Treasury Secretary Jacob Lew said the government will run out of money to
pay its bills sooner than previously thought around November 5, 2015. Lacking
sufficient cash, it would be impossible for the United States of America to
meet all of its obligations for the first time in our history.
Again, another year, to increase the USA debt limit by the government. Will
monetary and fiscal policy ever return to "sanity"? Will the political leaders
ever become brave enough to quit spending more of the taxpayer's monies than
they bring in without fear of losing elections? Will Americans ever elect someone
who doesn't just promise them more and more "stuff," and who will just start
acting responsibly with the nation's treasury?
Political leaders continue to "kick the can down the road" over and over again.
Now, like games that involve kicking something over and over again, it won't
get rid of the economic grim reaper. Their "Keynesian mantra" is that the
solution to debt is simply to spend more money. They believe it will stimulate
an economic recovery that never occurred in the first place over all these
years.
Until a proper resolution is reached to these issues, debt will rule. When
a nation loses control of its finances through debt, bad things happen in all
other aspects of its existence. It loses its power and survival becomes a challenge
and no longer a taken for granted right.
What is really required is the attention to what is really going wrong. There
must be a willingness to repair, reform, correct and heal it. This awareness
is now growing throughout the world. There is a feeling that something is out
of balance financially in the world. The issue of tax reform and getting rid
of government waste continues to be discussed and that surely has not helped.
The key of all this will be to get people back to work. The USA "unofficial" unemployment
rate is approximately 21%. Let's correct these policies and activities that
aren't working. Make them work again in new and different ways
Why Is The Federal Reserve Bank of New York So Important?
The Federal Reserve Bank of New York plays a special role in the Federal Reserve
System for several reasons. First the reason for the New York Fed's special
role is its active involvement in the bond and foreign exchange markets. The
New York Fed houses the open market desk, which conducts open market operations,
the purchase and sale of bonds, which determine the amount of reserves in the
banking system. This is the process of how the FED creates liquidity and controls
the money supply.
The involvement in the Treasury securities market, as well as its walking-distance
location near the New York and American Stock Exchanges, the officials at the
Federal Reserve Bank of New York are in constant contact with the major domestic
financial markets in the United States. In addition, the Federal Reserve Bank
of New York also houses the foreign exchange desk, which conducts foreign exchange
interventions on behalf of the Federal Reserve System and the U.S. Treasury.
Its involvement in these financial markets, means that the New York Fed is
an important source of information on what is happening in domestic and foreign
financial markets, particularly during crisis periods, as well as a liaison
between officials in the Federal Reserve System and private participants in
the markets.
Second, its district contains many of the largest commercial banks in the
United States, the safety and soundness of which are paramount to the health
of the U.S. financial system. The Federal Reserve Bank of New York conducts
examinations of bank holding companies and state-chartered banks in its district,
making it the supervisor of some of the most important financial institutions
in our financial system. Not surprisingly, given this responsibility, the Bank
Supervision group is one of the largest units of the New York Fed.
The third reason for the Federal Reserve Bank of New York's prominence is
that it is the only Federal Reserve Bank to be a member of the Bank for International
Settlements (BIS). Thus the president of the New York Fed, along with the chairman
of the Board of Governors, represent the Federal Reserve System in its regular
monthly meetings with other major central bankers and interaction with foreign
exchange markets means that the New York Fed has a special role in international
relations, both with other central bankers and with private market participants.
Adding to its prominence in international circles is that the New York Fed
is the repository for over $100 billion of the world's gold, an amount greater
than the gold at Ft. Knox.
Finally, the president of the Federal Reserve Bank of New York, is the only
permanent member of the FOMC among the Federal Reserve Bank presidents, serving
as the vice chairman of the committee. Each of the Federal Reserve banks is
a "quasi-public", part private and part government, institution owned by the
private commercial banks in the district in which they serve. The member banks
own stock in their Federal Reserve Bank. This is a requirement of membership.
Originally, the FED was not responsible for the health of the economy. . Over
time, it acquired the responsibility to promote a stable economy through its
control of the money supply and its ability to influence interest rates. It
is subject to the influence of Congress because of the legislation that structures
it is written by Congress and subject to change at any time. It reports quarterly
to the banking committees of the House and the Senate.
Our debt problem is now out of control. Between 2007 and 2014, the total global
debt increased by over 40%. Governments, financials, corporations and households
have all increased their absolute debt levels in the last few years. The chart
shows that total global debt has reached $200 trillion USD. World global output
measured by the gross world product was around 76 trillion USD in 2013. This
means that on a global scale we have a debt ratio of approximately 270% of
the total yearly world output.
In short, the Treasury is part of the executive branch of the US government.
They must follow the direction of the President. The Federal Reserve is independent
of the executive branch, almost like the Supreme Court. The voting members
of the controlling body of the Fed are nominated by the President. The goal
is to limit the impact of short-term politics on decisions about the money
supply. Specifically, there is a concern is that if the Federal Reserve was
not independent, politicians would seek to obtain short-term economic growth
through expanding the money supply, at the cost of long-term inflation. But
the fact of the matter is, everyone is addicted to creasing the money supply
and every week that goes buy with this artificial stimuli the worse uglier
things will be in the future for those not prepared.
A Global Rest is required. Gold is the only asset I know that has no sort
of counterparty risk and has been considered to be of value for thousands of
years. I follow gold's price daily. I am currently awaiting for my Proprietary
Trend Systems Analytics' Model to confirm that the bottom is in place so that
I may load up on much more.
I believe it is possible that this gold/silver/miners play alone could potentially
fund an individual's retirement if invested in at the correct time. And I will
be sharing this with members of my Gold newsletter at: www.TheGoldAndOilGuy.com
