help we can close it and shine some light on the Federal Reserve.

Bernanke has left his tremendous actions in the dark, and no one is watching
Fed Chairman Ben Bernanke, economically, is arguably more powerful than the President. Without anyone's oversight or approval, Mr. Bernanke has printed ~$1.1T out of thin air, spent it, and guaranteed much more on an alphabet soup of programs as of 5/20/09 (source 1, 2, 3). He has not said what he has bought. He has not said what price he is paying. The Federal Reserve Inspector General, who is responsible for overseeing the actions of the Federal Reserve, has no clue what is going on. Please see this video (YT 5/6/09).

The murmurs we do hear imply he is systematically overpaying
All we hear are murmurs every so often about how he have over-paid, like major losses due to Fed guarantees to JP Morgan over Bear Stearns' toxic muck (source 1, 2), and back door bailouts to Goldman Sachs and foreign banks via paying well over the market price to AIG for vastly depreciated "credit default swaps" (source 1, 2, 3). Let's not forget, Bernanke himself said on 4/1/09 that the Fed would NOT lose money on those Bear Stearns assets: "In his testimony Wednesday, Bernanke said he did not believe the central bank would lose money on the deal and said it could make money. He said he did not consider the transaction a bailout because of the losses sustained by Bear Stearns shareholders." (CBS 4/3/08) There has been a general trend of people saying government bailouts will be profitable to the taxpayer. This has been to justify their spending our money as an "investment" which could actually make us money. Each and every time thus far, we have lost big. This is not a coincidence.

His actions are scaring our trade partners, and he is putting us all at risk
The Federal Reserve's actions are scaring our major trade partners.

• Dallas Fed President Richard Fisher has been grilled by the Chinese about our money printing. "He has just returned from a trip to China, where "senior officials of the Chinese government grill[ed] me about whether or not we are going to monetize the actions of our legislature." He adds, "I must have been asked about that a hundred times in China."" (WSJ 5/23/09)
• Brazilian President Lula Da Silva singled out Fed printing as the reason for his newfound inclination to do trade with China in Yuan and not in US Dollars: ""We don't need dollars," Silva said. "It's crazy that the dollar is the reference, and that you give a single country the power to print that currency."" (BB 5/15/09)
• Brazil, Russia and China are all now taking very tangible steps to wean themselves off of US Dollars. In addition to the above, Brazil and Russia are to sell US Treasuries and buy $20B of IMF bonds (BB 6/11/09). Russia has said it would like to do trade with China in Yuan like Brazil. And China has set up a pilot program to settle transactions in Yuan (SD 1/7/09).
• Long term Treasury rates have gone up considerably (YF), rising from 2.03% on 12/13/08 to up to 4% today, 6/11/09. Part of this is due to a rise in risk appetite. However even Bernanke himself has admitted part is due to rising fears of inflation stemming from an inability to fund large federal deficits in the face of waning dollar demand: "These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows, and technical factors related to the hedging of mortgage holdings." (F 6/3/09)

They are scared, and rightfully so. The Federal Reserve is severely undercapitalized, and likely insolvent. You can look at the Fed balance sheet yourself (FR). As of 6/10/09 they have $46B of equity supporting $2.1T of assets. They have at least another $4.7T of guarantees and commitments (CNN). If the effective asset value of those guarantees and commitments is 30% of their principle value, then the Fed has $3.5T of assets supported by $46B of equity, or a leverage ratio of 76x. This means a 1.3% decline in the value of these assets will completely wipe out their equity. They probably have at least this much in losses, this very moment.

Think about this for a moment - $6.8T lent, committed or guaranteed. This makes the $700B of TARP look like a walk in the park. A veritable pimple.

Enron lobbyists will not heal his wounded reputation
To add insult to injury, Bernanke is attempting to help its ailing reputation (weakened further by allegations of lying which I have documented in the past) by bringing in a veteran lobbyist who had previously worked for Enron (RN 6/5/09). You cannot make this up.

Fiscal functions require approval, but not (yet) when the Fed does it!
The Fed, I am sure, means well. He is acting in times of great uncertainty to ensure the viability and stability of the financial system. At the same time, we are a nation of laws. As soon as we start making exceptions to the Rule of Law due to exigent circumstances, we jump out of the frying pan and into the proverbial fire. What is someone else feels strongly about something? Should he then make an exception? Where do we stop? When everyone comes to realize that the Rule of Law is no longer sacrosanct, how will they respond? This is a marathon and we have a long ways to go. Now is not the time to take an illegal short cut.

Regardless of its intentions, the Fed has pretty clearly exposed itself to substantial potential losses. It is no longer simply a liquidity provider. It is serving a fiscal function. Losses (if anyone was allowed to know what they were) past a certain point will require the Treasury to recapitalize it. Ironic, given the Fed is now printing money to buy Treasuries. Fiscal functions require congressional approval. The Fed has become a backdoor way through which the government can act without the checks and balances of Congressional approval. This is a loophole and it needs to be closed. We need to shine some sunlight on the Fed, and Ron Paul's HR 1207 will do just that

Please consider this video of Ron Paul explaining HR 1207 (YT 6/10/09).

We are almost over the finish line, which we can cross with 5 minutes of your time
If this so moves you, please consider the following. The following simple steps - a phone call and an online message - will take no more than 3 minutes, but will potentially get us to the 218 co-sponsors we need to pass this.

• 1. Go to Ron Paul's HR 1207 website link (RP).
• 2. Check if your Congressperson is on his list. This link (HOR) locates your Congressperson by zip code. To get the last 4 digits of your zip code, go here (USPS).
• 3. If your Congressperson is on his list, nothing more can be done in your area, but it would be very helpful if you could forward this around.
• 4. If your Congressperson is not on his list, please go to your Congressperson's webpage (see [2]), go to their "Contact" page, and go to the area where you can send a message online.