Is The Fed About To Hit The Fan?

Interesting times, my friends, we live in them without a doubt. Congressman Ron Paul’s “Audit The Fed” bill ( H.R. 1207: The Federal Reserve Transparency Act) reached enough congressional support last week to go forward out of committee and onto the floor of the house. It now has 222 co-sponsors. An audit of the Fed would be done by the General Accounting Office, and would greatly increase the amount of information the Fed is required to disclose. It would be unprecedented. (It might uncover why $134.5 Billion dollars of Government bonds were seized at the Italian/Swiss border when 2 (possibly) Japanese men tried to smuggle them into Switzerland.)

“Audit The Fed” has long been a rallying cry for fiscal conservatives, libertarians, independents, conspiracy theorists and, lately, even liberals. The central bank’s ability to operate in secret, without accountability to the American people, could finally come to an end. What kind of ammo does Ron Paul have? From what I’m hearing, it is EXPLOSIVE stuff. So explosive that Congress is rumored to be in a dither, and is quickly choosing up sides.

Zerohedge ran a story Friday that took some major guts. If true, the entire Federal Reserve has seriously broken the law…and the stuff is seriously hitting the fan.

…We were greatly troubled when we learned recently on good authority that Federal representatives may have opened multiple undisclosed-type accounts with none other than State Street Global Advisors over the past few months. All of these accounts are allegedly handled by one single trader, who is cocooned and isolated from interaction with other partners…

Karl Denniger reminds us in his Market Ticker that:

See, The Federal Reserve is explicitly not permitted to buy anything that doesn’t have the full faith and credit of The US Federal Government behind it. It is that fact (found in Sections 13 and 14 of The Act) that has led me to repeatedly rant about The Fed’s purchase of Fannie and Freddie paper – distinctly outrageous acts, given the plain language of the law. (Note that purchase of Ginnie Mae securities, which are fully guaranteed with full faith and credit, would be fine. Note also that Ginnie Mae didn’t get in trouble fiscally either. Hmmmm….)

….if this is true and is proved, the risk of capital flight (out of U.S. markets) is extremely high. Do you want to participate in a market that is “rigged” like this by The Fed, operating with essentially limitless liquidity to game the markets any time they’d like in violation of the law?

Those of us who watch the markets have not been fooled by all of the “3:30 rallies” that have pumped up stocks after they’ve been down all day. Especially on Fridays. Would you want to play blackjack with an opponent who held unlimited numbers of kings and aces? If our “free markets” aren’t truly free, we have a horrible problem that could give us a permanent black eye.

The Fed has operated without accountability and with impunity since it’s inception. A REAL audit is the least that is owed to the American people, as it is we who are quickly becoming slaves to the indebtedness it continues to create.

I have a fear, however. Barack Obama has never met a crisis he didn’t love. Should Ben Bernanke, Hank Paulson, Neil Kashkari and the gang be found guilty of criminal acts, and our markets exposed as being rigged, Barry may use the crisis as justification to end any semblance of capitalism left in this country. He has his foot in the door of America’s public companies now, and you can be sure he is just getting started with the fascist power-grab.

2010 and 2012 will be, in my opinion, our last changes to pull our country back from the abyss of a central-government with total control of our society. Wake up your family. Wake up your friends and neighbors, wake up strangers. The stakes could not be higher.

Yesterday, the contrast between America and Iran was stunning. Iranians were rioting over a stolen election. Americans were rioting over the Lakers’ win.

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