The Fed Wants More Control

Over the weekend, the Federal Reserve has sponsored a plan to revamp regulation of the financial system. Did anyone see this coming? Well, if you are a regular reader of this blog, you certainly should have.

Their new plan will broaden the control the Federal Reserve has significantly. The proposal would combine the five agencies now responsible for regulating banks, thrifts, and credit unions into a much larger single agency. The Fed would sit on top of this structure with expanded responsibilities and serve as the "market stability regulator". How much more control can they already have when they control the money supply in the market? Not only do they loan the government money at interest, change interest rates that directly affects how much money the banks can lend out, but now they also want more control over what the banks and other financial institutions do with this money. This seems to be another prescribed event coinciding with the solvency problems connected to Bear Stearns investment bank.

For example, the Treasury plan calls for the merger of the Securities and Exchange Commission and the Commodity Futures Trading Commission. The powers of the Securities and Exchange Commission would go into a super agency responsible for business conduct and consumer protection. What does this have to do with the credit crisis in the subprime mortgage industry? Over-leveraged mortgage backed securities is what caused the problem with Bear Stearns.

Here comes the Fed with a solution - give us more control so these events won't happen in the future. If you go back to previous posts in this blog on the History of Money, JP Morgan did this in the Panic of 1907. Franklin D. Roosevelt (at direction from the Federal Reserve) did this in 1933 with the Executive Order 6102 making it illegal to hoard gold by US citizens. The Great Depression was caused by the international bankers. Many farms were lost and handed over to the banks. These events all have one goal, to strip the money from the public and send it to the international bankers who do control the Federal Reserve. How much more can we put up with? When do we actually stand up and say "No more!"?

Take at look at this comment from a finance professor at Drexel University. "These proposals address regulatory problems that may be generally necessary, but none of the suggestions provide ways of dealing with the crisis and economic roots of the crisis," said Joseph Mason.

Others in the industry are comparing this act to the Sarbanes-Oxley legislation in 2002 in response to the accounting scandals with Enron and other large companies. However, now American companies are finding it even more difficult to compete on a global scale because of the additional reporting requirements. Many investors are also avoiding US companies already because of the scrutiny of the SEC. More regulation and more power will solve these problems?

But that is what they would have you believe. When do you realize that it doesn't work? When all your money is gone. Oops. Sorry. The economic slavery covered last week will pale in comparison if the Fed gets more control. Only we can stop it.

When the wicked rise to power, people go into hiding;
but when the wicked perish, the righteous thrive. Proverbs 28:28 (NIV)

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Email: DeltaInspire@panama-vo.com