The critical vote for Ben Bernanke will come tomorrow. That’s when the Senate will vote on Harry Reid’s cloture motion.Oh. And you question whether this is merely a "conservative" or libertarian concern?
Please call and email your senators (information is below) and continue to insist: “No Audit? No Bernanke!”
But we also need to send another message, and that is: “A vote for cloture IS a vote for Bernanke.”
That’s because some senators are looking to hide behind “voting for Bernanke before voting against him.”
You see, if Reid wins his cloture vote (requiring 60 senators), he only needs a simple majority on the final vote to confirm.
That gives nine senators political cover, while still putting Bernanke back in charge of the Fed -- with no transparency.
And they’ll actually think their “anti-Bernanke” vote will make you happy! That’s why it’s so important you call and email your senators now, and make sure they don’t try this cheap trick.
1) “No Audit? No Bernanke!”
2) “A vote for cloture IS a vote for Bernanke.”
Check out this article from the Huffington Post that, more or less, complains that Bernanke will be reconfirmed with a mere 50 votes, yet health care "reform," "a major plank in the Democratic platform for more than half a century," requires 60 votes!
In general, I really don't enjoy getting involved in these kinds of political fights. But I decided to write to each of my senators:
Sir:Are my notes going to make any difference?
It is way PAST time to "do the right thing" and AUDIT THE FED.
Every other institution in America is audited. Even I, personally, am subject to review by the IRS at its whim. Yet the Fed, which seems to have virtually unlimited economic power over our nation, gets a pass.
NOT FAIR! NOT RIGHT!
Before permitting cloture on the Bernanke reconfirmation, I urge you, with all my being, to "do the right thing" and demand a full audit of the Fed. Then, if that is passed, if you really feel Bernanke is the "best man," go for it, vote for cloture and let him keep his job. Otherwise, throw the profligate spender out on his ear.
Not likely! Especially when one of them, Mark Udall, had just released his confident statement that he was going to support Bernanke in the upcoming vote.
But I felt compelled to include my voice.
Well, after that, I receive the following item just this morning. An article by Dr. Mark Skousen, an economist whose views I usually find intriguing, to put it mildly. It was published in the free newsletter Money Morning.
Skousen describes a few questions he was able to ask of Mr. Bernanke
I showed [Mr. Bernanke] a copy of the talk he gave at the American Economic Association (AEA) meetings in January 2007. I circled all the times he used the words "panic," "crisis, and "stress" in his speech, entitled "Central Banking and Bank Supervision of the United States."Skousen offers some more insights and practical advice in his article.
A total of 36 occasions.
I asked him point-blank: "Did you know in advance that a financial crisis was headed our way?"
He looked nervous. I could tell he was uncomfortable with my question. He looked at me stoically and smiled.
And he refused to answer.
But there was no doubt in my mind what the correct answer was. I think he was worried about his job if he said,
"Yes." . . .
After our somewhat awkward confrontation, I sat down to listen to Bernanke's new speech: "Monetary Policy and the Housing Bubble."
He stepped up to the podium in a state of denial, rejecting the common-sense notion that the Fed's low-interest-rate policy in 2002-04 caused the housing bubble or the financial crisis. Bernanke said the housing boom was global and couldn't be blamed on U.S. monetary policy.
However, he did take some responsibility for the lack of proper banking standards that led to the housing crisis. According to Bernanke, the Fed's moves to regulate the subprime mortgage market were "too little, too late."
Once Bernanke had finished his speech, he took questions. He probably didn't want
. . .any more from me - but I asked anyway.
Three Ways to Play the Fed's "ZIRP" Policy
Mark Skousen: "Mr. Bernanke
. . .in your speech, you talked about interest rates and the price of money, but you said nothing about the supply of money. Will you comment on the fact that the adjusted monetary base [the Fed's checking account] is now growing at an 80% rate again? Does that suggest you fear another financial crisis or credit crunch soon?"
Ben Bernanke: "No, the rise in the monetary base is due entirely to the Fed's recent purchase of mortgage securities that we agreed to buy."
Mark Skousen: "I note that foreign central banks like Bank of India and Bank of China are now buying tons of gold. Is this a sign that foreigners are losing faith in the dollar-based world monetary system?"
Ben Bernanke: "The world financial system is sound."
What struck me about Bernanke's responses was his "What, me worry?" attitude. He showed no concern about the constant loss in the value of the dollar on the foreign exchange markets, or about the dramatic rise in the price of gold since he became chairman.
I came away from this meeting having reached the following conclusions: Don't count on the Fed chairman - or any other high government official - to admit mistakes or tell us what is really going on. No doubt many Americans share that view, too.
My advice: As long as the Fed's Zero Interest Rate Policy (ZIRP) is in place, the following three scenarios will play out:
* The U.S. dollar will remain weak.
* Gold prices will rise.
* Foreign stocks will perform better than U.S. stocks.
What do you think? Is the Fed out of control? Should Bernanke be given a pass?