AUDIT THE FED-Central Banks - The Shell Game - How the Federal Reserve is Monetizing Debt

Below is the first part of a Martenson Report from a few weeks ago, previously available only to enrolled members but now available for free to everyone.

Executive Summary

* The Federal Reserve and the federal government are attempting to "plug the gap" caused by a slowdown of private credit/debt creation.
* Non-US demand for the dollar must remain high, or the dollar will fall.
* Demand for US assets is in negative territory for 2009
* The TIC report and Federal Reserve Custody Account are reviewed and compared
* The Federal Reserve has effectively been monetizing US government debt by cleverly enabling foreign central banks to swap their Agency debt for Treasury debt.
* The shell game that the Fed is currently playing obscures the fact that money is being printed out of thin air and used to buy US government debt.

The Federal Reserve is monetizing US Treasury debt and is doing so openly, both through its $300 billion commitment to buy Treasuries and by engaging in a sleight of hand maneuver that would make a street hustler from Brooklyn blush.

This report will wade through some technical details in order to illuminate a complicated issue, but you should take the time to learn about this because it is essential to understanding what the future may hold.

One of the most important questions of the day concerns how the dollar will fare in the coming months and years. If you are working for a wage, it is essential to know whether you should save or spend that money. If you have assets to protect, where you place those monies is vitally important and could make the difference between a relatively pleasant future and a difficult one. If you have any interest at all in where interest rates are headed, you'll want to understand this story.

There are three major tripwires strung across our landscape, any of which could rather suddenly change the game, if triggered. One is a sudden rush into material goods and commodities, that might occur if (or when) the truly wealthy ever catch on that paper wealth is a doomed concept. A second would occur if (or when) the largest and most dangerous bubble of them all, government debt, finally bursts. And the third concerns the dollar itself.

In this report, we will explore the relationship between those last two tripwires, government debt and the dollar. To read the reportCentral Banks - The Shell Game -How the Federal Reserve is Monetizing Debt

CALL YOUR REP TO SUPPORT THE AUDIT THE FED BILL (H.R.1207)!

AUDIT THE FED FACT SHEET

Monday is massive calling in support of H.R. 1207 to "Audit the Fed."

Even though H.R. 1207 is getting surprisingly good bipartisan support and has 84 co-sponsers in the House as of today, it will still take a massive grassroots impact on Congress to get this "Audit the Fed" bill passed by both houses of Congress and signed by the President.

Participate in“melt-the-switchboard day" on Monday to help pressure Congress into passing H.R. 1207. by phoning a specific, toll-free congressional switchboard number, 1-877-851-6437, and asking to speak to the offices of the Members of House Financial Services Committeeand then, asking to speak to those representatives who have cosponsored H.R. 1207 to praise and applaud them.

The strategy appears to be to have everyone phone in through one congressional switchboard number in order to maximize the chances for overloading the phone system.

Monday is for melting the congressional switchboard by massive calling in support of H.R. 1207 to "Audit the Fed."


What is the Federal Reserve?

The Federal Reserve provides that Congress shall have the power to coin money and regulate the value thereof and of any foreign coins.

"The Federal Reserve is considered an independent central bank. It is independent since its decisions do not have to be ratified by the President or Congress. The Federal Reserve System was created by Congress in 1913 "to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes." This Nation

"The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency.( Article I, Section 8, Clause 5. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.

In fact, Congress' constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation's founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy."
Congressman Ron Paul