Injin Posted April 19, 2009 Share Posted April 19, 2009 http://www.bloomberg.com/apps/news?pid=206...&refer=home April 18 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker said Congress will probably review the authority granted to the Fed following emergency credit programs doubling the central bank’s balance sheet to $2.19 trillion.“I don’t think the political system will tolerate the degree of activity that the Federal Reserve, in conjunction with the Treasury, has taken,” Volcker, head of President Barack Obama’s Economic Recovery Advisory Board, said today at a conference at Vanderbilt University in Nashville, Tennessee. U.S. lawmakers from both political parties have expressed concern in recent months that the central bank has overstepped its authority by creating several emergency credit programs aimed at reviving lending and ending the recession. “I think for better or for worse we are at a point where the Federal Reserve Act, after all that has been happening in the last year or more, is going to be reviewed,” Volcker said. Under the act the central bank may in “unusual and exigent circumstances” lend to “any individual, partnership, or corporation” as long as the loans are secured “to the satisfaction” of the Fed. Lawmakers including House Financial Services Committee Chairman Barney Frank have said Congress should consider revising the Depression-era emergency provision. The central bank has been using such powers “with great abandon,” Frank, a Massachusetts Democrat, told reporters in January. “Ultimately we have to do something about this statute.” Volcker didn’t predict the future powers of the central bank. Fed Powers “It’ll be very interesting to see what the role of the Federal Reserve will be,” Volcker said. The possibilities “range all the way from giving the Federal Reserve more supervisory and regulatory responsibility to largely taking away” those powers. Volcker dismissed concerns the U.S. has entered a depression while saying a recovery will be slow. “It’s hard to see that we’re going to have a very rapid recovery,” he said. “We are in a great recession, for sure.” Gross domestic product fell at a 5 percent annual pace last quarter and will drop at a 2 percent rate in the following three months, according to the median estimate in a Bloomberg News survey earlier this month. The unemployment rate climbed to a 25-year high of 8.5 percent in March, from 8.1 percent the previous month. The U.S. has lost about 5.1 million jobs since the recession started in December 2007. Anyone want to place bets that they get even more power? Quote Link to comment Share on other sites More sharing options...
'Bart' Posted April 19, 2009 Share Posted April 19, 2009 Former Federal Reserve Chairman Paul Volcker said Congress will probably review Probably.... review.... then do nothing. Quote Link to comment Share on other sites More sharing options...
D.C. Posted April 19, 2009 Share Posted April 19, 2009 http://www.bloomberg.com/apps/news?pid=206...&refer=homeAnyone want to place bets that they get even more power? Depends how things pan out in the states. If they can turn it around this year or early next year, then they will be crowing about how great they are. If the US goes the way of Japan with a decade+ of depression I can see that right to bare arms coming to play. Quote Link to comment Share on other sites More sharing options...
oracle Posted April 19, 2009 Share Posted April 19, 2009 Probably....review.... then do nothing. actually volcker is one guy I do have a bit of respect for. He is willing to take tough and unpopular decisions in order to de-tox the welfare state.. it should never have been allowed to get into the state it was in the first place,by not foregoing the last couple of bevvies at the party,the cure for the hangover is going to be a great deal nastier. more hair of the dog will just induce addiction,which is equally unhealthy. the system needs to be purged.It doesn't have to be completely horriffic if it can be coupled with a serious productivity drive(note...productivity drive means making stuff to do more work with less energy......not armies of paper-shufflers) Quote Link to comment Share on other sites More sharing options...
R K Posted April 19, 2009 Share Posted April 19, 2009 China better get spending those $$ whilst it still can. Quote Link to comment Share on other sites More sharing options...
D Vardy's Shadow Posted April 19, 2009 Share Posted April 19, 2009 If the US goes the way of Japan with a decade+ of depression I can see that right to bare arms coming to play. Nowt wrong with bare arms. It's bare legs, high heels and short skirts which threaten stability. Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted April 19, 2009 Share Posted April 19, 2009 http://www.bloomberg.com/apps/news?pid=206...&refer=homeAnyone want to place bets that they get even more power? Mike Shedlock placed his bet on that outcome last year. Quote Link to comment Share on other sites More sharing options...
'Bart' Posted April 19, 2009 Share Posted April 19, 2009 actually volcker is one guy I do have a bit of respect for.He is willing to take tough and unpopular decisions in order to de-tox the welfare state. He's done it before. Thing is, as a former Fed chairman, any review carried out by him, or recommendations made, are unlikely to be against the long term interests of the Fed. I don't see there being much political will in Congress to tame the Fed either. Quote Link to comment Share on other sites More sharing options...
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