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Fed’s Board Meeting Minutes Released

January 18, 2012

Those of you who have read my writings before this blog began know I have been critical of the Federal Reserve for many years — well before the 2008 recession. In particular, I was critical of past chairman Alan Greenspan. Even before our economic calamity besieged us, I opined that Mr. Greenspan would go down in history as the worst central banker we have ever had.

Last week, the New York Times printed an article reporting on the actions and attitudes of our central bankers during the early stages of our real estate melt-down. The story was based on minutes from official meetings of the Federal Reserve Board in 2006. Why, you ask, is the Times just now running a story on the Fed’s 2006 meeting minutes? Because minutes of Federal Reserve Board meetings are considered confidential and not made public for five years.

This raises a whole series of other questions about how a clandestine group of central bankers control monetary policy — which controls our economy — and they are answerable to no one. The best we get from them is five-year-old meeting minutes!?! And don’t be surprised if that time frame changes in the future, as they become increasingly concerned with what might be revealed in the midst of our economic crash.

I have wondered for many years if our central bankers were corrupt or if they were inept. In reading the NY Times article, it seems they were inept (at least at the beginning of our economic collapse). We know that in the midst of the financial calamity in 2008, our U.S. Treasurer (Henry Paulson) was tipping off the big Wall Street firms about actions that should not have been shared. Did this extend to Bernanke, Geithner and others?

So I guess it is better to be inept than corrupt. The board minutes showed that even as others warned about the bursting housing bubble our central bankers ignored all the clear signs and even joked about there being a bubble at all. It is sad to read, particularly when you consider that it was the actions of the Federal Reserve that most contributed to the housing bubble in the first place.

What is most inexplicable, however, is how we (our national leaders) have done nothing about this ineptness. In fact, we have reappointed or promoted the same cast of characters. It doesn’t give me a great deal of confidence that the very group that contributed to the housing bubble, and even denied its existence as it was collapsing, are now undertaking the greatest monetary policy experiment (increasing our economy’s money supply, or quantitative easing) in our history.

If I have asked this question once, I have asked it 100 times (make that 101 times now): Why are our elected leaders accepting the Fed’s proposed medicine of more quantitative easing? I’m afraid we will discover one of these days that the medicine our central bankers prescribed was actually arsenic.

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