February 26, 2009
Madame Speaker,
I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.
Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.
Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed’s susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.
The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.
More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.
The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.
111th Congress – 1st Session
H.R. 1207
A BILL
To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.
1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.
SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
(a) IN GENERAL. – Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after “shall audit an agency” and inserting a period.
(b) AUDIT. – Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:
“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. -
“(1) IN GENERAL. – The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.
“(2) REPORT -
“(A) REQUIRED. – A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.
“(B) CONTENTS. – The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.
Sponsor
Rep. Ronald Paul [R-TX]
Cosponsors
The number of co-sponsors keeps growing! Check out the latest list here.
- Ron Paul: Audit the Federal Reserve! Ron Paul’s bill to audit the Federal Reserve continues to gain momentum. Last week’s...
- Sen. Jim DeMint Co-Sponsors Audit the Fed Bill Ron Paul’s Campaign for Liberty today issued high praise for Senator Jim DeMint and his...
- Ron Paul’s Bill To Audit The Federal Reserve Now Has 237 Co-Sponsors Ron Paul’s bill to audit the Federal Reserve (HR 1207) now has 237 co-sponsors,...
[...] February Representative Ron Paul (R-TX) introduced his Audit the Fed legislation. Congressman Paul, author of End the Fed, has been a long time opponent of the [...]
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[...] the Fed…02/2009: Ron Paul introduces bill to Audit the Federal ReserveOn February 26, 2009, Ron Paul introduces HR 1207, the bill to audit the Federal Reserve:I rise to introduce the Federal Reserve Transparency Act. [...]
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[...] his underlying message is spot on. In calling for transparecy in the Federal banking system, Paul said on the floor of Congress: Since its inception, the Federal Reserve has always operated in the shadows, without sufficient [...]
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Is there anyone who would help me get results for a credit card company’s outrageous behavior and analogous for holding me at gunpoint with their LEGAL BUSINESS right to charge me for being late–not a missed payment, just late, after years upon years of 100% perfect pay standing no matter what over ten years, up to 12/15 I have been with this Co. where reps rarely speak English and do not follow through or help. I digress. I just had triple bypass; a single disabled sr. female who has had not ONE missed or late payment ever with these guys; I was not able to plan for this procedure–it was a near-miss heart attack on Jan 22, surgery the 24th on Sunday; flown up by plane to a great facility out of this county due to living alone, I was not able to go home (Im trying to keep this brief, but it is difficult) for over three weeks in a place after ICU Cardiac, so there was no spouse, no secretary, family to help with bills. I was cut off from my home and responsibilities the longest I was ever, and my normal payment is around $30.00, I always send more, often a lot more over minimum, have pd it off more than once; we have had a perfect relationship since the onset. due to my being opened up from sternum to stem, also having to have my carotids done when i am sufficiently healed from this bypass open heart. i am alone, 100 lbs, and have taken good care of myself and my reponsibilities for over 30 years. If a citizen did this, it would be as if they (SS soldiers) sp? came to my door with gun in hand and robbed me, they;d be arrested. but corps can do it all they want to anyone, my story speaks for many, many people, this is not just for myself, i am a staunch supporter of Mr Dr Paul for a very long time and our thoughts and ideas are identical. i have been severely mistreatead (in criminal ways) by a county full of corrupt doctors, too, but there are good drs, too; i just don’t have acess to them. I need the entire story out there if someone can help me get it told. I am overwriting because my ire is so itense, but usually am a good strong writer, a born freedom “fighter” not the best word as i am a pacifist, so I am not whining, it is not about the money in that I could pay it, but of course, it is not the point. somehow, this has to be regulated, the rampant, blatant greed is out of control. With my perfect record I refuse to pay any of this.(except normal, a agreed)– they gave me no credit for the min. payment I did send a few days late as I was inhouse healing 24/7 medical watch, and in the kind of pain that keeps one quite out of it. This has to stop and I am not afraid to fight this. I have a strong following in my writings and editorials and trying to fight injustice; i was a detective for fraud most especially, but other works, too; now that i am 62 suddenly I am stupid, nobody and dispensible, but my skills did not go away with declining health issues. Please help me. I will be able to contribute to your/peers, etc. for payment, and have been ready for years.a9and I will keep working for these causes even if you can’t help me–one does not have to do with the other– I want and need to do this for myself, yes, but for all the thousnds/millions? who are victims of these tactics. they aren’t even US companies as if it matters any longer. I want to remain as anonomous as possible as long as a journalist or some one can know I am for real and I have the proof and info. I can hold my own, but i need credibility and support from those whose passion for TRUE change is equal to mine— and why are we allowing thsese things to happen to us and do nothing? Excuse the poor construction, but I am very — well, you know, i am sure. I need some help to get this all told and it is one heck of a story, there is so much more. I’m writing all about the corruption in a certain powerful group of people just in this county alone, but for starters, this paper I received for this card company today, all in red, with outlandish charges for first time, I want and need to be involved and have been, but not anywhere near deeply enough. I believe I have the skills (not recognized now that I am physically limited) my mind is stronger than ever. my writing skills can be very powerful; I’ve already ticked off some big shots locally. to me, a form of flattery. Can you help at all? I can and will give back, of that I am certain. Did not plan to write a novel my first letter. I’ll get some rest. I’m only 5 weeks out of surgery and doing well on my own now, i do have to hope this does not sound crazy; I’m just overwhelmed and fed up. Sincerely, and thanks in advance, just in case. . Please excuxe my redundancies and repetitions.., for obvious reasons, I hope. I’m just worn to shreds. Linda
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I wonder if Ron Paul realizes that a good argument for his bill to audit the fed is based in the constitution? If so why hasn’t he brought it up? “Article 1. Section 9. No money shall be drawn from the Treasury, but in Consequence of Appropriations made by law; and a regular Statement and Account of the Receipts and Expendatures of all public Money shall be published from time to time.” The fed’s secrecy is another in your face violation of the Constitution. In other words audit the fed is already fundemental law, but like so many other things is being ignored by the federal government.
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[...] While I expect Bernanke will be reappointed, there is growing opposition from three groups, all of which are concerned about the Fed’s commitment to fight inflation. The first group is libertarians such as Ron Paul: [...]
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[...] about the Fed’s commitment to fight inflation. The first group is libertarians such as Ron Paul: Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete [...]
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[...] specifically, the Ponzi scheme that is the Federal Reserve needs to be eliminated. Our new special interest-free government should be able to take over supervision of the Federal [...]
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[...] Dr. Ron Paul Introduces Bill to Audit the Federal Reserve [...]
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Check this out! State governments are pushing back!
IDAHO
http://www.legislature.idaho.gov/legislation/2009/HJM004.pdf
WHEREAS, Congress has inappropriately delegated its monetary authority to the private federal reserve bank, thus failing to protect and provide a sound monetary system as defined and mandated by the Constitution of the United States, forcing an unstable currency on us resulting in the past, and the current, economic perils; and
WHEREAS, a number of proposals from past and present Administrations and Congress may violate the Constitution of the United States.
NOW, THEREFORE, BE IT RESOLVED by the members of the First Regular Session of the Sixtieth Idaho Legislature, the House of Representatives and the Senate concurring therein, that the state of Idaho hereby claims sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States
at the state sovereignty site
http://www.tenthamendmentcenter.com/2009/02/23/state-sovereignty-resolutions/
Not all of the state’s petitions read exactly alike. Check out your state.
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[...] — “Ron Paul Introduces Bill To Audit The Fed.” RonPaul.com. 2008. 19 May 2009 http://www.ronpaul.com/2009-02-28/ron-paul-introduces-bill-to-audit-the-fed/ [...]
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Ya, both ponzi schemes and non intrinsic value currency systems are always based on a system of IOU’s, and that is what FED notes really are, IOU’s to energy producers. Every ponzi scheme is based on the same thing, and to keep going you must always issues more and more debt, so in that sense they are both one in the same.
This is where this “spend more is good” concept comes from. People spend more which means barrowing more, and as long as energy producers keep on trading their energy products in the currency barrowed on which is a storage vessel, or bank volt rather of IOU’s it can maintain. This ponzi system can maintain because there are two investment avenues for this keep functioning “absorption channel” & “capital account channel” and this is why, so called, “free trade” is such a big deal. You must keep expanding empire to maintain. Thing is the FED is setting the American people up to be Bernie Madoff, and anyone else barrowing Federal Reserve Notes. The Euro among others are also petro ponzi IOU currency systems too.
Just a note here, I have figured out what the filter programs stop, and what grabs the attention of moderators of major media message boards and blogs when I post about such a topic. Anytime “energy producers” or “oil producers” is posted with “FED” or “RFB” “Reserve Notes” exedra and “U.S. Government” within the same content together it seems to be taboo. Oh, and “protection racket” is bad too.
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I am not allowed to post how the macro dynamics of FED Notes operate. Not on Youtube, and not on major media blogs and or message boards. This below in quotes is what I am not allowed to post, or anything like Quote> “The 1 2 3 & 4 parts of Real World Economics 1>FED Notes would be worthless unless 1st demanded by energy producers 2>Energy producers would not demand FED Notes unless they’re protected by the U.S.Gov. in their ownership of energy production, and protect the places where they store their savings 3>The U.S.Gov. would not be able to protect :energy producers :the FED that issues FED Notes nor places where energy producers store their savings unless 4>the U.S.Gov. can finance a 1st class military” <End Quote
This is not about fait currency dynamics which is only relevant on a micro scale, but without the above macro dynamic currency would have no faith behind it on a day to day bases.
P.S. I am never given an explanation why the posting is so controversial to the point that I am not allowed to ever post such information.
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I don’t know…Because their PONZI scheme might collapse?
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The Federal Reserve Bank is a consortium of 9 associated banks with the Rothschilds at the head: (Mostly Foreign Owned)
$1. Rothschild Banks of London and Berlin
$2. Lazard Brothers Banks of Paris
$3. Israel Moses Seif Banks of Italy
$4. Warburg Bank of Hamburg and Amsterdam
$5. Lehman Brothers of NY
$6. Kuhn, Loeb Bank of NY (Now Shearson American Express)
$7. Goldman, Sachs of NY
$8. National Bank of Commerce NY/Morgan Guaranty Trust (J. P. Morgan Bank – Equitable Life – Levi P. Morton are principal shareholders)
$9. Hanover Trust of NY (William and David Rockefeller & Chase National Bank NY are principal shareholders). Here & Here
TIME LINE OF THE FOREIGN-OWNED FEDERAL RESERVE BANK
1791-1811: Rothschilds’ First Bank of the United States
1816-1836: Rothschilds’ Second Bank of the United States
1837-1862: Free Banking Era – no formal Central Bank through the efforts of President Andrew Jackson
1862-1913: System of National Banks through the efforts of President Andrew Jackson
1913-Current: Federal Reserve Act effects a consortium of privately held Jewish & associated banks called the Federal Reserve Bank. The largest shareholders of the Federal Reserve Bank are the Rothschilds of London holding 57% of the stock which is not available for public trading
On May 23 1933, Congressman Louis T. McFadden brought impeachment charges against the members of the Federal Reserve Bank. A smear campaign against McFadden ensued and he was poisoned 3 years later.
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[...] – Audit the Fed Ron Paul Introduces Bill to Audit the Fed | Ron Paul .com [...]
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Dear Mr. Paul
It’s all said in two words,Thank You
Please don’t stop fighting, We’re All behind you and the numbers are growing.
We will win. We run this country,We the people,I think that Washington forgot that,Remind them for us.
Mitchell
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I called, and wrote, my district rep (D) in DC strongly urging sh/im to cosponsor HR 1207. Don’t be afraid to do the same, even if you think your rep is rabidly migrating in the other direction (like mine is). These bailout bonzo’s need to get constant bombardment from people like us who are tired of supporting every tom dick and jane who doesn’t want to work for a living, or who doesn’t have the courage to take a job in the private sector. I hear about young folks almost every day who join the military and get sent off to Iraq and then to Afghanistan before their term is up (and sometimes when it’s almost up!), as well as those going to work for govt agencies that will have them spying on their fellow citizens, as well as their own families. Do we need to be harrassed to death when we’re just minding our own business working and trying to support our families? I really can relate to the guy who said he used to be in the middle class but no longer is because of our tax-paid terrorists whose tax code even they can never get their minds wrapped around. If you are not clever enough, the taxman will surely put you in the poor house. Beware and keep good track of your expenditures, receipts, etc. Keep good records so that you don’t fall victim to the tax-paid theives and thugs. Try using TurboTax or hiring a good CPA. It is worth the peace of mind and can result in a refund instead of a payment. Don’t be forced into borrowing money to pay taxes, or anything. Start saving and paying cash instead of using credit. Freedom comes from being free of debt. The bailout situation is resulting in keeping the interest rates too low for way too long. I keep hearing that the crash has not happened yet, but when it does, have your backyard garden going, as well as raising a few hens. Democrats/Socialists are all for population control, e.g., abortion, but if several million of us starve in the next few years, they won’t even shed a tear. They supposedly love the environment and animals, but humans they could care less about–we are expendable. We need more people like Ron Paul. I hear his son may run for congress, also keep your eyes on folks associated with the Mises Institute (as is Dr. Paul), as well as Classical Liberals (more conservative than your average republican) and folks from the Constitution Party. Many of these people used to be registered as democrat and republican (myself included) over the years but never felt quite like they’d really made a change.
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After all this time finally the lames in Congress get behind a Ron Paul bill. RP has been consistent all these years, now finally some of the brain washed congresspeople (who normally swing votes in the favor of their financial overlords) are feeling the pain of the peoples voice and the potential loss of votes and campaign funding. It will be interesting to see how the banks try and shoot this down, as they most definitely will try.
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[...] the Chairman , was well aware of Representative Pauls HB 1207. For complete details go to http://www.ronpaul.com/2009-02-28/ron-paul-introduces-bill-to-audit-the-fed/ And at last count has over 100 co sponsors. Calling for a audit of the Federal Reserve,. A [...]
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[...] Act written by Frank Williams – May 2nd, 2009 A specific piece of legislation discussed today was Congressman Ron Paul’s bill to audit the Federal Reserve (HR 1207, the Federal Reserve Transparency [...]
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Does anyone else think this could be the major economic event of the century if it happens??
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Auditing the Fed sounds like belling the cat. Or putting salt on a bird’s tail to catch him. It is an honorable attempt to rein in a huge festering cancerous growth on the world’s free market mentality. Should HR 1207 not pass, or worse it passes but the audit never takes place, then I hope Dr. Paul has the next bill written and waiting in the wings–outright abolishing the Fed and going on the gold standard.
There are communities that are starting their own currency and banks–unrelated to our current fiat money and fractional banking schemes. These are the types of things that we should have the courage to go forth and do. Look up Dr. BJ Lawson of NC–under his guidance, his community revived a local currency. And if you live near him in NC, please vote for him when he runs for Congress again. He is a friend of Dr. Paul.
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Getting media coverage to interview live with democratic and republican co-authors will sell HR 1207… it could become the economic story of the century…
I just sent emails with the links to HR 1207 on RonPaul.com… to the producer of Coast to Coast Am – ‘CoastProducer@aol.com’-suggesting also that if democratic and republican co-author’s were interviewed, live on Coast to Coast AM, discussing the significance of HR 1207… they would be breaking a story, beating other main stream media to the punch…
PS
The congressmen who support the bill may be saving their own careers and gaining national support.
SY MikeJaeger@live.com
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What can I do to help get more cosponsors for the bill
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I am writing to my two Alabama senators to cosponsor S604. What else can I do?
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Meagan, thank you for that long treatise from Ellen Brown. Sorry but I’m not getting excited about it. Fiat currency by any other name is still fiat currency. Fractional banking is the problem. Loose credit is the problem. I used to get 3-4 credit card offers per day in my mail. I used to get preprinted credit cards, huge loan offers–and after telling them to stop doing that, they ignored me. I was in constant fear someone would intercept my mail and send one of those in my behalf. I was quite powerless to stop the deluge. No doubt most other people have suffered the same assault. I wondered why such things occurred because, like other horrible things, e.g., abortion and genetic engineering, it just wasn’t supposed to happen! But a lot of crazy people are promoted way past their level of ignorance, especially in the banking industry where people with no college degree at all are promoted to VP. Here’s a good place to start learning about economics: The Mises Institute.
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Did you happen to read this letter below? We must audit and then eliminate the Federal Reserve, and then revive our constitutional monetary system. It’s important to know that as a solution Lincoln’s monetary policy is not new, but “a brilliant innovation of the American colonists”. Please help get this information out to people and the article below to Obama and help him see there are alternatives to his big spending approach that ‘we the people’ implore him to explore. Please read and forward to President Obama at: president@whitehouse.gov . Thanks.
Revive Lincoln’s Monetary Policy: an Open Letter to President Obama
by Ellen Brown
Dear President Obama:
The world was transfixed on that remarkable day in January when, to poetry, song, and dance, you gazed upon Abraham Lincoln’s likeness at the Lincoln Memorial and searched for wisdom to navigate these difficult times. Indeed, you have so many things in common with that venerable President that one might imagine you were his reincarnation in different dress. You are both thin and wiry, brilliant speakers, appearing on the national stage at pivotal times. Fertile imaginations could envision you coming back triumphantly as one of those slaves you freed, to prove once and for all the proposition that all men are created equal and can achieve great things if given a fighting chance. But as Wordsworth said, our birth is but a sleep and a forgetting; and if that is true, you may have forgotten a more subtle form of slavery from which Lincoln freed his countrymen, even if you were there at the time. You may have forgotten it because it has been omitted from the history books, leaving Americans ill-equipped to interpret the lessons of our own past. This letter is therefore meant to remind you.
We are now met on another battlefield of that same economic war that visited Lincoln and the Founding Fathers before him. President Obama, the fate of our economy and the nation itself may depend on how well you understand Lincoln’s monetary breakthrough, the most far-reaching “economic stimulus plan” ever implemented by a U.S. President. You can solve our economic crisis quickly and permanently, by implementing the same economic solution that allowed Lincoln to win the Civil War and thus save the Union from foreign economic masters. Lincoln’s Monetary Breakthrough
The bankers had Lincoln’s government over a barrel, just as Wall Street has Congress in its vice-like grip today. The North needed money to fund a war, and the bankers were willing to lend it only under circumstances that amounted to extortion, involving staggering interest rates of 24 to 36 percent. Lincoln saw that this would bankrupt the North and asked a trusted colleague to research the matter and find a solution. In what may be the best piece of advice ever given to a sitting President, Colonel Dick Taylor of Illinois reported back that the Union had the power under the Constitution to solve its financing problem by printing its money as a sovereign government. Taylor said:
“Just get Congress to pass a bill authorizing the printing of full legal tender treasury notes … and pay your soldiers with them and go ahead and win your war with them also. If you make them full legal tender … they will have the full sanction of the government and be just as good as any money; as Congress is given that express right by the Constitution.”
The Greenbacks actually were just as good as the bankers’ banknotes. Both were created on a printing press, but the banknotes had the veneer of legitimacy because they were “backed” by gold. The catch was that this backing was based on “fractional reserves,” meaning the bankers held only a small fraction of the gold necessary to support all the loans represented by their banknotes. The “fractional reserve” ruse is still used today to create the impression that bankers are lending something other than mere debt created with accounting entries on their books. 1
Lincoln took Col. Taylor’s advice and funded the war by printing paper notes backed by the credit of the government. These legal-tender U.S. Notes or “Greenbacks” represented receipts for labor and goods delivered to the United States. They were paid to soldiers and suppliers and were tradeable for goods and services of a value equivalent to their service to the community. The Greenbacks aided the Union not only in winning the war but in funding a period of unprecedented economic expansion. Lincoln’s government created the greatest industrial giant the world had yet seen. The steel industry was launched, a continental railroad system was created, a new era of farm machinery and cheap tools was promoted, free higher education was established, government support was provided to all branches of science, the Bureau of Mines was organized, and labor productivity was increased by 50 to 75 percent. The Greenback was not the only currency used to fund these achievements; but they could not have been accomplished without it, and they could not have been accomplished on money borrowed at the usurious rates the bankers were attempting to extort from the North.
Lincoln succeeded in restoring the government’s power to issue the national currency, but his revolutionary monetary policy was opposed by powerful forces. The threat to established interests was captured in an editorial of unknown authorship, said to have been published in The London Times in 1865:
“If that mischievous financial policy which had its origin in the North American Republic during the late war in that country, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.”
In 1865, Lincoln was assassinated. According to historian W. Cleon Skousen:
“Right after the Civil War there was considerable talk about reviving Lincoln’s brief experiment with the Constitutional monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution.”
The institution that became established instead was the Federal Reserve, a privately-owned central bank given the power in 1913 to print Federal Reserve Notes (or dollar bills) and lend them to the government. The government was submerged in a debt that has grown exponentially since, until it is now an unrepayable $11 trillion. For nearly a century, Lincoln’s statue at the Lincoln Memorial has gazed out pensively across the reflecting pool at the Federal Reserve building, as if pondering what the bankers had wrought since his death and how to remedy it.
Building on a Successful Tradition
Lincoln did not invent government-issued paper money. Rather, he restored a brilliant innovation of the American colonists. According to Benjamin Franklin, it was the colonists’ home-grown paper “scrip” that was responsible for the remarkable abundance in the colonies at a time when England was suffering from the ravages of the Industrial Revolution. Like with Lincoln’s Greenbacks, this prosperity posed a threat to the control of the British Crown and the emerging network of private British banks, prompting the King to ban the colonists’ paper money and require the payment of taxes in gold. According to Franklin and several other historians of the period, it was these onerous demands by the Crown, and the corresponding collapse of the colonists’ paper money supply, that actually sparked the Revolutionary War.
The colonists won the war but ultimately lost the money power to a private banking cartel, one that issued another form of paper money called “banknotes.” Today the bankers’ debt-based money has come to dominate most of the economies of the world; but there are a number of historical examples of the successful funding of economic development in other countries simply with government-issued credit. In Australia and New Zealand in the 1930s, the Depression conditions suffered elsewhere were avoided by drawing on a national credit card issued by publicly-owned central banks. The governments of the island states of Guernsey and Jersey created thriving economies that carried no federal debt, just by issuing their own debt-free public currencies. China has also funded impressive internal development through a system of state-owned banks.
Here in the United States, the state of North Dakota has a wholly state-owned bank that creates credit on its books just as private banks do. This credit is used to serve the needs of the community, and the interest on loans is returned to the government. Not coincidentally, North Dakota has a $1.2 billion budget surplus at a time when 46 of 50 states are insolvent, an impressive achievement for a state of isolated farmers battling challenging weather. 3 The North Dakota prototype could be copied not only in every U.S. state but at the federal level.
The Perennial Inflation Question
The objection invariably raised to government-issued currency or credit is that it would create dangerous hyperinflation. However, in none of these models has that proven to be true. Price inflation results either when the supply of money goes up but the supply of goods doesn’t, or when speculators devalue currencies by massive short selling, as in those cases of Latin American hyperinflation when printing-press money was used to pay off foreign debt. When new money is used to produce new goods and services, price inflation does not result because supply and demand rise together. Prices did increase during the American Civil War, but this was attributed to the scarcity of goods common in wartime rather than to the Greenback itself. War produces weapons rather than consumer goods.
Today, with trillions of dollars being committed for bailouts and stimulus plans, another objection to Lincoln’s solution is likely to be, “The U.S. government is already printing its own money – and lots of it.” This, however, is a misconception. What the government prints are bonds – its I.O.U.s or debt. If the government did print dollars, instead of borrowing them from a privately-owned central bank that prints them, Uncle Sam would not have an eleven trillion dollar millstone hanging around his neck. As Thomas Edison astutely observed:
“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is that the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people.”
A Wake-up Call
Henry Ford observed at about the same time:
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
Today we the people are starting to understand our banking and monetary system, and we are shocked, dismayed, and furious at what we are discovering. The wizard behind the curtain turns out to be a small group of men pulling levers and dials, creating an illusory money scheme that, behind all the talk and bravado, is mere smoke and mirrors. These levers are controlled by a privately-owned, unaccountable central bank called the Federal Reserve, which has recently dispensed billions if not trillions in funds to its banker cronies, without revealing where these monies are going even under Congressional inquiry or in response to Freedom of Information Act (FOIA) requests. As Chris Powell pointed out recently in conjunction with an FOIA request brought by Bloomberg News, which the Fed declined to comply with:
“Any government that can disburse $2 trillion secretly, without any accountability, is not a democratic government. It is government of, by, and, for the bankers.” 4
There was a time when private central bankers were the heavyweights in control, able to run their ultra-secret agenda with impunity; but that era is coming to an end. The bankers are scrambling, trying to patch up their crumbling creations with schemes, bailouts and sleight of hand. That effort, however, must ultimately prove futile. As investment adviser Rolfe Winkler said in a recent article:
“The great Ponzi scheme that is the Western World’s economy has grown so big there’s simply no ‘fixing’ it. Flushing more debt through the system would be like giving Madoff a few billion to tide him over. Or like adding another floor to the Tower of Babel. To what end? The collapse is already here. The question is: How much do we want it to hurt? Using the public’s purse to finance ‘confidence’ in a system that is already kaput may delay the Day of Reckoning, sure, but at the cost of multiplying our losses. Perhaps fantastically.” 5
The bankers are on the run, feverishly trying to use the collapse of the current system to steer us toward an “Amero”-style North American currency, or a one-world private banking system and privately-issued global currency that they and only they control. We the people will not accept those solutions, however, no matter how bad things get. We demand real solutions that empower us, not enslave us.
Abraham Lincoln had such a solution. President Obama, you can finally bring his monetary solution to fruition. Manifest the vision of Lincoln, Jefferson, Madison and Franklin, and we the people will make sure you are placed in the pantheon of our greatest leaders and are revered for all time. America’s greatest days can still be ahead of us; but for this to happen, we need to expose and root out the deceptive banking scheme that would enslave us to a future of debt and increasing homelessness in this great country our forefathers founded. The time has come for democracy to rise superior to a private banking cartel and take back the power to create money once again. Such a transformation would represent the most epochal and empowering shift that humanity has ever seen. As you recently said:
“This country has never responded to a crisis by sitting on the sidelines and hoping for the best. Throughout our history we have met every great challenge with bold action and big ideas.”
Your words are a timely reminder of our long legacy of action and bold solutions in the face of adversity. Can we do this? Yes we can.
________________________________________
Ellen Brown, J.D., wrote this article in April, 2009, for Path to a New Economy, a collection of online articles for YES! Magazine, on economic and financial solutions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are http://www.webofdebt.com and http://www.ellenbrown.com.
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Wow, this is a load of crap. Apparently this woman has never read the constitution, because fiat currency is unconstitutional. Not only that but she has no idea about inflation. Greenbacks were fiat currency, and they DID lead to inflation post civil war, just like the CSA’s dollar and the Continental dollars of the War of American Secession (revolutionary war). If you print tons of money, this is by definition inflation, you are increasing the money supply, which then leads to price inflation. Every time you increase the supply of a commodity, like money, you reduce its value. She also probably hasn’t seen the cartoon from the civil war with Lincoln and his cabinet sitting around a table with a printing press going, printing…greenbacks! It was a satirical cartoon as well, highly unflattering to the tyrant’s administration.
Other than that, there are too many other historical inaccuracies to deal with, and I have a headache, but the money printing stuck out.
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Dear Dr Paul, like most Americans I never paid much attention to what was happening with money & government. This financial crash has captured my attention because it hit my 401k and home value really hard. Now that I have taken the time to educate myself on some of the issues, and watching and listening to our government representatives, I am sickend by what I see happening. How did we ever get to this point in history? So many things need to change and this bill to try to reign in the FED is a good start.
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People who don’t support Ron Paul simply do not pay attention. We have been brainwashed, every generation, since 1865–it is small wonder so many of us remain ignorant most of our lives–we are simply afraid to trust what we’re hearing if it’s different from the status quo. Negative publicity works very well. (Heck, look what LBJ did to drive down demand for eggs!)
It should be incumbent upon us to spread the word about Dr. Paul’s HB 1207 as far and wide as possible. Don’t be afraid of offending liberals and neocons, they certainly aren’t afraid to offend you!
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Our government has bowed to economic terrorism to give huge sums of
dollars to the unaudited, therefore, secret operations of the Federal Reserve, a system that has foreign connections and is Federal in name only. Because of threats of economic disaster, we put future generations in tax bondage to pay for unaudited Federal Reserve operations. This is a good educational forum to learn from.
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Ron, why is it that no one is questioning the govt sanctioning AIG creating a new company called AIU and allowing this new organization to be a lifeboat for AIG execs to jump ship from AIG?
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Mr. Paul
I am an 18 year old college student that attends a very liberal university, and after seeing your website and reading your views I support you and your stance on nearly all subjects,I hope that your bill will aid in the limiting of this growing monster of bureaucratic mess that the US people have let ruin our country.
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[...] Ron Paul Introduces Bill to Audit the Fed | Ron Paul .com – Madame Speaker, [...]
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[...] Paul’s proposed bill to Audit the Fed is a step in the right [...]
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Hi all,
just learning about this and I am looking to write an article on it in the student paper..
Upon my research I found that the Fed. has been audited regularly over the years..
So why do people say the Fed. has never been audited?
What will this bill do different/accomplish?
thanks– looking for info.
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http://www.newyorkfed.org/aboutthefed/fedpoint/fed35.html
Read it carefully
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Thanks for the response.
I’ll have to reread that a couple of times, but basically the Fed controls the parameters of their audit and their foreign affairs are not subject to any audit?
Is this the gist of it?
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Basically yes. However I wouldn’t say “foreign affairs”. Best to keep with slightly more precise language.
From the link…”GAO auditors are restricted by law from reviewing monetary policy operations and transactions carried out by the Federal Reserve on behalf of foreign central banks.”
Which is why Ron Paul’s states in his speech “The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight?”
Why indeed.
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Before someone comes in and states that those transactions aren’t audited because (from the link) “This restriction was imposed by Congress to assure the independence of the Federal Reserve from political influence.” Let me just state that this is complete nonsense. The Fed is currently very much subject to political influence. Keeping the people from knowing its actions does not remove political influence. Indeed, it does the exact opposite.
You want to know what is free of political influence? I kinda already gave it away in the question. The unhampered FREE market!
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thank you
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No problem. Would you post your article? Maybe we can help with the editing and stuff.
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I appreciate help, but I would rather edit the article over email and not on a public forum. Is it safe to post email addresses on here?
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Maybe Congressman Ron Paul can use some of his $74 million earmark money from the omnibus bill to by some credibility.
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If you read this post…. Please do one thing, subscribe to http://www.ronpaul.com email… it is free and share them as they come with 3 different friends each time. Share them with your friends by forwarding them and add a personal note about what you think concerning http://www.ronpaul.com / Lets get this bill buzzin on the internet! SY…. big yahoo mike blog yahoo.com
Ron Paul Tells The Truth More Often, More Often Than Our Other Members of Congress, At Least.
Should add excellent post. Looking forward to seeing your next one!
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If you read this post…. Please do one thing, subscribe to http://www.ronpaul.com email… it is free and share them as they come with 3 different friends each time. Share them with your friends by forwarding them and add a personal note about what you think concerning http://www.ronpaul.com / Lets get this bill buzzin on the internet! SY…. big yahoo mike blog yahoo.com
Ron Paul Tells The Truth More Often, More Often Than Our Other Members of Congress, At Least.
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MY FRIENDS SAY IF THEY CANT ACCOUNT FOR THE SPENDING OF OUR MONEYS THEN THE BEST THING TO DO IS NOT GIVE THEM ANY MORE THAN ABSOLUTLY NECESSARY IF EVEN THAT MUCH. THE MORE THEY GET THE MORE CONTROL OVER THE WORLD AND US THEY CREATE , WEVE ACCIDENTLY CREATED A MONSTER AND NEED TO REGAIN CONTROL OF IT SOMEHOW AND ITS BECOME VERY UNRULLY TOWARDS ITS ORIGINAL CREATORS ,= THE PEOPLE.
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where are you now how to contact you and help rallying or VOTE ON ISSUES PETITIONS and the like.
please start a way for us to help the cause.
rebirth our constituion for the peoples freedom and protection from a self appointed government.
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GO RON PAUL!!!! BEST BILL EVER!!!
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Hey Flag man… send me your email chain letter with congressmen and senator email addresses and I’ll send it out plus I’ll write one with some talk show radio and tv host email address and send it to you so you can forward it on tro your friends… I wonder how many people will send email mto their congressmen and senators and media people… If we ask them to and do it as an easy do chain letter??
sy by mike.
You can use these XHTML tags:
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