Democratic Party

Money in the United States, a model of what gold and silver can do for a country. The goal of the US Federal Reserve is to have more money in their vaults than they have out. Thats the core-essential difference in other countries and the U.S.

The money game in the U.S. has many players with each one making their contribution to the very best economic machine in the world. Since the Americans installed their form of currency into the world, things have never been the same.

Sure the dollar can go up in value and it can go down, but make no mistake about it, the dollar is a great method of financial recourse and the world knows this. The US dollar is a bit down right now, sure it is. The stability of dollars was created first by backing every dollar by a fixed amount of gold. The dollars were a replacement of gold, and it was easier to carry and store than gold.

Then as the economy became larger, more people needed more money to exchange hands at a faster rate. The government then had to allow the dollar to be backed by silver as well so that they could print more and keep up with the economic growth. Not doing so would cause some people to hoard money, and it would slow down the velocity of money. When this happens there is deflation, and danger of things being worth less, and money being hard to find as people hoard it.

Soon the economy would go global, and this is why the government is having troubles printing enough money to keep up with the demand for dollars as the internet now allows money to exchange hands in seconds. In order for the system to keep working, money will have to change hands even faster.

There is one danger, and that is that inflation will become a problem. If there are more and more dollars being printed, while the velocity of money will still flow at a very fast pace, dollars could potentially lose their value. Even worse, as the government mismanages money, the danger is that the rest of the world no longer has the faith in the dollar. This will mean that they might no longer accept dollars, and that would result in a lot of money with no place to go. This can result in hyper-inflation like with what happened with Germany before World War 2. However, at the moment, the rest of the world has also printed lots of their currency, so the dollar remains the best bet. If you are nervous about hyper inflation, your best bet is to buy gold, silver, and non perishable food.

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Republicans cry that the Federal Reserve threatened to drive out Bank of America Business leader Kenneth Lewis if they did not follow through with the plans to overtake Merrill Lynch & Co. This came after they reviewed investigation documents. They also said that there was proof that the government withheld report related to the union from the public, exactly violating the Freedom of Information Act. Luckily, there was no confirmation that the government attempted to get Bank of America to hide Merrill?s losses from shareholders.

The House Oversight and Government Reform Committee is currently looking into preliminary claims that several top government officials, including then Treasure Secretary Henry Paulson and Fed Chairman Ben Bernanke, tried to get Kenneth Lewis to go through with the Merrill purchase and not unveil to shareholders how badly Merrill Lynch was doing fiscally. Lewis is thought to be testifying in front of the board today.

Bank of America has received $45 billion in bailout money, but as said here a week or so in the past, they have been working on raising resources to become independent of the state assistance. Thus far, they have sold $17 billion or more in additional stocks and raised at least that amount in liquidation money. Some of the national support was apparently going to put back the losses they would incur by buying Merrill Lynch.

Republicans said in a communication that Paulson and Bernanke ?put a pistol to the skull? of Lewis and the board of directors at Bank of America to push the joining between Bank of America and Merrill Lynch even though CEO Lewis allegedly ?felt it was hi responsibility to his shareholders to try his luck in the legal system and back out of the contract.? Republicans refer to quite a few documents as well as an e-mail by an employee at the Richmond Federal Reserve which said that Bernanke made it plain that if he backed out of the agreement, ?management is spent,? as testimony of the intimidation.

Just a small amount weeks after the transaction was finished, Bank of America released their fourth-quarter information where they claimed a $2.39 billion loss while Merrill Lynch claimed a loss of over $15 billion. Thus far, Merrill Lynch has fallen more in the pits of ?no man?s land? whereas Bank of America has been cutting losses with radiant financial decisions and the sale of company interest.