The Federal Reserve would become the nation’s most powerful financial overseer, an approach that is becoming a flashpoint as lawmakers and consumer groups attack the central bank for its role in creating and handling the financial crisis.
A movement is spreading in Congress to force the Fed to disclose the identity of institutions that borrow from the bank, a move officials say would discourage firms from seeking needed emergency funds. A large group of House members is pushing to audit the Fed.
Over the years, there have been a tiny handful of hard-money industry forecasters who have predicted that there will be an inevitable era of falling prices. I don’t mean stable money with slowly falling prices due to increased productivity, such as with falling computer prices. I mean a period of deflationary depression, where the central bank is powerless to stop falling consumer prices by pumping in fiat money.
These forecasters have been wrong. No post-World War II industrial nation has experienced falling prices as much as 2% per annum. Japan has had a few years where prices fell by 1%, followed by years where prices went up slightly. Japan’s experience contradicts the deflationists: no secular price deflation. See the chart. Yet Japan is always the #1 example used by deflationists. This is because they have no other example. They never refer to this chart or any other verifiable statistics. They just talk endlessly about Japan’s deflation, as if it were a reality. If you see any argument touting Japan as an example of inescapable deflation, you are being misled. Ignore the person making the argument. He does not know what he is talking about.
Last week Congress passed the war supplemental appropriations bill. In an affront to all those who thought they voted for a peace candidate, the current president will be sending another $106 billion we don’t have to continue the bloodshed in Afghanistan and Iraq, without a hint of a plan to bring our troops home.
From their spending habits, an economic collapse seems to be the goal of Congress and this administration. Washington spends with impunity domestically, bailing out and nationalizing everything they can get their hands on, and the foreign aid and IMF funding in this bill can rightly be called an international bailout!
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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