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Federal Reserve To Be Given Sweeping New Powers
Bankers get what they lobbied for, media reports total
lack of transparency as "regulation"
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The privately owned and run Federal Reserve is to be handed
sweeping new powers under Obama administration proposals in
a deal that will please bankers who lobbied for more Fed "oversight"
of their activities.
The new rules would see the Fed given the authority
to "regulate" any company whose activity it believes
could threaten the economy and the markets.
"The final plan due to be released on Wednesday
-- which originally aimed to streamline and consolidate banking
and securities regulation in one or two agencies -- now is expected
to sidestep most jurisdictional disputes and simply impose across
the board standards to be applied by all financial regulators,
according to administration and industry sources, " reports
the Washington
Times.
In other words, the Fed, which is already totally
unaccountable to Congress, is to be placed in complete control
of the entirety of the US financial system, to do as it wishes
without repercussion.
As the LA
Times reports, the government, in conjunction with
the private Federal Reserve, would effectively have the clout
to simply seize and take over any company it desires.
In order to appease those opposed to the plan,
such as Sen. Christopher J. Dodd, chairman of the Committee
on Banking, Housing and Urban Affairs, the Obama administration
has agreed to create a "watchdog" council of regulators
to "advise the Fed".
However, as former chairman Alan
Greenspan has most recently pointed out, given
that the Fed is an independent entity, accountable to no one,
it will have the power to simply reject and overrule any advice
it is offered.
(Article continues below)
The mainstream media, for the most part, has
reported the oversight plan as a much needed regulatory crackdown
on those responsible for the financial crisis. However, the
details of the plan constitute almost exactly what lobbyists
for leading bankers have been pushing for over the past few
weeks.
"All derivatives contracts will be subject
to regulation and all derivatives dealers subject to supervision,"
Treasury Secretary Timothy F. Geithner said at a Time Warner
Economic Summit in New York on Monday, also noting "When
you have too many people involved, there's an accountability
problem."
As we
reported earlier this month, heads of nine of the
biggest banks in the derivatives market, including JP Morgan
Chase, Goldman Sachs, Citigroup and Bank of America, secretly
lobbied to keep derivatives under Federal Reserve "oversight"
and away from real scrutiny.
As reported by The
New York Times, they all met secretly to discuss
how to use the lax regulation and institutional secrecy of the
NY Fed to shield their credit-default swaps business from prying
eyes and attempts at regulation.
The banks formed a lobby– the CDS Dealers
Consortium– only weeks after accepting TARP funds in October
2008 to protect its interests. Heading this effort was Edward
Rosen, who previously helped fend off derivatives regulation.
Rosen wrote and circulated a “confidential memo”
to the Treasury Department and leaders on Capital Hill, making
their agenda clear, the Times reported.
Rosen and his backers propose that derivatives be “traded
in privately managed clearinghouses, with less disclosure,”
according to the Times. The clearinghouse of choice for the
big banks in Rosen’s CDS Consortium is ICE U.S. Trust,
which is in turned regulated only by the Federal Reserve system.
So the upshot of all this is that the bankers get what they
want, are allowed to carry on as they were, while at the same
time the fractional reserve banking system and the federal government
are both greatly expanded and empowered, and the compliant corporate
media ludicrously tells us that a strict crackdown is underway.
This kind of activity is exactly what some leading
representatives have warned of in recent weeks.
A fortnight ago, the Democratic Chairman of the
Agriculture Committee, Collin Peterson, announced to the press
that “The
banks run the place,” in reference to the
US Congress.
While Peterson is also pushing for legislation
to regulate derivatives trading, his proposed bill would limit
derivatives trading to public exchanges, rather than
private clearinghouses, which are managed by banks.
Peterson's warning mirrors that of Democratic
Senator Dick Durbin, who just a few weeks before
uttered the same rarely acknowledged truth.
"And the banks -- hard to believe in a time when we're
facing a banking crisis that many of the banks created -- are
still the most powerful lobby on Capitol Hill. And they frankly
own the place," Durbin said.
How simultaneously dangerous and ridiculous it is that the
Federal Reserve is given more authority to oversee the economy.
This is the same privately run entity that refused to comply
with congressional demands for transparency and disclose the
destination of trillions
dollars in bailout funds. It is the same privately
owned entity that has withheld
internal memos, in spite of freedom of information
act requests. It is the same private entity, run for the most
part by European banking elites, that has arrogantly refused
to tell Senators and Congressmen which banks were in receipt
of government loans.
The government is ready to hand over everything to a monolithic
private corporation and a gaggle of bastard banker offspring,
that have gobbled up an
amount close to the entire GDP of the country in
taxpayers’ money and figuratively stuck the middle finger
up regarding questions over where that money has gone.
It can be no more apparent than at this time that legislation
to audit, repeal and eventually end the Federal Reserve,
must be supported by Americans if they want to see their children
and their grandchildren grow up without indentured debt and
entrenched servitude to a fascistic marriage of private banks
and hugely inflated government.
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