Archive for February 23rd, 2009

In  Worldnet Daily, “Financial Fix? Abolish the Fed, says congressman; Paul: Constitution Requires coin based on gold, silver” writes that Ron Paul advocates several changes, among them the removal of the Federal Reserve Board. Though I have not come to any decision myself, I’m not sure if giving control to Congress would fare any better. 

Ron Paul argues that even the current Federal Chairman, Bernanke admitted in a speechthat the Federal Reserve was responsible for the Great Depression. Though I have not finished reading it, I believe the critical point was that monetary policy caused the Great Depression. However, this does not mean that only the Federal Reserve can make bad monetary decisions.

For me, the underlying issue becomes who can control monterary policy better. Ron Paul argues that because the Constitution gives Congress the power coin and control the value of currency, not a centralist-private bank interested in their own income. Although I have not looked into the constitutionality of this, based on Congress current track record with the economic stimulus package, I’ll continue to be quite skeptical that Congress could do any better.

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In the Wall Street Journal article, “U.S. eyes Large Stake in Citi: Taxpayers could own up to 40% of Bank’s Common Stocks: Diluting Value of Shares,” CitiGroup has been talking to the  U.S. government about increasing the government’s ownership of Citigroup’s stock to as much as 40%. Since last Fall, the Treasuary Department has put $25 billion into CitiGroup on three seperate instances, in the form of preferred shares and warrants, a type of security issued by a corporation giving the holder the right to purchase a certain amount of common stock at a stated price.

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