That's about the best thing going for it these days.
The already rich English language is being even more enriched by the monetary policy of the Federal Reserve. And words still matter -- the last time I checked.
First, we had Quantitative Easing I and II, and now potentially QE III. These denote Fed monetary interventions of an exceptional nature, beyond the normal buying and selling of securities to maintain interest rates within a certain target range. No doubt some people were rightly confused over the QE moniker, perhaps thinking that three generations of the magnificent cruise ship Queen Elizabeth could be sighted in New York Harbor just off the Statue of Liberty -- with British and European royalty, Hollywood, and prominent artists on board.
But in recent days, new and robust vocabulary has been added to the American lexicon. Like Chubby Checker, who sang various songs about the Twist in the early 1960s, the Federal Reserve has announced its "Operation Twist" (named for a similar monetary action in 1961). This provides for the sale of $400 billion short term securities and the purchase of a like amount of long term ones -- all to make longer term borrowing more attractive -- and yes, to encourage the use of debt by the American people and companies. But for those of us already confused by the meaning of QE I, II, and III, this is yet a new rhetorical frontier.
If there is anything that has been learned from the financial crisis that erupted with fury in September 2008 with the collapse of Lehman Brothers, it is that the American financial system -- the consumer, corporate and government sectors -- has too much debt. The excessiveness and danger of debt are evident when revenues fall or real estate values decline. In that environment, debt cannot be repaid, or there is not enough equity left to refinance, or loan assets of banks become impaired with the drop in collateral value, or pools of mortgage securities must be written down with huge losses for banks -- indeed, all of the above.
Low interest rates do more than encourage consumers, corporations, and the federal government to borrow. They also punish savers, investors, and retirees, forcing them to incur more immediate risk or longer term investments that earn more to maintain a standard of living. Low interest rates make the use of debt for people and companies more attractive. Further, they cause risk averse folks and taxpayers who behave prudently to ultimately bear the losses and bail out those who behave recklessly -- this is the very type of moral hazard that we have heard so much warning about from our financial policymakers.
Some estimates are that one in four American homeowners is underwater, meaning the debt on their house is greater than its market value, and that the value of an average American home has declined by 27 percent since 2006 -- an immense loss in perceived purchasing power as well.
Meanwhile, back at the Fed, the high priests of pain are ensconced in the narcissistic and combative culture of the District of Columbia, heavily bunkered on L Street in an elegant 1930s building that is an example of classical revival architecture. Fed whiz kids consult their models and analytics, attend meetings to project their theories in PowerPoint slides, and with their utterances appear to treat the rest of the country as a high tech workshop for the experiments of well-trained financial minds.
The Fed must have an active communications or creativity department to craft such euphemistic and clever designations for its arcane programs such as Operation Twist. While to the Fed they are just clinical descriptors, to the American people they may be seen as glib expressions affecting our way of life.
We need a strong and credible Fed to manage the price and employment levels, regulate the financial system, be a steward of interest rates and the country's cost of capital, and be the lender of last resort. Moreover, we need a Fed that can look the European Central Bank and Chinese government in the eye, and be an opinion leader on the interconnectedness of their and our monetary policies. To its credit, the Fed has well-defined leadership and unlike Congress, actually accomplishes things.
We should want Fed staffers to like their jobs and have a sense of humor, even during times of stress and economic travail. But perhaps they should first see the pain on Main Street before making up their next witticism.
Letter to the Editor
Frank Schell is a business consultant and former international banking executive. He serves on the Dean's International Council of the Harris School of Public Policy Studies, University of Chicago, where he is a guest lecturer, and on the editorial board of the Chicago-based National Strategy Forum, which focuses on national security issues.
Audit The FED.
" The US Federal Reserve is a failure, its franchise system a failure, its monetary policy a failure, its balance sheet a failure, its analysis chronically incorrect, its initiatives in backfire, its toolbag empty. Perhaps it is time for the USFed to resign its contract with the USCongress. The crowning blow should have been the $16 trillion in unauthorized loans to global banks, given cloud cover by the TARP Fund and its confusion. This is a syndicate fortress with its own agenda, nothing more."
The Tea Party Rebellion Is Here.
Federal Reserve has gone down hill since Bernanke was confirmed and then featured on 60 Minutes. The @*#&%^! can not even afford razors and shave cream. Fed has also failed by not keeping the dollar strong.
El Wrongo, my friend from Rio Linda! Schell wrote: "We need a strong and credible Fed to manage the price and employment levels, regulate the financial system, be a steward of interest rates and the country's cost of capital, and be the lender of last resort" NO!! We need a strong and credible Fed to regulate the value of our money[PERIOD] It's all the other stuff which causes boom and bust cycles, inflation, and our slavery to government. Ron Paul is not wrong about the evils of the Fed, but a sudden death to the beast might be harmful to the nation. Herman Cain and Steve Forbes both want to return the Fed to a single purpose of managing (preventing) inflation by tying the creation of money to the price of Gold (and/or a basket of valuable commodities). Lets put the handcuffs on the Fed, not the people.
Cain Was Against Auditing The FED, Before He Was For Auditing The FED.
"Presidential hopeful and former Kansas City Federal Reserve chairman, Herman Cain, has flipped his position on auditing the Federal Reserve from being "not necessary" to now championing calls for the move.
"Some people say, we ought to audit the Federal Reserve," Cain said on the Neil Boortz radio show on December 29, 2010. "Here's what I do know: the Federal Reserve already has so many internal audits, its ridiculous. I don't know why people think we're gonna learn this great amount of information from auditing the Federal Reserve.
"There's no "?hidden secrets' going on in the Federal Reserve, to my knowledge," Cain continued. "and I tell people, you know, we've got 12 Federal Reserve banks, find out which district you're in, call them up and go from there!
"We don't need to waste money with another "?commission,' or an audit that's not necessary."
Cain's statemnt did not sit well with members of the Tea Party, whom the Republican is said to represent, and a growing consenus within the Party against a loose monetary policy. Online conservative magazine World Net Daily labeled Cain an "elite bankster" who "is far too financially and economically dubious to be given any serious thought as a conservative presidential candidate."
In an attempt to quell growing distrust, Cain issued a new video that praised Texas Republican, Ron Paul, for his calls to audit the Fed.
"I am thankful to representative Ron Paul for his consistant and steady pressure on the Federal Reserve," Cain said. "and as chairman of the Subcommitte of Domestic Monetary Policy, he will have oversight of the activities of the Federal Reserve, including, the ability to require an audit of the Federal Reserve Bank. Congressional oversight, and not more commissions appointed by the president, will bring more accountability to the Federal Reserve on behalf of the American people."
The Tea Party Rebellion Is Here.
A rabid Paul-bot seeks to destroy a REAL conservative once again~ Herman Cain.
In his own words, Herman Cain's thoughts on the Fed:
http://www.youtube.com/watch?v=wI_oocjB3A8
The FED is there to accommodate debt. The Federal government could not run trillion dollar deficits without the FED. The FED also devalues our currency. It is time for the FED to be abolished.
I agree with Ron Paul; end the Fed. Its been nothing short of a disaster. The money function properly belongs in the Treasury Department; not in an independent (supposedly) private bank. A Nation that does not control its money, is a Nation that does not control its destiny. But perhaps that was the real reason for its creation.
Pattymor and you 'nationalize the Fed' folks,
Before we run down this road, stop and ask yourself this question:
What if Eric Holder or Rahm Emmanuel or Valerie Jarrett were running the Fed right now. Where do you think we'd be?
Bernanke is as helpful as a whetstone at a gunfight, but imagine if BHO could just call the Fed up and Executive Order up himself QE's IV - LXIV?
Anyone holding a single cent of US currency would find it to be worthless. BHO would have inflated his way out of this debt thing in three heartbeats. They could inflate the currency to such a low value that we could pay of the national debt with the change in my car's ashtray!
We must remember, we do not win every election - do we really want to hand THAT power to any ol' fool that cons America into electing him?
You betcha, the Fed should get back to its single purpose, regulating the money supply. It should do so with close, active Legislative and Executive Branch oversight...
But let's not gleefully surrender the value of our currency to the whims of our sometimes whimsical Chief Executives...
THINK!
DTOM
PS And another thing: On this Solyndra deal! No, we don't want Eric Holder to appoint some Lizzie Warren type socialist to be a "Special Prosecutor" over this Democrat money laundering/theft scandal. Holder has a file cabinet full of reliable socialist law professor attorneys who can whitewash that thing out of existence, filing a report precisely two weeks before the 2012 election exonerating every elected Democrat and indicting every elected Republican in the country.
No DAMNNIT, Congress should haul out its gavel and have some good ol' fashion hearings and air this thing out in full.
Congressmen, do your Constitutional duty, don't delegate the investigation to the perps!
Hearings, televised hearings into Solyndra! Hearings, televised hearings into Fast and Furious! Hearings, televised hearings into Light Squared!
The only way we can fix our lawless Federal government is the vigorous application of the law so that these bureaucrats now that it actually does matter!
Remember Nancy Pelosi LAUGHING at the question of whether or not Obamacare was Constitutional? The woman laughed!!!
Are we a nation of laws or chumps? Well, chumps what are you gonna do, sit there?
Get on the danged phone!
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