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How To Fix The Federal Reserve [Infographic]

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Early in the 20th century, a financial crisis panicked citizens into withdrawing all their money at once, which in turn damaged banks. By 1913, Congress responded with the Federal Reserve Act, creating 12 regional banks acting as a federal bank to deal in local and global affairs with both private banks and the federal government.

However, the question remains, is the Fed still doing its job today? Also, what secrets are still being kept from us, and how are the Fed’s actions impacting our economy? Some say the Fed was meant to create a balanced economy, while others argue its purpose was to inorganically manipulate free enterprise, rescuing banks that we’d be better off without.

The main players we are facing today are Ben Bernanke, second term Fed and FOMC Board Chairman and Ron Paul, Texas Congressman and former Presidential candidate. Ben Bernanke says the Fed will continue to take appropriate action for economic stimulus, however, will not commit specific steps, and feels no policy changes are necessary unless the economy begins to decline. All the while, Ron Paul describes the Fed as “the collusion of big government and big business to profit at the expense of the taxpayers”. Ron Paul also believes the bank bailouts were unfair and damaging to our economy.

Continuing to go back and forth, the Fed retaliates complaints against them with explanations. Some say the Fed is overly secretive and should be fully audited, while the Fed exclaims they need their secrecy in order to maintain independence from political pressures and make wise, tough decisions. While it’s being accused that the Fed is systematically allows the value of money to decrease as a result of inflation: for 100 years before the Fed, money tended to retain or gain value over the time. To even the score, the Fed stated that it softens the blow and prevents depressions while keeping inflation in check.

What would things look like if the Fed had less influence? Just to name a few, the government would spend within its means, people would spend within their means, there would be decreased consumption, people would save more and spend less (meaning there would be more investing taking place), America would produce and manufacture more, trade deficit would shrink all meaning that the government would shrink as well.

But how exactly do we fix a broken Fed? For starters, booting Bernanke and getting Jamie Dimon, CEO and Board Chairman of JPMorgan Chase, other big bankers, and employees of money laundering banks off of the Fed boards. Upholding higher standards and not letting corporations pose as banks for bailout money may put a band-aid on the issues at hand with the Fed as well. However, even if the Fed is “fixed” how can we be sure the same secrecy and shady operations won’t happen again?

Uncovering The Fed
Source: Best Accounting Schools

Environmentalist. Consumer Tech Journalist. Science Explorer. And, a dreamer. I've been contributing informative news content since 2010. Follow me on all socials!

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Treasury Chief Says Crypto Is A “National Security Risk”

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Secretary of the Treasury Steven Mnuchin | 7/25/17 (Official White House Photo by Ricky Harris)

A new jab was thrown against Bitcoin and cryptocurrencies from the US government after statements from the U.S. Treasury Secretary branded the industry as a “national security threat.”

Facebook’s announcement of Libra has brought crypto and blockchain technology in the center stage, as governments around the world have heightened their scrutiny on the alternative financial system that the industry is offering.

Government executives and high ranking officials have raised concerns on the volatility of the technology, and how it is being used by malicious actors to facilitate illegal transactions such as money laundering and illegal drugs.

Now, US Treasury Secretary Steven Mnuchin chimed in the conversation and echoed earlier apprehensions versus Bitcoin and cryptocurrencies. The Secretary warns that Bitcoin, as well as, Facebook’s plans for Libra, pose a “national security issue” for the United States.

“This is indeed a national security issue,” Mnuchin told reporters at a press conference yesterday. “Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,” adding that Facebook’s Libra “could be misused by money launderers and terrorist financiers.”

Mnuchin echoed other politicians stance on Facebook’s Libra venture and said that he was “not comfortable” by the idea of it.

Trump vs. Crypto

In a series of tweets on last week, the POTUS said that he is not a “fan” of cryptocurrencies, asserted that America has only one currency, criticized bitcoin, as well as told Facebook that they need a banking charter if they want to launch their newly announced crypto-based money called Libra.

Trump said cryptocurrencies are not money, and “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

“If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations,” said the president.

Related: Trump Vs. Crypto: Dollar Is The Only Currency Of The USA

According to the President, the dollar is the only currency in America, and Libra, among other cryptocurrencies, are not “real money.”

“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!” Trump said in a tweet.

Trump’s anti-crypto stand was agreed upon by Mnuchin saying that “the president does have concerns as it relates to bitcoin and cryptocurrencies—those are legitimate concerns that we have been working on for a long period of time.”

Democrats vs. Crypto

Joining Trump’s army against cryptocurrencies and Facebook’s Libra plans are Democrats from the Senate who recently circulated a draft proposal that bans big tech companies from issuing digital money.

The bill, which was bluntly named as “Keep Big Tech Out Of Finance Act,” circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is not joking about its position against Libra and other similar ventures in the future.

Read More: Democrats Move To Ban Big Techs From Issuing Digital Money

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

Nonetheless, the bill is still in its earliest phase yet, and many could happen to move forward. For it to become a law, it still has to withstand the possible opposition by Republicans in both the House and the Senate.

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Senator To Facebook’s Libra: ‘Can People Trust You?’

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Photo: BTC Keychain | Flickr | CC BY 2.0

When it comes to Facebook’s Libra, the US government has made one thing clear: they don’t trust the tech giant and its plan to release an alternative financial system based on the highly debated blockchain technology.

In a Senate hearing today, a Facebook executive was grilled by lawmakers in the Senate Banking Committee over the plan to issue its digital currency and its possible effect on the global banking and financial ecosystem.

Facebook announced a month ago that it would roll out a new form of digital money, called Libra, which the tech superpower claims to be a stable coin. Unlike its predecessor, Bitcoin, the Silicon Valley giant claims that Libra is a cryptocurrency backed by real-world money and government certificates, and is also supported by a group of corporations such as Mastercard, Paypal, and VISA.

Libra is set to be available for circulation early next year, but a few weeks following Facebook’s announcement, staunch government opposition has proved difficult for Libra to push through with its most ambitious plan.

“Facebook has said ‘just trust us’” Senator Sherrod Brown, Democrat of Ohio, said at the hearing. “And every time Americans trust you, they seem to get burned.”

Many governments around the world have echoed concerns on how Facebook will handle such an ambitious feat. Many claims that because of the company’s reputation in data security, it is hard to trust Facebook in handling people’s money.

“Trust is primordial”

“Do you really think people should trust Facebook with their hard-earned money?” Senator Brown asked Facebook’s exec, David Marcus.

As a response, Marcus said that the company would do its best to protect people’s money, as well as, prevent fraud and other illegal activities that malicious actors may carry out using Facebook’s Libra.

One of the significant critiques against Facebook’s digital money comes from the fact that cryptocurrencies are not well regulated and criminal element can leverage the technology and use Libra for money laundering and other forms of illegal payments.

“We’ve made mistakes in the past,” Mr. Marcus said. “We have been working, and are working hard to get better.”

“Trust is primordial,” he added.

Keep Big Tech Out Of Finance Act

The Senate hearing comes a day after a copy of a draft proposal in the Senate penned by Democrat senators surfaced that practically bans major tech companies from issuing digital currencies.

Read: [Breaking] Democrats Move To Ban Big Techs From Issuing Digital Money

A new draft proposal for the bill, bluntly named as “Keep Big Tech Out Of Finance Act,” that circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is serious about its position against Libra and other similar ventures in the future.

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Global fiscal and legislative resistance vs. Libra

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

European officials have also expressed concern regarding Libra, citing that the system, if widely adopted, could shake the global economy and rival national banks. French Finance Minister Bruno Le Maire sent a letter to officials from the G7 and International Monetary Fund calling for a group to examine Libra’s impact on the global financial system. Le Maire said that Libra must not become a “sovereign currency,” while a German politician noted Facebook’s potential to become a “shadow bank” to the global financial system.

Aside from European officials, Japanese lawmakers are also investigating the possible impact of Facebook’s Libra in global banking and financial systems ahead of the G-7 Meeting of the country’s finance ministry to be held in France this week.

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Low Sign Up Prompts Desjardins To Offer Identity Theft Protection To All Members After Data Breach

Only 13% of the affected members signed up for their earlier offer.

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Photo: Desjardins Website

A month following a data breach that has affected more than 2.9 million members of Montreal-based financial and credit union, Desjardins, the company said that they are extending the coverage of their credit and identity theft protection to all members. This time, the coverage is for life.

In a press release published July 15th, the company said that all Desjardins Caisse members are automatically qualified to avail a lifetime worth of protection against identity theft and are not only available to personal members, but also business members, who are currently not served by any industry solutions.

“Today, we’re sending a message to all of our members. Don’t worry–we’ve got you covered. If your identity has been stolen, give us a call. Desjardins is here for you. And we’re going to continue to support you like we always have. That’s what we’re here to tell you,” said Guy Cormier, President, and CEO of Desjardins Group. “Our teams have been working non-stop to put this coverage together for you. All Caisse members are automatically covered as of this morning. You don’t need to sign up, and you’ll only ever have to deal with Desjardins.”

Last month, the credit union from Canada experienced a data breach when one rogue employee advertently shared financial information of their members to a third party. Around 2.7 million personal members and 173,000 business members were affected by the data breach, according to the investigation conducted by the Laval police. The cause of the data compromise: “an ill-intentioned employee who acted illegally and betrayed the trust of their employer.”

The organization clarifies that the company was not in any form targeted by a cyberattack, and they have not seen a spike in fraud cases involving their members’ accounts in recent months. All of the data breaches were attributed to the recently fired employee who shared financial information of members to individuals outside the organization maliciously. Furthermore, they said that AccèsD passwords (for both personal and business accounts), security questions and PINs were not part of the compromised data.

As part of their efforts to help affected accounts secure their financial data and to mitigate the possible effects of the data breach, Desjardins also offered those who are concerned with a 5-year credit monitoring plan, paid for by the organization. The service includes daily access to your credit report, alerts of critical changes, and identity theft insurance.

They advised the affected members that the letter they received includes a personal activation code which they can use to activate their credit monitoring plan with Equifax before October 31, 2019.

However, it seems like registering to the protection plan with Equifax proved terribly difficult. As of Monday, only 13% of the affected account holders have signed up to the monitoring plan set up by Desjardins.

Reports reveal that this is because of the difficulty of the registration process with Equifax. The Equifax website has frequently crashed due to the demand, and some customers reaching the company by phone have waited for hours on hold. Customers have also reported having trouble getting service in French.

As an additional measure, Cornier said that instead of having their customers sign up, they are now offering them the protection by default because they don’t want the majority of their customers to be unprotected.

“People with money invested at Desjardins should be able to sleep easily,” he said.

The identity theft protection plan includes protection of assets and transactions, identity theft assistance and restoration, as well as monetary compensation in the event that one protected member becomes a victim of identity theft.

“Starting today, all Desjardins Caisse members have a new type of coverage that will reimburse them up to $50,000 for expenses related to identity theft. This could cover salary loss, document notarization, legal or accounting fees, and other types of related expenses,” the company said.

“Members don’t have to do a thing; they’re already covered. If they think their identity has been stolen, all they have to do is contact Desjardins.”

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