End The Fed, Or At Least Repeal Its Monopoly Powers

In his latest column Ron Paul announces that he will soon introduce legislation requiring an audit of the Federal Reserve. If the audit reveals what he suspects, he will strongly urge Congress to abolish the Federal Reserve. But if neither of the above happens, Congress could at least repeal legal tender laws, thereby ending the Fed’s stranglehold on the lifeblood of our economy and opening the door for for competing currencies to be used by anyone who wants to.

Download the column as an MP3 file here (3:42 minutes).

On Transparency of the Fed

by Ron Paul

This week the Federal Reserve responded to the American people’s increased concerns over our monetary policy by presenting new initiatives aimed at enhancing the Fed’s transparency and accountability. As someone who has called for more openness from the Fed for over 30 years, I was pleased to see the Fed acknowledge the legitimacy of this need.

The Federal Reserve controls the flow of money and credit in our economy because Congress has abdicated its responsibility over the nation’s currency. This process therefore occurs centrally, and almost completely outside the system of checks and balances. Because of legal tender laws, people are left with no real choice, except to build their lives and futures around this monopoly currency, vulnerable to powerful central bankers. The Founding Fathers intended only gold and silver to be used as currency, however, inch by inch over the decades, this country has backed away from this important restraint. Our money today has no link whatsoever to gold or silver. For many reasons, this is extremely dangerous, and has a lot to do with the boom and bust cycles that have resulted in the crisis in which we find ourselves today.

The Fed is now pledging to reveal to the public more about its economic predictions, and calls this greater transparency. This is little more than window-dressing, at best, utterly useless at worst. Many analysts, especially those familiar with the Austrian school of economics, saw the current economic crisis coming years ago when the Federal Reserve was still telling the American people their policies were as good as gold. So while it might be nice to know what fantasy-infused outlook the Fed has on the economy, I am much more interested in what they are doing as a result of their faulty, haphazard interpretation of data. For instance, what arrangements do they have with other foreign central banks? What the Fed does on that front could very well affect or undermine foreign policy, or even contribute to starting a war.

We also need to know the source and destination of funds provided through the Fed’s emergency funding facilities. Information such as this will provide a more accurate and complete picture of the true cost of these endless bailouts and spending packages, and could very likely affect the decisions being made in Congress. But with so much of the Fed’s business cloaked in secrecy, these latest initiatives will not even scratch the surface of the Fed’s opaque operations. People are demanding answers and explanations for our economic malaise, and we should settle for nothing less than the whole truth on monetary policy.

The first step is to pass legislation I will soon introduce requiring an audit of the Federal Reserve so we can at least get an accurate picture of what is happening with our money. If this audit reveals what I suspect, and Congress has finally had enough, they can also pass my legislation to abolish the Federal Reserve and put control of the economy’s lifeblood, the currency, back where it Constitutionally belongs. If Congress refuses to do these two things, the very least they could do is repeal legal tender laws and allow people to choose a different currency in which to operate. If the Fed refuses to open its books to an audit, and Congress refuses to demand this, the people should not be subject to the whims of this secretive and incompetent organization.

  • Deft

    We are led to believe the subject of money is boring and complicated. Our media constantly provides distractions. It’s very hard to get the average person to understand the importance of the issue.

  • Mike

    They are afraid for there lives after all they are dealing with the most powerful Wise guys around. there is nothing worse then an educated crook. Street gangsters have been calling the working class fools for years. Now i see they are smarter then we give them credit
    for. We have been working harder to produce more so we can get less.
    they can rape us and no matter what happens like the sub prime bust or the dot com bust the fed is there to bail them out so it really don’t matter how much risk is involved unless you are joe nobody.
    then we all think we are doing something wrong when its the crooks
    in the fed and the polititions making promises they know they wont be able to keep. Then they wonder why so many of us are on drugs ,
    alcohol or in a mental institutions. It really burns my ass. I want to do something anything to stop this insanity. I will say one thing about ron paul i agree with everything you are doing brother and i will say u have some strong backbone. the last 2 people i know of that squared off against the fed are dead and they did’nt die of old age.
    I do think however that the american people have no chance of winning this in the political arena. Any transperancy these people offer anyone will probably be BS. I hope i am wrong and god help us all !


    • David

      Mike, this is a good post, and your obviously well aware of the problems we face and the nature of the power which is trying to destroy us as well. Some of us have been working very hard on putting good solutions and courses of action in front of our population, and we need many more in order to participate as well. It’s working too as we have 350,000,000 very angry people in this country, who are putting the blame for the problems which have been created for them exactly where it belongs, on America’s Banks, and all that they need are alternatives to work toward and establish which most won’t think of themselves. To affect the change we need to save our country, our lives and our freedoms through our political process is impossible as we no longer have any control of that whatsoever, but if we can use this to motivate the mass action by the population which we need to destroy that power first, then we can, and then Ron Paul can help us too, not before.

      I’ll say this once again, and many times more until the objective is accomplished. Mike, and all the rest of you. Get on the sound money blog, and start scrolling through the posts, going way back as well. Copy/paste everything you find that you like, into emails and forward them to everyone you know, and ask them to forward them on. If you have any ideas please contribute them as well. No matter how small you may think they might be, they can also motivate really good posts and solutions from others which we can use toward this end.

      If we are going to take back our country from America’s banks, and re-establish it for its people as our founding fathers intended, then it will simply and only be a result of the individual time and effort which each and every one of you contributes toward this end. The more who do, the better the chance.

      Once again, come help is do it people, come help yourselves.


  • Trent Kusters

    As a concerned member of the international community and an Australian citizen, it concerns me how little some (obviously intelligent) American citizens know about their own monetary system. The same monetary system that enslaves the entire world.

    Please, all I ask is that you believe no one, and research it for yourself. You will be truly shocked and dare I say scared… very scared.

    If not for the fate of the world, do it for the fate of your own people. Please.

  • Jim smith

    We’ve shaken these Central Banking rats off in the past, we can do it again. The trick will be to keep them off and minimize whatever reprisal they have set up.

  • Robert

    Don’t feel the housing bubble was an accident. The NWO is taking us down, debasing our currency. They’ve got our gold stored safely in the Bank of England, 700 trillion. They gave us play money which they used to buy up the world, through their instrument the Stock Market. Jefferson was right.

    They do not care about the Play Money. There main concern now is to destroy the perceived wealth of America, which unfortunately is in the stock market (where the fox guards the hen house) They are all about controlling us, and America must go.

    Ron Paul is a hero, hope he has a good plan, because in their quest to control others, they are totally ruthless. The things these bankers and politicians due in broad daylight is amazing.

  • Sean

    i dunno what your suspecting to find dr paul, but you will probably see lower m0 figures than you would imagine and congress will be asking for more support from the fed.. 40 billion dollars a month on oil and 40 billion dollars a month on products from china dwindles our supply of money, so it has to be replaced with security exports. As long as congress is for free trade, they are going to be for the federal reserve..

  • Sean

    We are the largest exporter of securities(national deficit). People around the world invest in our country because we replaced gold with our currency. They invest in our country also because we have the most transparent market available.. We don’t have to worry about them asking for their money back because of legal tender laws, that money has to be spent here…

    For those who wished that houses would devalue, you got what you wanted. I hope yOur REAL freakin happy. People’s homes in the midwest depreciated 30% in value.. I don’t think you understand what this means. People who have to pay their 400k mortgage, now only have a house thats worth 200k.. For those of you who have no money, i guess you can celebrate. But the majority of people are watching their life investment go down the drain, and now they have to pay a ton of money for nothing.. I guess all the free market advocates are poor, or have nothing to lose.

  • Kenji Lee

    End the Federal Reserve System competely, and get back to gold and silver as mention in the Constitution. Get back to the Constitution.

    Congress shall coin money, regulate the value thereof and set the standard of weights and measure. No emitting of bills of credit and do not make anything but gold and silver coin a legal tender in payment of debt.

    Congress needs to do it’s jobs.

    Kenji Lee

  • Ross

    Matt seems to have little knowledge of his own Federal Res system.Matt,the Res does conjure money from cyber space and then loans it to the Govt and the other banks at interest.The Res for years now has been creating a huge lending bubble by debt creation which has perverted the US and the world economies.When debt builds upon debt,it enslaves people to the point of collapse.This is what you are witnessing now.

    Govts do not need the a central banking system.They can create their own credit through owning their own reserve banks.The people then do not have to pay interest on money generated by increases in GDP.The productivity should belong to the people who created it and not a rapacious central banking system.

    If you cannot see how evil this system is,then I can only assume you are either intellectually challenged or you are profiting from this perversion of the US economy.

    • Matt

      I must be intellectually challenged then as I disagree in the simplicity of your answer.

      Anyone that lacks humility while also believing they can quantify and blame the current situation in two and a half paragraphs and so completely on one entity at the moral hazard of others has been blinded by ephemeral knowledge. Period.

  • Matthew Stone

    How truthful is this statement? Does the Federal Reserve really control the flow of credit?

    Please cite your source on this one Mr. Paul. I am fascinated to learn how, though you currently advocate the Fed is printing money, weirdly at the same time credit is contracting:

    “The Federal Reserve controls the flow of money and credit in our economy because Congress has abdicated its responsibility over the nation’s currency. ”

    The Fed controls credit? Would you like me to graph fed rates against credit availability? FYI the fed is trying to create credit, but the free market system is a lot more powerful…

    Sure, you can say the Fed created that credit in the first place, but rates are even lower now than they were then, and wealth destruction has been at a 40% year over year clip.




  • Daniel W. Jones

    Wonderful response. Cowards, traitors to the American People, Will we ever stop anointing these wealthy “whited sepulchres” to lead country. There is an ancient legent warning people to avoid letting “secret combinations” get above them. Surely “Skull and Bones” is well named and that is the flag we should be flying over this “corporate” ruled nation state. Cheers, Dan

  • John C. Randolph

    While I agree with Dr. Paul’s statements above, I wouldn’t so much describe the congress as having abdicated its responsibility to the Fed, as having shirked its duty. Abdication is a legal transfer of power, and nothing about the Fed is legal.

    It’s rather shocking to me that one of the branches of the Federal government that our constitution established has been so eager to turn its power over to the courts and the executive; the framers of the constitution envisioned a system where all three branches contended for power and would hold each other in check. They never imagined that the legislative branch would degenerate into a parliament of cowards.