federal reserve notes which i shared with you that our reserve notes are u.s.dollars in circulation just prior to september two thousand and eleven and this is compared to an average of the same period five years prior and basically this includes all the money injection that was prior to the y2k thing so what we saw in august and september of two thousand and eleven was definitely a large increase and so i'd like to ask you about these this guidance that came out is this still published on the federal reserve website it's not on the website anymore it had it was on the website but it's no longer on the website and why do you think that might be and what is what was the explanation given for this large increase in currency. well in a letter that we received. the banking crisis in argentina which may still completely innocently explain this it's also possible or course they. could say it's the types of explanations that we haven't seen investigated it really don't matter it could have been completely innocently explained by a banking crisis in argentina however t

federal reserve notes which i shared with you that our reserve notes are u.s.dollars in circulation just prior to september two thousand and eleven and this is compared to an average of the same period five years prior and basically this includes all the money injection that was prior to the y2k thing so what we saw in august and september of two thousand and eleven was definitely a large increase and so i'd like to ask you about these this guidance that came out is this still published on the federal reserve website it's not on the website anymore it had it was on the website but it's no longer on the website and why do you think that might be and what is what was the explanation given for this large increase in currency. and in a letter that we received. the banking crisis in argentina which may still completely innocently explain this it's also possible or is that you could say it's the types of explanations that we haven't seen investigated it really don't matter it could have been completely innocently explained by a banking crisis in argentina however tha

federal reserve notes were redeemable in gold on demand, and the fed was required to maintain a gold reserve equal to 40% of its outstanding notes. however, contrary to the principles of an idealized gold standard, the federal reserve often took action to prevent inflows and outflows of gold from being fully translated into changes in the domestic money supply. this practice, together with the size of the u.s. economy, gave the federal reserve considerable autonomy in monetary policy and in particular about the fed to conduct policy according to the real bills doctrine without much interest. the policy framework of the fed's early years has been much criticized in retrospect. although the gold standard not appear to grade retention u.s. monetary policy in the years after the fed's founding, subject -- subsequent research has highlighted the extent to which the international gold standard served to destabilize the global economy in the late 19th was an early 1930s. likewise, economic historians have pointed out that under the real bills doctrine the fed increased the money supply preci

about the federal reserve i think we should on the side research. so why did harry reid flip flop when he was finally given the chance to move this legislation some speculate at the same and dependence from congress that chairman bernanke was asking for did not go the other way around and that's what's in the fine print of auditing the fed. well it's time for the daily door and for the first time ever i have a prime interest producer justin underhill joining me thank you well let's get straight into a couple of stories that we're tracking here the first one deals with the automakers they're the ones that make electric cars and this is a federally subsidized industry in certain ways and they want to cut out the middleman that would be the dealers and sell directly to the public just in going to give you the floor your take. actually recently petition the white house and they got over one hundred thousand signatures which means that the white house is going to have to address the issue i didn't know about this the fact that tesla can't actually direct

a setting go interest rates and is perpetuated by federal reserve fractional reserve banking which allows banks to expand credit be on their own assets and customer funds this additional creation of cheap money encourages investments that would not look profitable otherwise these mal investments grow stimulating the bubble as prices and inflation rise eventually this expansion of credit over reaches the capacity of capital and labor and the economy and the bubble pops leading us into a recession economists dr mark four and wrote that during the housing bubble interest rates on thirty year conventional mortgages were at their lowest levels ever during the post gold standard when interest rates fall asset prices and real estate prices tend to rise and vice versa in other words the fed's low interest rate policy stimulated borrowing that was steered towards the housing market coupled with other government policies such as tax breaks and. government sponsored credit corporations a bubble was created eventually the high prices couldn't be sustained and the bubble popped in two tho

i was a federal reserve reporter for the "washington post." i had a long few weeks because if you remember the fannie mae-freddie mac bill about was the week before. i haven't had a day off in forever. sunday september 14 there was a few days before there was a cartoon in the financial times saying, please hank, take the weekend off. people were hank paulson to take the weekend off and not bail anybody out that we can. september 14 come to those in a, i was washington -- watching the redskins play the new orleans saints. i get an e-mail in the first quarter from a source. the e-mail says hey, are you in the office? and i respond, should i be? and they respond, you might want to be in the office. so i respond, can it wait until halftime? and their responses, you might want to be in the office. that, of course, is the day that lehman brothers was about to go into bankruptcy. it was also the day the bank of america bought at merrill lynch. debate the wall street changed forever. events that followed in this ugly weeks of the fall 2000 have been c

in particular -- federal reserve board. ofing the board majority the boards on the fdic and moving the secretary of treasury and the comptroller of the currency from both award. -- from the board. one economic historian described the fed as in the it was not until the 9 50 accord -- once the federal reserve regained its policy independence, the goal centered on price stability and implement object does laid out in the employment act of 1946. in the early postwar decade, the fed use open market operations and the discount rate to influence short term market interest rates and the federal funds rate rental emerged as a preferred operating target. beginning in the mid-1960s, inflation began a long climb upwards, partly because policymakers proved to be too optimistic about the economy's ability to sustain rapid growth without inflation. might havesms mitigated the damage from that mistaken optimism. first, a stronger policy response to inflation, more like that observed in the 1950s, would have helped. second, fed policymakers

in the words of one of the authors of the federal reserve act, robert latham owen, the federal reserve was established to, quote, provide a means by which periodic panic which is shape the american public and do enormous injury shall be stopped. in short the original goal was a great experiment that was the founding of the fed was the preservation of financial stability. at the time the standard view of panics is they were triggered when the needs of business an agriculture for liquid funds outstripped the available supply as when seasonal plantings or shipments of crops had to be financed and panics were further exars -- exacerbated by the tendency of banks and private individual -- individuals to horde liquidity in those times. the new institution was supposed to provide, quote, an elastic currency, by providing liquidity as needed to individual member banks to the discount window and the banks would then be able to accommodate their customers. although congressional advocates hopes the creethavings fed would help reduce future panics they didn't embrace the idea that he fed should s

finally, i think the federal reserve is a remarkable institution. it has a superb staff, a great deal of expertise and i hope that during the time that i've been there that we have succeeded in preserving those strengths and adding to those strengths, increasing the amount of expertise we have in critical areas like some of the financial stability areas, increasing inter sglin area work and making it stronger as an institution going forward. we had a fascinating day today talking about 100 years of the federal reserve. it's a central institution in the united states. it has a very, very important role in the economy and in the lives of ordinary americans. it's critical that it be a strong, well managed, well staffed institution. these internal management issues which are visible to insiders are important because they're the factors that determine how strong an institution this will be over the next 100 years. >> chairman bernanke, thanks for joining us today. >> thank you. >> welcome to "fast money." good evening. you've been watching fed chairman b

dollars borrowed by uncle will be bought by the clause our government enterprise known as the federal reserve and based on recent trends over two thirds of that money printing will end up in poor and brain so couldn't corrode encroach away from burning no wonder you're looking for a new gig. and speaking of new gigs the former harvard president who was scorned for a massage and a sick remarks about would be very summers is increasingly being touted as the front runner replacement next year just today obama and harry reid like summer's facebook style in the press anyway and battle eager slashed of us a journalist telling hill some rats said summers it is totally not against me so just call a skeptical we'll talk to the future with dems although we're a leader in the show and harry and will break down our ministry. economics revised g.d.p. statistics in just a bit oh and apple is a get in the news but not because of tim cook's desperately needed innovation apple employees are suing the tech giant because of the time uncle apple's spend searching their bags going in and out of the office would t

first, i came into the federal reserve as a governor. now some 11 years ago, quite a long time with a lot of interest in communication and transparency and i think, you know, in the last 11 years or eight years, however you want to count, the federal reserve has made significant strides in that area, including for example as i mentioned the press conference, the stating of a numerical objective for median term inflation, and other communications innovations as well. so i think that's something i think is quite, has changed over the last decade. for better or worse of course i was at the fed during the crisis and the aftermath. we have, you know, the future again will judge the response to that but what is certainly true that the federal reserve as an institution has changed very sharply in terms of its structure around the resources being devoted to financial stability questions and i would say that this relates both to the actions we took at the height of the crisis, which, i viewed as bringing badges of wisdom. letter of last resort wh

and that can create enough money to spur recovery the question is is this money that the federal reserve is going to create like the thirteen trillion that it's given to the banks going to help the banks recover or is it going to help the economy recover well president obama says we can give thirteen trillion to the banks but in the forty years we're going to have to spend one trillion for social security that's all off. we can only give money to my campaign contributors on wall street not a penny to the voters who elected me not a penny to the economy war in mosul or wants the government to create this money to spend into the economy to recover employment to spend on the real economy but the federal reserve says well we're monetary modern monetary theorists in a way we are going to create the money like you want mr muslim but we're only going to give it to our campaign contributors we're only going to give the money we can we can create to the banks to buy their mortgages were not going to help the economy buy goods and services were not going to help raise living standards were only go

so there's going to be prices after crisis and the federal reserve is just going to be because of their not going to tax people openly for the well you know that's fair are they allowed to go to print the money let's get into the federal reserve aspect you the question is where is the money going to come from the treasury can only issue so much debt at a certain percentage but theoretically the fed could just print these meanies out of their problem of course we'd have more problems but do you think that's a possibility and what would be the fallout from that yeah i think it is a possibility think it's a special one when it comes to chicago i think we're going to bail out of chicago it's a big one whether they will bail out detroit or not you know they're not that so far they're not doing it and they're not talking about it they may bail out let's say if you're a businessman you've sold things to the city of detroit you're not getting bailed out i think we can be one hundred percent sure of that will the unions be bailed out you know possibly will the chicago unions and the chicago city

a stunning blow interest rates and is perpetuated by federal reserve fractional reserve banking which allows banks to expand credit be on their own assets and customer funds this additional creation of cheap money encourages investments that would not look profitable otherwise these mal investments grow stimulating the bubble as prices and inflation rise eventually this expansion of credit over reaches the capacity of capital and labor in the economy and the bubble pops leading us into a recession economist dr mark four and wrote that during the housing bubble interest rates on thirty year conventional mortgages were at their lowest levels ever during the post gold standard era when interest rates fall asset prices and real estate prices tend to rise and vice versa in other words the fed's low interest rate policy stimulated borrowing that was steered towards the housing market coupled with other government policies such as tax breaks and government sponsored credit corporations a bubble was created eventually the high prices couldn't be sustained and the bubble popped in two th

at what point does the federal reserve taper? the number will be 165,000. i don't think that will be enough to inspire or have the federal reserve to think to taper or reduce the quantitative buying or stimulus at this junk tour. it's in the fall, in september, october, november, december, time period that i think you're going to see numbers around 200,000 plus in job growth when the federal reserve will be seriously considering reducing the buying or stimulus, and of course, it depends on the inflation numbers, as you know. >> great to see you. thank you so much. enjoy the holiday. >> my pleasure. >> hue johnson, chief investment officer. >>> it's the 4th of july and many people plan to get away and made it a long weekend, although aaa expects fewer cars on the road this weekend, it still sees nearly 41 million people traveling. that's a good start to the summer season for the travel business and simon hobbs tells us what else to expect for hotels, cruises and the like. >> here is what to watch for in the sector in the quarter ahead. hotels are able to ach

so the federal reserve is trying to keep inflation close to 2%. some intransitory factors at work that has brought inflation down a bit more than is fundamentally the case in some sense. we expect inflation to come back up. if that is the no the case, i think we have to say that that would be a good reason to remain a accommodative and try to achieve that objective. i guess the final thing i would say in terms of risks, of course, we have seen some tightening of financial conditions and that if, as i've said and as i said in my press conference and other places, that if financial conditions were to tighten to the extent that they jeopardized the achievement of our inflation an employment objectives then we would have to push back against that. so i think there are some risks now that we have to pay attention to but, i think it's also the case that there are some positive factors that, with some luck will generate somewhat faster growth and continued improvement in labor market conditions for the remainder of this year and into next year. >> i have

so the federal reserve -- in part, so the federal reserve needs to be clear about how they will get rid of it. i think clarity is important. go ahead. >> i was going to say i think your point about the fact these are incredible or extraordinary policy measures so it requires extraordinary explaining and signaling to the markets about what they will do and when. david, thank you very much for being with us. chief global strategist at jp morgan. >>> for more, log on nbr.com and you can read my blog about it. >>> you're golder years may have lost a lot of luster after a troubling report about under funded pensions at some of the nation's biggest companiecompan. the report out today shows a record amount of underfunded pensions for the 2012 fiscal year at s&p 500 firms. data shows a combined short fall of more than $450 billion, that's nearly $100 billion less than a year ago despite mass sir gains in the stock market. >>> a staggering 1.2 trillion in corporate profits from america's biggest companies being held in offshore accounts to avoid taxes. a study from the watchdog research group t

here we what is it federal reserve is right at the top of ridge sixty two to one what does that mean. amazing wit but they are in the business of loaning money they are in the business of debt and so when you look at the balance sheet there's somewhere around three point four trillion in liabilities and only about fifty five billion in. capital right most of the banks are around thirty to one prior to the two thousand and eight crisis they've come down since they've increased some of their reserves some of the regulatory agencies are pushing them to continue to increase their reserves which seems crazy . i think it doesn't matter because in the in the ed at the end of the day the leverage ratio is still extremely high road and whether it's twenty to one or thirty to one they're still going to be able to do many of the activities that got them into trouble in the first place and let's take a look at that there was a mcdonald's at the very end their leverage ratio zero point seven five three what it mean for corporate america that we do when you look at the difference between the bankin

of the federal reserve bank of san francisco and she has spent the last three years as the vice chairman of the federal reserve system as some as someone who is more concerned with unemployment than inflation she is considered to be a dove at the fed and therefore more prone to support an expansionist monetary policy the federal reserve operates under a dual mandate of maximum employment and stable prices today the fed has a two percent inflation target rate to achieve what it considers stable price is now when yellen was serving on the board of governors the doves and hawks debated over whether there are having a two or is. zero percent inflation target rate yellen took the two percent side and was quoted saying i believe that heading toward two percent inflation would be a good idea and that we should do so at a slow fashion looking at what happens along the way and see deflation as more of a threat than inflation because to cause the cost of credit to increase on the other side of the argument hawks prefer price deflation over price inflation because deflation and creases purchasing p

prints a lot of money lowers interest rates what's your position on the federal reserve itself. the federal reserve well first of all i think we should end the fed i don't really understand where we where we need to be talking about that but back to the issue of this black budget and where it all comes from but we should you know make note that over the last few years since two thousand and nine when we broke in this country fifty billion dollars for a black budget it's only been steadily increasing that's on on secret programs alone on the stuff that we have no idea where where the money's going literally we have no idea where this money is being funneled to that alone is more than most other countries spend on defense altogether so i mean that should tell you a lot and that's really does and the other reason i was mentioning the federal reserve is because it in abel's this process of one point seven trillion dollars you know paid who who's going to get this money who's going to buy these bonds if the federal reserve doesn't anyway we're going to move on to the next story i th

prints a lot of money lowers interest rates what's your position on the federal reserve itself. the federal reserve well first of all i think we should end the fed i don't really understand where we where we need to be talking about that but back to the issue of this black budget and where it all comes from but we should make note that over the last few years since two thousand and nine when we broke in this country fifty billion dollars for a black budget it's only been steadily increasing that's on on secret programs alone on the stuff that we have no idea where where the money's going literally we have no idea where this money is being funneled to that alone is more than most other countries spend on defense altogether so i mean that should tell you a lot and one of the other and go of the reason i was mentioning the federal reserve is because it in abel's this process of one point seven trillion dollars you know paid who who's going to get this money who's going to buy these bonds at the federal reserve does it anyway we're going to move on to the next story i think we're i

here we have what is it federal reserve is right at the top sixty two to one what does that mean amazing which but they are in the business of loaning money they are in the business of debt and so when you look at the balance sheet there is somewhere around three point four trillion in liabilities and only about fifty five billion in. capital right most of the banks are around thirty to one prior to the two thousand and eight crisis they've come down since they've increased some of the reserves some of the regulatory agencies are pushing them to. continue to increase their reserve which seems crazy well i think it doesn't matter because in the in the ed at the end of the day the leverage ratio is still extremely high road and whether it's twenty to one or thirty to one they're still going to be able to do many of the activities that got them into trouble in the first place and let's take a look at that there was a mcdonald's at the very end their leverage ratio is zero point seven five three what it mean for corporate america is that we do when you look at the difference between the bank