Peter Schiff and Marc Faber on The Glenn Beck

Marc Faber: “I am 100 percent sure that the U.S. will go into hyperinflation”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avgZDYM6mTFA

Marc Faber hyperinflation in the US like Zimbabwe

Why You've Never Heard of the Great Depression of 1920

Nixon will be one responsible for hyperinflation

Lost Vegas

Vote Libertarian!

Search Upload * Upload Video File * Record from Webcam 5/19/09 Walter Jones discusses Ron Paul's HR1207 on Fox Business

These anchors have no idea what they are talking about

Ron Paul Current Conditions or Just a Bad Dream 05-19-2009

A round up of footage, photographs and interviews covering the 2009 Bilderberg meeting this past weekend in Athens.

Let's Bring America Back!

YouTube:

Peter Schiff - Ron Paul - Rand Paul - Daniel Hannan - Judge Andrew Napolitano - Lew Rockwell - Bruce Fein - Jesse Ventura - Yaron Brook - Adam Kokesh

Jesse Ventura Owns Hannity

Daniel Hannan says it like it is

Ron Paul saw it coming

Worth Reposting

Peter Schiff at Hard Asset Conference

Support HR 1207 - Federal Reserve Transparency Act

Peter Schiff The Schiff Report Video Blog - April 28, 2009

The Schiff Report Video Blog - April 27, 2009

4/27/09 Ron Paul on Secession: the Ultimate States' Right (Texas Straight Talk)

Dr. Ron Paul with an Update on HR1207 to Audit the Federal Reserve

Marc Faber - The Fed will continue Printing Money

Jim Rogers Interview with Gold Seek Radio 24-04-09

Gerald Celente: Expect 25% Unemployment (Lew Rockwell Show) 4/26/09

Peter Schiff Speech at Audit the FED Rally 25 Apr-09

China 's gold reserves growing by leaps and bounds

Ron Paul Lew Rockwell Show 4-24-09

Ron Paul On The Alex Jones Schow an Excellent Interview End The Fed Rally

Peter Schiff - Video Blog - April 24, 2009

Peter Schiff on Fox BN End The FED Rally in New York 24 04 2009

The Lew Rockwell Show with Peter Schiff - April 24, 2009

Gerald Celente the 2012 Financial Armageddon on the The Wall Street Shuffle 27 03 2009

Peter Schiff on CNN - 04 21 09

Ron Paul on Freedom Watch

Dr Ron Paul On Secession, American Empire, & Bailouts 4/21/2009

Peter Schiff Video Blog Report April 20th, 2009

Gerald Celente and Peter Schiff accused of "Pessimis Porn" by ABC

Ironically they note them for being so accurate on forecasting everything we've already seen.

Peter Schiff on Kudlow 17 Apr 2009

Gerald Celente - 'America lives in a fascist state'

Peter Schiff Real Estate Radio USA Interview

GEAB N°34 is available! Summer 2009: The international monetary system’s breakdown is underway

- Public announcement GEAB N°34 (April 15, 200) -

The next stage of the crisis will result from a Chinese dream. Indeed, what on earth can China be dreaming of, caught – if we listen to Washington – in the “dollar trap” of its 1,400-billion worth of USD-denominated debt (1)? If we believe US leaders and their scores of media experts, China is only dreaming of remaining a prisoner, and even of intensifying the severity of its prison conditions by buying always more US T-Bonds and Dollars (2).

In fact, everyone knows what prisoners dream of? They dream of escaping of course, of getting out of prison. LEAP/E2020 has therefore no doubt that Beijing is now (3) constantly striving to find the means of disposing of, as early as possible, the mountain of « toxic » assets which US Treasuries and Dollars have become, keeping the wealth of 1,300 billion Chinese citizens (4) prisoner. In this issue of the GEAB (N°34), our team describes the “tunnels and galleries” Beijing has secretively begun to dig in the global financial and economic system in order to escape the « dollar trap » by the end of summer 2009. Once the US has defaulted on its debt, it will be time for the « everyman for himself » rule to prevail in the international system, in line with the final statement of the London G20 Summit which reads as a « chronicle of a geopolitical dislocation », as explained by LEAP/E2020 in this issue of the Global Europe Anticipation Bulletin.


Read the rest of the public announcement here

The resemblence of Germany pre-hyperinflation to the current US crisis

1) Post WW I Germany was the biggest debtor nation in the world, at that time. Debtor nations are dependent upon foreign cash flows. In contrast, in the 1930s, like Japan in 1990, the U.S. was the biggest creditor nation in the world. That is why Germany had hyperinflation when it printed money, while 1990s Japan and 1930s America had deflation as they did the same thing. Because we are the biggest debtor nation in the world, the current money printing will result in hyperinflation, NOT deflation.

2) Post WW I Germany had just finished fighting a major war on borrowed money, without properly budgeting or taxing. The USA has just fought, and continues to fight, multiple wars on multiple fronts that, while not quite as "big" as WW I, have been extraordinarily costly. We use a professional army, and its pay and equipment add huge costs. We have failed to budget these wars, and have borrowed money instead in order to fight them. By contrast, from an economic point of view, late 1920s and early 1930s America was a net "beneficiary" of WW I, which resulted in huge debts being owed to the USA, and the first stage of the rise of the U.S. dollar to replace the British pound as an international medium of exchange.

3) Post WW I Germany was heavily dependent upon the import of foreign raw materials. Indeed, the USA was one of its biggest creditors. The USA is no longer a creditor. It is now very dependent upon the import of foreign raw materials and finished goods. The temporary improvement in trade figures will disappear as the fake recovery gets under way. By contrast, in the 1930s, the U.S.A. was one of the biggest exporters of raw materials.

4) Post WW I Germany was heavily dependent upon foreign cash flows to plug holes in its budget after the War. Sales of bundesbonds to foreign buyers, including the American financier, J.P. Morgan, were critical. The USA is now even more dependent than post-war Germany once was, upon foreign cash flows. Sales of huge numbers of Treasury bills, notes and bonds are critical, and a lot of those sales are to China, who, unlike America to Germany in 1918, is currently our strategic competitor, and that makes our situation somewhat worse.

5) It is important to point out that Germany was not the only nation affected by the post-War depression and the so-called 1918 "credit crunch." All of Europe experienced it. Not all countries, however, followed the same path to ruin. Similarly, the whole world is now experiencing the so-called "credit crunch". Hopefully, not all nations will follow the path to ruin being forced by the United States, although the tendency to do so is greater, given the leadership position of this nation in the world compared to Germany then.

6) So, Germany led Europe in the effort to spend its way out of the post-war depression, while the rest of Europe, with the exception of the former Hapsburg possessions (the former Austro-Hungarian Empire) did NOT follow Germany's lead. The former Hapsburg possession did follow the German lead, although with less gusto, and ended up with hyperinflation, at a somewhat lower level. Similarly, the USA leads the world in an effort to spend its way out of this depression, and the U.K. is basically following in our footsteps. In 1919, many admired the Reichsbank. Employment rose, unemployment fell...economic output exploded -- or seemed to, at first. No doubt, that will be the case, again, this time as America leads the way into a fake recovery. Most of Germany's recovery amounted to irrational production. The industrial bailouts were improperly allocated and colored by the illicit transfer of wealth that is inherent when a nation chooses to print up new money. The same will be the case with America.

7) Like America, now, the post WW I German money flows, into that nation, continued for quite a while, in spite of the flawed policies of the Reichsbank. American trade interests, for example, supported German spending on U.S. raw material products, because Germany was one of their biggest markets. The USA played a similar role with respect to the Weimar Republic as China plays now to the USA. It was Germany's biggest creditor. It is quite likely that money flows to America may continue for an even longer time. However, eventually, they will be cut off. It is important, once again, to point out that China is our strategic competitor, whereas a large part of the U.S. population has German ancestry that made us a natural friend to Germany.

8) Like the foolish foreigners who now buy U.S. bonds, even otherwise savvy American financiers, like J.P. Morgan, were convinced by officials of the Reichsbank, that the problems were temporary, and that the mark would regain value, just as buyers of Treasury debt are now convinced that the dollar will retain value. The U.S. has a distinct advantage, because it is able to pump the exchange value of its currency with credit default events that must be settled in dollars. This results in a direct benefit to the dollar in terms of exchange value, and allowed the Fed to obtain foreign currency swap lines. The swap lines were obtained because foreign central banks temporarily needed to supply dollars to financial firms who needed to settle CDS events. In addition, most of the U.S. debt is denominated in dollars. So, the temporary party will go on longer in America, until the world's patience is finally exhausted, and the devaluation of the dollar will not be in the trillions, but, rather likely, it will be in the high single digits, or low double digits. My personal estimate is from a 4 to 10 to 1 devaluation, although anything is possible.

9) The Reichsbank claimed that it could control the events it created, just as the Federal Reserve does now. Questionable statistics were regularly published, just as is now the case in the USA. German authorities believed, just as American authorities now believe, that the perception is more important than economic reality. Eventually, however, when the foreign cash flows dried up, reality did reassert itself, as it always does, and the German economy entered hyperinflation.

10) Finally, most tellingly, the German "professional" economists called the 1918 post war depression, prior to the hyperinflation, "the credit crisis", or "the credit crunch", and the prevailing complaint was that banks were hesitant to lend money. Unwittingly, American professional economists, including Mr. Bernanke, have dubbed the present crisis with the same names, and the complaint is exactly the same. Notoriously, the prescribed remedy is also exactly the same, even though, from all the speeches given by Federal Reserve officials, rather than overtly intending to copy the Reichsbank, they seem to be blissfully unaware of the entire German event. Frightening...

Source

China cutting back

04/15/09 Freedom Watch Tax Day w/ Napolitano, Ron Paul, Peter Schiff, Lew Rockwell

Gov. Perry Backs Resolution Affirming Texas’ Sovereignty Under 10th Amendment

The illusions of a celebrated recovery

A month-long upturn in the stock market has sparked a round of optimistic media commentaries and statements by Obama administration officials suggesting that the US economy is on the road to recovery. But any serious examination of the state of both the financial system and the broader economy suggests that such celebrations are unwarranted.

• Factory orders have fallen so rapidly that US manufacturers are using less than 68 percent of capacity, the lowest level since records began in 1948.
• March saw 35 corporations default on bond payments, the largest monthly total since the Great Depression, according to Moody’s. The default rate has shot up from 1.5 percent a year ago to 7 percent, and will reach 14.6 percent by the fourth quarter, the rating service said.
• Bloomberg News forecasted that corporate profits for the first quarter will fall 37 percent, the seventh consecutive quarterly decline, the worst since the 1930s.
• As measured by the market for credit default swaps, investors have been making large bets that Citigroup and Bank America will collapse. Similar bets were seen before the liquidation of Bear Stearns and Lehman Brothers last year.
• World trade is shrinking more rapidly than during the plunge of 1929-30 according to a paper published this week by economists Barry Eichengreen of the University of California and Kevin O’Rourke of Ireland’s Trinity College.
The deepening crisis is demonstrated above all in its effects on jobs and living standards for the working class:
• The Bureau of Labor Statistics reported that 24 million workers, 15.6 percent of the labor force, are either unemployed or working only part-time when they want full-time work. This is an increase of 10 million workers in barely a year.
• Forty percent of US companies said they plan to freeze or cut salaries this year, according to a survey reported by Reuters April 7.
• Companies have cut back in five employee benefit areas, including 401(k) matches and tuition reimbursement, according to a report in USA Today.
• The average 401(k) account plunged in value by 27 percent in 2008, according to the huge Fidelity Investments mutual fund.
• Personal bankruptcy filings are up 38 percent compared with a year earlier, according to Mike Bickford, president of Automated Access to Court Electronic Records, a bankruptcy data and management company. In all, 130,793 people filed for bankruptcy in March.

Obama on the economy

Dr. Ron Paul on MSNBC in Response to Barack Obama's Speech 04-14-09

Ron Paul 4/14/2009 "Obama Wrong, Destroying Dollar W/ Economic Fascism & Central Planning"

Peter Schiff Vlog Report 14 Apr 2009

Peter Schiff Vlog Report 13 Apr 2009

Peter Schiff June 2005 explaining housing bubble, recession

V

Breakdown of US debt

The break out:

$9.7 Trillion in bailouts
$11 Trillion in national debt
$17 Trillion in corporate/financial debt, and $13.8 Trillion in household debt
$1 Trillion in credit card debt
$10.5 Trillion in mortgages
$52 Trillion in social security/medicare obligations

Like other government trust funds (highway, unemployment insurance and so forth), the Social Security and Medicare Trust Funds exist purely for accounting purposes: to keep track of surpluses and deficits in the inflow and outflow of money. The accumulated Social Security surplus actually consists of paper certificates (non-negotiable bonds) kept in a filing cabinet in a government office in West Virginia. These bonds cannot be sold on Wall Street or to foreign investors. They can only be returned to the Treasury. In essence, they are little more than IOUs the government writes to itself.

$200 Trillion in U.S. bank derivatives (notional)

Total excluding derivatives: $115 Trillion
Total including derivatives: $315 Trillion

In budgetary context:

$2.3 Trillion budget deficit this year, $10 Trillion in the next 10 years.

In the context of the consumer balance sheet:

$20.5 Trillion of residential real estate
$8.8 Trillion of equities
$7.7 Trillion of deposits and cash
$4.1 Trillion of consumer durable goods
$1.6 Trillion of corporate bonds
$960 Billion of municipal securities
$920 Billion of agency paper
$273 Billion of treasury notes and bonds

Total: $44.9 Trillion

Source

What the US national debt looks like in $1 bills

Salbuchi - Will It Be World Government?

Part 1: Summarizes how the Global System REALLY works. "New World Order" as a generic description of periodic global systemic overhauls. Now, the Power Elite want to go for World Government.

Part 2: Describes how the New World Order-promoting Think Tanks, Lobbies and NGO's operate as strategic and tactical DESIGNERS AND PLANNERS. The actual EXECUTION of their plans, however, is done from each Member's "natural place of action", i.e., as CEO or decision-maker at Multinational Corporations, Transnational Banks, Multilateral Institutions, Ivy-League Universities, The Media or Governement. Now, they are going for World Government...!

"We Want Our $$$$ Back" Goldman CEO stormed onstage

"We want our money back!" Dir Economic Council Lawrence Summers Protested!

We The People to Congress: Audit the Fed!

A Recipe for the Next Great Depression

Peter Schiff Vlog Report 09 Apr 2009

80 Years Later: Parallels Between 1929 and 2009

Wall Street Unspun with Peter Schiff - 4/8/09

Freedom Watch : Napolitano, Daniel Hannan, Peter Schiff, Lew Rockwell, and more 04/08/2009

The Global Financial Meltdown Seen by Argentine Eyes

Max Keiser on The Alex Jones

Ron Paul 4/62009 "The Largest Budget In History, I Expect $4 Trillion"

Peter Schiff on CNBC Apr 06 2009

80 Years Later: Parallels Between 1929 and 2009

Peter Schiff 4/2/09 - CBS Evening News

Peter Schiff Vlog Report 03 Apr 2009

Ron Paul "Audit The Fed!" 4/2/2009

Dr. Ron Paul in Opposition to the Budget, Inflation, Empire building, The Fed 04-01-09

Peter Schiff Vlog Report 02 Apr 2009

Wall Street Unspun with Peter Schiff - 4/1/09

Peter Schiff Vlog Report 01 Apr 2009

Ron Paul on Fox Business

Peter Schiff's Predictions 2002 to 2009

Ron Paul - "Focus On Violent Crime/Wasting Time Protecting People From Themselves"3/30/2009

Peter Schiff on the Jerry Doyle Show

Ron Paul on Keynesian Economics, Great Depression, & the Current Crisis

Peter Schiff The Dollar is Gonna Drop Like a Stone

35,000 protest before G20 meeting

Campaign For Liberty St. Louis Conference - Ron Paul

Daniel Hannan Supports Ron Paul, Comments On Republican Party 3/27/2009

Max Keiser - The Truth About Markets - 28 March 2009

Judge Napolitano interviews Peter Schiff 3/25/09

Max Keiser on new reserve currency - March 27

Audit the Federal Reserve (HR 1207)

Ron Paul’s bill to audit the Federal Reserve continues to gain momentum. H.R. 1207 now has 46 co-sponsors (as of 3/27/2009)!

If you too would like to see Ben Bernanke squirm and finally discover what the Fed has been up to behind the scenes, call and write your representative and ask that they support the “Federal Reserve Transparency Act H.R. 1207″.

Capitol Switchboard: (202) 224-3121 or 1-877-851-6437

Here’s a sample letter you can use:

Dear Representative,

Please co-sponsor and/or support H.R.1207, an effort to audit the Federal Reserve.

Recently, it has come to light that there is little to no accountability to the people on the part of the Federal Reserve. While the citizens of this country are required by law to give an accounting of every penny they come in contact with, the Federal Reserve has never been held to the same standard. During this time of extreme economic crisis, the people deserve an accounting of where our money is going.

Currently there are 46 co-sponsors for this legislation, and it is enjoying bi-partisan support. Your efforts in supporting this important legislation would go a long way in proving to your constituents that you not only hold the Federal Reserve to the same standard as you do your constituents, but it would also show that you believe in transparency. Anything less than support for this resolution suggests that you are in favor of secrecy and a lack of accountability to the people who pay the bills. We pay the tab; we have a right to know where our money is going.

Unlike recent bills that you voted in favor of that had hundreds of pages and just a few hours to read, this bill can be read in under 5 minutes. I encourage you to take the time to read it, and then move to support it.

Thank you in advance for your attention on this important legislation. I have every expectation that you will do right by your constituents and support this measure.

Sincerely,

Max Keiser "These guys are financial terrorists, they should be decapitated." - 27 March 2009

Wall Street Unspun with Peter Schiff - 3/25/09

Inside Story - China questions the dollar's value - 26 Mar 09

Ron Paul on regulation - March 26, 2009

Ron Paul on Fox Business 03-25-09

Peter Schiff CNN - March 27, 2009

Support HR1207 The Federal Reserve Transparency Act of 2009

Guns and Butter - March 25, 2009

Guns and Butter

"The World at Crossroads" with Franck Biancheri, Research Coordinator of LEAP/E2020's GlobalEurope Anticipation Bulletin. We discuss Franck Biancheri's open letter to the G20, "Last Chance Before Global Geopolitical Dislocation", which advocates for three strategic recommendations: 1) the creation of a new international reserve currency, 2) the control of banks on a global scale, and 3) an independent assessment of the three national financial systems at the heart of the current financial crisis - the United States, United Kingdom and Switzerland. If radical action is not taken within six months, it is anticipated that the opportunity to shorten the crisis to a 3 to 5 year duration will no longer be possible, and the world (particularly the U.S.) will be in for a very harsh geopolitical dislocation lasting for a decade or more.

Listen Here:

Guns and Butter - March 25, 2009 at 1:00pm

Click to listen (or download)

Peter Schiff 3/25/09 - Schiff Report Video Blog

Spread the word!

Hello Visitors,

I encourage you all to spread the word about this website to raise awareness about the cause of the economic turmoil and how we can be best equipped for what more of it is to come.

You can refer people to the homepage through:

www.FinancialBreakdown.net

Thanks!,

Andre G

Ron Paul 3/24/09 "We Didn't Have Capitalism/Easy Money Deceived The People"

Cato Institute Calls Out Bush/Obama's Keynesian Fallacy! 3/24/2009

Ending the Monetary Fiasco and Returning to Sound Money

Chinese Holdings of US Asstes

Gordon Brown, the devalued prime minister of a devalued country

Peter Schiff on The Lew Rockwell Show

Peter Schiff on MSNBC

Rep. Michael Capuano (D-MA) grills panel

Congresswoman Waters Questions Geithner & Bernanke

Congressman Manzullo: Not One Of You Can Give Me A Yes Or No Answer!

Ron Paul HR1207 The Federal Reserve Transparency Act of 2009 update 03-24-09

Congressman Sherman Explains The 3 Acts Of Kabuki Theater We're Witnessing

Ron Paul: Do You Operate With The Idea That Capitalism Has Failed?

Congresswoman Bachmann Questions Geithner & Bernanke About A Global Currency

Max Keiser and Stacy: Dollar in threat of no longer being the world reserve currency soon!

Ron Paul on Glenn Beck Radio 03-23-09 - MIAC Report, U.N., G20, Geithner, The FED

Jim Rogers the Dollar is Doomed 23 Mar 2009

Bankruptcy is Economic Stimulus by Ron Paul

Bankruptcy is Economic Stimulus

by Ron Paul

The distraction on Capitol Hill this week has to do with the jackpot bonuses that executives at AIG recently received. The argument is over a relative drop in the bucket. The total amount of bonuses given out was $165 million. The government has put $170 billion into AIG so far. Many now are demanding we get this money back. We ought to be spending our time and effort doing something more worthwhile, like figuring out how the Federal Reserve is handling the trillions of dollars they are creating and pumping into the economy, and how that is affecting the purchasing power of dollars in your pocket.

The big mistake was appropriating the TARP funds in the first place. A Johnny-come-lately bill of attainder won’t stop the spending epidemic. This whole situation is a perfect demonstration of why “doing nothing” and letting failing companies fail would have been much better than sinking valuable money and resources into them.

When a company makes a profit, it is a signal that it is taking resources and increasing their value while controlling costs. When a company operates at a loss, it is a signal that it is decreasing the value of its resources or letting out-of-control costs outstrip any value it has created. A company operating at a loss is therefore an engine of wealth destruction. Bankruptcies are a net positive for the economy because more productive competitors are rewarded by opportunities to buy up remaining assets at bargain prices to strengthen their operations. In an economy that allows this kind of growth and change, any jobs lost by bankruptcy are soon replaced by new ones as the most efficiently managed businesses gain access to more assets and expand.

Bankruptcy was the stimulus that we needed in the case of AIG. More bankruptcies would clean out malinvested resources and enable economic growth again.

AIG, by losing money and maneuvering their operations to the brink of bankruptcy, was telling us that they were inefficient. So what did we do? We forced the taxpayer to assume the losses, and now we are supposed to be shocked that it is not working out. Had AIG gone bankrupt, it would have been impossible to hand out these bonuses. The taxpayer would have been fleeced for $170 billion less last year. Had they gone bankrupt, the world would not have come to an end, it would just continue on with one less engine of wealth destruction.

We should have learned from Japan. The 1990s is referred to as Japan’s “lost decade” because of the zombie banks kept on life support by the Japanese government. Any productivity was redirected through these engines of wealth destruction, resulting in long term stagnation. We should and can avoid this outcome if we come to our senses.

A recession should be a time of strengthening and regrouping for an economy. But as long as the government insists on maintaining the status quo by propping up failed institutions, we will continue to dig a bigger hole for ourselves.

Peter Schiff The Crisis Just Begun

The Mother of All Bells by Peter Schiff

March 20, 2009

The Mother of All Bells


There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets. Investors who ignore the clanging do so at their own peril. The bell’s reverberations will be felt by everyday Americans, whose lives are about to change in ways few can imagine. While nearly every facet of America’s economy has been devastated over the past six months, our national currency has thus far skipped through the carnage with nary a scratch. Ironically, the U.S dollar has been the beneficiary of the global economic crises which the United States set in motion. As a result, our economy has thus far been spared the full force of the storm.

This week the Federal Reserve finally made clear what should have been obvious for some time – the only weapon that the Fed is willing to use to fight the economic downturn is a continuing torrent of pure, undiluted, inflation. The announcement should be seen as a game changer that redirects the fury of the financial storm directly onto our shores.

In its statement, the Fed announced its intention to purchase an additional $1 trillion worth of U.S. treasury and agency debt. The purchases, of course, will be made with money created out of thin air through the Fed’s printing presses. Few can doubt that they will persist with these operations until the economy returns to its former health. Whether or not this can ever be accomplished with a printing press alone has never been seriously considered. Bernanke himself admits that we are in uncharted waters, with no map or compass, just simply a hope that more dollars are the answer.

Rather than solving our problems, more inflation will only add to the crisis. Falling asset prices, the credit crunch, declining consumer spending, bankruptcies, foreclosures, and layoffs are all part of the necessary rebalancing of our economy. These wrenching movements, however painful, are the market’s attempts to resolve the serious problems at the root of our bubble economy. Attempts to literally paper-over these problems will lead to disaster.

Now that the Fed has recklessly shown its hand, the mad dash to get out of Treasuries and dollars should not be far off. The more the Fed prints to buy bonds the less the dollar is worth. Holders of our debt (read China and Japan) understand this dynamic. We must expect that they will not only refuse to buy new bonds, but they will look to unload those bonds they already own.

Under normal circumstances, if creditors grew concerned that inflation was eating into their returns, the Fed would raise interest rates to entice them to buy. However, the Fed will avoid this course of action as it fears higher rates are too heavy a burden for our debt laden economy to bear. To maintain artificially low rates, the Fed will be forced to purchase trillions more debt then it expects as it becomes the only buyer in a seller’s market.

Just last week, Chinese premier Wen Jiabao voiced concern about his country’s massive investments in U.S. government debt. In the most unequivocal statement yet by the Chinese leadership on this issue, Wen made it plain that he was concerned with depreciation, not default. With his fears now officially confirmed by the Fed statement, we must wonder when the Chinese will finally change course.

There is a growing consensus that if China no longer wants to buy our bonds, we can simply print the money and buy them ourselves. This naïve view fails to consider the consequences implicit in such a change. When the Treasury sells bonds to China, no new dollars are printed. Instead, China prints yuan which it then uses to buy treasurers. This effectively allows America to export its inflation to China. However, now that we will be printing the money ourselves, the full inflationary impact will fall directly on us.

With such a policy in place, America has now become a banana republic. It won’t be too long before our living standards reflect our new status. Got Gold?

For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read Peter Schiff’s book "Crash Proof: How to Profit from the Coming Economic Collapse".

Ron Paul on CNN

Peter Schiff Report March 19, 2009

Peter Schiff by George Stroumboulopoulos

Peter Schiff 3/19/09 - CNBC The Call

Wall Street Unspun with Peter Schiff - 3/18/09

Audit the Federal Reserve (HR 1207)

Ron Paul’s bill to audit the Federal Reserve continues to gain momentum. H.R. 1207 now has 33 co-sponsors (as of 3/19/2009)!

If you too would like to see Ben Bernanke squirm and finally discover what the Fed has been up to behind the scenes, call and write your representative and ask that they support the “Federal Reserve Transparency Act H.R. 1207″.

Capitol Switchboard: (202) 224-3121

Here’s a sample letter you can use:

Dear Representative,

Please co-sponsor and/or support H.R.1207, an effort to audit the Federal Reserve.

Recently, it has come to light that there is little to no accountability to the people on the part of the Federal Reserve. While the citizens of this country are required by law to give an accounting of every penny they come in contact with, the Federal Reserve has never been held to the same standard. During this time of extreme economic crisis, the people deserve an accounting of where our money is going.

Currently there are 11 co-sponsors for this legislation, and it is enjoying bi-partisan support. Your efforts in supporting this important legislation would go a long way in proving to your constituents that you not only hold the Federal Reserve to the same standard as you do your constituents, but it would also show that you believe in transparency. Anything less than support for this resolution suggests that you are in favor of secrecy and a lack of accountability to the people who pay the bills. We pay the tab; we have a right to know where our money is going.

Unlike recent bills that you voted in favor of that had hundreds of pages and just a few hours to read, this bill can be read in under 5 minutes. I encourage you to take the time to read it, and then move to support it.

Thank you in advance for your attention on this important legislation. I have every expectation that you will do right by your constituents and support this measure.

Sincerely,

Auditing the Fed is only the first step towards exposing this antiquated insider-run creature to the powerful forces of free-market competition. Once there are viable alternatives to the monopolistic fiat dollar, the Federal Reserve will have to become honest and transparent if it wants to remain in business.

Ron Paul introduced bill H.R. 1207 on February 26, 2009 with the following speech to Congress:

Madame Speaker,

I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.

Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.

Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed’s susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.

The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.

More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.

The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.

This is the bill itself, H.R. 1207:

111th Congress - 1st Session

H.R. 1207

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) IN GENERAL. - Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after “shall audit an agency” and inserting a period.

(b) AUDIT. - Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. -

“(1) IN GENERAL. - The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

“(2) REPORT -

“(A) REQUIRED. - A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

“(B) CONTENTS. - The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.

Sponsor

Rep. Ronald Paul [R-TX]

33 Cosponsors [as of 2009-03-19]

Rep Abercrombie, Neil [HI-1] - 2/26/2009
Rep Alexander, Rodney [LA-5] - 3/10/2009
Rep Bachmann, Michele [MN-6] - 2/26/2009
Rep Bartlett, Roscoe G. [MD-6] - 2/26/2009
Rep Blackburn, Marsha [TN-7] - 3/16/2009
Rep Broun, Paul C. [GA-10] - 2/26/2009
Rep Buchanan, Vern [FL-13] - 3/17/2009
Rep Burton, Dan [IN-5] - 2/26/2009
Rep Castle, Michael N. [DE] - 3/17/2009
Rep Chaffetz, Jason [UT-3] - 3/6/2009
Rep DeFazio, Peter A. [OR-4] - 3/9/2009
Rep Duncan, John J., Jr. [TN-2] - 3/6/2009
Rep Fleming, John [LA-4] - 3/18/2009
Rep Foxx, Virginia [NC-5] - 3/10/2009
Rep Garrett, Scott [NJ-5] - 3/5/2009
Rep Grayson, Alan [FL-8] - 3/11/2009
Rep Heller, Dean [NV-2] - 3/6/2009
Rep Jones, Walter B., Jr. [NC-3] - 2/26/2009
Rep Kagen, Steve [WI-8] - 2/26/2009
Rep Kingston, Jack [GA-1] - 3/6/2009
Rep Marchant, Kenny [TX-24] - 3/11/2009
Rep McClintock, Tom [CA-4] - 3/6/2009
Rep Petri, Thomas E. [WI-6] - 3/10/2009
Rep Poe, Ted [TX-2] - 2/26/2009
Rep Posey, Bill [FL-15] - 2/26/2009
Rep Price, Tom [GA-6] - 3/10/2009
Rep Rehberg, Denny [MT] - 2/26/2009
Rep Rohrabacher, Dana [CA-46] - 3/6/2009
Rep Stearns, Cliff [FL-6] - 3/6/2009
Rep Taylor, Gene [MS-4] - 3/6/2009
Rep Wamp, Zach [TN-3] - 3/16/2009
Rep Woolsey, Lynn C. [CA-6] - 2/26/2009
Rep Young, Don [AK] - 3/6/2009