The Federal Reserves charter lays out specific duties that it is required by law to perform. According to their charter, these duties are primarily tied to the protection of the monetary system, and as a central bank, to control the flow of money and protect against bubbles in the system.
Here is a list of those duties:
2.1 Addressing the problem of bank panics
2.1.1 Elastic currency
2.1.2 Check Clearing System
2.1.3 Lender of last resort
2.2 Central bank
2.2.1 Federal funds
2.3 Balance between private banks and responsibility of governments
2.3.1 Government regulation and supervision
126.96.36.199 Preventing asset bubbles
2.4 National payments system
In no place under their charter are they tasked with protecting, or facilitating the equities market in any way, shape, or form.
Unfortunately, this is exactly the course they have chosen to undertake. In a poll this week by CNBC, results show that more people believe the Fed’s purpose has become controlling and facilitating the stock market over helping to grow jobs and manage interest rates.
The survey of 76 economists, bond and stock traders, and analysts, found 63 percent saying the Fed’s program has been ineffective at lowering interest rates.
A similar percentage believes the program will not help lower the unemployment rate.
“I see QE2 as mainly pushing on a string,” wrote Scott Wren, senior equity strategist at Wells Fargo (NYSE:WFC – News) Advisors.
But respondents to the survey say the Fed program has played an important part in raising stock and commodity prices.
In fact, nearly three-quarters of the group say the Fed’s bond purchase program has helped raise stock prices, while 63 percent see it as a reason why commodity prices are higher.
The Federal Reserve has overstepped its charter and purpose in the actions it has taken since the 2008 credit crisis. It has bailed out banks and financial institutions by buying their toxic assets, it has bailed out foreign banks and institutions by doing the same, and it is now monetizing government debt, a program Bernanke stood before the House and said would never happen.
And now it is printing money to pump up the stock market.
This is why the Federal Reserve must be stopped or dissolved, Congressmen like Dennis Kucinich and Ron Paul number the few legislators not controlled by the Fed, and see this entity for what it has become.