Federal Reserve Chairman Ben Bernanke waged a fresh battle against Senate efforts to strip the Fed from banking supervision.
Bernanke, in a paper to Congress released Thursday, argued that stripping the Fed of such power would deprive the central bank of information that factors into the setting of interest rates to influence overall economic activity.
"Elimination of the Federal Reserve's role in supervision would severely undermine the Federal Reserve's ability to obtain in a timely way and to evaluate the information it needs to conduct its central banking functions effectively," according to the paper.
Information on the health of banks will factor into Fed decisions about when to start boosting interest rates and reeling in other stimulus to prevent inflation from taking off, the paper noted.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., wants to rein in the Fed's power and remove it from overseeing banks as part of a broader legislative revamp of the nation's financial structure. That conflicts with the Obama administration's stance as well as the approach taken by House lawmakers in their financial overhaul bill.
Dodd wants to curtail the Fed's banking powers because he blames the central bank for lax regulation and failing to spot problems-- mistakes that contributed to the worst financial crisis since the 1930s.
Bernanke Sprays Clouds of Ink
Pray tell what does access to information have to do with supervision? The answer of course is nothing.
Bernanke is fighting a strawman that does not even exist, on purpose, I might add. If it is information Bernanke wants, give it to him the moment it comes out. No one has proposed taking away the Fed's access to information. If the Fed wants more information than it has, all it has to do is ask.
Bernanke's tactics are much like that of a squid, spraying clouds of ink, hoping to hide the real issues and confuse the inept.
Send A Message
With every letter you send, with every bill you write, and with every dollar you spend, send a message.
Here's how:
Go out and buy some stamps that say things like ...
"End The Fed" "Got Gold?" "Dump Bernanke" "F#&! The Fed" "Buy Gold; End the Fed" "I Demand Honest Money" "Dump the Dollar, Buy Gold"
Use your imagination.
By the way, "End the Fed" is better than "Audit the Fed" as that is the ultimate goal.
Red Ink Will Stand Out Better
You can get custom rubber stamps cheap in many places.
Stamp a loving message on all the bills you pay, on every letter you send, any piece of paper or form you send anywhere.
Order some stamps today and tell your friends to do the same.
Mike Shedlock / Mish
Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.
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