central bank went from the convention in philadelphia all the way to the establishment of the federal reserve act in one thousand thirteen you could argue it still exists today i mean ron paul if we could imagine president ron paul he'd want to abolish the sort of reserve i think is a terrible idea well the thing about the abolishing the federal reserve has a lot of functions right so i can understand the argument for a lender of last resort although there is a lot of moral hazard related to that as we've seen with that question but i can understand that in terms of you've gotten the critique crises and ideally there if you could identify what banks are solvent what banks are insolvent then it makes sense to step in and help bridge the gap for a solvent institutions but again sticking with the market the market rate for a second even when we had free banking when you you know when you had banks determining interest rates between them so. did we have a period as bad as the the pression and i think thirty three or even the depression of eighty seven or eighty ninety three that was with the the

. >> tom: meanwhile, something new this week from the federal reserve. for the first time, the central bank will predict future interest rates. it's "nightly business report" for monday, january 23. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: captioning sponsored by wpbt >> susie: good evening, everyone. investors were hanging up on research in motion today after the surprise resignation of its co-c.e.o.'s leadership over the weekend. tom, shares of the company plunged 8%. >> tom: susie, this is a big management shakeup at the maker of the blackberry smartphone, but by the looks of today's stock sell-off, investors aren't convinced that new c.e.o. thorstein heins can do more to help the company better compete with apple and google. >> susie: but on day one in the job, the new c.e.o. was putting out the message that he has a plan to get rim on the right track. erika miller reports. >> reporter: thorsten heins is smiling in his media photo, but it's clear there's a lot of weight on his

that's what the federal reserve said today, wrapping its two-day policy meeting. policymakers said they would keep interest rates near zero for at least two more years. tom, the fed hopes super-low rates will make it easier for consumers and businesses to borrow money and then spend it boosting growth. >> tom: susie, this timetable is much longer than investors expected. the fed was expected to start raising rates by mid 2013, but a quick look at the fed's economic outlook explains what's behind the change in plans. the central bank described economic growth in the coming months as modest. unemployment as still high and inflation subdued. >> susie: also today, the fed made history by releasing the forecasts of its key policymakers, showing that only a handful want to raise interest rates quickly and most prefer to wait until 2014 or longer. darren gersh reports. >> reporter: for the first time, chairman ben bernanke and his colleagues at the federal reserve laid out their long-run goals for the economy. their aim? an inflation rate of 2% and an unemployment rate s

we need an audit of the federal reserve. re -- we need an annual audit, frankly and we need all the decision documents of 2008, it 0 shall -- 2009, 2010 so we can find out who they've been giving money to and why. the congress, which is supposed to be representative of the people, has been spending less money than the federal reserve, and the federal reserve spends all of it in secret and i think that's wrong in a free society. we need a full overhaul to bring it back under control and preferably without chairman bernanke being there. yes, sir? >> ok. i'm not a conservative. but i have quite a few conservative people at my group. friday i was trying to ask the question of rick perry. he walked away from me. he will definitely lose my vote. ok? i want to ask about the united nations. rick perry says we should defund it. do you agree with that or would you work with others to reform the united nations so it could become more efficient and more effective? >> well, i would dramatically reform and overhaul the united nations and

>> well, by that we mean when the fed, the federal reserve sets the so-called "federal funds rate" at ten basis points, where it is today, that more or less guarantees banks can go into the fed window, the discount window, and borrow at ten basis points. and then you take that money and you buy a government bond that is yielding 2% or 3%. or buy some corporate bonds that are yielding 5%. or if you want to really get aggressive, buy some australian dollars that have been going up. or buy some cotton futures. and this is really what has been going on in our markets. the cheap funding, which is guaranteed by the fed, the investment of that cheap funding into speculative assets and then pocketing the spread. and you can make huge amounts of money as long as the music doesn't stop. and when the music stops then all of a sudden, the cheap, overnight money dries up. this is what's happening in europe today. this is what happened in 2008. and then people are stuck with all these risky assets, and they can't fund them. they owe cash to the people they borrowed overnight from or on a weekly bas

the federal reserve works with more snow and mirrors but ultimately the same principle. they make up money with a magic wand and landed and circulate. that money effectively is circulating government debt. as the result the government got rid of the debt entirety. there is a study under the clinton administration when they were trying to get rid of the deficit or drew a budget surplus, what happened if they got rid of the debt entirely? they concluded it would cause an economic catastrophe. you need -- banks would have to make up some money. in second periods they did do. when andrew jackson got rid of the debt it was the one time anybody has. the way the wheels are turning in the opposite direction as we think they are money isn't actually the scarce resource like petroleum or something where there's only so much. but how much we create and who gets it. that is the real political struggle. on a global scale is similar for most of cold war history. the countries actually were holding the treasury bond. the u.s. has this advantage it can raise checks and treat them like g

time we not only audit the federal reserve but also in due time get rid of the federal reserve. ron paul sees a world getting rid of the federal reserve and with sound money as the solution or at least the country probably not the world maybe the world to look at how the country got here though today we step back and take a look at history let's first take this issue of money and eight hundred ninety six the u.s. different time it was on the gold standard and the populist candidate for president william jennings bryan was actually running on a platform of easier money cheaper money he wanted by metal isn't this is money backed by silver in addition to gold which would expand the money supply has been talking. we were. down before the probably for. our own. famous speech the campaign then for easier money was an effort to help the poor the worker to free him to allow him to borrow with lower interest rates boy how times have changed bank america hard cash rewards credit card one percent cash back on everything i buy here no limit to the money because practically no hoops to jump

they are just beginning outside the federal reserve bank. the clip you saw earlier at the beginning of the show was from new york. we had a good crowd. i'm so pleased that not only black people and white people and asian and native americans are truly -- it's a multiracial dynamic happening. dr. king would be so pleased to see people supporting and recognizing his birthday in an activist way. we need to challenge income and inequality. economic injustice. so i like what you wrote today in terms of occupy the dream, the mathematics of racism. the economics of racism. the politics of racism. but also when we talk about racism, we think only black people are involved. all people are involved when we need to get this money out of our system. that's why occupy the dream supports a constitutional amendment to ban all this corporate money out of politics today. we have to rescue our democracy. we have to reset things. i'm looking forward. this is just the first day. and i'm romming my sleeves. russell simmons is giving me the authorization. i'm on

what is the role of the monetary policy, what is the role of the federal reserve?hat's the open question, extremely important to the tea party. >> great debates during the debate. in all seriousness, a freddie mac consultant. i understand that. i want a good debate in the debate. >> can i throw something in here? 83% of americans, according to a cbs poll agree -- >> with me. they always agree with me. >> the president's ideas in state of the union would help jobs. 83%. across the board. you want to talk about the debate between mitt romney and newt gingrich. take a look in front of your nose. >> 43% approval rating. >> 83% of people polled think it would help the economy. . we should put that cloud thing back on. i can't even see the word deficit. need a set of reading glasses. nice try. good to see you. david goodfriend, jimmy, thank you. now, let's bring in michael steele, former republican national committee chair, joining us live from miami, florida. what is the republican message? i'm trying to figure this out. >> i am too. and i think so are a lot of republic

since the start of the recession and one point six trillion of that is sitting on deposit at the federal reserve making point two five percent interest ok so you got into so much right there that i want to dive further into the excess reserves here at all of this but first just kind of break down because there's a difference between inflation and i when we're talking about price inflation things like food and computer chips or the government's key measure the c.p.i. which came out today is basically i'm changed month to month and inflation in the broader money supply can you just kind of distinguish that because some of our viewers may know that distinction but some may not and it's important our conversation so could you explain why that matters there's actually three distinctions we need to make your first we need before we can discuss inflation and how much it is we have to agree on what it is and there's not a lot of agreement out there most people think inflation in terms of prices i think of inflation in terms of expansion of money supply and credit and most people believe that credit out

than the federal reserve is created in 1913. yes, indeed, it was a panic in 1929 and the fed really got that one wrong. the fed allowed the money supply to shrink by as much as a third which a devastating effects to the economy as well. the fed on from that and the american financial system, from then forward has performed a whole lot better than it did before there was a fed. now, as to the question, ron paul contends that the federal reserve is unconstitutional. and if you look at the constitution, if you look at section eight of article one which specifies enumerated powers of congress and says that congress has the power to coin money, it doesn't say that congress has the power to print money. this is where ron paul and the libertarians say the federal reserve is unconstitutional. now, they do have a supreme court decision in their favor. in 1870, the supreme court ruled, remember those legal tender notes that came out of the civil war? in 1870, the supreme court ruled the later tyndall dash of the legal tender law and the n

ponzi finance and federal reserve dominance that we are continuing to push forward with and obama is a key player in that and of course it's destroying america i think as most people now recognize well and some mafia model jack low as proven himself to be a killer mortgages and a people's that worth so he gets a. bump up in the mafia organization to get gangsters john karr's on another proven killer from m.f. global former governor new jersey ex goldman sachs terrorist he's got a big payday coming i guess or move him to a new office and give him another role in ransacking the the economy what are your thoughts on john course on at this juncture and the school has been talked about to death but i do you know and i mention this on nettles interview i did recently it was a huge deal for people like meet the head who sort of following the markets in the background saying ok will what's their next move where they can attack futures are is the theft good we celebrate the fact is john coors on has seemingly gotten away with what he's gotten away with and the media really giving him a break

the federal reserve plans to keep interest rates near historic lows through late 2014.he fed says the economy is improving, but not enough least two-and-a-half more r at - years. the move is designed to stimulate spenning by keeping lending rates low for everything from mortgages to car anddstudent oans. the central bank also boosted its jobs outlook for 2012 -- but lowered the forecast for economic growth.starbucks is voicing its sspport of gay marriage. the company is backing a bill that would make washington state the seventh marriage. other major including microsoft and nike -- also support the move. starbucks says the bill "upholds our belief in the equal treatment of partners." walmart is pulling ggeeeers from the overnight shift. a spokesman for the woold's pargest retailer tells bloomberg that the move will save money and make sure the stores are well staffed during regular houus. walmart founder sam walton added greeters in 1980 to make the stores more friendly.for business bbief, i'm john lisk coming up... ball so hard... indeed. indeed.cheeeing where his masc

base money portion that portion of the federal reserve has direct influence over is only six percent of our currency supply it's three trillion dollars the number of dollars that exist as a reflection of total credit and that stands at fifty three trillion so only three trillion out of fifty three trillion is the portion the government created everything else you and i create the public creates when we go out and we borrow to buy a car or a house or we spend money on a spend currency on a credit card that currency is created by us when we signed that document and you argue if if we had didn't have this debt based system we probably would have better growth longer term but it sounds like to unwind that might be really painful if they're realistic are they going to have your day right calamity and financial history i believe i don't as i don't then. it's absolutely coming you know one of the things when i was writing my book i discovered that every thirty to forty years the world has a new monetary system and nobody really has paid attention to this. a manmade system can't possibly las

president what's often forgotten is where that buck starts and it starts quite literally at the federal reserve. the committee decided to keep the target range for the federal funds rate at zero to one fourth percent and currently have just a preset economic conditions are likely to warrant exceptionally low levels for the federal funds rate at least until late two thousand and fourteen. operation twist continues and so to the financial repression of zero percent interest rates at least i'm told twenty fourteen but how low will the bond market need to submit to the whims of policymakers and the fed's policy is just moving us from zombie banks to his zombie economy let's get today's capital count. angela merkel kicked off davos today by taking on the bond market and promising more europe as a solution to our problems and what we've heard public concerns over the ills of current capitalism don't you worry that was found just the man to defend it here to tell us about this and other palace intrigue from that snowy hamlet atop the swiss mountains is our own lauren lyster. so lauren look i do mean b

>> the federal reserve has been everybody's favorite whipping boy since 1913 recreated. it has made its share of missteps but so during the 19th century been how things were from 1913 through the present -- with panic and bubble there is a panic of 1837 and 1857 and panic of 1873 and 1893 in 1907. than the federal reserve is created 1913. yes there was a panic 1929 and the fed got that wrong. says that let the money supply to shrink as much as 1/3? but the fed learned from that in the american financial system from then forward has performed a lot better as to the question ron paul contends the federal reserve is unconstitutional and if you look at the constitution in particular section 8 article i that specifies innovate -- enumerated powers is says congress has the power to coin money. it does not say congress has the power to print money. this is where ron paul brandi libertarians say the federal reserve is unconstitutional. they do have a supreme court decision in their favor. in 1870 the supreme court ruled, remember the legal tender notes coming out of the civil wa

and of course they talk about independence which is ridiculous and on the democratic side the federal reserve is the mechanism that is used to transfer increasing amounts of wealth from the middle class and poor to the super super super rich so you know both sides of the of the aisle support is the device should be attacking this and either reduce or there's ron paul that does and that's why i think he's getting support from both sides he's going to the root issues that no one else wants to discuss all right talk about the fed as being the ultimate and central planning and you know borrow from central plan to governments of the past that have failed apparel supposedly that america somehow triumph against and yet now other through the federal reserve seem to be emulating the saudi have some planning and another aspect of these centrally planned governments and economies from the past was that really strong propaganda mechanism and here with ron paul he comes in second in a primary and yet the mainstream media who is on its way are quite obvious now that there's this huge propaganda element in

yeah i would not conflate the federal reserve with the government the government and of course law or aren't in september two thousand and four that there was an epidemic of mortgage fraud and predicted it would cause a crisis and the industry itself warned that there were ninety percent of stated income loans were liar's loans by two thousand and six roughly one out of every three loans made was a liar's loans so the remarkable thing about the release of the fed trad scripts is that they absolutely refused to listen to anybody that was trying to tell them that it was a catastrophic problem in a housing and that because of the financial derivatives the collateralized debt obligations and the c.d.s. the credit default swaps this was going to pose a clear systemic risk and had to take down absent bailouts mel host of the most elite financial institutions in the united states of america so what we've learned is a the federal reserve is really their economists are terrible in understanding the economy and b. they utterly ignore criminology to their disaster oh i guess that so is the role