Are Freddie, Fannie, & the Fed having an illicit affair?

Well, maybe. Perhaps this was all a ploy so that Freddie and Fannie could have the same access to borrowing from the Fed, as does the banking industry. It’s anyone guess as to what really was behind it all, but from some accounts these two organizations were not in danger of immediate collapse. Certainly, the panic was real and it’s not over yet.

I saw Senator Bunning on the news last week, which is rare, and he was giving an impassioned speech against putting the American public on the hook for bailing out two semi-private businesses – Freddie and Fannie. He also spoke adamantly in condemnation of the Federal Reserve and the miserable failures of Alan Greenspan. You can listen to an audio clip of his statement here:

http://src.senate.gov/public/_files/radio/bunning7_15_08.mp3

In my view his criticisms of the Fed and the Treasury are right on target. Bunning wants to radically limit their powers – all things that I fully support. However, right now they are the only lifeboats around and we need a definitive plan for moving in a different direction before we scuttle what we have.

Of course Bunning and all the rest of the do-nothing-congress are always looking around for someone to blame, and so he blamed the Fed for everything including the price of oil. Certainly the devaluation of the dollar is causing the cost of oil to rise – it simply takes more dollars to buy the same quantity of oil because our dollar isn’t worth very much and the Fed’s policies directly affect that. The thing that makes me incredulous about Bunning is that he never opened his mouth about the real cause of our economic woes and impending doom – and we know that cause to be "OIL FUTURES TRADING". Why do you think he remains silent on this hot-button issue? Maybe we should all ask him.