Geithner Can’t Answer Why Middlemen Profit When The FED Buys US Debt
Ron Paul v. Tim Geithner – House Testimony – July 25
Ron Paul’s point is that the Fed has been and continues to monetize the national debt, despite Bernanke’s ridiculous denial on 60 Minutes, and so why not drop pretense and have the Fed buy directly from the Treasury, eliminating profit for the broker dealers.
Geithner, the bank protector, does not like the idea.
Start watching at the 2:25 mark. Runs about 3 minutes from there. Transcript is inside.
—
Paul-Geithner Transcript
| 00:02:28 | ON LIBOR, I DON’T WANT TO GET INTO THE DETAILS OF FRAUD AND WHO COMMITTED CRIMES AND WHO SHOULD BE PUNISHED WHAT NOT. |
| 00:02:35 | I WANT TO TALK ABOUT THE PRINCIPLE. |
| 00:02:38 | AND THE PRINCIPLE HERE IS THAT PEOPLE ARE COMPLAINING BECAUSE THEY BELIEVE LIBOR WAS FIXED. |
| 00:02:45 | THE INTEREST RATES WERE FIXED. |
| 00:02:48 | AND THAT IT BENEFITED SOMEBODY FINANCIALLY. |
| 00:02:50 | AND I DON’T THINK THERE’S A BIG ARGUMENT ON THAT. |
| 00:02:54 | THAT’S WHAT ALL THE TALK ABOUT AND THAT’S WHY BARCLAY’S WAS ACTUALLY PENALIZED FOR IT, BUT ISN’T THIS A WHOLE LOT LIKE DOES? |
| 00:03:02 | EXACTLY WHAT THE FEDERAL RESERVE AREN’T THEY FIXING INTEREST RATES ALL THE I’M FOR THE BENEFIT OF SPECIAL INDIVIDUALS? |
| 00:03:09 | I MEAN, IF THE MARKET GOES DOWN, INTEREST RATES ARE LOWERED AND THERE’S GOOD EVIDENCE TO SHOW THE MARKET USUALLY COMES BACK UP. |
| 00:03:16 | IF BANKS GET INTO TROUBLE, INTEREST RATES ARE LOWERED. |
| 00:03:19 | RIGHT NOW, INTEREST RATES ARE LIKE ZERO AND BANKS GET A LOT OF FREE MONEY AND THEY TURN AROUND AND THEY PUT IT BACK IN THE FED AND THEY EARN INTEREST. |
| 00:03:28 | TREASURY BILLS AND THEY’RE DOING QUITE WELL. |
| 00:03:31 | SO IT SEEMS LIKE THERE’S A TREMENDOUS AMOUNT OF MANIPULATION OF INTEREST RATES FOR THE BENEFIT OF SOME INDIVIDUALS, BUT THIS MANIPULATION OF INTEREST RATES HARMS PEOPLE WHO SAVE MONEY IF THEY’RE RETIRED AND THEY CAN’T EARN ANYTHING, IT SEEMS LIKE IN THE SENSE OF MORALITY AND ECONOMIC POLICY, OUR MONETARY SYSTEM IS EVERY BIT AS GUILTY AS WHAT WE’RE ACCUSING LIBOR OF DOING. |
| 00:04:00 | NOW, THEY MAY HAVE — WE MAY BE AND THE FED MAY BE PROTECTED BY RULES AND LAWS, BUT ISN’T THERE A SIMILARITY? |
| 00:04:06 | ISN’T THERE HAVE SOMETHING THAT WE SHOULD QUESTION ABOUT THE MANIPULATION OF INTEREST RATES FOR THE SPECIAL BENEFITS OF SOME INDIVIDUALS AS THE FED DOES THIS? |
| 00:04:16 | NO, I WOULD NOT MAKE ANY COMPARISON. |
| 00:04:18 | I DON’T THINK THEY’RE REMOTELY SIMILAR. |
| 00:04:21 | I MEAN, THE FED WITH AUTHORITY CONGRESS GAVE IT TO MAINTAIN. |
| 00:04:25 | AUTHORITY. |
| 00:04:25 | I’M NOT TALKING ABOUT THE I RECOGNIZE THAT. |
| 00:04:27 | I’M TALKING ABOUT WHAT THEY DID. |
| 00:04:30 | BUT WHAT THE FED IS DOING IS WITH RESPONSIBILITY CONGRESS GAVE IT TO KEEP PRICES LOW AND STABLE OVER TIME AND UNDIPLOMAT LOW — UNEMPLOYMENT LOW OVER MANY TIE AND USING A SET OF TOOLS IN THE PUBLIC INTEREST TO ACHIEVE THOSE OBJECTIVES. |
| 00:04:45 | I WOULD SAY THAT’S A FUNDAMENTALLY DIFFERENT THING FROM BEHAVIOR OF INDIVIDUAL BANKS TO OF MISREPORT THEY MIGHT PAY TO BORROW MONEY. |
| 00:04:55 | VELY HAVE ONE OTHER QUICK QUESTION. |
| 00:04:57 | WOULD YOU SUPPORT CHANGE IN POLICY WHERE THE FED COULD BUY TREASURY DEBT DIRECTLY SO IT DIDN’T GO THROUGH THE BOND BROKERS WHERE THEY MAKE HUGE COMMISSIONS ON THIS? |
| 00:05:07 | WOULDN’T THIS BE MUCH BETTER FOR THE AMERICAN TAXPAYER? |
| 00:05:09 | FOR THE FED TO DIRECTLY FINANCE. |
| 00:05:12 | YEAH, WHY CAN’T THEY BUY TREASURY BILLS FROM THE TREASURY? |
| 00:05:16 | INSTEAD, WE HAVE 20 OR SO BOND DEALERS AND I THINK THEY MAKE SOME COMMISSIONS ON THIS, AND THEN THE FED GOES OUT AND BUYS THESE BONDS AND BOND DEALERS MAKE MONEY OFF THIS. |
| 00:05:27 | WELL, LET ME BE CAREFUL IF ANSWERING THAT QUESTION. |
| 00:05:30 | LET ME TELL YOU I PERSONAL LIAM A STRONG DEFENDER OF TWO VERY IMPORTANT PRINCIPLES. |
| 00:05:35 | ONE IS TO TRY TO MAKE SURE THE FED IS INDEPENDENT OF POLITICS BUT ALSO TO MAKE SURE THERE’S NOTHING IN THIS RELATIONSHIP BETWEEN THE FED AND THE TREASURY THAT WOULD RAISE CONCERNS THAT THE FEDERAL RESERVE IS DIRECTLY FINANCING THE FISCAL DEFICITS OF THE UNITED STATES. |
Source:The Daily Bail
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2012-07-27 16:51:25
Source: http://blog.alexanderhiggins.com/2012/07/27/geithner-answer-middlemen-profit-fed-buys-debt-152631/
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