Kohtz.org

You've probably heard me talk about the Federal Reserve. Ron Paul, a Republican representative from Texas, wants to do away with the Federal Reserve. In an attempt to expose what they do behind the scenes, he has introduced a bill that has over 2/3rds of the House in support, and 1/4 of the Senate in support that will audit the Fed, letting us know which banks (foreign and domestic) receive virtually free loans so they can continue their reckless risk taking while tax payers pay for it through debt and inflation.

Wall Street and Wall Street Banks are terrified that this might actually happen, and they might have to be responsible for the first time in almost 100 years with their lending practices.

Douglas A. McIntyre writing for 24/7 Wall Street wrote a piece very critical of the idea that we should know who our money is going to and which banks we constantly keep afloat due to their poor lending standards and poor banking practices. He inadvertently mentions these fears and outright tells us that banks are constantly on the verge of insolvency. Were it not for the Federal Reserve, the big banks on their "high wires" would fail.

The Fed's argument against Paul's proposal is simple and defensible. The agency keeps important secrets including which large banks need substantial amounts of money during hard times. The public cannot know these details because it would cause a national panic. What if it was common knowledge that Citigroup (NYSE:C) had borrowed $100 billion in emergency funds from the agency? Citi's stock could lose 90% of its value in a day. The Fed wants to keep secrets to prevent runs on major banks. The Fed, its defenders would argue, is the home to impartial financial minds that have the best interests of the nation's credit system at heart. The average person would not be able to stand the strain of watching the agency's daily high wire act up close, certainly not during a crisis.
-The Federal Reserve Vs. Ron Paul

In English, he is saying that banks would fail in "hard times" were it not for the Federal Reserve giving them money when nobody else in their right mind would. Instead of letting banks fail when they make mistakes, the government gives them money to keep them alive. It gives them our money. It socializes their losses (tax payers pay for their mistakes), while allowing them to pay themselves million dollar salaries and dish out insane bonuses when their risks pay off.

His article goes on to explain that we are simply "to stupid" to understand the complexities of banking and economics. I'll tell you right now, it's not that complex. They know they are bad at banking. They know they take too many risks. And they know that if they were exposed to true market forces, Wall Street would be worthless.

This is why we need Ron Paul's Audit the Fed bill to pass in it's original form. This is why we need to End the Fed. It's not rocket science, it's actually quite easy to understand. If you're interested, start here.

Here is a very simple example of inflation caused by government spending.

The Labor Department said consumer prices rose 0.3 percent in October, a bit more than the 0.2 percent economists had expected. Core inflation, which excludes energy and food, rose 0.2 percent, compared with analysts' expectation for a 0.1 percent rise.

The higher figure was driven by another increase in energy prices and the biggest jump in new car prices in 28 years (emphasis mine). The price of used cars and trucks also rose by the most since September 1980.

Weak home building a drag on economic recovery

Since the government gave everyone $4500 to buy a new car, everyone buying a new car was willing to spend more. It's not their money they're spending, it was easy to come by, so why not spend more? Thus, car manufacturers charged more.

Whoever thinks a government takeover of health care will reduce costs is fooling themselves. And if you want to look at why health care is so expensive right now, you might want to see if there are any similarities between "cash-for-clunkers" and our current health care system. Hint: health care is heavily subsided by the government, and employers + insurance companies pay for the rest (free money, easy to come by).

Just saw this article...

Afghanistan slips in corruption index despite aid
Afghanistan has slipped three places to become the world's second most-corrupt country despite billions in aid meant to bolster the government against a rising insurgency, according to an annual survey of perceived levels of corruption

Despite aid or because of it? Why do people think giving a country (ie. the select few in power) billions of dollars will lead to less corruption? Money, especially money that is easily come by, is generally the root of corruption, not a cure for it. This is especially true in situations where proper checks and balances aren't in place. It happens in our country and we have the best checks and balances in the world.

If we were really interested in stable governments, politically as well as economically, we would leave them alone. We wouldn't give them foreign aid. Yeah, a few might still become failed states, but at least they wouldn't be failed states with lots of money. We need to start minding our own business since we've been neglecting it for so long. I'm not sure if anyone realizes this, but we don't really have the money to give away right now.

Here is the letter to the editor I wrote the other day. When I wrote it I was really mad because I thought they had just passed a $15K tax credit that I hadn't heard of before. It turned out I was wrong, but I figured I should be just as mad anyway.

---

I woke up this morning and discovered my family had once again been robbed. No, our house wasn't broken into. This was a bit more sinister, and I learned about it on the news.

Five of the perpetrators were from Nebraska. They, with their colleagues, took it on the morning of Friday, Nov. 6. They took it from me, they took it from my children and they took it from my grandchildren.

It's difficult to understand their motive, although I suspect it was for personal gain. What might be confusing to some is that they aren't keeping the money for themselves. They're actually giving it to my neighbors. Anyone who wants it, in fact. I've even been thinking about trying to get some of it back myself, although out of principle I just can't bring myself to do it.

I'm talking about the Worker, Homeownership, and Business Assistance Act of 2009, which lets those who buy a home for the first time get an $8,000 tax credit, or $6,500 for those who already own a home and buy another one.

The most upsetting thing to me is that although we have four representatives in Congress who say they are Republicans, they voted for it, too. Just to be clear, they are Rep. Jeff Fortenberry, Rep. Adrian Smith, Rep. Lee Terry and Sen. Mike Johanns. Sen. Ben Nelson voted for it, but I didn't expect otherwise.

Each one of these thieves - individuals who voted to take my money and give it to someone else in exchange for votes and/or support from the real estate industry - are now directly responsible for the next housing bubble, higher inflation and increase in government debt. Not one of them will receive my vote again.

Every time I think the government can't do anything else to shock me, they shock me. Today it was the "Worker, Homeownership, and Business Assistance Act of 2009." This morning the Senate amended the House bill which the House accepted that lets anyone who buys a home get a 10% of purchase price tax credit up to a maximum of $15,000 from the government. Fifteen thousand dollars! It's spread over two years, but who cares.

This is robbery plain and simple. Taking our money and giving it to someone else. It's going to create another housing bubble, increase inflation, and increase debt. And what's worst of all, every one of our Nebraska representatives voted for it. Rep. Fortenberry, Rep. Smith, Rep. Terry, Senator Johanns and Senator Nelson. I expected it out of Nelson since he is a Democrat, but the Republicans? Seriously? Not one of them will ever get my vote again. I just can't do it.

It prompted me to write a letter to the editor which I'll post at a later date. Here is an article about the bill.

UPDATE: It's not as bad as I thought I guess. The $15K was proposed, but didn't actually pass. The bill is $8K for new home buyers, $6.5K for existing. Still robbery, still won't vote for these politicians.

A bill sponsored by Ron Paul and 308 House members was "gutted" today by the Financial Service Committee Chairman, Mel Watt (D-N.C.). According to Paul, Watt eliminated "just about everything" in preparation for the bill's consideration on the floor of the House.

Why? It's pretty obvious he was bought off.

Watt's campaign contributions in the 2008 cycle amounted to $609,072, but the largest portion was from the banking and financial institutions, a whopping 35.6 % or $217,109!

Contributors to Watt's campaign were Bank of America, Wachovia Corp., American Express and the American Bankers Association.

-Democrats gut a popular Congressional bill

These are the primary beneficiaries of the Federal Reserves ability to create money. I highly doubt he would have their support if he wasn't chairman of this committee.

I really have no idea what can be done with our "democratic" system to get rid of the corruption, except to gut the government itself. That's what this bill was trying to do though, shed some light on where all the money the government creates goes, and you can see how far it got.

Paul says he's going to try and amend the bill to restore it to it's original language when the chance arises. With 308 co-sponsors who supported the bill in the first place, let's hope he can do it.