Mish's Global Economic Trend Analysis

Unicredit Debt Collection Scam "Serves" Fake Court Papers by Fake Cops and Fake Judges
Jobs Expand by 151,000, Unemployment Steady at 9.6%; Birth-Death Methodology Changes for the Better; Reflections on the Numbers
R&D Spending Declines First Time in Decade
South Korea, Hong Kong, Brazil, China, Volcker Complain about Bernanke's QE Policy
Ron Paul Questions Fed Authority, Vows Another "Audit the Fed" Effort

Unicredit Debt Collection Scam "Serves" Fake Court Papers by Fake Cops and Fake Judges

Posted: 05 Nov 2010 12:08 PM PDT

This story is so outrageous that I cannot figure out why it has not gone viral on the internet. Unicredit America Inc, a debt collection firm, had people dress up (pretending to be police), serve fake papers to people requiring them to show up in court.

People showed up in a fake court for a fake hearing with a fake witness stand, and an individual in black pretending to be a judge.

Please consider Debt Collector Scam Reaches New Low: The Unicredit Bogus "Courtroom" Scam

It isn't easy for consumers to protect themselves these days, from robo-signers, foreclosure-rescue scams, and all manner of abusive collection tactics, but the Unicredit scam may take the prize for sheer audacity. It seems that Erie, Pennsylvania debt collection agency Unicredit not only set up a fake courtroom, complete with phony judge, with which to bamboozle and intimidate, but it dressed up employees like sheriff's deputies to "serve" faked court papers on consumers.

The Unicredit scam, as outrageous as it is, differs mainly in scope from tactics that are commonly used by creditors and collection agencies, whose stock in trade is to mislead, exaggerate, and intimidate.

And while I haven't seen the pseudo-courtroom scam before, the pseudo-law enforcement official is nothing new.

It's not always easy when you are scared and someone is breathing down your neck, but again, that is a debt collector's stock in trade. The more urgent he makes everything sound, the more likely you won't slow down to think, and ask yourself some practical questions.

The most important and most practical advice is to go see an attorney. If you're being threatened with legal action, an attorney can tell you what really can (and can't) happen. If you've already been intimidated or scammed into giving up something you shouldn't have, an attorney can tell you how to redress the situation. An attorney can also help you come up with a plan for addressing persistent credit problems, explain your options, and tell you what you can do about it. Knowledge is power, and it is the best, and most effective weapon you can have in protecting yourself from scam artists of all kinds–even the ones you owe.

I concur with the advice of Dana Wilkinson, Attorney at Law who wrote the above. If you are facing financial difficulties, please see the article for additional tips on how to protect yourself.

For still more reasons on why you need to consult an attorney in these matters please consider

Before Walking Away Consult An Attorney

How to Find a Bankruptcy Attorney

Pennsylvania Attorney General Files Charges

How could anyone at Unicredit possibly think what they did was legal?

Straight from the Pennsylvania Attorney Generals website: Erie debt collection company sued; accused of using bogus "hearings" and fake "courtroom" to collect from consumers

Attorney General Tom Corbett today announced that a consumer protection lawsuit has been filed against an Erie debt collection company accused of using deceptive tactics to mislead, confuse or coerce consumers - including the use of bogus "hearings" allegedly held in a company office that was decorated to look like a courtroom.

Corbett said the civil lawsuit was filed by the Attorney General's Bureau of Consumer Protection against Unicredit America Inc., with corporate and business offices located at 1537 West 39th St., Erie, also identified as the "Unicredit Debt Resolution Center."

"This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection," Corbett said. "Consumers also allegedly received dubious 'hearing notices' and letters - often hand-delivered by individuals who appear to be Sheriff Deputies - which implied they would be taken into custody by the Sheriff if they failed to appear at the phony court for 'hearings' or 'depositions'."

Corbett said that in conjunction with the lawsuit, the Attorney General's Office has also filed a petition for special and preliminary injunction, asking the court to freeze all Unicredit assets; prohibit the company from engaging in any debt collection; immediately cease all bogus hearings or depositions; and to provide detailed information about company bank accounts, assets and business records.

Question Authority

Max Keiser talked about this incredible scheme in Fake Markets! Fake Finance

Max Keiser and co-host, Stacy Herbert, look at the scandals of fake judges using fake deputies to collect fake debts in fake courts and of Irish austerity under imposed under fake pretences. In the second half of the show Max talks to David McWilliams about Ireland's first ever economics festival, Kilkenomics, and the financial and banking crisis that inspired it.

The video is 25 minutes but covers a wide variety of topics including "fake authorities" in the US and Ireland demanding repayments in fraudulent ways.

The video is well worth a listen in entirety.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Jobs Expand by 151,000, Unemployment Steady at 9.6%; Birth-Death Methodology Changes for the Better; Reflections on the Numbers

Posted: 05 Nov 2010 10:58 AM PDT

Today the BLS reported jobs expanded by 151,000. This should not be totally unexpected as I noted last night in Gaming the Jobs Report that TrimTabs called for +95,000, ADP +43,000, and Gallup showed a surge in October hiring.

Moreover, recent ISM surveys were stronger than expected. The important question this morning is whether or not this surge is sustainable. I do not think it is, nor does TrimTabs.

Here is the Email alert from TrimTabs once again (sorry, no link).

TrimTabs

Sausalito, CA – November 3, 2010 – TrimTabs Investment Research estimates that the U.S. economy added 95,000 jobs in October, the first monthly increase since May.

"The economy clearly improved in October," said Madeline Schnapp, Director of Macroeconomic Research at TrimTabs. "Unfortunately, the gains probably aren't sustainable."

Multiple indicators suggest the labor market perked up last month. Real-time tax data shows wage and salary growth accelerated, TrimTabs' proprietary measure of online job postings jumped 5.6%, and initial unemployment claims fell to the lowest level since August 2008.

In a research note, TrimTabs argues that the economy will remain stuck in slow-growth mode. October's employment increase likely owes to temporary factors such as inventory building. Also, a cheaper dollar boosted exports, and record low mortgage rates spurred refinancing activity.

"Economic growth is likely to stay sluggish because the private sector isn't able to pick up the slack from waning government stimulus," Schnapp noted. "State and local government budget crises and the weak housing market will be significant drags on growth for a long time."

I strongly concur with that last paragraph in red above.

I had a typo in the headline number from TrimTabs yesterday (now corrected). The TrimTabs estimate was +95,000 not +75,000 as I had in the title. No changes were made to the body of my post.

Had I read that properly I would have upped last night's estimates higher by 20,000. I was very aware today's report might be on the hot side.

This is what I said ...

Anything from +40,000 to +110,000 seems like a reasonable guess. I certainly would not be surprised to see a number in the upper end of that range. Stores are hiring, Black Friday sales are starting 3 weeks early, and ISM reports seemed surprisingly strong.

Please see Recap and Reflections at the end of this article to put things into proper perspective as to what today's numbers mean.

BLS October Report

Please consider the Bureau of Labor Statistics (BLS) October 2010 Employment Report.

Nonfarm payroll employment increased by 151,000 in October, and the unemployment rate was unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Since December 2009,nonfarm payroll employment has risen by 874,000.

Unemployment Rate - Seasonally Adjusted

Nonfarm Payroll Employment - Seasonally Adjusted

Establishment Data

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Highlights

151,000 jobs added
5,000 construction jobs added
7,000 manufacturing jobs were lost
154,000 service providing jobs were added
27,900 retail trade jobs were added
46,000 professional and business services jobs were added
53,000 education and health services jobs were added
5,000 leisure and hospitality jobs were lost
8,000 government jobs were lost

Note: some of the above categories overlap as shown in the preceding chart, so do not attempt to total them up.

Index of Aggregate Weekly Hours

Production and non-supervisory work hours ticked up by .1 to 33.6 hours. Average hourly earnings rose $.07 at $19.17.

BLS Birth-Death Model Black Box

For those unfamiliar with the birth/death model, monthly jobs adjustments are made by the BLS based on economic assumptions about the birth and death of businesses (not individuals).

Birth Death Model Revisions 2009

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Birth Death Model Revisions 2010

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Birth/Death Model Methodology

The big news in the BLS Birth/Death Model is the BLS is going to move to quarterly rather than annual adjustments.

Effective with the release of January 2011 data on February 4, 2011, the establishment survey will begin estimating net business birth/death adjustment factors on a quarterly basis, replacing the current practice of estimating the factors annually. This will allow the establishment survey to incorporate information from the Quarterly Census of Employment and Wages into the birth/death adjustment factors as soon as it becomes available and thereby improve the factors.

For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey

In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.

It is possible that the BLS model is now back in sync with the real world. Moreover, quarterly rather than annual adjustments can only help the process.

Please note that one cannot subtract or add birth death revisions to the reported totals and get a meaningful answer. One set of numbers is seasonally adjusted the other is not. In the black box the BLS combines the two coming out with a total. The Birth Death numbers influence the overall totals but the math is not as simple as it appears and the effect is nowhere near as big as it might logically appear at first glance.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Household Data

The number of unemployed persons, at 14.8 million, was little changed in October. The unemployment rate remained at 9.6 percent and has been essentially unchanged since May.

The number of long-term unemployed (those jobless for 27 weeks and over) was about unchanged over the month at 6.2 million. In October, 41.8 percent of unemployed persons had been jobless for 27 weeks or more.

Both the civilian labor force participation rate, at 64.5 percent, and the employment-population ratio, at 58.3 percent, edged down over the month.

Involuntary Part-Time Workers

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell by 318,000 over the month to 9.2 million, partially offsetting large increases in the prior 2 months. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

[Mish Note: In January the number was 8.3 million]

Persons Not in the Labor Force
About 2.6 million persons were marginally attached to the labor force in October, up from 2.4 million a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the
survey.

Among the marginally attached, there were 1.2 million discouraged workers in October, an increase of 411,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Table A-8 Part Time Status

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There are now 9,154,000 workers whose hours may rise before those companies start hiring more workers, about where we were a year ago. The number is down from last month but massively higher than the reported 8,300,000 reported in January.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

click on chart for sharper image

Grim Statistics

The official unemployment rate is 9.6%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

It reflects how unemployment feels to the average Joe on the street. While the "official" unemployment rate has held steady, at an unacceptable 9.6%, U-6 is much higher at 17.0%

Looking ahead, there is no driver for jobs. Moreover, states are in forced cutback mode on account of shrinking revenues and unfunded pension obligations. Shrinking government jobs and benefits at the state and local level is a much needed adjustment. Those cutbacks will weigh on employment and consumer spending for quite some time.

Expect to see structurally high unemployment for years to come.

Keep in mind that huge cuts in public sector jobs and benefits at the city, county, and state level are on the way. These are badly needed adjustments. However, economists will not see it that way, nor will the politicians.

Recap and Reflections

This is the first respectable jobs report in years. The reports earlier this year were padded by part-time census hiring. This report was all private hiring, a very good thing.

However, it is important to put this into perspective. It takes approximately 125,000 jobs a month just to hold the rate steady. Here we have +151,000 and a falling participation rate with the unemployment number flat. This apparent anomaly can be explained by the fact that unemployment numbers are derived from the household survey while the reported jobs number comes from the establishment survey.

The key point to remember is even if we were to see +150,000 jobs a month for the next year, it would not put a dent in the unemployment rate. In fact, if the participation rate rose, it could even go up.

Moreover, it is highly unlikely jobs rise by +150,000 jobs a month, on average, for a whole year.

This month's rise in jobs was fueled by retail hiring. Retail hiring is not sustainable. Nor is the rise in manufacturing. We might see a few more months of this (or not), but this is highly unlikely to be the start of something big or sustainable.

I still expect to see the unemployment rate back up above 10% in this cycle. While today's report may not be as good as it gets, it certainly is close to as good as it gets on a sustainable basis.

Expect to see the unemployment rate stubbornly high for a decade.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

R&D Spending Declines First Time in Decade

Posted: 05 Nov 2010 09:09 AM PDT

Corporations are reluctant to spend money, even research and development notes the Wall Street Journal article R&D Spending Drops at Major Firms

Research and development spending at major companies declined last year for the first time in more than a decade, according to a survey by management consulting firm Booz & Co. But R&D as a percentage of revenues was up slightly from a year earlier because revenues dropped at a faster rate than R&D spending.

Booz makes an annual study of the 1,000 publicly traded companies globally that spend the most on R&D, based on their public disclosures. The consulting firm, which has studied data going back to 1997, said 2009 was the first year to show a decline in total R&D spending among these companies.

The cuts last year were concentrated in auto, computing, electronics and industrial companies, some of the biggest spenders.

"The world-wide recession finally caught up with the world's top innovation spenders in 2009," the Booz report says, adding that "the most forward-looking companies will likely move quickly to restore the R&D cuts they made in 2009."

Total 2009 R&D spending by the companies surveyed declined 3.5% from a year earlier to $503 billion. But that worked out to 3.8% of 2009 sales, up from 3.5% in 2008.

Apple last year spent about 3.1% of its sales on R&D, or about half the typical level for computer and electronic companies, said Barry Jaruzelski, a partner at Booz, and yet Apple's R&D appears to be far more effective than that of many rivals.

The Jobs number came in hot today although the unemployment rate was flat. This should not be too surprising as ADP, TrimTabs, and Gallup all suggested a surge in October hiring as did recent ISM reports.

I will have more on jobs in just a bit.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

South Korea, Hong Kong, Brazil, China, Volcker Complain about Bernanke's QE Policy

Posted: 05 Nov 2010 03:39 AM PDT

A parade of countries have expressed grave concerns over the Fed's misguided Quantitative Easing policy.

South Korea Aggressively Considers Curbing Capital Inflows

On Wednesday South Korea Warns It's Close to Curbing Capital Inflows

South Korea on Thursday issued its strongest warning in months that it was close to taking steps aimed at curbing fund inflows, saying it would "aggressively" consider taking such measures.

"The government believes it needs to turn away from the perception that controlling capital flows is always bad and consider introducing measures to improve the macroeconomic prudence," the Ministry of Strategy and Finance said in a statement.

"The government will 'aggressively' consider implementing relevant measures, the ministry said after listing recent remarks made internationally in favor of capital controls.

The statement titled "a message to the markets" was issued hours after the U.S. Federal Reserve said it would buy billions more in government bonds by the middle of next year.

Brazil Central Bank Says QE Causes Distortions and Excessive Liquidity

Please consider Brazil's Meirelles: Fed's latest move on G20 agenda

The head of Brazil's central bank said on Thursday that the U.S. Federal Reserve's latest plan to lower domestic borrowing costs and jumpstart the ailing economy would cause further "distortions" in world markets and complicate his country's efforts to stem the rise of its currency.

"QE creates excessive liquidity that flows over to countries like Brazil," Meirelles said. "Definitely, for Brazil it does create a problem and Brazil will present proposals in that regard to several countries -- the U.S. and China -- to reach a different agreement not to generate so many distortions."

Hong Kong Monetary Authority Warns of QE Related Housing Bubbles

Bloomberg reports Fed Easing Worsens Hong Kong 'Bubble' Risk, Chan Says

The U.S. Federal Reserve's expansion of stimulus will add to the risk of a housing bubble in Hong Kong and may force extra measures to cool prices, said Norman Chan, the head of the city's central bank.

The Hong Kong Monetary Authority will "take measures that are specific to the housing market if necessary," Chan said at a press briefing in the city today. "The risk of an asset bubble in Hong Kong's property market is rising."

Hong Kong has already tightened purchase requirements after home prices rose about 50 percent from the start of 2009 to the highest level since 1997, according to an index compiled by Centaline Property Agency Ltd.

The Fed's move to buy another $600 billion of Treasuries, announced yesterday, will "definitely add pressure to the asset markets in emerging-market economies," Chan said.

China Central Bank Says "Unbridled Printing is Biggest Risk to Global Economy"

A China central bank says U.S. dollar printing is huge risk

Unbridled printing of dollars is the biggest risk to the global economy, an adviser to the Chinese central bank said in comments published on Thursday, a day after the Federal Reserve unveiled a new round of monetary easing.

China must set up a firewall via currency policy and capital controls to cushion itself from external shocks, Xia Bin said in a commentary piece in the Financial News, a Chinese-language newspaper managed by the central bank.

"As long as the world exercises no restraint in issuing global currencies such as the dollar -- and this is not easy -- then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament," he said.

Li Daokui, another academic adviser to the central bank, said loose money in the United States would translate into additional pressure on the Chinese yuan to appreciate. "A certain amount of capital will flow into China, either through Hong Kong or directly into the mainland," Li said.

Fed Governor Richard Fisher Blasts QEII

On October 7, Fed Governor Richard Fisher blasted the idea of QEII in To Ease or Not to Ease? What Next for the Fed?

In my darkest moments I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places. Far too many of the large corporations I survey that are committing to fixed investment report that the most effective way to deploy cheap money raised in the current bond markets or in the form of loans from banks, beyond buying in stock or expanding dividends, is to invest it abroad where taxes are lower and governments are more eager to please. This would not be of concern if foreign direct investment in the U.S. were offsetting this impulse. This year, however, net direct investment in the U.S. has been running at a pace that would exceed minus $200 billion, meaning outflows of foreign direct investment are exceeding inflows by a healthy margin. We will have to watch the data as it unfolds to see if this is momentary fillip or evidence of a broader trend. But I wonder: If others cotton to the view that the Fed is eager to "open the spigots," might this not add to the uncertainty already created by the fiscal incontinence of Congress and the regulatory and rule-making "excesses" about which businesses now complain?

In performing a cost/benefit analysis of a possible QE2, we will need to bear in mind that one cost that has already been incurred in the process of running an easy money policy has been to drive down the returns earned by savers, especially those who do not have the means or sophistication or the demographic profile to place their money at risk further out in the yield curve or who are wary of the inherent risk of stocks. A great many baby boomers or older cohorts who played by the rules, saved their money and have migrated over time, as prudent investment counselors advise, to short- to intermediate-dated, fixed-income instruments, are earning extremely low nominal and real returns on their savings. Further reductions in rates earned on savings will hardly endear the Fed to this portion of the population. Moreover, driving down bond yields might force increased pension contributions from corporations and state and local governments, decreasing the deployment of monies toward job maintenance in the public sector. Debasing those savings with even a little more inflation than what is above minimal levels acceptable to the FOMC is unlikely to endear the Fed to these citizens. And if―and here I especially stress the word if because the evidence is thus far only anecdotal and has yet to be confirmed by longer-term data―if it were to prove out that the reduction of long-term rates engendered by Fed policy had been used to unwittingly underwrite investment and job creation abroad, then the potential political costs relative to the benefit of further accommodation will have increased.

Part of our cost/benefit analysis should include where the inertia of quantitative easing might take us. Let's go back to that eye-popping headline in yesterday's Wall Street Journal: "Central Banks Open Spigot."

My reaction to reading that article was that it raises the specter of competitive quantitative easing. Such a race would be something of a one-off from competitive devaluation of currencies, a beggar-thy-neighbor phenomenon that always ends in tears. It implies that central banks should carry the load for stymied fiscal authorities―or worse, give in to them―rather than stick within their traditional monetary mandates and let legislative authorities deal with the fiscal mess they have created. It infers that lurking out in the future is a slippery slope of quantitative easing reaching beyond just buying government bonds (and in our case, mortgage-backed securities). It is one thing to stabilize the commercial paper market in a systematic way. Going beyond investment-grade paper, however, opens the door to pressure on a central bank to back financial instruments benefiting specific economic sectors. This inevitably leads to irritation or lobbying for similar treatment from economic sectors not blessed by similar monetary largess.

Why QEII Will Backfire

Let's review a snip from Three Reasons QEII Will "Backfire"; Pavlov's Dogs and the "No Choice" Argument Yet Again

Dr. El-Erian, CEO and co-CIO of PIMCO states several reasons why QEII will backfire.

1. The Fed is going it alone, without meaningful structural reforms
2. Emerging economies burdened by capital inflows in the wake of QEII will react with currency wars, protectionism, and capital controls
3. Resultant commodity price increases will increase input costs and reduce earnings of American companies

The position of El-Erian is interesting given that PIMCO founder, managing director and co-CIO endorsed QEII as discussed in Bill Gross' Arrogant Endorsement of Fed's QE Policy he calls History's Most "Brazen Ponzi Scheme".

Unintended Consequences of QEII

Mohamed El-Erian addresses the unintended consequences of Fed policy actions and the reasons Quantitative Easing will fail in QE2 blunderbuss likely to backfire.

....

Intended vs. Unintended Consequences

Add a junk bond bubble to the list of consequences (unintended or otherwise).

Bernanke is clearly misguided enough and arrogant enough to purposely blow a junk bond bubble as an "intended consequence", even though the housing bubble bust proves without a doubt the asininity of such policies.

Thus, it's hard to say if Bernanke wants a junk bond bubble or is merely willing to live with one.

Then again, Bernanke is dense enough to not have any clues about what is happening. He did not see the housing bubble, the recession, the huge rise in unemployment, and any number of other things that happened. In fact, he even denied there was a housing bubble.

In the academic wonderland in which Bernanke lives, it is perfectly possible he is oblivious to the bubbles he is creating.

However, looking at things from every angle, given that Bernanke Admits Targeting Stock Prices, I am leaning towards the first option: Bernanke is misguided enough and arrogant enough to purposely blow more asset bubbles as an "intended consequence", hoping he can deal with them later.

Bernanke Out of Control

Points number 2 and 3 are already in play.

2. Emerging economies burdened by capital inflows in the wake of QEII will react with currency wars, protectionism, and capital controls

3. Resultant commodity price increases will increase input costs and reduce earnings of American companies

Paul Volcker on QE

Please consider Volcker: future inflation risk limits QE effect

Former U.S. Federal Reserve Chairman Paul Volcker on Friday repeated his scepticism about the benefits of the Fed's latest quantitative easing, citing concern about long-term inflation.

He told reporters after a lecture in Seoul that short-term U.S. interest rates had almost no room to go down further, while long-term bond prices were under pressure from increasing concern about future inflation.

There is no way QEII can possibly do any good, and at least two current Fed governors know it. So does former Fed chairman Paul Volcker.

Bernanke claims to be a student of the Great Depression. The reality is he is an academic wonk with no real world experience in anything. He has proven three things however:

1. He will not listen and cannot be taught
2. He has no common sense whatsoever
3. He is dedicated to bubble blowing in response to crises

Other than that, Bernanke is perfectly suited for the job. On second thought, those traits are why he was appointed in the first place.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Ron Paul Questions Fed Authority, Vows Another "Audit the Fed" Effort

Posted: 04 Nov 2010 11:20 PM PDT

Ron Paul is back at it with another "Audit the Fed" campaign, this time with a House and Senate far more to his liking.

Please consider Ron Paul vows renewed Fed audit push next year.

U.S. Republican Representative Ron Paul on Thursday said he will push to examine the Federal Reserve's monetary policy decisions if he takes control of the congressional subcommittee that oversees the central bank as expected in January.

"I think they're way too independent. They just shouldn't have this power," Paul, a longtime Fed critic, said in an interview with Reuters. "Up until recently it has been modest but now it's totally out of control."

Paul is currently the top Republican on the House of Representatives subcommittee that oversees domestic monetary policy, and is likely to head the panel when Republicans take control of the chamber in January.

That could create a giant headache for the Fed, which earlier this year fended off an effort headed by Paul to open up its internal deliberations on interest rates and monetary easing to congressional scrutiny.

Rand Paul's Victory Speech

In case you missed it, please consider Rand Paul's victory speech.

One play of that video is all you need to hear to know that Bernanke's life is going to be a lot more miserable after this election.

Several senators were elected who are openly hostile to the Fed. Rand Paul is one of them. Tea Party candidates won 29 seats in the House. They too will make Bernanke miserable.

Some people claim the election will not change anything. I bet otherwise. But it will take time.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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Mish's Global Economic Trend Analysis

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