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Gary North: Why Bernanke is in panic mode
9:22p ET Sunday, August 2, 2009
Dear Friend of GATA and Gold:
In his latest essay, "Why Bernanke Is in Panic Mode," financial letter writer Gary North (http://www.garynorth.com/) brilliantly exposes and demolishes the secret patronage on which the Federal Reserve system now is mainly based, patronage that risks exposure if U.S. Rep. Ron Paul's legislation to audit the Fed is ever enacted.
"The Federal Reserve has bailed out the biggest banks and has let almost 100 little ones die. This is crony capitalism at its most notorious. The threat is that Congress will discover what should be obvious: the biggest banks last October almost went bankrupt. [Fed Chairman Ben] Bernanke and [former Treasurer Secretary Hank] Paulson admitted this to congressional leaders. This is how they got the leaders to authorize the Treasury bailout. This is why the Fed swapped marketable Treasury debt for unmarketable toxic debt at face value with the biggest banks. Which banks? The Fed refuses to say.
"This is the heart of the matter. This is what has Bernanke in a panic. If Congress compels a full audit -- a real audit, not a Fed-controlled audit -- individual members of Congress will discover that the American financial system is a house of cards. A few of them will release the results of the audit to the public. This will include Website publishers, who will go over the audit, line by line. The mainstream media will face being scooped by newsletter writers, so they will try to publish first.
"The public will find out which banks are not safe. This is what has Bernanke in panic mode."
To some extent North is elaborating on points long made by other critics of central banking, including GoldMoney founder James Turk and your own secretary/treasurer, who, at GATA's Washington conference in April 2008, remarked:
"And so we have come to an era of daily market interventions by central banks -- so much so that the main purpose of central banking now is to prevent ordinary markets from happening at all.
"Central banking controls the value of all labor, services, and real goods, and yet it is conducted almost entirely in secret -- because, in choosing winners and losers in the economy, advancing infinite amounts of money to some participants in the markets but not to others, administering the ultimate patronage, central banking cannot survive scrutiny.
"Yet the secrecy of central banking now is taken for granted even in nominally democratic countries."
(See "There Are No Markets Anymore, Just Interventions": http://www.gata.org/node/6242.)
North's essay is essential reading, a powerful argument in favor of Paul's legislation to audit the Fed. You can find it at Lew Rockwell's Internet site here:
And at GoldSeek here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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