Archive for June, 2011


Allen West: First Principles for National Security

June 30, 2011
Posted by clinicalthinker @ 17:53 PM


Geithner’s economic rational for raising the debt ceiling exposed

June 29, 2011
Posted by Economics9698 @ 18:02 PM

U. S. Treasury Secretary Timothy Geithner wrote a letter to Colorado Senator Michael Bennet dated May 13, 2011, explaining why the national debt ceiling should be raised from the current limit of $14.3 trillion. Here are few insights into the mind of a oblivious Keynesian economist.

Geithner, “I hope that congress will act in a timely manner to increase the debt limit and protect the full faith and credit of the U.S. government, but I appreciate the opportunity to respond to you about this matter.”

U. S. Treasury Secretary Timothy Geithner


Currently the federal government owes about $9.2 trillion in “hard” debt to the public and foreigners, an additional internal debt owed to various federal agencies, such as Social Security, brings the total debt to$14.4 trillion. This constitutes about 96% of our GDP. If you add state and local debt the number climbs to 115% of the GDP. Add in personal debt and the figure climbs to 223% of GDP. Add in all current U.S. debt owed and the figure jumps to 365.6%. And Mr. Geithner’s solution is to raise the debt ceiling and add more debt?

“As you know, the debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congress and presidents of both parties have made in the past.

Failure to raise the debt limit would force the United States to default on these obligations, such as payments to our service members, citizens, investors, and businesses. This would be an unprecedented event in American history. A default would inflict catastrophic, far reaching damage on our Nation’s economy, significantly reducing growth, and increasing unemployment.”

Geithner continues “A default would call into question, for the first time, the full faith and credit of the U.S. government. As a result, investors in the United States and around the world would be less likely to lend us money in the future.”

First the federal budget is $3.75 trillion. In that $3.75 trillion we would automatically cut off payments to “service members, citizens, investors, and businesses?” What say we concentrate on eliminating waste, fraud, and a few thousand bureaucrats who produce nothing for our economy and cost thousands of jobs? I know Florida District 24 Representative Sandy Adams is up to the task.

President Richard Nixon defaulted on the Bretton Woods agreement in 1971 reneging on our agreement to redeem dollars for gold payments.


Second we have defaulted in the past. It is a myth to we never have defaulted. In 1971 the U.S. federal government under the direction of President Richard Nixon went off the gold standard and told various world bankers the Federal Reserve would renege on the Bretton Woods agreement signed in 1944 that promise to back U.S. dollars with gold.

“And those investors who still choose to purchase Treasury securities would demand much higher interest rates, reflecting the increase risk that we might default on our obligations again.”

Did this actually happen in 1971?

In August 1971 when it was announced by President Nixon that the U. S. would default on its obligation to redeem the dollar for gold under the Bretton Woods system the Federal Funds rate increased from 5.63% to 5.75% from August to September and dropped down to a low of 3.29 in February 1972 and raising back to 5% by the end of 1972.

If the U. S. reorganizes does Geithner think the increase in interest rates would be permanent?

Apparently in 1971 the raise in interest rates lasted all of one month. Investors are not dim-witted idiots as Geithner would have Congress believe.

“Default would not only increase borrowing cost for the Federal government, but also for families, businesses, and local governments – reducing investment and job creation throughout the economy.”

The Federal Funds rate since 2007


Ah one slight problem there Mr. Geithner, the facts. When the “Great Recession” began in Fall 2007 government “investment,” that would be spending to the rest of us, has increased 27.8%. Government “investment” has increased from 2.942 trillion to $3.761 trillion. During that time of “investment” real investment, or to us regular folk, the productive private sector investment has declined 16.7%, from $2.26 trillion to $1.88 trillion.

Is there an inverse relationship?

Almost like the government was “crowding out” private investment. Maybe if the federal government borrowed less there would be more funds for private sector investment?

Commercial Real Estate Loans since 2007. There does not seem to be a correlation between a low Federal Funds rate and actual loans.


Of course there would be. You do not have to be an economist to figure it out.

“Treasury securities set the benchmark interest rate for a wide range of credit products, including mortgages, car loans, student loans, credit cards, business loans, and municipal bonds. Accordingly, an increase in Treasury rates would make it more costly for a family to buy a home, purchase a car, or send a child to college. It would be more expensive for an entrepreneur to borrow money to start a new business or invest in new products and equipment.”

So increasing the federal debt will increase the amount of loans to the private sector?

Not likely to any meaningful degree. It will it keep the federal government in business longer enabling a greater concentration of wealth into the hands of a few powerful men in Washington D.C. addicted to cheap money. “Concentration of wealth” being the key goal.

Federal Reserve Chairman Ben Bernanke


The facts are that with the Federal Funds rate is at 0.08% and the monetary base increased to 18% of the GDP, there is no more room for the Federal Reserve to monetize the debt without severe consequences. The swimming pool is full of water. Any more “liquidity” will spill out over the sides of the pool in the form of inflation or incurring more “hard” debt by selling treasury securities to the public or foreigners further “crowding out” private sector investment with the result being further stagnation and or inflation.

The last quarter of GDP growth in the spring of 2011 was 1.9%. Low interest rates do not seem to be “stimulating” much of anything except the federal government’s appetite for debt.

Artificially low interests rates are having a hugely damaging effect on the economy that will be visible for years. The main beneficiary of low interest rates is the federal government and Federal Reserve. The federal government can march onward financing its big government (currently 25% of the GDP is consumed by the federal government) movement and the privately owned Federal Reserve is bogged down with billions in low interest junk and foreclosed housing paper.

Florida Congressional District 24 Representative Sandy Adams would like a chance to find fraud and waste in the federal budget so our veterans benefits are not jeopardized.


If a local private bank owed billions of 3.5% junk bonds and foreclosed housing assets would that bank want a increase in interest rates making their portfolio worthless? Not likely.

“A default would lead to a sharp decline in household wealth, further harming economic growth. Higher mortgage rates would depress an already fragile housing market, causing home value to fall. Additionally, a default would substantially reduce the value of the investment – including Treasury securities – held in 401(k) accounts and pensions funds, which families depend on for their retirement security. This significant reduction in household wealth would threaten the economic security of all Americans and, together with increased rates, would contribute to a contraction in household spending and investment.”

He certainly has the deflation from cheap money part correct. Will there be pain by doing the right thing?

Yes, there certainly will be the right way and the wrong way.

The facts are from the fall of 2007 the Federal Funds rate has declined from 4.76% to 0.08%. From the peak of May 2009 real estate loans have declined 9.4%. During that time the highest the Federal Funds rate has been is 0.21%. Low interest rates do not seem to be stimulating the housing market.

Bankers have the education and training to know that low interest rates cannot last forever. They see the massive debt incurred. They know it is safer to invest in short-term in T-bills than a 15 or 30-year fixed mortgage at 5% when the possibility of 5% inflation is very possible in the near future. Since February 2011 the CPI is up 3.4%. How good does a 5% loan look to a banker when the inflation rate is 3.4%? A 10% inflation rate would wipe out thousands of banks that made loans at 5%. We would see a repeat of the S&L disaster in the late 1980’s.

The 4.2 million unsold homes on the market have depressed resale housing prices 34% below the new home prices. There are another two million homes in foreclosure not on the market at this time. This creates uncertainty for bankers and frankly scares the hell out of them from making loans. Under these circumstances would you be out there peddling 5% loans for 15 or 30 years?

The combination of inflation fears and the unsold housing stock are the root of the real estate problem not low interest rates. If bankers could raise their interest rates to take into account the additional risk of inflation and the huge inventories of unsold homes they would be more willing to lend money and stimulate the housing market. Housing prices would fall, but because of the housing surplus created by the policies of Greenspan, Bush, Clinton, Carter, Frank, Dodd, and Maxine Waters, and higher interest rates.

Allowing interest rates to rise would create more economic activity as more consumers could obtain loans and purchase housing that fit their budget and needs. Bankers would be more willing to take on additional risk if they were compensated with fair market value interest rates for their risk.

“The unique role of Treasury securities in the global financial system means that the consequences of default would be particularly severe. Treasury securities are a key holding on the balance sheets of virtually every major insurance company, bank, money market fund, and pension fund in the world. They are also widely used as collateral by financial institutions to meet their day-to-day cash flow needs in the short-term financing market.”

So borrowing and monetizing the debt will make these holdings “safer.”

What Geithner is discussing is referred to as “seigniorage.” Seigniorage is a convenient source of revenue for dishonest governments. Basically if a financial firm or individual holds dollars and the value of those dollars decreased relative to gold or other world currencies the government wins.

Did you get that?

If the Federal Reserve gives the federal government a bunch of cash, the federal government spends it on goods and services before inflation occurs, inflation occurs, businesses, firms, households owning the “old” money lose out to the federal government. The federal government has tricked these businesses and bond holders out of their rightful return on investment by creating inflation. This is a hidden form of taxation, some like economist Gary North would refer to it as theft.

The federal government has a huge, $14 trillion dollar huge, vested interest in seeing that all the paper owned by these institutions declines in value. Future inflation is a hidden tax on these U. S. financial instrument holders, suckers to Geithner and his circle of friends.

How is inflation created?

By increasing the money supply. More debt almost guarantees that the money supply will increase. Geithner is either a dishonest crook or another clueless Keynesian economist. I think the former.

To ensure the value of these low interest financial instruments an honest central banker would tell the federal government that no additional deficit financing credit will be extended and the money supply will be scheduled to grow within strict limits in the future designed to maintain the value of the dollar in relation to other world currencies and gold.

Currently Ben Bernanke is at the helm of the Federal Reserve acting more like an irresponsible bartender handing out cash like it is dollar beer night at the pub. Under his tenure the monetary base (reserves and cash) have increased 200% in the last three years. I do not foresee a defense of the value of the dollar anytime soon. Bernanke will more than likely increase holdings of reserves using stealth intermediaries to acquire three to five year notes so as to avoid the publicity nightmare that Quantitative Easing II created. This will further cheapen the value of the dollar and create inflation.

“A default on Treasury debt could lead to concerns about the solvency of the investment funds and financial institutions that hold securities in their portfolios, which could cause a run on money market funds and the broader financial system- similar to what occurred in the wake of the collapse of Lehman Brothers. As the recent financial crisis demonstrated, a severe and sudden blow to confidence in the financial markets can spark a panic that threatens the health of our entire global economy and the jobs of millions of Americans.”
The risk for the global economy is a continued decline in the dollar. When we borrow money and monetize our debt it increases, not decreases, the chances for a world panic as businesses and central banks increasingly divest themselves from the devalued dollar.”

Geithner is right that a dollar collapse would be catastrophic but his remedy of devaluing the dollar with more borrowing is not sound.

China has divested itself of $200 billion of our short-term securities. Japan has suffered a tsunami and the resulting loss of GDP production. Greece is in financial turmoil and Geithner’s solution is to raise the debt ceiling?

What banking book did he learn this from?

Stupid question. Keynes 1936 work the General Theory of Employment, Interest and Money. An English fairy tale that somehow got classified as non-fiction and is taken seriously by the politicians and economist in Washington D.C.

“Even a short-term default could cause irrevocable damage to the American economy. Treasury securities enjoy their unique role in the global financial system precisely because they are viewed as a risk-free asset. Investors have absolute confidence that the United States will meet its debt obligations on time, every time, and in full. The confidence increases demand for Treasurer securities, lowering borrowing cost for the federal government, consumers, and business. Indeed, during the recent crisis, investors flocked to Treasury securities as a safe-haven asset in the midst of a damaging financial panic. A default would call into question the status of Treasury securities as a cornerstone of the financial system, potentially squandering this unique role and economic benefits that come with it.”

Geithner is right that the world currently flocks to the dollar as crisis hits world markets. That is more a reflection on the poor economic policies in Europe than it is on our policies. Geithner seems enthusiastic that he can get more suckers to buy United States securities and the benefits of seigniorage. As these suckers wake up and see their assets devalued by our Federal Reserve and federal government inflationary policies they most certainly will re-examine their view of the dollar as a “cornerstone” currency.

“Moreover, the fact that the United States would not have enough money to meet all of its obligations would have serious economic consequences. If the United States were forced to stop, limit, or delay payment on obligations to which the Nation has already committed-such as military salaries, Social Security and Medicare, tax refunds, contractual payments to business for goods and services, and payments to our investors – there would be a massive and abrupt reduction in federal outlays and aggregate demand. This abrupt contraction would likely push us into a double dip recession.”

Typical Keynesian nonsense. If you take away government spending there will be a “double dip recession.” Would Mr. Geithner like to make a bet on that? Spot me 12 months.

The Keynesians predicted the same scenario after government spending declined drastically after WWII. They predicted the sky would fall and unemployment would skyrocket. What happened?

GDP from 1944 to 1950. The predicted disaster and financial collapse after WWII spending stopped never happened. When the federal spending stopped the economy boomed.


From the end of the war in 1945 to 1946 GDP fell 0.36%. Yes despite a reduction of government spending from 1945 to 1946 of 36.9% the GDP declined less than 1%!

So what happened after WWII?

From 1946 to 1947 federal government spending declined another 15.5% and the GDP increased 9.9%. That does not seem to match up with the Keynesian script very well, or Geithner doomsday forecast.

By 1950 the GDP had increased a staggering 31.7%. Federal government spending did not return to its WWII level in nominal terms until 1957. Accounting for inflation federal spending did not return to WWII levels until 1966. The GDP grew 253% in that time frame.

Call me crazy but give me a double dip recession and years of prosperity.

“It is critically important that Congress act as soon as possible to raise the debt limit so that the full faith and credit of the United States is not called into question. Congress has never failed to raise the debt limit when necessary. I fully expect that Congress will once again take responsible action, and look forward to working with you and your colleagues on this issue in the weeks ahead.

Sincerely,

Timothy Geithner.”

Looking at this mans grammar it is clear he missed his calling in life. He and his hero John Maynard Keynes should have written fairy tales because it is clear the man is clueless as an economist.

The full faith and credit of the United States is in question?

China has already spoken on this matter. They are selling our financial instruments. Our debt will make China the new financial capital of the world, not America. China has the money, the capital, and we have debt. The financial capital of the world will not be New York it will be Beijing in 10 years, maybe five, and Geithner is playing games with the rest of the world trying to squeeze the last few billions out of the suckers still buying our debt.

I do not know when this façade will fall. Some say 2014, some 2018. I think 2012 will be worse than 2011. This financial mess will unravel. An official inflation rate of 5% to 10% would destroy this pretense Geithner is putting up.

Congressman Barney Frank assured the public that Fannie Mae and Freddie Mac were sound investments. Geithner soon will join Frank in the Hall of Shame


Reading this letter is disturbing on so many levels. It is disturbing that Geithner and his Keynesians in the White House and Federal Reserve would believe this garbage. It is disturbing that rational men with billions would believe this gibberish.

I do not believe Geithner, Bernanke, and Washington politicians believe this crap behind closed doors. Washington will sacrifice anything to increase spending and concentrate economic power in the hands of Obama and the Democratic Party. Any overt or hidden tax by inflation will serve their purpose. If millions of investors the world over are hurt, it is the price paid for progress.

Geithner and the other bastard “economist” and politicians know exactly what they are doing. They are concentrating economic wealth in the hands of a few and ripping off millions. History shows that when the hyperinflation comes, 2014 to 2018, the concentration of wealth in the hands of a few will intensify and the possibilities of a tyrannical fascist government like the one in Germany from 1933 to 1945 will be ensured.

Geithner with this letter firmly places himself next to Barney Frank, who assured the public right before the collapse in 2008 that Fannie Mae and Freddie Mac were good investments.

Geithner’s letter is more of the same con game by a dishonest federal government looking for more suckers to rip off. Geithner is a bastard of the first order and should be jailed for the fraud he is committing. The Washington politicians think they will get away with this scam. They are already busted, soon the consequences will follow.


House Republicans Will Stand With The American People

June 29, 2011
Posted by clinicalthinker @ 17:02 PM

Today, President Obama renewed his request to raise the debt limit and continued to press for job-crushing tax hikes instead of larger spending cuts.

But as I’ve said: a tax hike cannot pass the House. It’s off the table. The American people know taxes aren’t the problem – Washington’s spending binge is the problem. And we’re standing with the American people.

There will be no debt limit increase unless it includes spending cuts that are larger than the debt limit increase; includes reforms to hold down spending in the future; and is free from tax hikes. If the president puts forward such a proposal, he has my word the House will act on it. But a measure that fails to meet these standards cannot pass the House.

We have an extraordinary opportunity to do something big for our economy. If we seize this moment, we can deliver an important victory for our country and for the future of our children and grandchildren.

Sincerely,
John Boehner

Spending Cuts Must Exceed Debt Limit Hike Or It Will Cost Jobs

Jun 24, 2011

Washington-

Today, Congressman John Boehner (R-West Chester) released the following column discussing President Obama’s request for an increase in the national debt limit:

“Last November, the American people voted for a new majority in the House and sent us to work with a clear objective: ending the job-crushing spending binge in Washington. The government’s addiction to spending has created even more debt, hurt our economy, and threatens our very way of life. But make no mistake; we have a debt crisis in this country because Washington continuously spends more than we have, not because our taxes are too low. So when the Democrats who run Washington proposed tax hikes as part of an agreement in our negotiations to raise the debt limit, I knew that this meant more problems for our economy and another way Washington would be hindering job creation. This is unacceptable.

“When President Obama requested a debt limit increase I was clear that any agreement would have to include spending cuts that were larger than any increase to the limit and that tax hikes were off the table. The American people will not accept an increase in the debt limit that is accompanied by job-crushing tax increases and fails to dramatically cut and reform government spending. And since January, I have been clear: the new majority in the House will stand with the people.

“The president and his party may want a debt limit increase that includes tax hikes, but such a proposal cannot pass the House. I agree with Stanford economist John B. Taylor when he said, If you look around the globe, the countries that have a simultaneous growth problem, and we have a very bad growth problem, and a budget problem – the recipe for success has been to keep taxes low and then cut spending on transfer programs and government employment. That really is a playbook that the U.S. should run and be much more successful.’

“The president and his party may want a debt limit increase without spending cuts that exceed the amount of the debt limit increase, but such a proposal cannot pass the House. On June 1st, more than 150 economists signed a statement agreeing with House Republicans that any debt limit increase that ‘is not accompanied by significant spending cuts and budget reforms to address our government’s spending addiction will harm private-sector job creation in America.’

“The president and his party may want a debt limit increase without budget reforms that will restrict Washington’s ability to spend in the future, but such a proposal cannot pass the House. Everyone agrees that we cannot continue down this path. Our nation’s debt currently stands at more than $14 trillion, which amounts to a $45,500 ‘birth tax’ for every child born in America this year or $120,500 for every household. The Federal Government is currently borrowing more than 42 cents of every dollar it spends, much of it from the Chinese, and sending the bill to our children and grandchildren. I believe our future generations deserve better and I intend to work toward that brighter future.

“House Republicans understand that a debt limit agreement that raises taxes and fails to rein in out-of-control government spending will not only hurt our economy but further impede much needed job creation across the country. If the president and his allies want the debt limit increased, it is only going to happen via a measure that meets these tests. If the president puts forth such a proposal, he has my word that the House will act on it. But legislation that fails to meet these tests cannot pass the House.

“If the president wants this done, he must lead. We have an extraordinary opportunity to do something big for our economy and for the future of our country. With presidential leadership, we can seize this moment and deliver something important for the people we are lucky enough to serve.

“Boehner represents Ohio’s 8th District, which includes all of Darke, Miami, and Preble counties, most of Butler and Mercer counties, and the northeastern corner of Montgomery County. He was first elected to Congress in 1990.”


Self proclaimed communist Van Jones starts anti-tea-party group.

June 28, 2011
Posted by clinicalthinker @ 10:11 AM

It is no surprise that Van Jones the avowed Communist Revolutionary is spearheading an Anti-Tea Party movement.

Van Jones came to public attention when Glenn Beck outed the self professed communist who appeared to be one of the Barack Obama, Valerie Jarrett darlings for change.

Jones had been appointed by President Obama to a newly created position of Special Advisor for Green Jobs, in March of 2009.

Beck shocked the public with video tape of Jones speaking in front of different organizations which gave a clear picture of his agenda. That agenda was and remains “redistribution of wealth”. Now it is under the guise of “Green Everything”.

This exposure caused Jones to slip out of the White-house in the dead of night after turning in his resignation.

His parting comment was: “They are using lies and distortions to distract and divide.”

What is Jones up to today?

Well a new movement led by this communist revolutionary group founder seeks to counter the tea party while petitioning for a progressive agenda that includes “making Wall Street and the super-rich pay their fair share.”

The organization, dubbed “The American Dream Movement,” is partnered with a slew of radical groups funded by billionaire George Soros.

As WND first reported, the movement was introduced using subversive tactics, particularly a hoax Youtube video in which it appeared the ticker outside News Corporation’s Manhattan headquarters had been hacked and reprogrammed with an anti-Fox News script calling for revolution.

Full details here …


It is time for a full Audit of the Federal Reserve!

June 28, 2011
Posted by clinicalthinker @ 8:52 AM

June 27, 2011

Dear Patriot,

“There is No Risk of an Economic Bubble”

Do you remember the “historically low interest rates” that had been manipulated by the Federal Reserve?

Do you remember the lies that we were fed from government and academia as the Federal Reserve inflated the most horrendous economic bubble since the Great Depression?

Do you remember the idiotic laughter as pundits on both sides of the political divide ridiculed the few people that tried to warn us of our coming economic troubles?

Do you remember the propaganda that we were asked to swallow as incompetent members of Congress allowed the Federal Reserve to march our country towards an economic crash?

Barney Frank in 2005: What Housing Bubble?

“The Biggest One-Day Loss in American History”

Do you remember the record bankruptcies and credit card defaults? Do you remember the sweeping layoffs as companies across the country axed thousands of employees day after day?

Do you remember how millions of people lost their homes and watched their retirement funds evaporate?

Do you remember how suited ex-banksters snaked their way into powerful bureaucratic positions so that they could scheme for taxpayer-funded favors?

Do you remember how they fear-mongered in backroom deals about the imposition of martial law if Congress didn’t vote for the bailouts?

Do you remember how the stock markets continually jerked and crashed as politicians hand-picked politically connected companies to bailout while other companies drowned?

Do you remember how people across the country stepped forward in protest to rebel against the bailouts?

Do you remember the millions of calls into the offices of Congress to tell them we stood in unison against this extortion of middle class Americans?

Do you remember how Congress ignored us?

“U.S. Taxpayers Bailout Bankers to the Cost of $700 Billion”

Do you remember cringing at the headlines as the rich ex-bankers successfully lobbied for the bailouts of their rich banker buddies with your personal credit card? Do you remember how billions of dollars went to the executives of failed banks?

Do you remember how the federal government snatched up banks and auto-makers as if we were caught in some twisted chapter of Atlas Shrugged?

Do you remember how the same people that demanded that we bailout these billionaire bankers, would not tell us who received the $2 trillion dollars in emergency loans from U.S. taxpayers?

Ben Bernanke: “I don’t know who received the money”

The Federal Reserve has continually denied responsibility for creating the bubble that has consumed the last ten years of American economic prosperity and has destroyed the livelihoods of millions of Americans.

Despite being probed by the few members of congress who had the courage to press the issue, the Federal Reserve has quietly dodged every Congressional attempt to acquire information about how it has manipulated the economy or to whom it has shoveled trillions of dollars.

Americans understand that this is a scam. When Congressman Ron Paul introduced a bill to audit the Federal Reserve, the American public rallied behind the initiative.

When the public spoke out against the shady and unaccountable practices of the Federal reserve, the audit bill secured 317 co-sponsors in the House of Representatives and 32 co-sponsors in the Senate.

However, this unprecedented call for oversight did not go unchallenged.

Congressman Mel Watt – whose district encompasses the corporate headquarters of Bank of America – attempted to torpedo our efforts for more accountability by replacing the language of the bill with his own toothless language.

When the Campaign for Liberty sent out the alert about Mel Watt’s attempt to undermine our audit efforts, Americans responded and his treachery was voted down with a huge bi-partisan majority.

By the time the Senate took action on the bill, the Federal Reserve had actually hired its own lobbyist and was fiercely resisting every attempt to tear down its veil of secrecy.

Unfortunately, Senator Bernie Sanders–who had introduced the bill in the Senate–caved under the pressure of the Federal Reserve lobbyists and the Obama Administration by significantly watering down the language of the bill.

Despite having most of the language of the bill watered down or removed, what the public began to learn was astounding.

What was the Federal Reserve up to? Where was the money going?

It was going to middle-eastern dictators and billionaire housewives.

The small bit of audit language that remained intact in the bill uncovered that the Federal Reserve had provided at least 46 low-interest loans to the Arab Banking Corporation, of which the Central Bank of Libya owns a majority stake.

Totaling more than $26 billion, these loans shifted capital from the job markets of our country to the government and banking system under Libyan dictator Muammar Gaddafi.

Yes, the same Muammar Gaddafi that has recently been condemned for turning his military against his own people.

It was also found that $220 million was given directly to Christy Mack, wife of the chairman of Morgan Stanley, and to Susan Karches, the widow of the former president of Morgan Stanley’s investment banking division.

Under the agreement for the “loans,” Mack and Karches can keep all of the profits on their investments while the Treasury and the Federal Reserve would have to absorb 90% of all losses on the investments.

This has nothing to do with protecting our economy or creating jobs. This is political wrangling and corporate welfare at the expense of the American taxpayer.

This insanity has to end. For too long the Federal Reserve has manipulated our economy to disastrous results without oversight. For too long the Federal Reserve has shuffled taxpayer dollars in dangerous political games without transparency.

It is time for a full Audit of the Federal Reserve.

Congressman Ron Paul has reintroduced the bill for a full audit of the Federal Reserve. This time he has a partner in the Senate who won’t stab us in the back when the Federal Reserve and the Obama Administration start pulling strings.

Congressman Paul’s son, Senator Rand Paul, has introduced companion legislation in the senate and has pledged to continue to help us drive this vital issue forward.

We already have huge momentum on this issue as 159 members of the House and 6 Senators have co-sponsored this bill. Can you help mobilize Congress behind this issue?

Please contact your legislators today if they have not already become co-sponsors of “Audit the Fed.” When we last pushed for transparency we proved that the winds of change are in our favor. Only with your help will we finally be able to tear down the walls of secrecy surrounding the Federal Reserve.

For Liberty,

Debbie McKee
Texas State Coordinator
Virginia Campaign for Liberty