Volcker Says Fed’s Authority Probably to Be Reviewed

April 18 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker said Congress will probably review the authority granted to the Fed following emergency credit programs doubling the central bank’s balance sheet to $2.19 trillion.

“I don’t think the political system will tolerate the degree of activity that the Federal Reserve, in conjunction with the Treasury, has taken,” Volcker, head of President Barack Obama’s Economic Recovery Advisory Board, said today at a conference at Vanderbilt University in Nashville, Tennessee.

U.S. lawmakers from both political parties have expressed concern in recent months that the central bank has overstepped its authority by creating several emergency credit programs aimed at reviving lending and ending the recession.

“I think for better or for worse we are at a point where the Federal Reserve Act, after all that has been happening in the last year or more, is going to be reviewed,” Volcker said.

Under the act the central bank may in “unusual and exigent circumstances” lend to “any individual, partnership, or corporation” as long as the loans are secured “to the satisfaction” of the Fed.

Lawmakers including House Financial Services Committee Chairman Barney Frank have said Congress should consider revising the Depression-era emergency provision.

The central bank has been using such powers “with great abandon,” Frank, a Massachusetts Democrat, told reporters in January. “Ultimately we have to do something about this statute.”

Volcker didn’t predict the future powers of the central bank.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ainh3qdHJuoM&refer=home

 

Volcker has been mysteriously absent the last month or so, and that's deeply troubling to me, as he's the one Obama's inner circle that still has any measure of credibility, IMO.

I had thought he had gotten pissed trying to go up against Summers and Geithner (Paulson's little lackey) and being disregarded by Obama, ready to resign at the indignity of it all.

I'm glad to see he's back and hope he takes a much more active role from the criminals that surround him.

 

Jim Sinclair says he caved in and with that went the last vestige of economic sanity in the Adm. Volcker is tough and I can't see him giving up a lifetime of integrity. I hope this is true.

 

Question for Volcker is :

Are you man enough ?

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/0awviXb8M7k&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/0awviXb8M7k&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

 

Perhaps HR 1207 has a chance.
http://www.govtrack.us/congress/bill.xpd?bill=h111-1207
http://www.youtube.com/watch?v=bW4YZ6R53yA

 

“I don’t think the political system will tolerate the degree of activity that the Federal Reserve, in conjunction with the Treasury, has taken,” Volcker, head of President Barack Obama’s Economic Recovery Advisory Board, said today
--------------------

Wow, I am confused. Where does the tax relief on wooden arrows and tatoo removal fit in with the bailout money. The focus is on activity of the federal reserve? What about the political system?

 

He has been completely sidelined, reminds me of Powell. He just isn't on the same page, he is absent from the King's court.

 

lets pray this makes it through.

 

Volcker should be put in charge of all, and Summers relegated to a closet shared with Geithner, for the good of the Republic.

They can spoon bread pudding under the door every hour or so.

I heard Summers loves rich bread pudding.

 

I have a feeling Summers will be brushed aside or will resign within the next few months... Volcker will have the reigns when SHTF in the next several years.