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Ron Paul on CNN (28 Apr 08) Food Inflation, Abolishing the FED, Destruction of the Dollar etc... (Video 8.00)

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April 28, 2008 – Comments (7)

CNN does a good interview with Dr Paul here. FED, food inflation, war, the value of the dollar etc... all covered 

The Pentagon Strangles Our Economy: Why the U.S. Has Gone Broke

7 Comments – Post Your Own

#1) On April 28, 2008 at 6:57 PM, lquadland10 (< 20) wrote:

Tank the economy to push through the super highway. And we trust Bush Why?  

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#2) On April 28, 2008 at 7:26 PM, lquadland10 (< 20) wrote:

Hey Aba, I liked you posting. If the Fed just raised the intress rate gas would go down. Boy then see my score tank. I have a question. Is it not the secretary of state which would be Paulson the one who tells the Fed to raise or lower the rate? I think I read it somewhere. If that is true Paulson  worked for Goldman  Sacks  and  so far only gs was the one who was least hurt and seamed to have all the good calls. I think the lending rate should go back to 5% to start. Did you hear the new fees the banks are starting to charge? It's bad. Now if you want to play that bush will get the country's united then buy land in Texas and Florida. You will really make a bundle.

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#3) On April 28, 2008 at 8:23 PM, deuspecuniae (97.27) wrote:

Ron Paul would have been one of the best Presidents to date. We are talking about a doctor, statesman, and self educated economist--what else can a country ask for.

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#4) On April 28, 2008 at 9:59 PM, floridabuilder2 (99.34) wrote:

thanks

 

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#5) On April 28, 2008 at 11:51 PM, abitare (58.10) wrote:

lq,

Thanks for the videos 

The FED is a private cartel, with a Congressionial charter. The FED decisions are independent of the Treasury (Paulson is the head of the Treasury).

Paulson was CEO of GS until recently, he has/had $600-800 million in GS stock.  

Banks are in trouble due to high loan defaults nation wide. I think it might be early to be buying land anywhere.

 deuspecuniae,

Concur....

fb,

np

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#6) On April 29, 2008 at 4:48 AM, abitare (58.10) wrote:

FYI - great comments here on digg.com:

http://digg.com/2008_us_elections/Ron_Paul_on_CNN_GOP_can_t_shut_me_out 

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#7) On April 29, 2008 at 7:51 PM, lquadland10 (< 20) wrote:

Hey Aba, The FED is a private cartel, with a Congressionial charter. The FED decisions are independent of the Treasury (Paulson is the head of the Treasury). Yes I know that but I'll find what I was trying to say. Anyway that was then. Can you give me your take on this? Sorry about the mess I am extreamly techno impared and if there are repeats please forgive me.
Economic View The Fed Gets a New Job Description The Fed Gets a New Job Description'); } function getShareDescription  business/06view.html By ROBERT J. SHILLER Published: April 6, 2008

THE plan of Treasury Secretary Henry M. Paulson Jr. to overhaul the financial system includes a crucial proposal: it would officially transform the Federal Reserve into a “market stability regulator” rather than merely a banker’s bank.

Skip to next paragraph David G. Klein

 

Related Times Topics: Federal Reserve System

This aspect of the Treasury plan is a natural step in a historical trend. The Fed is no longer just a regulatory agency presiding over a narrow group of businesses called banks. Rather, its mission increasingly is to maintain macro confidence — confidence that the entire financial system is functioning well as part of the whole economy.

In contrast, traditional securities regulators like the Securities and Exchange Commission have as their primary mission the maintenance of micro confidence — confidence that individual firms are disclosing the truth about their own internal operations and are not manipulating information.

But as the current financial crisis attests, it is macro confidence that requires the most subtle attention. The instability in even in the most modern economies accounts for the growing respect for the financial stabilization offered by central banks.

Moreover, the nature of financial institutions is changing, and as finance becomes more sophisticated, the traditional boundaries of banking have blurred. In the current crisis, for example, there have been significant liquidity problems associated with “special-purpose vehicles” or “conduits,” which issue asset-backed commercial paper. These entities resemble banks but are not technically banks. In the new financial order, in fact, we do not clearly know what is or is not a bank, so a narrow definition of the mission of the central bank is no longer appropriate.

In recent years, central banks have not always managed macro confidence magnificently. The Fed failed to identify the twin bubbles of the last decade — in the stock market and in real estate — and we have to hope that the Fed and its global counterparts will do better in the future. Central banks are the only active practitioners of the art of stabilizing macro confidence, and they are all we have to rely on.

The trend toward greater powers for the Fed isn’t new. In 1932, Congress extended the Fed’s power by giving it the authority “in unusual and exigent circumstances” to make discount-window loans to any organization or individual, not just to member banks. In 1980, Congress gave the Fed the authority to use its discount window in the normal course of business for all depository institutions, including savings associations and credit unions, and to set reserve requirements for them as well.

The Fed has been taking an expansive view of its own powers recently, for the most part with considerable public approval. Witness its decision to give a $29 billion line of credit to JPMorgan Chase to encourage the purchase and rescue of Bear Stearns. There was very little criticism of this move because so many people rightly feared the systemic effects on financial institutions if the Fed did not act. Bear might have had to dump its troubled assets on the market, and the whole financial house of cards could have collapsed. Because we sense that maintaining confidence in our financial system is so important, we are permitting the Fed to expand its role. Also read http://www.nytimes.com/2008/04/12/business/12paulson.html and then read this one and the links in the artical. http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=SecretsCh14 so all of this is to make a one world system.

On Paper, Wall Street Gets Its Way 'On Paper, Wall Street Gets Its Way'); } function getShareDescription() { return encodeURIComponent('Wall Street for years demanded an overhaul of the system overseeing the American financial system, and may have gotten its wish with the new Treasury plan to do so.'); } function getShareKeywords() { return encodeURIComponent('Banks and Banking,Reform and Reorganization,Securities and Commodities Violations,Stocks and Bonds,United States Economy,Treasury Department,Securities and Exchange Commission'); } function getShareSection() { return encodeURIComponent('business'); } function getShareSectionDisplay() { return encodeURIComponent('Business'); } function getShareSubSection() { return encodeURIComponent(''); } function getShareByline() { return encodeURIComponent('By JENNY ANDERSON'); } function getSharePubdate() { return encodeURIComponent('April 1, 2008'); } E-Mail Print Reprints Save ShareDiggFacebookMixxYahoo! BuzzPermalink writePost();new_york_times:http://www.nytimes.com/2008/04/01/business/01wall.html
By JENNY ANDERSON Published: April 1, 2008

More than a year ago, when the markets were flying high, a chorus of alarm went up on Wall Street. Talk spread that the United States risked losing its edge in the financial world.

Skip to next paragraph Enlarge This Image Seth Wenig/Reuters

Richard C. Breeden, above, and Harvey J. Goldschmid, below, former S.E.C. members, question any loosening of financial regulation.

Related Doubts Greet Treasury Plan Regulation (April 1, 2008) Enlarge This Image Chris Kleponis/Bloomberg News

Harvey J. Goldschmid is a former S.E.C. member.

Enlarge This Image Richard Sheinwald/Bloomberg News

Hal S. Scott of Harvard Law School favors broader change.

But the threat that many executives saw was not the credit crisis then looming — it was the threat of excessive litigation and overregulation. Wall Street urged Washington to lighten up.

The financial industry could not get what it wanted then, but it may get what it wants now.

If adopted, the sweeping overhaul of the system overseeing the American financial system proposed by Treasury Secretary Henry M. Paulson Jr. on Monday could hand Wall Street investment banks a major victory in their years of effort to streamline regulation.

While the plan is unlikely to gain Congressional approval soon, and may go nowhere in a partisan election year, it echoes many of the seemingly subtle and yet profound changes that Wall Street has been lobbying for all along.

One change Wall Street wants is for regulators to shift from policing the industry with hard and fast rules — do this, don’t do that — to using looser “principles” that might be open to interpretation. Another is to modernize the hodgepodge of state and federal regulators that sometimes overlap and compete with one another.

Mr. Paulson’s plan would take a step toward both of these changes by consolidating banking and insurance regulators and potentially merging the Securities and Exchange Commission with the Commodity Futures Trading Commission, then stripping the combined entity of much of its regulatory authority. Many on Wall Street applaud those proposals.

“I thought it was a major step forward,” Thomas A. Russo, chief legal officer of Lehman Brothers, said of the proposal. “The world became homogenized, but the regulatory structure stayed within the same straitjacket.”

Proponents of the principles approach say it is more efficient. They point to the meteoric rise of London as a global financial center, which has fueled worries that New York might one day lose its title as the world capital of capital. The Financial Services Authority, Britain’s main financial regulator, relies on principles rather than rules.

Some former American regulators, however, wonder whether Wall Street deserves a longer leash, especially at such a chaotic time in the markets and the broader economy. After all, the financial industry has had plenty of scrapes with regulators in recent years, over issues ranging from conflicted stock research to questionable mortgage investments.

“Some advocates want broad principles that will not be enforced,” said Harvey J. Goldschmid, a former Democratic commissioner at the S.E.C. who now teaches at Columbia Law School. “You take that approach and the problems of subprime and securitization will look like minor bumps compared to the mess we will have in the future.”

Richard C. Breeden, former chairman of the Securities and Exchange Commission and chairman of Breeden Capital Management, questions whether the Treasury’s proposals will end up hurting rather than helping the investing public.

“I don’t see what’s in it for the public in this plan,” Mr. Breeden said. “What’s in it for the taxpayers and the customers of these firms?”

But Wall Street, among the most deep-pocketed and politically savvy industries in America, senses opportunity.

In November 2006, the Committee on Capital Markets Regulation released a report concluding, “It is the committee’s view that in the shift of regulatory intensity balance has been lost to the competitive disadvantage of U.S. financial markets.”

A separate report, released two months later by Mayor Michael R. Bloomberg and Senator Charles E. Schumer, stated in stark terms that the United States was falling behind.

“The last thing that New York and the country, for that matter, need is to wake up one morning and find we are no longer the financial capital of the world,” Senator Schumer, Democrat of New York, said at the time.

Hal S. Scott, the Harvard Law School professor who directed the Committee on Capital Markets Regulation, said on Monday that he agreed with many of the Treasury’s short-term recommendations. But he argued that the government should not waste its time with the medium-term proposals and instead move directly toward more radical reform with a principles-based system.

“Too often we have a problem and we say ‘here’s a rule’ and then people figure out a way to get around the rule,” Mr. Scott said. “We’d be better off with a principle.”

Still, Wall Street has until recently flourished despite — and sometimes because of — the current regulatory system. Markets for some complex investments, like collateralized debt obligations, do not appear to have been policed by anyone. And no agency has effectively addressed the huge leverage in the system, a problem that seriously compounded the recent crisis.

Indeed, as the industry has increased its profits geometrically in recent years, the size of agencies like the S.E.C. has not kept pace. As a result, regulators have struggled to react to seismic changes in the industry, like the rise of hedge funds and the proliferation of financial products that are traded in the shadows among firms, rather than openly on exchanges. That has former S.E.C. commissioners wondering why turning the commission into a different agency would improve things.

It’s the height of disregard to America’s investors to abolish the one agency that has done something to protect the public from the baser urges of Wall Street,” Mr. Breeden said.

But he admitted change was hard. “It’s not so clear that just because you draw simpler charts and simpler boxes, the system works better,” he said.

 

The trend toward greater reliance on central banks has been global. These institutions have been given more independence, as with the Bank of Mexico in 1994, both the Bank of England and the Bank of Japan in 1997, and the creation of the European Central Bank in 1998. Independence, of course, means more power.

Two of the Fed’s most important innovations were internationally coordinated measures. These were the establishment of the Term Auction Facility in December, for the auctioning of 28-day advances to depository institutions, and the creation last month of the Term Securities Lending Facility, which lends Treasury securities to so-called primary dealers — banks and securities firms like Goldman Sachs, Morgan Stanley and Lehman Brothers. The rising prestige of the world’s central bankers is apparent, as these have been perhaps the most significant international steps to deal with the financial crisis.

It has been said that Ben S. Bernanke chose an awful time to become chairman of the Federal Reserve — in February 2006, just as the economy was about to enter its worst financial crisis since the 1930s. But it was also the perfect time, because it presented him with challenges for which he had a lifetime of preparation. His most famous academic work concerned the crisis of the Great Depression, and he has thought deeply about systemic economic problems.

Mr. Bernanke’s own analysis of history, as well as that of other economists, emphasizes the essential importance of confidence in financial institutions and the subtlety of the issues involved in promoting such confidence.

For example, Mr. Bernanke has said that a significant motivation for starting the Term Auction Facility was to make it possible for troubled banks to borrow from the Fed discount window without encountering “the so-called stigma problem.” What is stigma? We are not talking about emotions here, but about banks’ efforts to act in such a way as to maintain the confidence of people who deal with them. We are talking about discovering subtle instabilities in the house of cards, and fixing them.

CONFIDENCE is too complex for the consumer confidence indexes — which are based on surveys of ordinary people — to measure adequately. It has to do with confidence in specific institutions — confidence that they will behave properly and that the leaders who are trying to promote others’ confidence will act in a constructive way.

Formalizing the Fed’s transformation into a market stability regulator makes sense. The Fed has already begun to play this role. And by doing so, it is taking a significant step toward reducing the fundamental instability of our economy.

Robert J. Shiller is professor of economics and finance at Yale and co-founder and chief economist of MacroMarkets LLC.

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