IBGerm

On Thursday, Federal Reserve Chairmen launched a “robust defense of its independence.” Vice Chairman Donald Kohn said that allowing sensitive decisions to be politically criticized would cause higher interest rates and hurt the USA’s credit  rating.

Kohn warned the House of Representatives that if there was removal of power of  monetary independence of the Federal Reserve would cause interest rates to raise due to inflation fears from investors.

The Federal Reserve has felt Ron Paul’s bill, hr 1207, as a threat to its independence. The bill would audit and bring transparency to an otherwise secretive entity. Paul’s bill has about 250 cosponsors.

Source: www.reuters.com

The Federal Reserve warned local governments, state contractors, and other potential recipients of the state of California issued IOU’s. Sacramento  issued IOU’s back in 1992, most banks accepted the IOU’s then.

The Fed warned to check with banks about details about the IOU’s before depositing the IOU warrants. $3.4 billion dollars in IOU’s will be handed out. If the IOUs were not handed out California would run out of cash by the end of July.

These are desperate attempts from Californian politicians that are facing a growing budget deficit. The IOUs will add to the growing debt with interest that will amount in the millions.

http://www.sco.ca.gov/5935.html

 

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