END the U.S. Federal Reserve

"What most people don't realize is that the Fed -- created by the Morgans and Rockefellers at a private club off the coast of Georgia -- is actually working against their own personal interests." Congressman Ron Paul

"The Federal Reserve, which serves private banks, has compromised our economy and is undermining our freedom. It can and must be stopped now." Vince Vaughn

Economics 101: When you create more of something, the value decreases.
Economics 201 T:he Federal Reserve printing (Liquidity Injections) of Federal Reserve Notes (Dollars) has decreased their value.

Economics 301: The dramatic increase of Federal Reserve money printing in the last couple of decades has devalued our money and caused the current economic crisis.
Economics 401: The Fed is trying to solve the problem with more of the same thing that caused the problem.

The Federal Reserve system is nothing less than the most brilliant tool ever for the transfer of wealth and power from the average citizen to the wealthy and powerful, and we must rein it in to preserve our freedom.Recall earlier questioning of whether Fed-led credit creation was creating a housing bubble. Then Fed Chairman Greenspan would only allow that in isolated parts things were "frothy." He denied the bubble when it was obvious. Greenspan at the same time verbally encouraged mortgage equity withdrawals by homeowners. This turned out to be a vicious trap for trusting citizens. Homeowners trusted the Fed.

Greenspan insisted that one cannot spot a bubble before it bursts. However, the following is a selection of high-profile people that clearly identified the housing bubble and predicted a possible financial collapse: Ron Paul, Nouriel Roubini, David Walker, Nassim Nicholas Taleb, Joseph Stiglitz, Stephen Roach, Stephanie Pomboy, Naomi Klein, Robert D. Manning, Danny Schechter, Juliet Schor, Alf Field, Peter G. Peterson, John Rubino, Daniel A. Arnold, John R. Talbott, Park Dae-sung, Bill Gross, Jim Sinclair, John Mauldin, Fred Hickey, Robert J. Shiller, Barry Ritholtz, Marc Faber, Richard Rainwater, George Soros, Peter Schiff, Bob Bixby, Martin Weiss, Robert Prechter, David Tice, James D. Scurlock, Elizabeth Warren and Paul Krugman.

We later found out the Fed enjoys unlimited power to create and disburse money when circumstances become "unusual and exigent." Its battalions of $350K/yr economists decided to create public funds to make good on unregulated derivatives. Over $173 billion went to AIG and much got routed to derivative counterparties. The Fed isn't telling the details. This action saved the bonus system, making a hero out of Ben Bernanke. End the Fed would stop this abuse for good.

As background, AIG derivatives traders took the wrong side of the bet for cash up-front fees. AIG used the windfall for fabulous multi-million dollar bonuses. When the derivatives matured, AIG would owe a magnitude beyond anything any corporation on earth could pay. But the Fed could pay up if and only if circumstances were unusual and exigent. That is how the Great Panic saved the leaders of the financial industry and preserved the bonus system.

The Fed used $2 trillion in addition to other financial commitments, and there's more than one way to discover where it went. Bloomberg news service is using the Freedom of Information Act (FOIA). Fed resistance has foreign observers aghast. At the heart of the case, the Fed benefits from being a private agency where it can and a governmental agency where it can. The court ruled the Fed must make this information public, but the Fed has time for appeal.

Meanwhile, H.R. 1207 is languishing in committee in the House. US Representative Barney Frank is responsible for this holdup, preventing Ron Paul from calling expert witnesses to testify. By holding up the bill in committee, Frank is giving time for Fed lobbying to get results. I fear the Fed can selectively dispense liquidity as concessions for votes.

The Fed distributed liquidity with criminal unfairness. Citizens are not beneficiaries of Fed largess - just go to a bank for a mortgage or business loan to confirm it. This puts the Fed on the defensive for the FIRST TIME in its history.

In response, the Fed implemented a sophisticated public relations campaign. Bernanke went on 60 minutes with the patter. He's telling the public what it wants to hear, basically that we hit bottom and we're on the way up again. Of course, he hedges himself with disclaimers. These pronouncements are part of an extensive defense and an effort to buy time.

Eventually new events will emerge to dominate media coverage and capture the public's attention. The Fed is counting on that. Also, in a display of raw power, the Fed hired a former Enron lobbyist as its own lead lobbyist to Congress. Congressional votes are in play, worked by Fed lobbyists. Whatever the price, the Fed "crossed the Rubicon." In other words, courageous Ron Paul is outgunned unless in this short window of time the public gets on board.

Mike's Financial Blog and Hot Links - Click Here H.R. 1207 would allow genuine auditing of the Federal Reserve and open Pandora's Box. Auditors would find out where all the public money went and investigations into the scandal would become the hallmark of the next several years. This could even contribute to civil unrest if the foreclosure rate increases. One naturally wonders if any sitting President will stand up to the Fed or get elected without the Fed's imprimatur. Expect fireworks if Fed disbursements gets made public. The Fed distributed trillions in secrecy. We know money went to where wealth was concentrated, the big banks. Small banks were generally excluded. We know money got routed through entities to pay politically powerful investment banks, where the public made good on unregulated derivatives bets. We might find some well-connected hedge funds were bailed out. While money is fungible, we're likely to be shocked at the amount paid as executive bonuses. The Fed claims H.R. 1207 will subject interest rates to political influence. It loves secrecy. As author David Wessel warned, the Fed has become a fourth branch of government not directly accountable to voters. H.R. 833 goes further - it would abolish the Fed. So far no lawmaker has courage to co-sponsor it. This marks the first time a well-known person (Ron Paul) has had the courage. Recall earlier questioning of whether Fed-led credit creation was creating a housing bubble. Then Fed Chairman Greenspan would only allow that in isolated parts things were "frothy." He denied the bubble when it was obvious. Greenspan at the same time verbally encouraged mortgage equity withdrawals by homeowners. This turned out to be a vicious trap for trusting citizens. Homeowners trusted the Fed. Ron Paul did not believe in the Keynesian approach because he didn't trust the Fed. Paul's been fighting Fed secrec toprotect the average person. The book shows all the damage it caused: slow economic growth after its establishment; culpability in The Great Depression; burdening the middle class with the stealth tax of inflation; credit cycles followed by financial accidents and runaway debt that never gets repaid. The book convinced me that our military engagements would not have played out as they did if government had to pay by raising taxes the old-fashioned way.