As central banks around the world unleashed a coordinated deluge of new money to deal with the economic crisis swamping Europe, critics expressed outrage that the Federal Reserve System — and all holders of U.S. dollars by extension — would be bailing out profligate European governments and the troubled euro currency. And furious American lawmakers are again demanding congressional oversight of the Fed and a restoration of sound money.
On November 30, the Fed announced in a press release that it was cutting the cost of temporary dollar liquidity swaps almost in half. The rate was slashed from about one percent to slightly over 0.5 percent, making it much cheaper for foreign central banks and the financial institutions they fund to borrow a practically unlimited supply of newly created U.S. dollars.
The news was met with outrage by Congressman Ron Paul, whose subcommittee deals with monetary policy and the central bank. Paul is once again calling for, among other measures, an audit of the Fed and the eventual restoration of honest money.
“The Fed's latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed,” said Rep. Ron Paul (R-Texas), the Chairman of the House Domestic Monetary Policy and Technology Subcommittee. “Under current law Congress cannot examine these types of agreements.”
Cato Institute senior fellow Jim Powell wrote in Forbes magazine about the inevitable and predictable decline of rich nations that debauched their currencies in order to pay their bills. Powell said that politicians’ urge to promise and then to spend is almost overwhelming, calling it “a visceral urge to spend money they don’t have. They can’t control themselves. They’ll weasel their way around any efforts to put the lid on the cookie jar.”
The Roman Empire was on a gold standard, minting and using the aureus from the 3rd century B.C. until the 4th century A.D. The aureus initially contained 10.9 grams of gold, which was worth about 25 denarii, or about a month’s wages. As the empire devolved into promising more and more services (grain subsidies, public entertainment, and a huge bureaucracy and military establishment) it soon exceeded revenues generated through taxation. To make up for the difference, the aureus was steadily debased so that by 50 B.C. it contained 9.09 grams of gold, 8.18 grams by 46 B.C., 7.27 grams by 60 A.D., 6.55 grams by 214 A.D., 5.45 grams by the year 292, 4.54 grams in 312, and 3.29 grams by 367.
Paper money was more easily debased, as the Chinese discovered. Powell noted that seven different Chinese dynasties issued paper money to pay their bills and all of them eventually collapsed or were defeated by others that issued their own paper currency.
Responding to a new analysis published Monday, the White House denied charges that President Obama's "official business" trips (paid with taxpayer money) to presidential swing states were actually for campaign events. White House officials suggested that the study overlooks the fact that Obama "expanded the political map dramatically" in 2008, which created a notable spike in the number of battleground states.
According to the Wall Street Journal, which published the exposé, when the President jets to Scranton, Pennsylvania, on Wednesday to promote his jobs agenda ("official business") — including a renewal of a payroll tax cut — he will log his 56th event in a swing state this year, vaulting him well ahead of President George W. Bush’s record-breaking swing-state campaign drive in 2003. Obama’s excessive campaign politicking has been a magnet for Republican criticism, as conservative politicians and pundits criticize the President for exerting more effort toward his 2012 reelection campaign than toward working to fix the nation’s high unemployment and stagnant economic growth.
The Federal Reserve Bank and five other central banks across the world cut the "temporary U.S. dollar liquidity swap arrangements" rate for central bank borrowing nearly in half, from just over 1.00 percent to a bit more than 0.50 percent, according to a November 30 Federal Reserve Bank press release. Stock and commodities markets rallied all day with the news, with the Dow Jones Industrial Index gaining 490 points on the day.
The swap rate is the interest rate the Federal Reserve charges foreign central banks to borrow dollars from the Fed. A lower interest rate makes it easier for European and Japanese central banks to go further into debt.
"The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity," the Federal Reserve claimed. In plain English, that means the central banks' answer to the European debt crisis is to make it much easier to borrow more money and get deeper into debt. That's a bit like a bunch of doctors agreeing that the solution to the pain in a patient's eye is to push the ice pick further into his eye.
The European Central Bank and the national central banks of Canada, Switzerland, Japan, and the U.K. also lowered their swap rates. This will have the effect of burgeoning the money supply, meaning existing money will purchase less and less goods for an equal price — inflation.
“New Company Policy: We Are Not Hiring Until Obama Is Gone.” Those words are plastered across every truck owned by U.S. Cranes LLC of Waco, Georgia — not as a threat but as a recognition of the fact that, as owner Bill Looman told ABC News, “overregulation and the cost of complying with federal mandates has [sic] caused many of his customers to shut their doors.” As a result, he has been forced to lay off three of his nine employees.
“I’ve got people that I want to hire now, but I just can’t afford it,” Looman, whose company operates cranes at construction sites, told Atlanta’s WXIA-TV. “And I don’t foresee that I’ll be able to afford it unless some things change in D.C.”
“The way the economy’s running, and the way my business has been hampered by the economy, and the policies of the people in power, I felt that it was necessary to voice my opinion, and predict that I wouldn’t be able to do any hiring,” he added.
His chosen method of voicing his opinion was to place his “not hiring” message on his company’s trucks and post photos of the signs on his personal Facebook page about six months ago. Until recently, the response was overwhelmingly positive (although he did receive a perfunctory visit from the Secret Service after someone reported him to the FBI as a threat to national security). Then last week “one of the photos went viral on the Internet,” according to WXIA; and that is when all the controversy began.
Despite the best efforts of the Occupy Wall Street protesters to sabotage Black Friday Christmas shopping, the National Retail Federation reported that shoppers spent a whopping $52 billion over the weekend after Thanksgiving. OWS had hoped to launch protests that would stop the frenzy of consumerism, but alas, the lure of spending prevailed.
New work rules from the Department of Labor will end most teens' farm jobs.
“The only solution is World Revolution” So declares occupywallst.org, the “official” website of the Occupy Wall Street (OWS) movement. The website’s heading for November 23 reads: “Occupy Wall Street — NYC Protest for World Revolution”
And right below that is the OWS logo, the communist clenched fist symbol alongside the blaring declaration, “OccupyWallStreet — the revolution continues worldwide!”
Revolution. Lots of talk about revolution amongst the OWS demonstrators and the websites, blogs, publications, and media networks that support them. But what is it they are actually calling for? “Revolution” is one of those words that have many meanings. Congressman Ron Paul’s presidential campaign uses the term but with decidedly different intentions and objectives in mind than the bulk of the OWS protesters. Dr. Paul’s “revolution,” for instance, calls for abolishing the Federal Reserve System, as well as Fannie Mae and Freddie Mac — for starters. The Fed, Fannie, and Freddie are three of the institutions most responsible for the housing bubble/mortgage meltdown, the bailouts, and the transfer of hundreds of billions of dollars to Wall Street insiders at Goldman Sachs, JPMorgan Chase, AIG, Citibank, Morgan Stanley, Bank of America, Wells Fargo, et al.
The Fed, Fannie, and Freddie are not capitalist institutions; they are socialist, fascist, Marxist institutions. The Fed is a central bank with virtual monopoly control of credit, as called for by Karl Marx in the The Communist Manifesto (plank number five in his ten-plank program).
UPDATE: The House passed H.R. 3094, which would amend the NLRB's new unionization elections rule, by 235-188.
When Venezuelan President Hugo Chavez announced last Tuesday the imposition of new price controls on a long list of consumer items, he expressed optimism that they would help curb inflation. This is a law to protect the people from capitalism. We have a tough battle ahead [because] inflation is one of the biggest problems we have.
I’m at the front of this operation, and we’re going to occupy factories and companies. We’re going to nationalize what needs to be nationalized. The bourgeoisie hoard milk, sugar and cooking oil and then [they] blame me. But it’s their fault, the hoarders.
The citizens were smarter than Chavez. Having lived under a regime enforcing price controls on cooking oil and sugar with its natural and predictable resulting shortages, they looked at the list of household items about to be “fixed” and went shopping before the items disappeared. Evangelina Guerra, standing in line to get into the Dulcinea market in Caracas, said, “This is more regulation on top of regulation, and what we have is sky-high inflation and a lack of products.” In fact, cars were parked two rows deep and even onto the sidewalk in front of the store. Shelves normally full of toothpaste, soap, and toilet paper were being cleaned out faster than stockers could replenish them.