Why Don’t The Elite Want the Fed to be Audited?

CNBC just gave self made billionaire, real estate tycoon (CEO Boston Properties), media mogul (Editor in Chief; U.S. News and World Report, Chairman; New York Daily News) and CFR member Mort Zuckerman, the floor for 8 minutes to talk about the economy and explain why auditing the Fed was a bad idea.

Perhaps CNBC’s agenda today was to discredit Ron Paul’s appearance in the morning where he debated former Fed governor Mishkin and Senator Gregg on his Audit the Fed bill, H.R. 1207 with 317 bipartisan cosponsors and 79% of the People wanting the Fed audited.  The Senate version is S.604.

Since Ron Paul got the best of those two during that morning CNBC interview, perhaps CNBC got some flack by some powerful people and decided to bring on another opponent of the Federal Reserve being audited, the aforementioned Mort Zuckerman.

Zuckerman was telling the CNBC audience that “if the Fed raised rates it would be a disaster for the economy.”  Technically, it would be a disaster for your commercial real estate holdings there Mort, but Mort’s right, it would be a disaster for the economy.

The Fed is stuck between a rock and a hard place.

If the Fed raises interest rates too quickly to support the U.S. Dollar, it will bring the economy to a screeching halt.  Consumers, who have in the past made up 70% of GDP, wouldn’t be able to borrow.  Small businesses and big businesses alike would see their cost of doing business would go up.  But the Fed’s only option if the U.S. Dollar were to break down is to raise interest rates to satisfy their two biggest creditors, China and Japan.

Does Zuckerman Represent the People?

The reality is, Zuckerman and the Fed don’t want you to know is which banks are in trouble so behind the scenes the Fed can secure more time to bailout the troubled institutions.  It’s a good old boys network and the connections are obvious to most.  Just Google Goldman Sachs “bailout” or “bonuses” to get yourself up to date.

There have been over 130 banks that have failed this year and that’s even after the original TARP money that was supposed to go towards “toxic assets” went instead to shore up the banks cash balance sheets.

I remember going into troubled WAMU bank when Chase first said they were going to take them over and overheard a teller doing some soliciting of funds from clients and offering to pay them 6% on a CD.  6%?  In a climate that at most Treasuries were paying 3.5%?  This shows you how hard up these troubled banks really were for cash.

Earth To Zuckerman

Zuckerman though would have you believe Fed interest rate manipulation wasn’t the original cause of the crisis.  Perhaps he should read the book “Meltdown” by Thomas Woods.  While there were other reasons for the bank failures, like lending to any human with a pulse and repackaging those loans to suckers on Wall Street, it was the artificial lowering of interest rates by the Fed that originally spurred on the real estate speculation causing the boom and eventual bust cycle.

Zuckerman Wants the Fed to Get Special Treatment That the SEC Wont Even Give U.S. Corporations

Zuckerman calls the six months lag time in auditing the Fed “a very short time” that would “undermine the independence of the Fed.”

Well Mort, aren’t all corporations in America required to file Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934?  Don’t shareholders of banks have the right to know what’s going on with their bank, especially if it is in trouble and secretly receiving funds from the Fed?   Then why shouldn’t the People of the United States also know what’s going on with the one entity that destroys the purchasing power of the U.S. Dollar?

Zuckerman Believes the Fed Is Our Savior.

Transparency is something that Zuckerman would have you believe is only for others, not for the elite.

Zuckerman wrote an article two days ago for the Financial Times called; “We must safeguard the Fed’s independence.”

He glorifies the Fed for getting us out of the financial mess when in fact it was the Fed that got us into this mess to begin with.  He even goes so far to say;

“The House proposal seeks to have the General Accounting Office audit all Fed operations, including emergency lending, dealings with foreign central banks, aid to major institutions and the Fed’s ability to drive down interest rates by intervening in bond markets.” (emphasis added)

This is exactly why the Fed needs to be audited.  If they were truly trying to prevent unemployment, by following their mandate of full employment, then they would let the free market do what it does best; weed out the bad companies by allowing them to fail and let the good companies prosper without government regulations and interference.  The free market will weed out those companies that don’t perform as expected.   What Zuckerman is afraid of is the Audit the Fed bill will weed out the bad institutions, including the Fed!

Zuckerman goes on to say;

“Markets would reckon that US inflation would lead to higher interest rates. There would be pressure on the dollar, as investors back away from buying Treasury debt. Given the deficit, we are facing a run on the dollar that would be disastrous.”

Thanks Mort, for explaining what is going to happen in our future because of the Fed!

Don’t buy U.S. News and World Report.
Don’t buy the New York Daily News
Audit the Fed and make sure H.R. 1207 is a stand alone bill and not attached to a bill that gives the Fed even more powers.
Call your Senators and request they pass S.604.