Ron Paul.
We all owe him a debt of gratitude for focusing our attention on the very real erosion of American freedom and prosperity caused by the actions of the Federal Reserve.
Recently I had the opportunity to question Federal Reserve Chairman Ben Bernanke when he appeared before the congressional Joint Economic committee. The topic that morning was the state of the American economy, and many of my colleagues raised questions about how the Fed might better "regulate" things to ease fears of an economic downturn. The tenor of my colleagues' questions suggested that Mr. Bernanke's job is nothing less than to run the U.S.
Certainly it's true that Mr. Bernanke can drastically affect the economy at the drop of a hat, simply by making decisions about the money supply and interest rates. But why do members of Congress assume this is good? Why do we accept without objection that a small group of people on the Federal Reserve Board wields so much power over our economic well-being? Is centralized, monopoly control over our money even compatible with a supposedly free-market economy?
Few Americans give much thought to the Federal Reserve System or monetary policy in general. But even as they strive to earn a living, and hopefully save or invest for the future, Congress and the Federal Reserve Bank are working insidiously against them. Day by day, every dollar you have is being devalued.
The greatest threat facing America America
The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement.
The financial press sometimes criticizes Federal Reserve policy, but the validity of the fiat system itself is never challenged. Both political parties want the Fed to print more money, either to support social spending or military adventurism. Politicians want the printing presses to run faster and create more credit, so that the economy will be healed like magic — or so they believe.
Fiat dollars allow us to live beyond our means, but only for so long. History shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic and political structure becomes unstable. Spendthrift politicians may love a system that generates more and more money for their special interest projects, but the rest of us have good reason to be concerned about our monetary system and the future value of our dollars.
Ron Paul is the Mark Reynolds of Republican politics. The Orioles 3b/1b tends to either strike out or hit it out of the park, on the Fed Paul hits a grand slam. Here is a link that gives the text of his bill to have the Comptroller of the US
Rick Perry: He has won favour with the Tea Party movement and among other fiscal conservatives with his strong opposition to Barack Obama's stimulus strategy. Addressing a political rally in Iowa Texas
Perry said that would amount to little more than an attempt to buy support at next year's election, at a huge cost to the country.
"If this guy prints more money between now and the election, I dunno what y'all would do to him in Iowa Texas
He went on to accuse Obama of an economic strategy that endangered America
Herman Cain: While inexperience is a key liability to Cain, on this matter he is more experienced than any other candidate. He served on the board of the Federal Reserve Bank of Kansas City
Here also is an article about Cain’s time at the KC Fed which offers insight into Cain’s administrative style and a little about his policies there.
Michelle Bachmann: Congresswoman Bachmann is a strong supporter of auditing the Federal Reserve Bank. She co-sponsored the legislation to audit the Fed and spoke out about the need for the public to know the actions of the organization and the extent of it's movement into the economy.
In February of 2009, Congresswoman Bachmann spoke out against $8 trillion in lending and guarantee programs enacted in 2008 by the Fed and the FDIC. She stated that while she understand the need for emergency response tools, she was concerned that the Fed's discount window provision is so broad and unaccountable that it has the potential to really harm the taxpayers over the long run.
In March of 2009, Congresswoman Bachmann sent a letter to Federal Reserve chairman Ben Bernanke asking for transparency in the 11 lending facilities implemented under the Fed’s existing discount window authorities. These programs did not require a vote from Congress to authorize the use of taxpayer dollars to finance them.
During a Presidential debate in September of 2011, Congresswoman Bachmann stated that no only did the Federal Reserve need to be audited, it need to be shrunk down and put on a leash. From http://www.thepoliticalguide.com/rep_bios.php?rep_id=54464227&category=views&id=20110425133756
I find it amazing that at no time in its history (98 years) has the Fed ever been audited, this is either insanity or something far worse and no one should argue about the need for accountability
Rick Santorum:
Senator Santorum has stated that he supports an audit of the Federal Reserve Bank, but that he does not support ending the Fed. He supports returning the Fed to a single mandate of controlling inflation.
In June of 2011, Senator Santorum appeared on the Glenn Beck show and stated that he supported returning the Federal Reserve to one purpose - controlling inflation.
In the Iowa Presidential Debate and in the TEA Party debate, Senator Santorum stated that he would support an audit of the Federal Reserve.
Mitt Romney: Mitt Romney, who just formed a presidential exploratory committee, told Larry Kudlow tonight, when asked about the Fed:
I think Ben Bernanke is a student of monetary policy; he's doing as good a job as he thinks he can do.
When Kudlow followed up by asking what kind of job Bernanke is doing, Romney replied:
I'm not going to spend my time going after Ben Bernanke. I'm not going to spend my time focusing on the Federal Reserve.
And there you have it, despite the economy going thorough one of its worst periods because of Federal Reserve manipulations of interest rates and the money supply. And despite the fact that we are on the verge of a huge new bout of price inflation, Romney is not going to focus on this.
Once again we have an issue where the Republicans have a very strong field. I included a long section of the Gingrich speech because it gives the most detail as to his position and plan and hence I would place Gingrich as the strongest candidate on this issue. Ron Paul has been the pioneer on this. At one time he was in favor of a complete return to a gold standard but now has backed of that a little. I like Perry’s fire; Bachmann Cain and Santorum are also strong. Mitt doesn’t seem to believe that altering the course of the Fed is a priority and once again does not take a very strong conservative view.
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