Wildman’s Hangout

By Fred A. Kingery
August 18, 2010

Mark it down. At 2:15 p.m. on Tuesday, August 10, 2010, the U.S. Federal Reserve made a historic announcement. It signaled that the central bank was going to “preserve the size of its balance sheet.” The announcement didn’t sound all that dramatic, but don’t be fooled. In the two subsequent days, the stock market fell over 300 points, and the price of gold rose $20.

The Fed’s balance sheet, which historically consisted of nearly 100 percent U.S. Treasury securities, has grown in size from about $850 billion to a towering $2.3 trillion (or $2,300 billion) currently. In the middle of the financial crisis two years ago, the Fed expanded its holding of securities by purchasing lower-quality, mortgage-backed debt securities primarily from our nation’s domestic banking system. The need for this balance sheet expansion was to provide massive liquidity for our entire financial system.

The cash used to purchase the debt securities was literally created out of thin air, or in other words, the Fed simply printed the money. Two years ago, the financial emergency was deemed severe enough to require this dramatic money-printing exercise by the Fed. There was never any intent to make the vast expansion of money injected into the banking system anything other than “temporary” due to the financial emergency. There was always discussion in the financial press and among Fed policy makers of an “exit strategy.” The “exit strategy” discussion implied that the inflationary (or even “hyper-inflationary”) potential of this massive expansion of the banking system’s base reserves was being monitored closely. The financial markets took comfort that the Fed was standing at the ready, to withdraw the cash, should there be any sign that the central bank’s monetization exercise was having a negative effect on investor inflation psychology. That feeling of comfort has been dealt a blow with the Fed’s announcement on August 10. There is now no “exit strategy” being considered, and the size of the central bank’s balance sheet may very well become permanent.

Historically, the U.S. Federal Reserve has been given two primary objectives: one is the preservation of the purchasing power of the U.S. Dollar, and the other is to conduct a monetary policy that supports full employment. It is not an easy task to serve two masters. Additionally, in its role as a central bank, the Fed is to remain an independent institution that resists political influences. This, too, is not an easy task. The Fed’s track record as an independent institution that has preserved the purchasing power of our currency and maintained full employment is fully open to challenge. The central bank has not always demonstrated a firm independence from political influence, and the purchasing power of the U.S. Dollar has significantly diminished over the past 40 years.

An independent central bank, free of political influence, has always been a critical corner stone supporting confidence in whatever the currency the bank is charged with managing. Confidence is the one and only real currency of a central bank. What has just transpired here with the Fed’s announcement is that, in no uncertain terms, the central bank has explicitly stated it is prepared to “preserve the size of its balance sheet.”And I would add, what it didn’t say explicitly, but did signal to the political class in Washington, is a willingness to “further expand the balance sheet dramatically if need be.” The fancy term being used to describe its intent here is called “quantitative easing” or “QE.”

The real inflationary (or hyperinflationary) risk that the financial markets will calculate very carefully going forward is that the central bank, with this announcement, has now opened itself to being fully co-opted by the political process in Washington. Consider, why make hard political decisions on taxes and spending when the central bank has, in effect, just announced that it stands at the ready to print the money to finance any deficit of any size in order to underwrite any amount of future debt accumulation?

The political class in Washington will see the Fed’s announcement as a potential gold mine. They will no doubt attempt to mine it for all it’s worth. The significantly rising risk is that the accumulation of future government debt attended to this process will result in hyperinflation rather than a garden-variety, modest inflation.

Hyperinflation occurs when there is a total collapse of confidence in a currency. A central bank that is willing to simply print money out of thin air to finance unlimited amounts of debt will eventually undermine the confidence in the currency being managed as lenders eventually seize on the realization that they will never be paid back in anything other than worthless paper.

The road to hell is indeed paved with good intentions.

V & V

source:  http://www.visandvals.org/The_Federal_Reserve_s_Historic_Announcement.php

Posted by Ben on August 20, 2010 ·

Ben Johnson, Floyd Reports

Conservatives often see the government as an Orwellian apparatus hungrily devouring our God-given rights. Liberals in power (three of the scariest words ever written) often given them ample reason to think so. But just as often, the government is less a sleek tiger than a bloated pig gorging on everything available, reveling in filth, and unintentionally destroying everything it touches in the process. Republican Senators Tom Coburn and John McCain have revealed how Obama’s stimulus bill is at once dangerous and hapless, disconcerting and idiotic.

Yesterday, I reported that $500,000 of the  bill went toward implanting microchips in recycling bins in Dayton, Ohio, to monitor residents’ trash. The senators’ “Summertime Blues” report lists 100 boondoggles underwritten by the taxpayers as part of the $862 billion American Recovery and Reinvestment Act (ARRA). While some have unnerving undertones, most of the waste uncovered in the 74-page synopsis just shows what a broken and corrupt place Washington is.

Among the more amusing findings, the report documents how our beloved leaders gave:

• $298,543 to the Southwest Research Institute in Texas to study “atmospheric forecasting of weather and climate on other plants.” Yes, they will tell you the weather on Mars. The scientists insisted this “has great appeal.” We’re waiting with bated breath and our wallets open.
• $712,883 for Northwestern University reserchers to build a robotic comedian.  (Has Janeane Garofalo retired?)
• $89,298 to Boynton, Oklahoma, to build a sidewalk that leads to a ditch.
• $144,541 to provide cocaine for Monkeys. Scientists at Wake Forest University will study the coked-up primates to research the “Effect of Cocaine Self-Administration on Metabotropic Glutamate Systems.”
• $200,000 to Toledo, Ohio, to maintain a freighter ship it keeps on display that averages 30 visitors a day (in that tourist paradise of Toledo).
• $253,123 for museum with 44 visitors a year. The North Carolina State Insect Museum will use the money to promote itself and end its Maytag repairman-like life. The first step is a “Insect of the Week” feature on its website, followed by a line of baseball cards with “native and fascinating insects.” Good luck with that, you social butterflies.
• $1 million a year for 19 Los Angeles bus stations to purchase artwork to “enhance the customer experience.”
• $1 million for buy iPod touches for 1,600 high school students in Salt Lake City. They get to keep the devices if they graduate with their class.
• $6 million to build a boutique hotel in Buffalo, New York, “as high-end as they come.” But the local conventions bureau’s former president said they need no more hotel rooms.
• And perhaps most unforgivably — $25,000 for the International Accordion Festival in San Antonio, Texas.

Feeling fleeced yet? You will after you read the report.

Their booklet recounts page upon page of such grants. The beneficiaries’ attempts to explain  these pork projects “create jobs” is imaginative fiction, and their claims of having created, e.g., one-quarter of one job here, one-half of one job there, make one wonder how anyone could ever believe Keynesian economics again. The report makes clear, upon a careful reading, the bill destroyed as many jobs as it produced, even in projects that actually hired people. Heaven knows how many jobs this $0.84 trillion confiscation could have generated in the free market, or how much better the average taxpayer’s quality of life would have been if he had some of that money back in his pockets.

It’s funny about the Left; you have to laugh to keep from crying.

source:  http://www.impeachobamacampaign.com/100-ways-obama-is-wasting-your-money/

Debra J. Saunders Only in Washington Is This Transparency

Only in Washington Is This Transparency

The Senate Democrats’ “DISCLOSE” Act — “DISCLOSE” stands for “Democracy Is Strengthened by Casting Light on Spending in Elections” — represents perhaps the baldest, if failed, power grab attempted this year. But you wouldn’t guess it reading news stories on the bill.

As The New York Times reported, “The Senate on Tuesday refused to take up a bill that would require more disclosure of the role of corporations, unions and other special interests in bankrolling political advertisements, after Democrats failed to persuade even one Republican to support it.”

The Washington Post began, “Senate Republicans on Tuesday blocked legislation requiring fuller disclosure of the money behind political advertising, derailing a major White House initiative and virtually ensuring an onslaught of attack ads during this year’s midterm election season.”

So … it’s the Republicans’ fault if there are attack ads in November?

The leads to these stories have one thing right. The measure, sponsored by Sen. Chuck Schumer, D-N.Y., failed to garner a single Republican supporter and hence failed to reach the 60-vote mark needed to bring it to a floor vote. Thus, it died with 57 votes in favor and 41 against.

But don’t let the first paragraphs fool you. The bill isn’t simply a spending disclosure reform; the DISCLOSE Act also would bar “electioneering communications” by corporations that have government contracts worth more than $10 million, received TARP funds or are controlled by foreign entities. So it’s not simply about disclosure; it’s also about suppressing free speech.

You also would not know that while proponents frame the bill as a response to the U.S. Supreme Court’s 5-4 Citizens United ruling, which lifted restrictions on independent political advertising by labor and corporations, the House version of the bill imposed restrictions on the above corporations — with no parallel restrictions on labor.

On the disclosure front, Schumer made a nod toward fairness. Unlike the House bill, Schumer’s measure would require that union heads, like CEOs, disclose contributions to political ads or mailers. Hence his claim that the bill promotes transparency. Quoth Schumer, “All we’re saying is that if you attack us, put your name on the ad.”

Facing the same spotlight that Schumer would shine on corporations, the AFL-CIO now “reluctantly” opposes the bill.

Other special interests fared better. Both the House and Senate bills exempted powerful special-interest groups, including the National Rifle Association and Sierra Club, from their disclosure rules.

Perhaps the most naked provision in the bills was language that would have made the DISCLOSE Act federal law within 30 days of President Obama’s promised signature. Clearly, the Dems were trying to skew the rules before the November elections.

Sen. Olympia Snowe, R-Maine, hit it when she said, “We have not had hearings, no vetting, no attempt, I think, to bring people together to work on an issue that responds to the Supreme Court’s decision.”

The Democrats tried to sneak this so-called reform onto the books like a midnight pay raise.

source:  http://townhall.com/columnists/DebraJSaunders/2010/07/29/only_in_washington_is_this_transparency/page/full#

Ann Coulter With Friends Like These, Who Needs Keith Olbermann?

While engaging in astonishing viciousness, vulgarity and violence toward Republicans, liberals accuse cheerful, law-abiding Tea Party activists of being violent racists.

Responding to these vile charges, conservative television pundits think it’s a great comeback to say: “There is the fringe on both sides.”

Both sides? Really? How about: “That’s a despicable lie”? Did that occur to you simpering morons as a possible reply to the slanderous claim that conservatives are fiery racists?

All the accusations of “racism” at anti-Obama rallies so far have turned out to be completely false. The most notorious was the allegation that one black congressman was spat on and another called the N-word 15 times at an anti-ObamaCare rally on Capitol Hill last March.

The particularly sensitive Rep. Emmanuel Cleaver, D-Mo., perhaps walking too closely to a protester chanting “Kill the Bill,” was hit with some spittle — and briefly thought he was a Freedom Rider! When observers contested Cleaver’s account — with massive video evidence — he walked back his claim of being spat upon.

The slanderous claim that a protester called the civil rights hero John Lewis the N-word 15 times was an outrageous lie — never made by Lewis himself — but promoted endlessly by teary-eyed reporters, most of whom cannot count to 15.

The media never retracted it, even after the N-word allegation was proved false with a still-uncollected $100,000 reward for two seconds of video proof taken from a protest crawling with video cameras and reporters hungry for an act of racism.

When St. Louis Tea Party co-founder Dana Loesch did make the point on CNN that no one spat on any black congressmen at the anti-ObamaCare rally, a liberal on the panel, Nancy Giles, told her to “shut your mouth,” while alleged “comedian” Stephanie Miller repeatedly called Tea Party activists “tea baggers.”

It’s like watching Hitler hysterically denounce Poland for being mean to Nazi Germany while Polish TV commentators defend Poland by saying, “There are mistakes on both sides.”

Meanwhile, we do have video proof of the New Black Panthers standing outside a polling station in Philadelphia in 2008 with billy clubs threatening white voters who tried to vote. And there is video footage of Sarah Palin, Karl Rove,

Condoleezza Rice as well as a slew of conservative college speakers being assaulted by crazed liberals.

We also have evidence of liberals’ proclivity for violence in the form of mountains of arrest records. Liberal protesters at the 2008 Republican National Convention were arrested for smashing police cars, slashing tires, breaking store windows, and for possessing Molotov cocktails, napalm bombs and assorted firearms. (If only they could muster up that kind of fighting spirit on foreign battlefields.)

There were no arrests of conservatives at the Democratic National Convention.

Over the past couple of election cycles, Bush and McCain election headquarters around the country have been repeatedly vandalized, ransacked, burglarized and shot at (by staunch gun-control advocates, no doubt); Bush and McCain campaign signs have been torched; and Republican campaign volunteers have been physically attacked.

It was a good day when George Bush was merely burned in effigy, compared to Hitler or, most innocuously, compared to a monkey.

In the fall of 2008, Obama supporters Mace’d elderly volunteers in a McCain campaign office in Galax, Va. In separate attacks, a half-dozen liberals threw Molotov cocktails at McCain signs on families’ front yards in and around Portland, Ore. One Obama supporter broke a McCain sign being held by a small middle-aged woman in midtown Manhattan before hitting her in the face with the stick. These are just a few acts of violence from the left too numerous to catalog.

There were arrests in all these cases. There was, however, absolutely no national coverage of the attacks by Obama supporters.

Obama is in danger from the Tea Partiers! The Poles are mobilizing on the border!

Since Obama became president, the only recorded violence at Tea Parties or Town Halls has been committed by liberals. Last fall, a conservative had his finger bitten off by a man from a MoveOn.org crowd in Thousand Oaks, Calif. Two Service Employees International Union thugs have been charged with beating up an African-American selling anti-Obama bumper stickers at a St. Louis Tea Party in August 2009.

Respected elder statesmen of the Democratic Party have referred to Obama’s “Negro dialect” (Harry Reid), said he would be getting them coffee a few years ago (Bill Clinton), and called him “clean” (Joe Biden). And that’s not including the former Ku Klux Klan Democratic senator, the late Bob Byrd.

So I’m thinking that maybe when conservatives are called racists on TV, instead of saying, “There are fringe elements on both sides,” conservative commentators might want to think about saying, “That is a complete lie.”

Liberals explode in rage when we accuse them of being unpatriotic based on 50 years of treasonous behavior. They have zero examples of conservative racism, but the best our spokesmen can think to say when accused of racism is: “Man is imperfect.”

Conservatives who prefer to come across on TV as wonderfully moderate than to speak the truth should find another line of work and stop defaming conservatives with their “both sides” pabulum.

I hear BP is looking for a new spokesman.
source:  http://townhall.com/columnists/AnnCoulter/2010/07/28/with_friends_like_these,_who_needs_keith_olbermann/page/full#