Safehaven | Senator Shelby Calls Fed's Expertise "Grossly Inflated" as Geithner Attempts to Defends the Indefensible

June 18, 2009

Senator Shelby Calls Fed's Expertise "Grossly Inflated" as Geithner Attempts to Defends the Indefensible
by Mike Shedlock

Like every bloated bureaucracy, the Fed wants still more power. Secretary of Treasury Tim Geithner, a former Fed Governor, is all too happy to give it to them.

Please consider Geithner Defends Plan to Give Fed Stepped-Up Powers in Overhaul.

Treasury Secretary Timothy Geithner defended the administration's proposal to give the Federal Reserve increased powers in his first public tussle with lawmakers skeptical whether the central bank is up to the job.

Advocating for President Barack Obama's regulatory overhaul on Capitol Hill, the Treasury chief faced repeated questions from senators who cited previous regulatory failures at the Fed and potential conflicts with its monetary-policy duties.

"The Federal Reserve is best positioned" to oversee the biggest financial companies, Geithner told the Senate Banking Committee in Washington, adding that the Obama plan gives the Fed only "modest additional authority." Most central banks around the world have some responsibility for monitoring systemic risks, he said.

Dodd, a Connecticut Democrat, quoted one critic's view that giving the central bank more power was like awarding a son a "bigger, faster car right after he crashed the family station wagon." He added that he hadn't made a conclusion on the issue.

Geithner said that the Fed has "greater knowledge and feel for broader market developments" than any other U.S. banking agency. He added that giving those powers to a council of regulators wouldn't work.

"You don't convene a committee to put out a fire," he said.

The president's announcement yesterday marks the beginning of what promises to be a political battle that's likely to alter the administration plan, with some lawmakers opposing any expansion of the Fed's power. Obama, who has called the "sweeping overhaul" of regulation one of his top domestic priorities, said he wants to sign legislation by year-end.

Blueprint For A Power Grab

Obama and Geither call this "reform". It's not. Abolishing the Fed would be reform. Giving the Fed more authority is a a power grab not reform.

Obama's Blueprint for Reform Concentrates Still More Power in Hands of the Fed.

Fed Uncertainty Principle In Action

Flashback Thursday, April 03, 2008

Inquiring minds are taking another look at the Fed Uncertainty Principle.

Uncertainty Principle Corollary Number Two

The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

That prediction was made well in advance of any of the Fed's power grabs. I wish I was wrong.

Stop The Power Grab

Phone, Fax, or Call your legislative representatives and tell them you support Ron Paul's effort to dismantle the Fed not increase its power.

Please see Speak Out - Audit the Fed, Then End It! for ways to contact your representatives.

Make the message simple.

"Stop the Fed's Power Grab"
"Audit the Fed, Then End It"

Phone, Fax, or Call your legislative representatives today!

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/

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.