Update: This amendment passed by voice vote.

Frankly, I just don't understand foreign currency swaps. It's above my pay grade.

Yet, we have an amendment, by Rep. Alan Grayson and Ron Paul, to restrict the Federal Reserve on issuing foreign currency swaps.

The amendment restricts the Federal Reserve by requiring five Federal Reserve members of the board of Governors approve as well as the U.S. Treasury Secretary.

The Bank of International Settlements, Switzerland, has written a paper on the U.S. dollar shortage and the international policy response, from what happened by the fall of 2008. Below is a graph of the sudden increased foreign currency swaps issued by the Federal Reserve:

^{Src: Zero Hedge, click on image to enlarge}

Ben Bernanke has come out with a now, now, there, there on the falling dollar:

The Federal Reserve is monitoring currency markets “closely” and will conduct policy in a way that will “help ensure that the dollar is strong”, Ben Bernanke said on Monday in rare comments on the US currency.

The Fed chairman also indicated that the US central bank would not ignore the impact of rising commodity prices when evaluating the outlook for inflation. He said he would not rule out using interest rates to combat new asset price bubbles, even though he did not see obvious mispricing in the US at this stage.

Hmmmm, no obvious mispricing. Does that include the oil speculative bubble of 2008?

Meanwhile Gold is through the roof, in part due to the dollar decoupling.

It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

Tonight's Friday Movie Night is a little different and why it's being posted early. Senator Bryon Dorgan has come alive and getting involved in financial reform. This is great news for Dorgan predicted derivatives were a very serious problem 15 years ago (take that Taleb & Roubini!). First, below is Dorgan's call to action. Next is a talk on derivatives and financial reform by Dorgan. Finally is Senator Bernie Sander''s Too Big to Exist bill which breaks up the systemically risky institutions.

Considering we have financial lobbyists writing the House derivatives bill (exceptional piece by William Greider) and a complex maze of financial reform (where we are still digging through to find the loopholes exemptions), we call your attention to a refreshing breeze blowing down from common sense North Dakota.

Senator Bryon Dorgan is requesting you get involved in demanding common sense financial regulatory reform and reinstate Glass-Steagall (separate out FDIC insured banks from investment banks).