Ex FED Chief alter ego…

In a recently declassified lot of FED papers from a top secret cache, a batch of very old photographs were discovered, which -after scrutiny- leave no doubt about its previous Chairman’s true origins…

***

 

Orlandini doesn’t mince his words when it comes to the credit crisis

Here’s a very enlightening excerpt from Enrico Orlandini’s weekly missive, “Dow Theory Analysis”, regarding the credit crisis:

“..For those of you who haven’t figured it out yet, the credit crisis and resulting bail outs had nothing to do with concern for the general public.

Two ex-Goldman Sachs men, the Treasury Secretary Henry Paulson and then President of the New York Federal Reserve Bank Timmy Geithner, got together and figured out a way to consolidate Goldman’s power and rid them of the competition at the same time.

They waited until early March of this year when things looked dismal and, in a blaze of cell phone calls between Geithner and Goldman (twenty-one in one day) it was decided that Lehman Brothers and Merrill would disappear, and Goldman would take over the lucrative parts of their business. Bear Stearns was already gone, so Goldman would be the power house and Morgan would get a bone or two thrown its way.

The failure of Lehman was the key though, as it forced Congress to commit to TARP money that would eventually fill Goldman’s coffers. Lehman drew the short stick even though they all were more or less equally leveraged.

Both the Fed and Treasury now clear everything through Goldman, allowing them to make trading profits on 89 out of 92 days in the third quarter, a phenomenal accomplishment to say the least. You, of course, paid for all of this, you have little or no knowledge of it, and you’re not going to receive a single benefit. Your taxes will be raised, you may lose your job, the currency you earn is worth less every day, and they may come and foreclose on your house. How do you like them apples?..”

 

Declassified 1975 Fed memo explains need for gold price manipulation!

The Zero Hedge Internet site has unearthed another U.S. government memorandum from the not-so-distant past expressing the intent of the government to rig the gold price in a nominally free market and detailing the need for and methods of doing so. It’s a memo written in 1975 by the chairman of the Federal Reserve Board, Arthur Burns. It’s headlined “Exclusive Smoking Gun: The Fed on Gold Manipulation,” and you can read about it HERE

You can read the real Macoy below in glorious scribd ipaper format:

View this document on Scribd

 

GATA: Fed admits hiding gold swap arrangements

Dear Friend of GATA and Gold:

The Federal Reserve System has disclosed to GATA that it has gold swap arrangements with foreign banks that it does not want the public to know about.

The disclosure contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.

The Fed’s disclosure came this week in a letter to GATA’s Washington-area lawyer, William J Olson of Vienna, Virginia (http://www.lawandfreedom.com/), denying GATA’s administrative appeal of a freedom-of-information request to the Fed for information about gold swaps, transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks. (See the International Monetary Fund’s treatise on gold swaps here: http://www.imf.org/external/bopage/pdf/99-10.pdf.)

The letter, dated September 17 and written by Federal Reserve Board member Kevin M. Warsh (see http://www.federalreserve.gov/aboutthefed/bios/board/warsh.htm), formerly a member of the President’s Working Group on Financial Markets, detailed the Fed’s position that the gold swap records sought by GATA are exempt from disclosure under the U.S. Freedom of Information Act.

Warsh wrote in part: “In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”

When, in 2001, GATA discovered a reference to gold swaps in the minutes of the January 31-February 1, 1995, meeting of the Federal Reserve’s Federal Open Market Committee and pressed the Fed, through two U.S. senators, for an explanation, Fed Chairman Alan Greenspan denied that the Fed was involved in gold swaps in any way. Greenspan also produced a memorandum written by the Fed official who had been quoted about gold swaps in the FOMC minutes, FOMC General Counsel J. Virgil Mattingly, in which Mattingly denied making any such comments. (See http://www.gata.org/node/1181.)

The Fed’s September 17 letter to GATA confirming that the Fed has gold swap arrangements can be found here:

http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf

While the letter is far from the first official admission of central bank scheming to suppress the price of gold (for documentation of some of these admissions, see http://www.gata.org/node/6242 and http://www.gata.org/node/7096), it comes at a sensitive time in the currency and gold markets. The U.S. dollar is showing unprecedented weakness, the gold price is showing unprecedented strength, Western European central banks appear to be withdrawing from gold sales and leasing, and the International Monetary Fund is being pressed to take the lead in the gold price suppression scheme by selling gold from its own supposed reserves in the guise of providing financial support for poor nations.

GATA will seek to bring a lawsuit in federal court to appeal the Fed’s denial of our freedom-of-information request. While this will require many thousands of dollars, the Fed’s admission that it aims to conceal documentation of its gold swap arrangements establishes that such a lawsuit would have a distinct target and not be just a fishing expedition.

In pursuit of such a lawsuit and its general objective of liberating the precious metals markets and making them fair and transparent, GATA again asks for your financial support and that of all gold and silver mining companies that are not at the mercy of market-manipulating governments and banks. GATA is recognized by the U.S. Internal Revenue Service as a non-profit educational and civil rights organization and contributions to it are federally tax-exempt in the United States. For information on donating to GATA, please visit here:

http://www.gata.org/node/16

You can also help GATA by bringing this dispatch to the attention of financial news organizations and urging them to investigate the Fed’s involvement in gold swaps particularly and the gold (and silver) price suppression schemes generally.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

 

Richard Russell: Fed will do anything to keep gold down

By Richard Russell

Dow Theory Letters

http://ww2.dowtheoryletters.com/

Wednesday, September 9, 2009

As the great Bob Dylan song goes, “There’s a battle outside, and it’s raging, it will soon shake your windows and rattle your walls, for the times are a’changin’.”

The battle is obvious — it’s the primary forces of overproduction and deflation vs. the Fed’s obsession (“whatever it takes”) to fight deflation and to produce asset inflation.

The one signal for rising inflation that the world understands is rising gold. The central banks do not want to see the gold signal, which tells the world that inflation is in command.

What the Fed really wants is asset inflation in housing. Housing is collateral for almost everything in the nation, and the Fed and Treasury are frantic to get housing prices heading higher.

Yesterday most assets got the message. Oil was higher, the base metals were higher, the stock market was higher, but gold (pressured by forces we know not from where) failed to close at the highly significant number of $1,000 an ounce or better. Incredibly, after being as high as $1,009 during yesterday’s session, gold closed at $999.80 — just 20 cents below $1,000.

Coincidence? Mistake? Random chance?

Hardly. To me it was obvious that the Fed did not want to see the following headline in the newspapers: “Gold closes above $1,000.”

Whatever it takes, it seems, will be utilized to hold the only constitutional money down.

When a can is placed on a stove burner, the pressure builds up inside the can. At some point, we know not exactly when, the can will explode and the pressure will be released. That, I believe, is where gold is.

You can threaten gold with forthcoming central bank sales. You can sell gold in quantity. You can smother gold with short sales. But the primary trend of gold will win out. It will be expressed today, in a month, or in 2010. The trick for us is to hold onto our position — don’t trade it, don’t move in and out with it, don’t hold so much of it that you get the heebie jeebies every time it dips $10.

The primary trend of gold is up. We’re riding the bull. The bull will try to shake us off his back. We’ll hang on.

The word is that China wants to load up on gold while diversifying out of its huge position in dollar-denominated securities (T-bonds). China’s problem is how to accumulate gold secretly without driving the price up. This has led to what is now called “the China gold put.” Every time gold backs off, China is in there to scoop up what is offered.

On top of that, China is urging its over-1 billion population to buy gold and silver.

Finally, China is now the world’s biggest miner of gold. China, in its patient way, is preparing for the future. The future that China sees is a world without fiat currency or a world in which its own renminbi is the world’s reserve currency.

* * *

Chrys N.B. … got Gold..?

 

Orlandini: We’re heading into a long, cold and grim winter…

What follows is taken from Enrico Orlandini’s latest weekly missive: The Next Shoe to Fall ( in Dow Theory Analysis) and although it doesn’t paint quite a very pretty picture of things to come, it just hopefully might nudge some of you out there from your slumber into a sober awakening!..

Funny thing is, it also ties in rather nicelly with the latest Mises.org daily article called The Trouble with Democracy (which you can read HERE)

***

“… So that’s the long and the short of it. We are heading into a long, cold winter and we are all naked in the sun. As long as it’s warm we feel great and life goes on, but once the temperature drops we’re all in trouble. The problem is that no one sees, or wants to see, what’s coming and that is a real shame. Everyone says the US will enter a long period of sideways movement like Japan, but I wouldn’t hold my breath. Japan had reserves! All the US has is mountains of debt and poor leadership. I am old enough to remember the Kennedy inauguration, which means that I also remember Eisenhower and I experienced Johnson and Nixon first hand. I liked Nixon and couldn’t stand Johnson, but at least he took a stand and stuck to it. In today’s world I can’t see one decent politician in the United States and let me qualify that by saying that there isn’t anyone with a good message and great communication skills the people will listen to.

Back in the 1960’s we had some really great public speakers like the Kennedy brothers, Martin Luther King, and Medgar Evers and they all died a violent death. In particular Robert Kennedy had the communication skills and a message that played well to the American public. Is it an accident they were all shot? I don’t know but I think it served as a message to the next generation of politicians that you don’t mess with the system. On November 15, 1963 John F Kennedy gave a speech in Pittsburg saying he wanted to close down the Federal Reserve and he was dead two weeks later. I don’t know if that was just a coincidence or not, but I personally don’t think so. In any event it produced a system that punished original thought and anyone who wanted to challenge the status quo. Fast forward to the present and you see the fruits of that labor, a system bloated on debt and pork that violates its own constitution almost on a daily basis.

So many paid such a high price so Americans could enjoy the freedoms they so easily cede to the Bushes and Obama that it’s scary. Fortunately there is a mechanism called a market that is so big and so powerful that no one individual, group, or government can manipulate it for very long. The current manipulation has been going on for more than seventy years and involves the biggest transfer of wealth the world has even known. In 1913 the US was the richest nation in the world and most of that wealth belonged to the American people as a whole. Then along can a very small and select group of men, under the guise of the Federal Reserve and began to transfer that wealth to themselves and a few others. The result is the largest debtor nation in the world and an uneducated population that can’t compete. Along with the wealth went the entire production base of the US and now we are service oriented, meaning we sell each other insurance.

The greed has been so extreme that it overflowed the shores of the US and permeated the rest of the world in the form of over-the-counter derivatives. Almost US $700 trillion worth of them! Those chickens will come home to roost this fall and it will be very messy indeed. The market will have its day and no amount of bad legislation will change that, and neither will the printing press. The only salvation will be gold, silver, and maybe the Swiss Franc. A couple acres of vegetables in a backyard surrounded by an electric fence won’t hurt either. While you’re at it don’t forget your own well and power source since most public utilities are antiquated and their employees may not get paid. Civil disobedience will be a real problem and I wonder just how far it will go. The Viet Nam demonstrations aside, Americans haven’t been really worked up over anything since the days of “Hooverville” and will react negatively once they figure out that they’ve been taken to the cleaners. Like all distortions, the repercussions are likely to be extreme and I suspect will lead to a new form of government.

Whether it’s framed after the US Constitution or not remains to be seen.”

 

Ron Paul: End the FED

End the Fed

Most Americans haven’t thought much about the strange entity that controls the nation’s money. They simply accept it as though it has always been there, which is far from the case. Visitors to Washington can see the Fed’s palatial headquarters in Washington, D.C., which opened its doors in 1937. Tourists observe its intimidating appearance and forbidding structure, the monetary parallel to the Supreme Court or the Capitol of the United States.

People know that this institution has an important job to do in managing the nation’s money supply, and they hear the head of the Fed testify to Congress, citing complex data, making predictions, and attempting to intimidate anyone who would take issue with them. One would never suspect from their words that there is any mismanagement taking place. The head of the Fed always postures as master of the universe, someone completely knowledgeable and completely in control.

But how much do we really know about what goes on inside the Fed? With the newest round of bailouts, even journalists have a difficult time running down precisely where the money is coming from and where it is headed. From its founding in 1913, secrecy and inside deals have been part of the way the Fed works…

..To read Ron Paul’s complete article on Mises.org, please click HERE

 

Hyperinflation Nation!

The following is a -must see- video documentary (in 3 parts) entitled, “Hyperinflation Nation” which tells all about the past, present, and future state with regards to the outlook of the USD.

 

Ron Paul: Audit the Fed, Then End It!

I have been very pleased with the progress of my legislation, HR 1207, which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system. This bill now has nearly 170 cosponsors, with support from both Republicans and Democrats. Senator Bernie Sanders has introduced a companion bill in the Senate S 604, which will hopefully begin to gain momentum as well. I am very encouraged to see so many of my colleagues in Congress stand with me for greater transparency in government.

Some have begun to push back against this bill, and I am very happy to address their concerns.

The main argument seems to be that Congressional oversight over the Fed is government interference in the free market. This argument shows a misunderstanding of what a free market really is. Fundamentally, you cannot defend the Federal Reserve and the free market at the same time. The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money – the lifeblood of the economy. In a free market, interest rates, like the price of any other consumer good, are decentralized and set by the market. The only legitimate, Constitutional role of government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters.

Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who, instead of stabilizing the economy, have destabilized it. It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930’s. It has also inflated away the value of our currency by over 96 percent since its inception. It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts. It has predictably exacerbated the very problems it was meant to solve.

Detractors have also argued that the Fed must remain immune from the political process, and that that more congressional oversight would distort their very important decisions. On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High level officials routinely make the rounds between positions at the Fed, member banks, Treasury and back again, taking care of friends and each other along the way.

As far as the foolishness of placing complex monetary policy decisions in the hands of politicians – I couldn’t agree more. No politician or central banker, no matter how brilliant, is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over. It is frankly beyond me why we ever agreed to try it again.

To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so.

However, it is the responsibility of every member of Congress to represent the interests of the people that sent them to Washington and find out what has been happening with our money. As the branch of government with the power of the purse, we really have no other reasonable choice when the economy is in the shape it is in.

—–

U.S. Rep. Ron Paul is a Republican representing the 14th District of Texas. He sought the Republican presidential nomination last year.

* * *

 

U.S. key economic charts

The following charts are provided by the St. Louis Federal Reserve Bank and are automatically updated as the Federal Reserve and the federal government make various statistics public.

They provide an opportunity to regularly monitor important statistical developments. As they are chosen from an immense supply of economic data, they isolate areas of particular interest to the gold owner, i.e. the national debt, money supply, inflation and unemployment numbers, securities held outright by the Federal Reserve, foreign-held debt, adjusted monetary base, etc.

A quick review of the charts as they stand at the moment reveals a brave new world of government finance and central banking. An array of disturbing trends which buttress the principle argument for gold ownership, as a means to insuring one’s assets.

Bookmark this post and come back often to monitor the state of the US economy.

 

The FED’s shredded dollar…

As a tourist site, Federal Reserve is worth its weight in gold

Amid these troubled economic times, a trip to the central bank is an eye-opening glimpse into the world of currency. Plus, don’t you want to see the big vault?

By John Horn
Los Angeles Times
December 24, 2008

The stock market was in the middle of another spectacular gyration — up more than 500 points one day after dropping more than 400 — and President Bush had come to try to calm Wall Street, urging world leaders not to over-regulate free markets. The economic crisis was palpable throughout Manhattan’s downtown financial district, yet the atmosphere inside the Federal Reserve Bank of New York was eerily serene, almost like a church.

It was fitting, for money is worshiped at the Fed, as the central bank is known, and an outing to the nation’s central bank feels like a trip to capitalism’s cathedral. Where the bodies of saints would otherwise lie, the bank’s catacombs are stuffed with about $180 billion in gold bars — more yellow metal than is stowed in Ft. Knox, and almost a quarter of the world’s supply.

As New York tourist destinations go, the Liberty Street historic landmark attracts a fraction of the visitors to the city’s more famous spots. But the bank plays a much more vital part in our daily lives: The Fed implements monetary policy and, in the New York building’s open market trading floor, handles billions of U.S. government debt. It’s all a part of how the government is trying to rescue the economy, primarily by dropping interest rates.

The bank’s free, 30-minute tour won’t leave you fully grasping the nuances of reserve requirements and the difference between real and nominal gross domestic product. Yet you will leave knowing a lot more about money than when you walked in, and some of it will be more enjoyable than your college economics class.

The first thing you come across while waiting for the guided tour is what looks like an unguarded gold bar, slowly spinning with the invitation, “Help yourself!”

But the bar turns out to be a hologram, your hand passing through it like fog. Though the guided tour is largely humorless and strict (you’re instructed not to take pictures or notes during the visit to the massive subterranean gold vault), the displays in the lobby — a stunning foyer adorned with some of designer Samuel Yellin’s 200 tons of ornate wrought ironwork — are surprisingly fun, even as they’re informative.

Used bank notes are no longer burned (it’s not green to send up green in smoke) but shredded, and there’s $48 million in minced $100 bills in one display, part of the $105 million in paper currency cut up daily.

Not far away, an exhibit about counterfeiting presents some really good fakes; only with an oversized magnifying glass that slides over both the real and the ersatz bills (along with some what-to-look-for pointers in the exhibit) can you spot the impostor $5, $10 and $20 bills.

The American Numismatic Society has lent the bank hundreds of rare coins and currency to illustrate the history of money, grouped by era and region. The highlights include a shekel from 109 BC, similar to the 30 pieces of silver paid to Judas for Jesus’ arrest, and the most valuable coin ever sold, a 1933 Double Eagle that fetched nearly $8 million in a recent auction.

New York’s Fed is one of a dozen Reserve Banks that make up the country’s central bank, and the rest of the lobby tour outlines their history and role. Once a clearinghouse for checks and a walk-up sales location for Treasury bills, the Reserve Banks, among other current responsibilities, supervise and regulate state-chartered banks and foreign bank branches.

The bank’s top historical exhibits are interactive. The best is called “Match Wits With Ben” (as in Franklin), a computer game in which your knowledge of monetary policy is measured against a clock. There are only seven questions, but you will likely miss about half of them unless you dream of stock tables in your sleep. Sample: What organization did the United States create in 1865 to suppress counterfeiters? Answer: the Secret Service.

After the Sept. 11 terrorist attacks (the World Trade Center site is just a few blocks to the west), the Fed tour eliminated a stop in the bank’s trading floors, making the trip down to the gold vault the centerpiece of its guided visit.

Two-dozen MBA students were in my group traveling five stories below street level to see the vault, and they nearly swooned when they saw all the gold bars (each worth about $320,000) neatly stacked to the ceiling.

Ninety percent of the gold belongs to foreign countries, stored in the Fed’s little cells for safekeeping. The bricks are so heavy (about 28 pounds each) that vault workers wear $500 magnesium boots to avoid smashed metatarsals, and the concrete floor is dented from bars that once toppled over.

As soon as the tour is over, guests are given a free little bag of shredded bills. It’s a funny souvenir of one of the bank’s functions, but a more sobering — though unintentional — reminder of the status of the economy.

 

Former Fed governor hints at big upward revaluation of gold

Interviewed Monday this week on the “Trading Day” program of Business News Network in Canada, former Federal Reserve Governor Lyle Gramley hinted that a big upward revaluation of gold may figure heavily in the Fed’s attempt to rescue the U.S. economy.

The program’s guest host, Niall Ferguson, an author and history professor at Harvard, asked Gramley, now senior adviser at Stanford Group in Houston, about the seemingly grotesque expansion of the Fed’s balance sheet in recent months.

Ferguson asked: “I‘ve heard it said that the Fed has turned into a government-owned hedge fund, leveraged at 50 to 1. Do you feel nervous about what this might actually do to the Fed’s reputation?“

Gramley replied: “I think you have to reckon with the fact that one of the Fed’s assets is gold certificates, which are priced, as I remember, at $42 an ounce, and if we were to price them at market prices, the Fed’s leverage would look a lot less than it is now.”

While valuing the U.S. government’s claimed gold reserves at today’s Comex closing price of around $822 per ounce instead of the government antique bookkeeping entry of $42.22 per ounce would indeed vastly expand the government’s monetary assets, it might not be enough to offset the liabilities and guarantees the government lately has taken on. But the job might be done by revaluing the gold to $5,000 or $10,000 per ounce, as the British economist Peter Millar speculated two years ago might be necessary to prevent debt deflation:

http://www.gata.org/node/4843

You can watch BNN’s interview with Gramley HERE