More Power for the Fed as the Central Bank Cooks the Books

Mercury news is reporting Administration calls for giving Fed more powers .
Treasury Secretary Henry Paulson says the government must move quickly to give the Federal Reserve more powers to regulate the financial system. Paulson said today that the central bank's powers should be expanded in the wake of the near collapse earlier this year of Bear Stearns, the giant Wall Street investment firm.

He said there was a need to consider quickly how to give the Fed the power it needs to obtain information from investment banks and the responsibility to intervene to protect the overall financial system. His comments were provided by the Treasury Department as excerpts from a speech he was to give later in the day.

Fed At Fault

This is of course as disgusting as it was predictable. It is all in accordance with the Fed Uncertainty Principle .

Uncertainty Principle Corollary Number Two: The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Notice the need to move "quickly". The reason to move quickly in this case is that Bush's days are numbered. Our next president, Obama, may very well have different ideas about what role the Fed should play. My position is clear: Want To Fix The Fed? Get Rid Of It .

Fed Is Cooking The Books

Please consider Fed's Bear Stearns Books Look Prime for Cooking .

Flip through the footnotes to the Fed's latest annual report, and you'll come across an open secret. The Fed doesn't follow normal accounting rules, as promulgated by any of the major standard-setting boards. Rather, the Fed writes its own, in a document called the Financial Accounting Manual for Federal Reserve Banks.

If you ever wanted to design an accounting regime to help a bank cook its books, the Fed's would be perfect. This doesn't exactly inspire faith in the U.S. financial system, at a time when a good example might help a lot.

Imagine if there were no rules specifying when a bank must bring an Enron-style special-purpose entity onto its own balance sheet. The Fed's accounting manual has none. Now picture an accounting system where a bank never had to recognize losses on any securities it holds, as long as it continues holding them. That, too, is the Fed's policy.

JP Morgan Chase & Co., which completed its purchase of Bear Stearns this month, will lend the Delaware entity $1 billion and absorb the first $1 billion of any losses. The Fed is on the hook for the rest. The central bank has hired an outside company, Black Rock Inc., to manage the sale of the assets over the next 10 years. The proceeds will go back to the Fed and then, if anything is left over, to JP Morgan after the Fed is paid.

If the Fed were a normal bank, it probably would have to put the Delaware special-purpose entity's assets and liabilities on its own balance sheet, under the Financial Accounting Standards Board's rules. The reason is that the Fed will bear most of the risk of losses. Under the Fed's 161-page accounting manual, however, there's no such requirement. That's because the manual doesn't have any rules on the subject. The Fed hasn't said yet what it will do.

Are we in a banking crisis? You bet we are, the worst one since the great depression. And the root cause of that crisis is the Fed's micro management of interest rates in conjunction with Bush wasting trillions of dollars we do not have in a senseless and in my opinion illegal war in Iraq, and Congress (both parties) that have no sense of fiscal responsibility.

Now instead of eliminating the problem, the screams are getting louder and louder to expand the powers of those causing the problem.

Ron Paul would fix this in a flash. It would be painful, but it would be short and painful. Giving the Fed more powers is guaranteed to do one thing: make the recovery process long and painful and worse.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Bam Bam Bam and be Healed in the Name of Jesus

Most fundamental christian churches are nothing more than watered down religion to serve the denominations business and wealth or serve to make wealthy a non- denominational pastor. They emotionally brow beat and dumb down their parishioner's into submission to brainwash them into the "only way to heaven and the only way to a good life". But now we have found a pastor-healer that physically beats his parishioners into submission and people sit around in his sermons and laugh with him. WTF

More crazy religion out of the US. The real Deal is Here, Watch this mess... Click here.

THE REAL REASON FOR ANIMAL IDENTIFICATION

Derry Brownfield
July 6, 2006
NewsWithViews.com

I try to instill in my listeners (the Derry Brownfield Radio Show) on a daily basis that the United States is no longer a sovereign nation. Practically everything that happens here, be it the Patriot Act -- National ID -- Sustainable Communities -- Gun Control -- or a host of other programs and projects that destroy our God-given freedom is happening in Australia. The European Union, New Zealand and in most of the free world. It is because these nations are linked together in a global economic ambush, by global corporations, the World Bank and the World Trade Organization. Animal identification is being forced upon us because of documents our officials have signed tying us to certain international alliances.

Doreen Hannes (animalwaitress@yahoo.com) has written a white paper proving that Animal Identification was spawned by international entanglements. This article will quote some of the highlights of her paper.

The players involved in the National Identification System (NAIS) are varied. The world Trade Organization (WTO) reached an agreement among participating countries several years ago in Uruguay called the Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) agreements. The SPS agrees that each member country can make regulations that must be met by other member countries in order to TRADE IN AGRICULTURAL GOODS with each other. These regulations must be in the interest of the country making the regulations to protect that country from disease, pests, or perceived health dangers. The TBT says developed countries must help less developed countries advance technologically in order to trade with other member countries.

The OIE is a World Animal Health Organization similar to our USDA but on a global basis. The OIE is independent of the United Nations but works closely with the Food and Agriculture Organization (FAO) and Codex Alimentarius, both of which are tied to the United Nations. Codex may be compared to our Food and Drug Administration (FDA) on a global basis. The United States has membership in both the OIE and the UN which puts us under the control of Codex. The OIE has authority over all member nations' veterinary services. The OIE has a publication available on line called the Terrestrial Animal Health Standards commission (TAHSC) which contains information regarding (traceability product tracing and Codex standards).

Page 41 of the TAHSC states there is a critical relationship between animal identification and the traceability of animal products. Animal Identification and traceability are key tools for animal health and food safety. TAHSC relates to vaccination programs, herd and flock management, zoning, surveillance, early response, and animal movement and health measures in order to facilitate trade. A quote from page 41, "the competent Authority in partnership with relevant government agencies and the private sector should establish a legal framework for the IMPLEMENTATION AND ENFORCEMENT OF ANIMAL IDENTIFICATION AND ANIMAL TRACEABILITY in the country." The European Union declares that their animal identification requirements are in line with both Codex and the OIE.

Remember - the United States has signed documents with these member nations so we also are a member. As a member we must harmonize if we are to trade in agricultural goods. What if the United States refuses to implement a program of Animal Identification? World Trade Organization documents regarding the SPS and the TBT recommend disputes be mediated by the OIE or Codex.

It is plain and simple - this dictate is coming directly from the OIE - (world animal health organization) which is an off-shoot of the United Nation's Food and Agricultural Organization, and since the United States has signed documents creating membership in these foreign alliances, the US is obligated to create an Animal Identification program.

This is exactly what George Washington warned us against in 1796 when he gave his farewell address. Washington told us to "STEER CLEAR OF PERMANENT ALLIANCES WITH ANY PORTION OF THE FOREIGN WORLD." Thomas Jefferson stated during his 1801 Inaugural address, "ENTANGLING ALLIANCES WITH NONE." Our national leaders have forgotten American History and have us so entangled in foreign alliances that the noose is tightening around our economic neck and choking the life out of our sovereignty.



Doreen writes, "It is abundantly clear that through these international entanglements our officials are both legislating and regulating our God=Given and constitutionally guaranteed rights away in the name of international trade and globalization. These officials have agreed to implement a plan that is destructive to our nation's existence as well as our freedom to feed ourselves without intense surveillance. Is our freedom for sale in the global market? Is selling beef to Japan important enough to throw our Constitution and our children's future into the trash can? Can we not support ourselves agriculturally with the excellent controls we already have in place?"



© 2006 Derry Brownfield - All Rights Reserved