Ron Paul Vs. Ben Bernanke, Moody's Puts the U.S. AAA Credit Rating on a Downgrade Review, and Somlia CIA Prisons

The blogosphere was all a twitter today as Ron Paul and Ben Bernanke squared off in probably one of the last times in the House Financial Services Committee today.  Right from the get go, WSJ reports on this golden nugget:

Ron Paul‘s announcement yesterday that he won’t seek re-election in 2012 elicited the expected reaction from Federal Reserve Chairman Ben Bernanke: a big smile.
As today’s House hearing got underway, frequent Fed critic Paul prepared to give his opening statement. But before he could speak, Rep. Barney Frank (D., Mass.) brought up the announcement, saying that despite their disagreements he would miss the Texas Republican.
Paul thanked him for the sentiment and noted some were saying the announcement would likely bring a smile to the Fed chairman’s face. Bernanke obliged, and was clearly trying to maintain a polite grin.

In the preliminary testimony, Bernanke once again made it clear that if the economy continues to be sluggish, he will be more than willing to suck up some more Treasury bonds:

Federal Reserve Chairman Ben S. Bernanke told Congress the central bank is prepared to take additional action, including buying more government bonds, if the economy appears to be in danger of stalling.

My boss at my old internship, though fairly liberal, told me once that although he thinks an institution such as the Fed should be around to have some control over the economy (I tried for four months to convince him otherwise, but you know how some people are), that idea that one man can affect global markets with the simple utterance of a few words is downright scary.  Today demonstrated just how right he was.  As Bernanke testified today, the dollar weakened while gold soared to brand new heights:

The dollar weakened against all its most-traded counterparts as Federal Reserve Chairman Ben S. Bernanke said policy makers will provide economic stimulus if needed and investor demand for higher-yielding assets increased.

Gold futures surged to a record $1,588.90 an ounce as the dollar’s slump and the European debt crisis spurred demand for precious metals as alternative assets. Silver surged the most since March 2009.

It's a shame Bernanke comes off as rather timid interviews, any other narcissist in Congress or Washington would more than love to have that kind of power.

So what did Ron Paul say today which caused quite a stir?  A rather simple question really:

Is gold money?
(skip to just before the 5:00 mark)

Bernanke pause is almost deafening.  He knows damn well what Paul is getting at.  Now "no" may be the technical answer in terms of currency, but Paul asked about money, not currency.  Sure, gold isn't legal tender now.  But Bernanke's complete disregard to gold's use for thousands of years was just plain sloppy.  He played right into Paul's diamond question and his answer of "traditional" is bullshit considering how much gold China's Central Bank has been purchasing.  Also, watch the video just before the "is gold money?" exchange, Bernanke claims gold is used to hedge against world uncertainties and disasters.  Hmmm, I don't think people buy gold in preparation of global warming or natural disasters, what could they possibly buy gold for......
Bernanke sure knows how to be slick.

The debt ceiling negotiations continued today and don't seem to be getting there.  In another worthless attempt at gaining credibility, Moody's had this to say:

New York, July 13, 2011 -- Moody's Investors Service has placed the Aaa bond rating of the government of the United States on review for possible downgrade given the rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on US Treasury debt obligations. On June 2, Moody's had announced that a rating review would be likely in mid July unless there was meaningful progress in negotiations to raise the debt limit.

Once again, if Moody's (or S&P or Fitch) had any credibility, it would have downgraded the U.S.'s credit rating a long time ago.

The Nation, not one of my favorite rags, has a pretty good article on CIA prisons in Somalia today:

As part of its expanding counterterrorism program in Somalia, the CIA also uses a secret prison buried in the basement of Somalia’s National Security Agency (NSA) headquarters, where prisoners suspected of being Shabab members or of having links to the group are held. Some of the prisoners have been snatched off the streets of Kenya and rendered by plane to Mogadishu. While the underground prison is officially run by the Somali NSA, US intelligence personnel pay the salaries of intelligence agents and also directly interrogate prisoners. The existence of both facilities and the CIA role was uncovered by The Nation during an extensive on-the-ground investigation in Mogadishu. Among the sources who provided information for this story are senior Somali intelligence officials; senior members of Somalia’s Transitional Federal Government (TFG); former prisoners held at the underground prison; and several well-connected Somali analysts and militia leaders, some of whom have worked with US agents, including those from the CIA. A US official, who confirmed the existence of both sites, told The Nation, “It makes complete sense to have a strong counterterrorism partnership” with the Somali government.

According to former detainees, the underground prison, which is staffed by Somali guards, consists of a long corridor lined with filthy small cells infested with bedbugs and mosquitoes. One said that when he arrived in February, he saw two white men wearing military boots, combat trousers, gray tucked-in shirts and black sunglasses. The former prisoners described the cells as windowless and the air thick, moist and disgusting. Prisoners, they said, are not allowed outside. Many have developed rashes and scratch themselves incessantly. Some have been detained for a year or more. According to one former prisoner, inmates who had been there for long periods would pace around constantly, while others leaned against walls rocking.

The article is pretty long, but The Nation should be commended for uncovering some important facts about our illegal detainment of foreigners.  Still, I don't see The Nation coming out anytime soon calling for Obama to be put on trial for war crimes.