I got this from the sovereignsociety.com it's a bit long but Well worth more than a single read.

I highly recommend giving them a look see.

The Fed does not represent you...
but it has its hand in your Pocket

Today's comment is the first in a weekly series of A-Letter ‘lies reports' by Matthew Collins, A-Letter Editor.

Dear A-Letter Reader,

By far one of the biggest shams ever foisted on the American public, the Fed is nothing more than the creation of "member" banks. Purportedly to achieve the goals outlined in their charter; their only real purpose is to grow their member banks balance sheets. Of course they'll never tell you that...instead you get Federal Reserve double-speak and the ex-CEO of Goldman Sachs in charge of our economic well-being (which he assumes to entail making charitable donations to his alma mater.)

The Fed's structure and operations are notoriously clandestine and obscure. They operate under a shroud of secrecy, they don't release minutes from their meetings until five years later, and - as New York Times reporter Edmund Andrews puts it - even expert policy analysts are usually dumbfounded by the Fed's decisions.
So in the next few pages we're going to clear up many of the myths and misconceptions regarding the Federal Reserve System. You'll finally get to see what their true objectives are supposed to be - according to their government charters and bylaws - and you'll be shocked by just how poorly this quasi-governmental agency has actually done its job.

Fed paves the way for a very hard landing
In the last few months we've been struck by the perfect storm. Cheap credit, financial engineering, rampant consumerism and a sub-zero savings rate teamed up to make September/October of 2008 one for the record books. The S&P has so far shed over 30%, and most of the broad market indices are testing multi-year lows in one of the most volatile periods in stock market history. It seems that everyone is flying blind.

And in the middle of all this, Ben Bernanke and Hank Paulson have been terribly busy men. They've executed backdoor changes to tax policy in the middle of the night, told half-truths on the floor of Congress, and they've thrown out some US$4.2 trillion in taxpayer money (so far)...mostly at Hank's old co-workers.

It's worth noting that US$2 trillion of our money has gone out the door for "hush-hush" loans to undisclosed recipients. And for that secrecy they're currently being sued by Bloomberg.

They've used those taxpayer funds to buy stakes in questionable banks and the failing insurance giant AIG, and to top it all off, Hank and his sidekick Kashkari have given conflicting reports on the TARP plan that essentially exposes one of the two as a liar. As I said; they've been very busy.

But with all of America clutching our pocketbooks in panic, it seems that we've forgotten to ask the important questions. Like ‘Do they have any right to be doing this?' ‘Is this what they're supposed to be doing?' and my personal favorite, ‘Is the Fed simply cleaning up a mess that they were responsible for in the first place?'
We'll be answering those questions in detail over the next few pages. But I suppose if you're not one for suspense we can go ahead and do it now; no, no and yes.

The Fed's scorecard

Their charter reads like a mix between stereo instructions and the tax code, but at its core is the idea that the Fed's impact on the economy should be positive, not negative. According to their website, their four duties to the American people - and the goals of their monetary policy - are to 1) maximize employment, 2) stabilize prices, 3) Moderate long-term interest rates and 4) Promote sustainable economic growth. Let's go through these one at a time;

1) Maximize employment. Well, that one definitely falls out in the next year or two. Jobless claims beating 500,000 at a weekly rate, an impending disaster in the automotive industry and an un-fudged unemployment rate of 11.8%. Some pessimists suggest that number could scrape the 20s by next year. Add in the 25% unemployment rates and you get a big, long-term fail there. What was unemployment in 1912, the year before we got the Fed? 4.4%. Thanks again Fed. Big help.

2) Stable prices. I got six words for that one. One hundred-fifty dollars a barrel. Thanks for the help there, Fed.

3) Moderate long-term interest rates. We'll talk about that one shortly. But apparently moderating long-term interest rates doesn't mean keeping those rates sub-zero to skirt a short recession and set up the greatest asset bubble in the history of mankind. Who would've guessed that?

4) Promotion of sustainable economic growth. Well, if you take the word sustainable out of that one then they've done a great job! Otherwise it's right back to the drawing board.
Wow. When you look at it like that, it's hard to make a good case for the Federal Reserve. Well, if they've failed at these four core goals, then they must have been up to something. What other great things has the Fed been doing for the American people, you ask?

How about setting the stage for this massive economic collapse? That's right, Alan Greenspan's ‘liquidity experiment' and the years of effectively sub-zero interest rates gave businesses the incentive to absorb credit like a sponge and take on debt by the boatload. After all, if the government is paying you to take the money, why not?

What followed were more years of painfully irresponsible lending and borrowing, of which sub-prime and Adjustable Rate Mortgages have now become the poster-child. And the sheer volume of bad loans made during that period are currently endangering the whole of the world's credit, not to mention its sovereignty and well-being.

And once again...History proves that Andrew Jackson was Right
Andrew Jackson was certainly a crazy old man, and by today's standards he'd fall somewhere between ‘geezer' and ‘curmudgeon,' but it turns out that many of his worldviews were right on target.

In addition to defusing America's first attempted presidential assassination by bludgeoning the would-be assassin halfway to death with his walking stick, Jackson abolished the country's second central bank. Yes...you read that right. This Federal Reserve is America's third go at a centralized banking system. And yes, the first two were indeed miserable failures.

In reference to the second central bank, Jackson once said:
"The bold effort the present bank had made to control the Government, the distress it had wantonly produced ... are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution, or the establishment of another like it."

They just don't make politicians like they used to. Jackson was also the only president in American history to get America out of debt and into the black...a place we're all wishing we could be right now.

Instead what do we have? We have a quasi-governmental institution printing dollars to back terrible business decisions. We have a central bank that's currently leveraged around 60:1 and throwing paper at a monster of its own design. We have a congressionally approved bail-out of US$700 Billion attached to a payout of roughly US$4.2 trillion. And one of the men facilitating all of this is retiring on money he earned from a bank receiving some of the most special care in the proceedings.

But more importantly, we have a complex system that's ultimately shifting the balance of risky investments from private institutions over to the government, and gradually turning Treasury notes into sub-prime paper. We have an institution that's fighting fire with fire, instead of water. They're playing ‘Depression dominoes' and hoping that a problem causedby irresponsible and overzealous lending can be cured by irresponsible and overzealous lending.
And they seem to be steadfast in their determination to crash our ship into that iceberg. The best reference in history for this event is the Crash of 1345, where kings and governments traded their sovereignty to the bankers for prosperity and quick cash. What followed is something we now call ‘The Dark Ages.'

MATT COLLINS, A-Letter Editor

Currency Controls rear their ugly Head

Indonesia announced foreign exchange controls last week, triggering the first round of restrictions on foreign currency trading. Other nations are sure to follow as economic growth falls off a cliff this quarter, compounded by plunging exports.

As the global financial crisis deepens and spreads to the real economy, more countries will resort to protectionist policies in the emerging markets, eventually imposing semi or hard foreign exchange controls.

The G-20 Summit last weekend in Washington saw a pledge by all members to keep trade flows free of protectionist sentiment. One of the catalysts of the 1930s Great Depression was the introduction of the Smoot-Hawley Tariff Act of 1930, which raised imports tariffs on foreign goods and, in some cases, shuttered access to U.S. markets. In retrospect, Smoot-Hawley was a disaster, prolonging the Depression in the United States and elsewhere until World War II commenced in September 1939.
With countries like Russia now drowning amid a market meltdown and draining its reserves, I would not be surprised if Russia is next to impose foreign currency controls.

Just a few months ago, Russia was boasting its vast oil and gas reserves, asserting an aggressive foreign policy in the region and demanding more political muscle in the G-7. With oil prices crashing more than 60% since July and Moscow's stock market literally in a freefall, the Russians have moderated their opposition.
Russia continues to bleed foreign currency reserves since September following a US$250 billion dollar stimulus package. The rouble, however, has remained relatively strong compared to the euro; in 2008 the rouble has declined 12% versus the dollar but has risen 4% against the euro. Still, some sort of quasi-foreign exchange control is likely in Russia.

Other prospective countries on the FX control block include Ecuador, Bolivia, Kazakhstan, Ukraine, Turkey, South Africa and, possibly, South Korea, where the won has collapsed 55% this year.

Venezuela, a major oil exporter, has already absorbed big losses financing Ecuador, which is contemplating a bond default this week. Venezuela's hard Bolivar, or Bolivar fuerte, is fixed by the central bank and the currency has been non-convertible for more than 15 years.

Extreme economic conditions usually result in severe policy responses by government's - including major economies.
Starting in 1997, several Asian countries imposed foreign exchange controls or restrictions following a regional economic collapse. Many countries restricted foreign currency trading, conversion, and some imposed outright controls, including Malaysia.

In the early 1970s the United Kingdom, mired in economic turmoil, imposed foreign exchange controls. And in 1933, FDR confiscated gold.

It's not unlikely that some major industrialized countries might do the same or - at the very least - implement the first stages of foreign asset restrictions or foreign property ownership.
The United States, Europe and Japan have been pummeled over the last few months as economic growth contracts and even deepens in Q4. Gold confiscation, foreign exchange restrictions and new reporting rules for personal assets lie ahead as Big Brother delves deeper into our pockets and our daily lives to ease rapidly declining prosperity.

ERIC ROSEMAN, Investment Director