Slippery Words Versus Transparency ?This morning’s first item is something of a personal rant, but deserves to be said. We begin by looking at the Federal Reserve website, upper right where there’s a little box reading “Does the Fed get audited? YES”
Now, the problem I have is that this is one of those half-truths which run around Washington in large herds, reminiscent of days long ago when buffalo roamed the west, too.
The half-truth, spied by reader Holly, was Ben Bernanke’s speech on “Five Questions.” Please note that what the Chairman himself outlines is the limited scope of the Government Accounting Office (GAO) role in reviewing the Fed:
“While the GAO has access to all aspects of the Fed’s operations and is free to criticize or make recommendations, there is one important exception: monetary policymaking. In the 1970s, the Congress deliberately excluded monetary policy deliberations, decisions, and actions from the scope of GAO reviews. In doing so, the Congress carefully balanced the need for democratic accountability with the benefits that flow from keeping monetary policy free from short-term political pressures.
However, there have been recent proposals to expand the authority of the GAO over the Federal Reserve to include reviews of monetary policy decisions. Because the GAO is the investigative arm of the Congress and GAO reviews may be initiated at the request of members of the Congress, these reviews (or the prospect of reviews) of individual policy decisions could be seen, with good reason, as efforts to bring political pressure to bear on monetary policymakers. A perceived politicization of monetary policy would reduce public confidence in the ability of the Federal Reserve to make its policy decisions based strictly on what is good for the economy in the longer term. Balancing the need for accountability against the goal of insulating monetary policy from short-term political pressure is very important, and I believe that the Congress had it right in the 1970s when it explicitly chose to protect monetary policy decision-making from the possibility of politically motivated reviews. “
Now, we all know that under Article 1, Section 8 of the Constitution, the Founders laid on Congress responsibility to “To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;“
However, when the bankers began the systematic hijacking of America on behalf of corporate interests, they exercised the last paragraph of Section 8 which allows Congress “To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof. “
This may seem like minutia, but it really is terribly important stuff. Remember, the Fed goes on almost endlessly about it’s “dual mandate.” As the Chicago Fed explains that: “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.”
As you can see, here, the Fed clearly has constitutional authority which can be delegated by Congress when it comes to the value of money, but I can’t find a satisfactory answer to the delegation of “employment,” “prices,” nor “interest rates,” as I didn’t see reference to them directly in the Constitution.
Which leaves me with just two unanswered questions for the GAO in its partial auditing role:
1) where is authority to get into employment, prices, and interest…which are obviously different as hell from simply coining money and regulating the value thereof. And…
2) Who pulled Gold out of the Z.1 report and why? I refer to the Flow of Funds Accounts of the United States, which included multiple references to gold in (as one of many examples) this 1999 report, whereas the current Z.1 makes no reference to gold. I mean WTF? One Z.1 report (March of 2000) there are lots of reference to gold (see here) but the following report all references disappeared down a statistical dark alley. Go find the word “gold” for me in the June 2000 Flow of Funds here.
I don’t mean to start off your morning on an overly conspiratorially-sounding bent, but we do notice gold (an asset) disappeared off the books and any [purported] audit of the Fed can’t touch the one thing they do that matters most: monetary policy.
Paper with ink on it is not wealth. It is a taw, placeholder, mythical storehouse but when comes right down to it, paper is little more than a TEGWAR* with one player holding a gun (or the full force of government) against the head of the other players.
Don’t know what a TEGWAR is? From Wikipedia: “Tegwar – [from] Bang the Drum Slowly (the novel by Mark Harris, also a film) It is a game basically designed to separate a sucker from his cash. The letters stand for “The Exciting Game Without Any Rules.” When the characters in the film play the game, they appear to be making things up as they go along. “
I know the Fed is playing TEGWAR here, and hiding behind accounting nits like the notion that since there are no gold certificates out there (which would let a customer demand gold, just like silver certificates disappeared, too) but accounting fictions like “non-monetary gold” are a dead-giveaway that there’s TEGWAR being played and the other players? Say hi to one of them in the mirror this morning.
And in Washington? It’s the only game in town. I’ll get back to you when there’s a gold audit and when the GAO grows some goanies. And I pass on to the forensic accounting grad students this dandy pop quiz question: What is non-monetary gold? Answers due soon. Be sure and quote rhyme, verse, and pickle in your answers.
TEGWAR Game Hints
Might want to look at the Clean Up Washington site, although that has moved on to Citizen.org and DontGetRolled.org. Seems that if you’re a member of The Club there are no rules on things like insider trading…which is why people go to Washington poor and come home rich. If they ever dare come home, at all.
To Market, To Market…
And up again this morning say the futures… Which should mean (as loosely coupled hyper-complex systems go) that the dollar should be down (.7737 vs. Euro) and gold up (+2.80). Gee, who’d thought?
Leading the hype fest later on this morning should be auto sales, out at 10 Eastern.
Waiting for Debating
Polls are all over, depending on brand of true believing you’ve been conned into. I read my first inside look at campaign strategy in 1972, or so, and when I saw how voters were sliced and diced by the marketing teams, it was disgusting.
Basically, you’re going to fit into one of four quadrants:
positive candidate | negative candidate
identification | identification
negative opponent | positive opponent
identification | identification
Which means, you either get really turned on to the candidate, turned off to the opponent, or get turned off to the candidate or on by the opponent.
Then it’s a simple matter of managing the message matrix and Presto! New congresstype, senatetype, or presitype. East, huh? If you have a billion in charisma, you too can play.,..
6.2 off Japan last night. And because of the economic ruins from all the quakes, we’re hearing some stories of Japanese companies (in high tech) leaning on US subsidiaries to send more cash home…so Japan could have some downside ahead. Wonder how bankrupt is spelled in Japanese?
Foreign Policy: We are Geniuses
Sayeth the NYTimes piece here “U.S. abandoning hopes for Taliban peace deal.“
I don’t claim to be much of a tactician, but this is what history books would call “home field advantage.” People fighting for ancestral lands fight harder, longer, and with more heart, than say, oh….you figure it out. Vietnam taught the world that lesson. But apparently people in Washington STILL DON’T GET IT. Kick ass any way you can, or leave…polite wars don’t exist except as an Ivy League wet dream.
More than Candid Cameras
Tape over that smartphone camera when not in use! New paper out from Indiana University and the Naval Surface Warfare Center (Indiana, as well) has figured out how to 3D map the room you’re in so that team of SEALS waiting outside can know how things are laid out inside – in advance. Check the abstract:
“As smartphones become more pervasive, they are increasingly targeted by malware. At the same time, each new generation of smartphone features increasingly powerful onboard sensor suites. A new strain of `sensor malware’ has been developing that leverages these sensors to steal information from the physical environment | e.g., researchers have recently demonstrated how malware can `listen’ for spoken credit card numbers through the microphone, or `feel’ keystroke vibrations using the accelerometer. Yet the possibilities of what malware can `see’ through a camera have been understudied.”
Which leads to Ure’s newest computer science axiom:
“The smarter the device, the dumber the user.”
Not that cameras matter with TSA reportedly confiscating cameras with suspected pix of checkpoints. Like that’s a secret? Doesn’t seem to be a law against filming in public says the TSA website…but absolute power corrupts what?
More after this…