Americans losing confidence in the Federal Reserve according to survey
I count myself in this camp as well. I don’t think using interest rates and open-market operations is the proper way to expand and contract our monetary base. Personally I would like to see us nationalize the Fed and give back those monetary controls back to our U.S. treasury and also have us examine how we issue our currency.
I am in serious doubt that a debt-based currency can be sustainable over the long-term. Through financial history, every fiat currency has eventually defaulted and the currencies that were in private hands create the worst economics crisis.
News:
Most Americans say the country’s financial crisis has hurt their confidence in the Federal Reserve, according to a Reuters/University of Michigan survey released on Friday.
Bernanke Tries to Define What Institutions the Fed Could Let Fail
Oh man, this was some good humor to read. It was like some children’s story where they learn they have great power and then they have to decide how to use it or whether it will be for good or bad. Some of the quotes in this are too good like “Federal Reserve chairman has repeatedly expanded the central bank’s protective role, turning its balance sheet into a parking lot for Wall Street’s hard-to-finance bonds (read: Junk)” or “The lack of clearly defined limits may put the Fed’s independence at risk as Congress discovers that its $900 billion portfolio can be used for emergency bailouts“.
Who needs TV when you have reading material like this? Next article will be titled “Congress finally knows who issues the money”. Pure comedy too see how this one will play out, I agree they have set a precedent on bailing out the 5th largest investment bank so I think that sets the bar pretty low. Maybe I should start a bank and see if I bring them some paper that has “IOU” crayoned on it, they will give me some treasuries or maybe a full bailout happy meal. Okay now with my rant/commentary out of the way, here is the Bloomberg article.
Fed Says Banks Toughen Lending Standards Amid Economic Slump
Banks in the United States further tightened lending standards in all major categories, especially for consumer loans, in the past three months amid a weakening economic outlook, according to a Federal Reserve survey released on Monday.
The July survey of senior loan officers at 52 domestic banks and 21 branches and agencies of foreign banks also showed that demand for loans by both businesses and households had weakened since the last survey in April.
Money Market `Plagued’ by Libor That Fed Can’t Reduce
A year after central banks started to pump trillions of dollars into the financial system to end a seizure in credit markets caused by subprime mortgages, cash is about as tight as it’s ever been.
The U.S. market for commercial paper, or short-term IOUs, backed by assets such as mortgages has shrunk 40 percent from its peak in July 2007. The amount borrowed in pounds between banks in the U.K. fell by 70 percent in June from a record in February 2007. The European Central Bank received $100 billion of bids for the $25 billion it offered to financial institutions on July 29, the most since the sales began in December.
Fed holds interest rates steady at 2% citing growth worries
The Federal Reserve decided to hold our prime interest rates at 2% citing the risk to growth and added risk to additional inflation. The decision vote was 10-1 when all was said in done. With all the dissent from different reserve banks I am surprise the vote was almost unanimous.
It is also interesting seeing this statement in the Reuters release. “However, the central bank omitted a phrase contained in the June statement that had said risks to growth appeared “to have diminished somewhat.”" Here is part of the release.