Very interesting article.....Im sure about 95% of the people here would agree to this.... Why the Federal Reserve should be audited By John Crudele August 31, 2015 | 8:43pm Modal Trigger It is time for a comprehensive audit of Janet Yellen ’s Federal Reserve — and not just for the reasons presidential candidate Rand Paul and others have given. The Fed needs to be audited to see if its ruling body has broken the law by manipulating financial markets that are outside its jurisdiction. A thorough investigation of the Fed will show once and for all if its former chief Ben Bernanke and current Chairwoman Yellen should go to jail. I know, that’s a bold statement coming as it does on Sept. 1, 2015, with Wall Street still in half-bloom. But it won’t be so preposterous some day in the future if the stock market suffers a full-blown economy-busting collapse and Congress and everyone else are looking for scalps. The Fed should be audited as a brokerage firm would be — its financial holdings, its transactions, market orders, e-mails and phone calls. Special attention should be given to what is called the “trade blotter” at the Federal Reserve Bank of New York, which handles all market transactions for the Fed. The Fed’s dealing with foreign central banks — especially at times of market stress — should be given special attention. Trades in the wee hours of the morning should be in the spotlight. Not surprisingly, the Fed is strongly opposed to an audit and sees it as an intrusion into its autonomy. Washington shouldn’t be intimidated. Autonomy? Hah! That ended when the central bank started playing footsie with Wall Street. Let’s look at what happened to the stock market last week, and it’ll explain what I think those who audit the Fed need to look for. As you probably remember, stocks were headed for oblivion on Monday, Aug. 24. The Dow Jones industrial average was down 1,089 points early in the day before the index rallied for a close that was “only” 588 points lower. China’s problems. Weak US economic growth. Greece. The possibility of an interest-rate hike. Those and other issues were the root causes of last Monday’s woe. But Wall Street’s real problem is that there is a bubble in stock prices created by years of risky monetary policy by the Fed. Quantitative easing, or QE — the experiment in money printing that has kept interest rates super-low — hasn’t helped the economy (and even the Federal Reserve Bank of St. Louis concluded that). But QE did force savers into the stock market whether they wanted to take the risk or not. None of that is illegal. But the Fed now finds itself in the awkward position of having to protect the stock market bubble it created. So Yellen and her board of governors must have been pretty nervous when the Dow and other market indexes fell by an unprecedented amount on Aug. 24. Then, overnight, there was massive buying of Standard & Poor’s 500 Index futures contracts. This was the remedy proposed by a guy named Robert Heller back in 1989 just after he left the Fed board. The Fed, Heller proposed, should rig the stock market in times of collapse. Were those contracts being bought overnight by some Wall Street cowboy for whom potential losses in the disastrous market were of no concern? Or was it the Fed propping up the market? Stock prices initially reacted well to the mysterious overnight buying on Tuesday, and the Dow was up 442 points — until it wasn’t anymore. The blue-chip index finished Tuesday, Aug. 25, with a loss of more than 200 points. Then the same magical buying of S&P futures contracts happened Tuesday night and early Wednesday morning. Stocks again went up at the opening on Wednesday, but this time the gain held. Credit was given to William Dudley, the head of the NY Fed I mentioned above, who offered his soothing opinion that interest rates probably wouldn’t be raised by the Fed at its September meeting. “Once again, the Federal Reserve helped save the day for investors,” the New York Times wrote in a front-page article that cited Dudley’s speech. But that wasn’t true — not unless Dudley’s speech leaked ahead of time. Stocks were up before Dudley’s talk and actually fell when he began speaking. That was probably due to the fact that Dudley pooh-poohed the idea of another dose of QE. Wall Street got lucky the rest of the week ahead of this past weekend’s St. Louis Fed annual conference in Jackson Hole, Wyo. Plus, the month of August was coming to an end — usually a time when traders pretty up their books. Money managers don’t want stocks to go down right before their performance is locked in and reported to clients. The Fed has certain mandated responsibilities. It is supposed to keep inflation within a certain range. It is also charged with protecting the US dollar. Plus — and this is a modern-day responsibility — the Fed is supposed to help the economy and keep unemployment low. Even if you agree with Heller that the market sometimes needs help, there is an enormous risk in doing this too often. First, traders come to think that there is no risk in the stock market — a belief that has been proven wrong time and again. Second, investors have no way of telling what the real value of stocks are. And third, certain well-placed people on Wall Street will always know what the Fed is doing and benefit from it. And when the financial elite benefit, regular folks suffer. It’s time to find out what the Fed has been up to. In this case, ignorance isn’t bliss — it’s costly. http://nypost.com/2015/08/31/why-the-federal-reserve-should-be-audited/
Sounds like anyone who doesn't want to have a peak has something to gain from the lack of full disclosure... LOL Just messing with you though. I hardly doubt that if you were privy to anything that you would actually be here with us ET folk.
I'm genuinely curious if the "audit the fed" crowd is being willfully ignorant of how often and by how many different parties the fed is actually already audited, or if they really can point to exactly what needs auditing that isn't currently audited? Not only the GAO, but Deloitte & Touche audit the financial statements and transactions of the Fed. Its one of the most audited agencies in the federal government. Their "financial holdings, its transactions, market orders, e-mails and phone calls." are already audited! The only part of the Fed that isn't audited is the "deliberations, decisions or actions on monetary policy matters.", which is the core of an independent Fed. S2007S, I'm really trying to get an insight into your thought process, not trying to pick a fight. Did you know how much the Fed is already audited? If so, what specifically that isn't already being audited would you like audited, or do you believe the GAO and Deloitte & Touche are providing false audit results?
You don't have a clue about an audit. You just read this claptrap somewhere and then state it as if you know what you're talking about. You obviously don't. An audit report is just a fairness opinion upon examining a statistically relevant number of transaction and the procedures for gathering them. It does not reveal an in depth accounting of everything the client, in this case the federal reserve, does. If the fed is legally authorized to trade s and p futures, and it appears they are, given the futures exchanges say they have accounts with the fed, then we'd like to know what kind of mkt shenanigans, if any, the fed is engaging in. Among other things. Both Greenspan and Volker have made public statements in the past about how they made mistakes by not trading in Gold at appropriate times. I don't think they would have made these statements unless they had the authority to actually make those trades. It is absolute BS that the public is not allowed to know just what kind of things the federal reserve is doing. And we don't from an audit report. We are only allowed to know if the statements are 'fairly represented'.
I've been pretty heavily involved in both public and private sector audits, coincidentally conducted by the GAO and D&T, providing data for auditors, and have had my own company's financials audited, so while I don't hold myself out to be an expert I'm certainly not regurgitating "claptrap" I read somewhere. I can tell you, again with first hand experience with these two auditing entities, that there is no way you could move money into a somehow hidden futures account at the amounts necessary to move world markets without that showing up in the paper trail that the auditors are reviewing and throwing giant red flags. Just to give you a concrete example of the level of detail these guys are looking at from my past experience, the Coast Guard's audit includes a random sample of spare parts including things like washers and bolts, and requires two people to actually physically count the items in the sample to ensure it matches what is in the inventory system, at every Coast Guard unit from Alaska to Maine. I understand washers aren't futures accounts, I provide that concrete example just to show the level of thoroughness of one of these audits and how inconceivable it would be, having actually experienced one, to think that somehow billions of dollars of "shenanigans" would be missed by the auditors. Are you maintaining that these alleged nefarious transactions just happened to not be part of the "statistically relevant number of transactions" that were examined, they were hidden from the examiners, or the examiners are crooked? And also, by the way, I'd be curious what your firsthand experience has been in one of these audits?
After 2008 crisis many americans are holding cash in history, but unfortunately the fed did excessive monetary easing, mom and pop, those who experience job insecurity are not making monies out of their rainy days savings. If only the fed do the right thing and let the market finds its true value we should be in real recovery by now. If only trillions of dollars in cash hoarded by savers earning some interest that will be a lot of money circulating in the economy instead of those money going into momentum stocks that will be bankrupt once this bubbly stock market POP's.
Mr Crudele should be more careful. History has shown that messing with the Fed can end badly (executive order 11110 anyone?). In the UK we are much more transparent, the Bank of England has been privately owned for the majority of it's existence but in recent times there is no doubt it is owned by the UK government. What about ownership of the Fed? A much more opaque subject. Consisting of a membership of 12 regional bank, the New York Fed is the largest. Who owns the New York Fed?