You know, I just friggin love a good mystery. I always have. And one of the things I love most about Daily Kos is how much I learn here, day in and day out about how our Democracy works. For instance, I had no idea until recently that our Congress is not allowed to audit the Federal Reserve.
I assumed that Congress had 'oversight' over the money supply in our country, but after reading the outstanding article written my Matt Taibbi, The Big Takeover - I was astounded to read about: The Accounting and Auditing Act of 1950, which prevents the Federal Reserve from being audited by Congress in section 31, USC 714(b).
My new favorite person in Congress is Rep. Alan Grayson (D-Florida) because he is not taking no for an answer, and apparently did not get the 'memo' that Ben Bernanke and the Federal Reserve answers to NO ONE.
Oh goodness. How dare him question the 'smarmy little powers that be'...how dare him try to find out what has happened to two trillion dollars of our tax-payer money.....how dare him question the Great Oz!!!!!
It reminds me when Dorothy dared to try to get into see the great Wizard of Oz:
Guardian of the Emerald City Gates: [gasps] The Wizard? But nobody can see the Great Oz! Nobody's ever seen the Great Oz! Even I've never seen him!
Dorothy: Well, then how do you know there is one?
Yes, that's how I think Alan Grayson feels. I think he wants to know 'who in the hell are these people at the Federal Reserve, and what he hell are they doing with our money?' Good question. A better question is since the Federal Reserve controls our money supply, and we now know how Alan Greenspan manipulated the interest rates (18 times) to create the Real Estate bubble, that crashed the world's economy and made Wall Street rich beyond their wildest dreams, is why are we as a country allowing the head of the Federal Reserve to dictate (as in Dick-tater) our financial future without any real meaningful oversight? Who the hell are these people?
Alan Grayson is on it big time:
Gotta love someone like Grayson who actually takes his job seriously. It makes me wonder why Barney Frank isn't asking these same questions. Here's how some of this is playing out:
None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.
Stevens isn't the only person in Congress to be given the finger by the Fed. In January, when Rep. Alan Grayson of Florida asked Federal Reserve vice chairman Donald Kohn where all the money went — only $1.2 trillion had vanished by then — Kohn gave Grayson a classic eye roll, saying he would be "very hesitant" to name names because it might discourage banks from taking the money.
"Has that ever happened?" Grayson asked. "Have people ever said, 'We will not take your $100 billion because people will find out about it?'"
"Well, we said we would not publish the names of the borrowers, so we have no test of that," Kohn answered, visibly annoyed with Grayson's meddling.
Grayson pressed on, demanding to know on what terms the Fed was lending the money. Presumably it was buying assets and making loans, but no one knew how it was pricing those assets — in other words, no one knew what kind of deal it was striking on behalf of taxpayers. So when Grayson asked if the purchased assets were "marked to market" — a methodology that assigns a concrete value to assets, based on the market rate on the day they are traded — Kohn answered, mysteriously, "The ones that have market values are marked to market." The implication was that the Fed was purchasing derivatives like credit swaps or other instruments that were basically impossible to value objectively — paying real money for God knows what."Well, how much of them don't have market values?" asked Grayson. "How much of them are worthless?"
"None are worthless," Kohn snapped.
"Then why don't you mark them to market?" Grayson demanded.
"Well," Kohn sighed, "we are marking the ones to market that have market values."In essence, the Fed was telling Congress to lay off and let the experts handle things. "It's like buying a car in a used-car lot without opening the hood, and saying, 'I think it's fine,'" says Dan Fuss, an analyst with the investment firm Loomis Sayles. "The salesman says, 'Don't worry about it. Trust me.' It'll probably get us out of the lot, but how much farther? None of us knows."When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. "We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion," says Sen. Bernie Sanders. "It is beyond comprehension."
Count Sanders among those who don't buy the argument that Wall Street firms shouldn't have to face being outed as recipients of public funds, that making this information public might cause investors to panic and dump their holdings in these firms. "I guess if we made that public, they'd go on strike or something," he muses.
And the Fed isn't the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn't — particularly the first $350 billion given out under Bush appointee Hank Paulson.
The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded — and this isn't a joke — by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.
"Do you believe that?" she says incredulously. "That's not what we had in mind."
http://www.rollingstone.com/...
LMAO. 'That's not what we had in mind.' Yeah Elizabeth, I don't think that's what ANY OF US HAD IN MIND, but if there is a silver lining about the financial meltdown, it is that we are all getting a first class education on how the markets are in fact being manipulated by the Federal Reserve (who answers to NO ONE), and the fact that the Federal Reserve is more powerful than Congress or the Presidency.
Who knew? Yesterday, my new favorite 'Ceiling Cat' questioned the individual who is supposed to be 'overseeing' the Federal Reserve. Her name is Elizabeth Coleman, and of course, it comes as no surprise to me that the Federal Reserve appointed her (kind of like how AIG appointed their own 'oversight' organization...same difference...fake regulation at it's best).
What is Elizabeth Coleman's job you ask? Well the IG's Web site proudly declares that her office "conducts independent and objective audits, inspections, evaluations, investigations, and other reviews related to programs and operations of the Board of Governors of the Federal Reserve System." Her title is: Federal Inspector General.
Coleman could not tell Grayson what kind of losses the Fed has so far suffered on its $2 trillion portfolio, which has greatly expanded since September. She appeared unaware that the Fed engages in trillions of dollars in off-balance-sheet exchanges.
She did not know where the Fed has invested its $2 trillion on the liability side of the balance sheet. "I do not know. We have not looked at that specific area at this particular point on," she said.
"We do not have jurisdiction to directly go out and audit reserve bank activities specifically."
http://www.huffingtonpost.com/...
I must warn you before you watch this video. I could not believe what I was watching. I thought, what in the fuck does this person do? How much money does she make? Finally I figured out that she has a 'fake job'...but I'll let you decide. Once again Rep. Alan Grayson hits the nail right on the head.
So.........let me get this straight: she says she does not have jurisdiction to directly go out and audit reserve bank activities specifically, but here job description says: "conducts independent and objective audits, inspections, evaluations, investigations, and other reviews related to programs and operations of the Board of Governors of the Federal Reserve System."
Ok. Got it. Back to square one. No one questions the Wizard of Oz. No how, no way, never. Except my new favorite 'Ceiling Cat', Rep. Alan Grayson. I love it when someone is actually you know, doing their fucking job in Congress.
I love to read the diaries on Kos by bondad, Jerome Paris, NBDunn, and bobswerve (hope I got everyone's name right, please forgive me if I did not). I've learned and continue to learn a great deal about how our government works, and my question to all of your today, is this:
What would our government look like without the Federal Reserve, who apparently, controls our money supply, and thereby for better or worse manipulates how our markets work, ergo, our entire economy. I'm not a 'conspiracy person' or a closet Ron Paul person....I am a lifetime loyal Democrat who worked for President Obama to get him elected. I love my President, period.
Having said that, I would really like to have an open, honest and civil debate with my fellow Kossacks on what our government would look like, without the 'middle man' (who answers to no one...let's remember that...and cannot be audited (The Accounting and Auditing Act of 1950, which prevents the Federal Reserve from being audited by Congress in section 31, USC 714(b)) .
So, what would our government look like without the Federal Reserve? What would happen if we took back the control of our own money supply? Why do we need the Federal Reserve?
Thanks for your interest, and thank you Rep. Alan Grayson for being 'Ceiling Cat'...glad someone is questioning the Great Oz.
I lift my glass to you Alan...chin chin.
UPDATE: I decided to change the title of my diary, because I really wanted an open and honest debate about the Federal Reserve. The former title was: Alan Grayson is Ceiling Cat !!!.....
Plus I'm adding a poll. Shit, I really wanted to find out what people think on this subject. After all, it's only the most important thing going on: Our Money and the Economy. Oh well.