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According to Wikipedia: "The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. Created in 1913 by the enactment of the Federal Reserve Act (signed by Woodrow Wilson), it is a quasi-public and quasi-private (government entity with private components) banking system[1] that comprises (1) the presidentially appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) twelve regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the United States Department of the Treasury, each with its own nine-member board of directors; (4) numerous other private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks; and (5) various advisory councils. Since February 2006, Ben Bernanke has served as the Chairman of the Board of Governors of the Federal Reserve System. Donald Kohn is the current Vice Chairman (Term: June 2006-June 2010)."

Apparently, Fed Chairman Ben Bernanke had his feathers ruffled last Thursday when he was questioned about the support of Ron Paul's bill to audit the Fed as he responded, "My concern about the legislation is that if the GAO is auditing not only the operational aspects of the programs and the details of the programs but making judgments about our policy decisions would effectively be a takeover of policy by the Congress and a repudiation of the Federal Reserve would be highly destructive to the stability of the financial system, the Dollar and our national economic situation."

Perhaps this is the introduction to yet another U.S. financial debacle with enormous implications that is making its way to center stage as the entire world is trying to wrap its mind around just how the "derivatives bubble" got to its current size of over $500 trillion (the entire U.S. annual gross domestic product is about $15 trillion).

Maybe its got something to do with the same reasons why the Fed currently holds almost $250 billion of gold (current market value) that was once used to back U.S. currency which it shows on its balance sheet, as of March of 2009, to be an asset worth $11 billion.

Somebody ought to keep an eye on that gold.

- Ed Smith, Publisher
The EHS Letter Manual