The government's white paper describing the causes and effects of the financial crises provides the rationale for President Obama's proposals for reform. Conveniently, nowhere does the paper mention the actual primary causes:

1. The Federal Reserve kept real interest rates negative for nearly five years. Negative interest rates are an abomination, a radiation to proper pricing of risk:they encourage if
not force excessive risk-taking.

2. The Federal Reserve kept margin requirements at banks too low for too long.

3. The shoddy monitoring of off-balance sheet leverage and derivatives, both of which accelerated leverage to unparalleled levels.

4. The Congressional creation and support of the GSEs, which guaranteed and bought debt that would otherwise never been made because of its quality.

Of course the banking industry played along. Unfortunately, the private market will always take advantage of shoddy government regulation. But the private market never would have had the fuel or the risky inclinations if not for the above.

But the above wasn't mentioned, because the paper was written by those culpable.

Now we are about to give the very institution, a private bank with its own shareholders and where only half its board members are appointed by the government, undefined powers. Ron Paul has nearly half of Congress willing to support a bill to audit the Fed. It can't come soon enough. We know a lot more about the operations of the CIA than we do about the operations of the Fed, whose operations that always devalue our currency.

We will rue the day that we gave this power to the Fed. The power is undefined; they have carte blanche. We should by now all realize the destruction for which the Fed is already responsible.

Risk is high.