The Federal Reserve Is Playing Defense by Gary North

You probably missed any media coverage of the September 26 speech by Federal Reserve Board of Governors member Sarah Raskin. The media ignored it. You would be wise not to ignore it.

There were a few brief news reports about it. There was no detailed analysis. The media usually ignore speeches by any FED Board member other than Bernanke.

Raskin’s speech reveals what is slowly dawning on the public. The economy is getting worse, and the FED is powerless to stop it.

Her speech was an attempt to reassure her listeners that the FED really does know what it’s doing, contrary to the evidence. The Federal Reserve has spent 45 months trying to deal with the sagging U.S. economy. Nothing is working. It looks as though nothing will work. But she wants us to believe that it’s not the FED’s fault. She did not say whose fault it is.

I have offered a line-by-line analysis of her speech. If you have money in a retirement fund, you would be wise to read it. I have posted it here.

I do not expect many people to read it. People are too busy. Bernanke knows this. The other Board members know this. They give their speeches, which get little coverage. They receive little criticism. They receive little applause. They have little power.

The Federal Open Market Committee has the power. Every eight weeks, the FOMC makes decisions in closed-door sessions that affect a billion people.

Then why read speeches by members of the Board of Governors? Officially, they are the government’s only source of indirect control over the FOMC, which is made up of presidents of the regional Federal Reserve banks, who in turn are appointed by regional FED banks, which are privately owned.

Members of the Board are appointed by the President. Their organization’s Web address ends in .gov. Legally, the Board is in charge of the entire system. This is a convenient myth for public consumption. Operationally, the Board acts as the mouthpiece of the New York Federal Reserve Bank. The New York FED is the most important private economic organization in the world.

Board members are apologists for the New York FED. When I say “apologists,” I mean this in the theological sense: “apologetics” – the defense of the faith. I do not mean it in the sense of offering an apology. The FED never says it is sorry for anything it has done. That would be perceived by Congress and the public a sign of weakness.

THE SYSTEM OF REPRESENTATION

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via The Federal Reserve Is Playing Defense by Gary North.

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