Here's the real skinny on the Federal Reserve. The Wall Street Journal just came out with this today, about an hour ago...the banksters are nervous. Look, the sky is going to fall if we ever dare look inside the Federal Reserve. We will all turn to stone or pillars of salt....dire warnings of disasters should we venture into the sacred vaults. Amazing, they are already employing scare tactics and threats. Sweat pours down their cheeks and into their eyes as they try to avert the possibility of scrutiny..
Actually, Kohn is saying that the Federal Reserve cannot function unless it works in deep absolute secrecy. What kind of "free" country has an institution like this one? It is an oxymoron....free countries with secretive money managers. The two cannot exist together and we all know that the Fed is real. Therefore, America being a "free" country is a political fallacy that is blown down in the face of the hard evidence that the Federal Reserve exists.
Quote: (1) Maintaining the secrecy and autonomy of the Federal Reserve itself. No daylight allowed on what they are doing in there. This is JOB ONE and they work feverishly at it.
- JULY 9, 2009, 1:58 P.M. ET
Monetary Policy Audits Would Hurt Fed Debate, Kohn Says
WASHINGTON—Federal Reserve Vice Chairman Donald Kohn said Thursday that while the U.S. central bank doesn't object to government audits of its emergency facilities, extending those audits to monetary policy could "cast a chill" on the Fed's deliberations.
"Although Federal Reserve officials regularly explain the rationale for their policy decisions in public venues, the process of vetting ideas and proposals, many of which are never incorporated into policy decisions, could suffer from the threat of public disclosure," Mr. Kohn said in prepared testimony to a House Financial Services subcommittee. (NOTE: Only dishonest persons and institutions fear public disclosure in my experience.)
If policy makers "believed that [Government Accountability Office] audits would result in published analyses of their policy discussions, they might be less willing to engage in the unfettered and wide-ranging internal debates that are essential to identifying the best possible policy options," Mr. Kohn said. (NOTE: In other words, the Fed would not be so willing to engage in throwing our money away frivolously if it faced real accountability. And this is bad why?)
A bill introduced in Congress by Rep. Ron Paul (R., Texas), a Fed critic, would open up the Fed to unprecedented scrutiny by the GAO. The bill has quietly racked up 254 co-supporters, meaning that more than half of the House now supports it.
Mr. Kohn warned of the consequences if the Fed were thought to be losing its independence.
"The bond rating agencies view operational independence of a country's central bank as an important factor in determining sovereign credit ratings, suggesting that a threat to the Federal Reserve's independence could lower the Treasury's debt rating and thus raise its cost of borrowing," Mr. Kohn said. (NOTE: Yep, the ratings agencies have been soo honest and open in their own dealings...does the Fed pay them, too? How can they rate them if they are never allowed to see anything?)
Opening up longstanding credit facilities like the discount window to audits could also have damaging effects, Mr. Kohn said.
"Rumors that a bank may have used the discount window can cause a damaging loss of confidence even to a fundamentally sound institution," he said.
Separately, another Fed official on Thursday urged banks in the U.S. to carefully evaluate their capital needs before deciding to repay or forgo federal rescue funds.
"The public is angry" at banks because of bailouts, bad loans, tight credit conditions, big salaries and high rates and fees, said Fed governor Elizabeth Duke, according to the text of a speech she planned to deliver to a minority banking conference in Chicago.
But public distaste for bailouts shouldn't be the driving factor in whether banks tap the $700 billion Troubled Asset Relief Program, she said.
She added that financial markets are still hurting and that banks are still likely to need capital to grapple with unexpected challenges.
"Please, before you make your decision, take one more unemotional run through your projections, your assumptions, and your 'what-ifs,' and make sure you are comfortable with your decision," Ms. Duke said. "And if you have already received TARP capital, consider holding it in reserve for a little longer, at least until conditions are more favorable."
Hundreds of U.S. banks, large and small, have received capital from the U.S. government under the Capital Purchase Program, a centerpiece TARP initiative launched in October.
Ms. Duke pointed out that TARP isn't an indefinite government program. "Once you repay the TARP investment, it likely will not be available again," she said.
She added that "much of the financial weakness that led to establishment of the Capital Purchase Program still exists."
"Economic activity is still at a low level. Real estate prices are still declining. Confidence in the financial system has still not returned to precrisis levels," she continued. "And you still may be faced with unusual opportunities for growth or unexpected challenges that may require more capital."http://online.wsj.com/article/SB124716141172118959.html