Ron Paul’s Bill To Audit The Federal Reserve Now Has 92 Co-Sponsors

Ron Paul’s bill to audit the Federal Reserve (HR 1207) now has 92 co-sponsors, and the numbers keep growing!

This is history in the making, and victory is within reach. Imagine what will happen if HR 1207, The Federal Reserve Transparency Act, comes up for vote in Congress! With more than 20% of Congress already co-sponsoring this bill, it has real potential to pass — BUT only if we educate and rally the people to support it and get our Congresspeople to put it to vote and pass it.

Step 1: Your Representative

If your representative is not on the following list of HR 1207 co-sponsors, call their offices, write to them, email them, etc. Let them know they need to support HR 1207. If you live in their district, let them know. Go to their office.

Capitol Switchboard: (202) 224-3121

HR 1207 Co-Sponsors (as of 4/24/2009)

Rep Abercrombie, Neil [HI-1] – 2/26/2009
Rep Akin, W. Todd [MO-2] – 3/19/2009
Rep Alexander, Rodney [LA-5] – 3/10/2009
Rep Bachmann, Michele [MN-6] – 2/26/2009
Rep Baldwin, Tammy [WI-2] – 4/21/2009
Rep Bartlett, Roscoe G. [MD-6] – 2/26/2009
Rep Bilbray, Brian P. [CA-50] – 4/21/2009
Rep Bishop, Rob [UT-1] – 4/21/2009
Rep Blackburn, Marsha [TN-7] – 3/16/2009
Rep Blunt, Roy [MO-7] – 3/24/2009
Rep Brady, Kevin [TX-8] – 4/22/2009
Rep Broun, Paul C. [GA-10] – 2/26/2009
Rep Buchanan, Vern [FL-13] – 3/17/2009
Rep Burgess, Michael C. [TX-26] – 3/19/2009
Rep Burton, Dan [IN-5] – 2/26/2009
Rep Capito, Shelley Moore [WV-2] – 4/1/2009
Rep Carter, John R. [TX-31] – 3/31/2009
Rep Castle, Michael N. [DE] – 3/17/2009
Rep Chaffetz, Jason [UT-3] – 3/6/2009
Rep Cole, Tom [OK-4] – 4/21/2009
Rep Culberson, John Abney [TX-7] – 3/26/2009
Rep Deal, Nathan [GA-9] – 3/23/2009
Rep DeFazio, Peter A. [OR-4] – 3/9/2009
Rep Doggett, Lloyd [TX-25] – 4/21/2009
Rep Duncan, John J., Jr. [TN-2] – 3/6/2009
Rep Ehlers, Vernon J. [MI-3] – 4/21/2009
Rep Fallin, Mary [OK-5] – 4/2/2009
Rep Fleming, John [LA-4] – 3/18/2009
Rep Foxx, Virginia [NC-5] – 3/10/2009
Rep Franks, Trent [AZ-2] – 3/23/2009
Rep Garrett, Scott [NJ-5] – 3/5/2009
Rep Gingrey, Phil [GA-11] – 3/30/2009
Rep Gohmert, Louie [TX-1] – 4/23/2009
Rep Graves, Sam [MO-6] – 4/22/2009
Rep Grayson, Alan [FL-8] – 3/11/2009
Rep Heller, Dean [NV-2] – 3/6/2009
Rep Herger, Wally [CA-2] – 4/21/2009
Rep Inglis, Bob [SC-4] – 4/23/2009
Rep Jenkins, Lynn [KS-2] – 4/23/2009
Rep Johnson, Sam [TX-3] – 4/22/2009
Rep Johnson, Timothy V. [IL-15] – 4/23/2009
Rep Jones, Walter B., Jr. [NC-3] – 2/26/2009
Rep Kagen, Steve [WI-8] – 2/26/2009
Rep Kaptur, Marcy [OH-9] – 4/23/2009
Rep Kingston, Jack [GA-1] – 3/6/2009
Rep Lamborn, Doug [CO-5] – 4/21/2009
Rep Latham, Tom [IA-4] – 4/21/2009
Rep Lucas, Frank D. [OK-3] – 4/21/2009
Rep Luetkemeyer, Blaine [MO-9] – 4/21/2009
Rep Lummis, Cynthia M. [WY] – 3/19/2009
Rep Manzullo, Donald A. [IL-16] – 4/21/2009
Rep Marchant, Kenny [TX-24] – 3/11/2009
Rep Massa, Eric J. J. [NY-29] – 4/22/2009
Rep McCaul, Michael T. [TX-10] – 4/21/2009
Rep McClintock, Tom [CA-4] – 3/6/2009
Rep McCotter, Thaddeus G. [MI-11] – 3/19/2009
Rep Miller, Jeff [FL-1] – 3/24/2009
Rep Olson, Pete [TX-22] – 4/21/2009
Rep Paulsen, Erik [MN-3] – 3/30/2009
Rep Pence, Mike [IN-6] – 4/21/2009
Rep Peterson, Collin C. [MN-7] – 3/19/2009
Rep Petri, Thomas E. [WI-6] – 3/10/2009
Rep Platts, Todd Russell [PA-19] – 3/19/2009
Rep Poe, Ted [TX-2] – 2/26/2009
Rep Posey, Bill [FL-15] – 2/26/2009
Rep Price, Tom [GA-6] – 3/10/2009
Rep Rehberg, Denny [MT] – 2/26/2009
Rep Roe, David P. [TN-1] – 4/21/2009
Rep Rohrabacher, Dana [CA-46] – 3/6/2009
Rep Rooney, Thomas J. [FL-16] – 4/22/2009
Rep Sessions, Pete [TX-32] – 3/23/2009
Rep Shimkus, John [IL-19] – 4/22/2009
Rep Smith, Adam [WA-9] – 4/22/2009
Rep Smith, Lamar [TX-21] – 4/2/2009
Rep Stark, Fortney Pete [CA-13] – 3/26/2009
Rep Stearns, Cliff [FL-6] – 3/6/2009
Rep Taylor, Gene [MS-4] – 3/6/2009
Rep Terry, Lee [NE-2] – 3/30/2009
Rep Thompson, Glenn [PA-5] – 4/22/2009
Rep Wamp, Zach [TN-3] – 3/16/2009
Rep Westmoreland, Lynn A. [GA-3] – 4/2/2009
Rep Wittman, Robert J. [VA-1] – 4/1/2009
Rep Woolsey, Lynn C. [CA-6] – 2/26/2009
Rep Young, Don [AK] – 3/6/2009

Step 2: Financial Services Committee

HR 1207 is now in the House Committee on Financial Services. This is THE MOST IMPORTANT STEP in this legislation! If it doesn’t get out of committee it will not come to a vote! There are 71 members on this committee and they are all listed below.

We need to let all members of the House Committee on Financial Services know that we want them to allow full House consideration of HR 1207 so it can move forward; we need them to support this. Now is the time.

Call their offices, write to them, email them, etc. Let them know they need to support HR 1207. If you live in their district, let them know. Go to their office.

Start with Barney Frank! His staff said that his office isn’t receiving a lot of calls about HR 1207… let’s change that!

House Committee on Financial Services

Chairman Barney Frank, MA

Republican Members

Rep. Michele Bachmann, MN [co-sponsor] Rep. Spencer Bachus, AL
Rep. J. Gresham Barrett, SC
Rep. Judy Biggert, IL
Rep. John Campbell, CA
Rep. Michael N. Castle, DE [co-sponsor] Rep. Scott Garrett, NJ [co-sponsor] Rep. Jim Gerlach, PA
Rep. Jeb Hensarling, TX
Rep. Lynn Jenkins, KS
Rep. Walter B. Jones , NC [co-sponsor] Rep. Peter King, NY
Rep. Christopher Lee, NY
Rep. Leonard Lance, NJ
Rep. Frank D. Lucas, OK [co-sponsor] Rep. Donald A. Manzullo, IL [co-sponsor] Rep. Kenny Marchant, TX [co-sponsor] Rep. Thaddeus McCotter, MI [co-sponsor] Rep. Kevin McCarthy, CA
Rep. Patrick T. McHenry, NC
Rep. Gary G. Miller, CA
Rep. Randy Neugebauer, TX
Rep. Shelley Moore Capito, WV [co-sponsor] Rep. Ron Paul, TX [sponsor] Rep. Erik Paulsen, MN [co-sponsor] Rep. Bill Posey, FL [co-sponsor] Rep. Tom Price, GA [co-sponsor] Rep. Adam Putnam, FL
Rep. Edward R. Royce, CA

Democratic Members

Rep. Gary L. Ackerman, NY
Rep. John Adler, NJ
Rep. Joe Baca, CA
Rep. Melissa L. Bean, IL
Rep. Michael E. Capuano, MA
Rep. Andre Carson, IN
Rep. Travis Childers, MS
Rep. William Lacy Clay, MO
Rep. Emanuel Cleaver, MO
Rep. Joe Donnelly, IN
Rep. Steve Driehaus, OH
Rep. Keith Ellison, MN
Rep. Bill Foster, IL
Rep. Alan Grayson, FL [co-sponsor] Rep. Al Green, TX
Rep. Luis V. Gutierrez, IL
Rep. Rubén Hinojosa, TX
Rep. Jim Himes, CT
Rep. Paul W. Hodes, NH
Rep. Paul E. Kanjorski, PA
Rep. Stephen F. Lynch, MA
Rep. Mary Jo Kilroy, OH
Rep. Ron Klein, FL
Rep. Suzanne Kosmas, FL
Rep. Dan Maffei, NY
Rep. Carolyn B. Maloney, NY
Rep. Carolyn McCarthy, NY
Rep. Gregory W. Meeks, NY
Rep. Brad Miller, NC
Rep. Walt Minnick, ID
Rep. Dennis Moore, KS
Rep. Gwen Moore, WI
Rep. Ed Perlmutter, CO
Rep. Gary Peters, MI
Rep. David Scott, GA
Rep. Brad Sherman, CA
Rep. Jackie Speier, CA
Rep. Nydia M. Velázquez, NY
Rep. Maxine Waters, CA
Rep. Melvin L. Watt, NC
Rep. Charles Wilson, OH

Help with this all important public outreach. NOW REALLY IS THE TIME!

Here’s a sample letter you can use:

Dear Representative,

Please co-sponsor and/or support H.R.1207, an effort to audit the Federal Reserve.

Recently, it has come to light that there is little to no accountability to the people on the part of the Federal Reserve. While the citizens of this country are required by law to give an accounting of every penny they come in contact with, the Federal Reserve has never been held to the same standard. During this time of extreme economic crisis, the people deserve an accounting of where our money is going.

Currently there are 92 co-sponsors for this legislation, and it is enjoying bi-partisan support. Your efforts in supporting this important legislation would go a long way in proving to your constituents that you not only hold the Federal Reserve to the same standard as you do your constituents, but it would also show that you believe in transparency. Anything less than support for this resolution suggests that you are in favor of secrecy and a lack of accountability to the people who pay the bills. We pay the tab; we have a right to know where our money is going.

Unlike recent bills that you voted in favor of that had hundreds of pages and just a few hours to read, this bill can be read in under 5 minutes. I encourage you to take the time to read it, and then move to support it.

Thank you in advance for your attention on this important legislation. I have every expectation that you will do right by your constituents and support this measure.


Step 3: The People

Tell everyone you know about HR 1207 and ask them to support it and to contact their representative as well. Link to this page and to

This initiative is crucial and we need to redouble our efforts to get HR 1207 passed.

  • Pingback: Cartoon: You’re Going to Audit OUR Bank? | Austrian Economics Blog()

  • Cheryl A.

    Where are my posts?

  • Oscar_DeGrouch

    KIds, take it elsewhere.

    Let’s try to keep the discourse civil. Discussion like this doesn’t help our reputation.

  • Ross

    Sean knows no depths of depravity.He likens himself to the hidden paw ,yet betrays himself and our common humanity with subversion.

    Study TS Elliot Sean.The US Federal Reserve and those of like minded arrogance Sean,are on the path to demise.Money will not save you.


    • Sean

      “An association of men who will not quarrel with one another is a thing which has never yet existed, from the greatest confederacy of nations down to a town meeting or a vestry.” – Thomas Jefferson

  • Joe

    What is up with all this back and forth? Let’s get the audit done. Regardless of what it shows it needs to be done. The “AMERICAN” Government, and by proxy the FED since they handle America’s money, should be open to public scrutiny. The only exceptions are ones the would endanger national security.

    Have a nice day everyone.

  • longshotlouie
  • longshotlouie

    Lessee, 109 sponsors for HR 1207 as of 5pm ET, yesterday.

    Any news for today?

  • longshotlouie

    At which government-sponsered institute of re-education do you study?

  • Ross

    Sean is the village idiot designed to distract us.Ignore him.

    Prof Niels Harrit a Danish scientist has proof that explosives were used in a 9/11 in the World Trade Centre.He and 8 other scientists have found conclusive evidence of nano-thermite a highly sophistocated explosive,more powerful than dynamite in the rubble of the 9/11 Towers.Building 7 [Not impacted by a plane]which was not included in the official enquiry came down in a classical controlled demolition.Both scientists and engineers agree that a concrete steel reinforced building will not implode in this fashion uder the duress of a few minor fires.These are the only 3 concrete steel reinforced buildings in history to self implode in this fashion due to fire.

    Niels,”This is not the smoking gun,this is the loaded gun!”
    Will Obama initiate a credible enquiry into 9/11? I think not!

    • Sean

      that has nothing to do with the federal reserve, but ok.

    • longshotlouie

      That ties in to the fed very well, actually. Of course, our resident troll will say likewise.

      Wonder what motivates he/she to post here incessantly? (rhetorical question)

      He/she seems to be uplifted by being continually proven wrong.
      The worse the effects of the failed policies that he/she endorses, the more he/she posts.

      When we hit bottom, he/she will have to give up sleeping to keep up.


      • Sean

        haha what? i’ve gotten 4 million dollars worth of work this year. i’m not going to lose an oz of sleep.

        • longshotlouie

          And you are a lying POS, unless of course you are getting paid by the post.

          Just one more thing that you are unable to prove.

          Thx for your jester work here. Is Seinfeld your Hero?

          • Sean

            Whatever, I do estimating and make shop drawings for a commercial contractor. I got all that work last october and now i’m drawing up the blueprints. I’m also a full time student, so i have days off.

          • longshotlouie

            Whatever? LMAO

            You have been exposed as a paid blogger more than once.

            How does it go? A full-time student that did $4,000,000.00 worth of work this year, and it’s only the end of April?

            Bwahahahahahahahahahahahahaaaaaaaa ………………….

            Shouldn’t you be studying your Pocket Obama?

          • Sean

            shouldn’t i be studying my pocket? thats how much work i’ve gotten, thats not how much money i’ve made. I’m going to school to get my business degree, because maybe some day I would like to start my own business.

          • longshotlouie

            suuuuuuuuuuuuuuure, we believe you.


          • Sean

            Ya, i learn ethics, micro economics, macro economics, global economics, entrepreneurship and buisness planning, managing effectively, organizing structures, improving productivity, pricing, distributing, promoting products, financing, financial analysis, and expanding.

  • longshotlouie

    Sean replies:
    April 28th, 2009 at 5:44 pm

    We can’t have sound money. We got rid of sound money because there was not enough of it to fund our oil needs.

    This is really the capstone of Sean’s belief system.
    Day after day, for months, on this blog trying to resell his failed Marxist economic theory. While the pillars of his faith crumble around him, he becomes even more condescending.

    Sean recycles his disproven arguments for every new passer-by willing to feed the troll.

    Why are you still here, Sean? Are you still trying to save us?

    Do you have anything in common with the any of the ideals put forth at this site, or are you simply a troll sowing sterile seeds of doubt?

    How are you able to spend so many of your waking hours posting @


    • Sean

      wow. you really thought that thru

    • longshotlouie

      Still waiting for a significant response.


      • Sean

        I start out leaving a single comment or response here and there and then people who disagree want to start debates. Why are you critisizing free speech? Why do you butt into other peoples conversations? Why don’t you have any input for yourself? Why are you so negative? What is your purpose in life?

        • longshotlouie

          1. You’ve never left a single comment.
          2. This is a blog, not a private conversation.
          3. You obviously haven’t read my posts.
          4. Negative? TPCTKB
          5. To serve God and country

          Thx again for your jester-like performance.

          Still waiting for a significant response.

          • Sean

            i’m just trying to say that you butt in with negative remarks and no insight for yoursef. what, do you expect me to feel bad from your hatred. As that your intention? Are you trying to break me down mentally? your just like some punk kid back from high school who was never invited to hang out with anyone.

          • longshotlouie

            I don’t think you get it. You are a paid Obamaho blogger.
            You deserve zero respect, and you will receive none.
            You lurk here daily, arguing with distorted facts.
            I’m tired of the bullshit, so I am now your shadow.
            I will be here every day to expose you as the traitorous SOB that you are.

            Every Day, No Quarter

          • longshotlouie

            Sounds like transference to me.

  • Dan Ambrose

    I would like to see if the Federal Reserve pays taxes on the interest earned. Maybe that why they have problems paying personal taxes.

    • BT

      I’m curious to know how we can even be expected to pay our ‘debt’ to the Federal Reserve. When you consider that all the money printed by them is done at interest, and all the money in circulation doesn’t cover the interest we ‘owe’ on this ‘debt’…They’d have to print more money for us to pay the interest with, which is again loaned to us at interest, to pay the previous interest…Otherwise we’d have to come up with some way to repay them with objects they can assign a value to, in order to pay the interest without accruing more interest…

      It seems like an obscure form of slavery really.

      • Dave

        Actually one of the goals of the Fed would be to inflate the value of our currency, then pay down all of the loans, and then start pulling in the money in circulation. Since no treasury notes have a tie to trade rates one simply needs to devalue the currency to a level that paying back is nominal, then through trade recieve back that money, remove it from circulation and then actually have made more money because you made the system pay pennies on the dollar.

        The main problem is that there becomes a point where people recognize this (ie China)and lose consumer confidence. If the trade rate drops because of consumer confidence and you can’t borrow enough backing to reduce debt, then your ability to trade to get back money diminishes. When that happens your currency fails and the game is lost.

        The Fed in its infinite wisdom have lost for 2 reasons: (1) the world has caught on before it could institute part 2 of their plan and (2) they never were close to instituting part 2 of their plan (if they were even going to) before they caught on.

        • Peter

          Dave, you’re right, but loans cannot be payed down if spending isn’t decreased.The government can’t do all of these things at once: Continue Wars,increasing the size of Goverment,adding Healthcare Coverage,build new Rail Ways, taking ownership of Banks and Auto Factories, etc.

          There’s no sign whatsoever of any decrease in Government spending.

          • Dave

            Exactly right. That is the problem, this would be a 3 year problem if reduced spending to 1980 or even 1990 levels. Instead we are trying to do it all. I think the example RP says that the reason that we got out our credit issue after WWII is cause we increased taxes a third and decreased spending by 2/3s.

            I just think I should build a bunker with guns, ammo and gold so I can sit this whole thing out. Sadly I don’t feel like owning a gun and I don’t have the means to just sit on gold while I wait for the world to stop turning.

            Save us Ron Paul, you’re our only hope.

          • Peter

            I’m 48 years old. I use to question my Grandfather about the depression back when he was alive. Because all of his neighbors told me that my Grandad went from rags to riches during the depression. How?

            He told me that it wasn’t something that he had planned, it just happened. There were numerous warning signs just as there are now. There was over confidence in the Government’s ability to take care of everything.And the Banks were misleading everyone about their stability. But he (like many others )had a bad feeling about that. So he quit his job at a local Saw Mill, sold his house and moved into a renthouse. He sold most all of his possessions,(car,jewelry,etc.)payed off all debts and bought 10 acres of land. He was left with a two bedroom home with 6 kids a Mule and a plow. No car, just a wagon and 10 acres of land nearby. But debt free.

            Then he took what cash that he had left (very little) and bought some gold coins(he would trade them for supplies not cash). As things got worse, the prices went up.So whoever was able to do things like grow crops,harvest wood,construction etc. actually started turning more of a profit. The government bought a lot of things. So the government was one of his biggest customers. Then came WWII. He was ordered to sell most of his crops to the War Department. So he sold just about everything he grew to the War Department. And he bought more land, expanded,bought a tractor produced more crops hired people and came out of it all pretty wealthy.

            My Grandad said that the people who didn’t pay off their debts went belly up first. He said that owning land and having any kind of a trade that involves producing something was the deciding factor as to who succeeded or not.

            And also, he told me that barber shops (he was a part time barber), Beauty Salons,Bars and Music Venues did very well. It seems that people who’ve lost everything didn’t sit around a lot. They went out and at least tried having some fun.

  • Peter

    Somebody answer this question.

    Suppose we didn’t shutdown or even audit the Fed. But instead, Congress were to pass a bill ordering the Fed to return to the gold standard or “sound money”.

    Regardless as to whether or not returning to sound money would be a wise idea or even possible, would this not,in effect, render the Fed obsolete?

    Would it also not stabilize the markets,liquidate bad assets and force the government to balance it’s budget since there would be no more free printing of money?

    • Dave

      I don’t think it fixes the problem however it does hamstring the Fed quite a bit. The Fed would still have the ability to do cloak and dagger techniques to inflate, it would just be more obvious by how much. This happened a few times in between WWII and Nixon.

      Personally, until the Fed is gone there is no accountability for voting to inflate money for no good reasons, which to me is a strategic move by Congress. This is much the same as allowing the President to declare war under UN resolutions. The Congress gets to support the troops without having the accountability for voting for war. By delgating the responsibility, the members of Congress actually avoid having risk to re-election.

      The Constitution has granted the powers to each branch which are supposed to limit the ability of them to each other and to the states. There is no provision limiting them from delegating them to another sub government body, but there is no reason the Congress should not be held accountable for that sub-body’s actions.

      Hopefully soon we will act as a populous to not allow delegation of responsibility through voting so we as a populous can enact our power to vote people in or out based on the execution of their responsibility.

      • Nate Y

        Remember though, the way the Constitution is written the Government can only do what the Constitution says it can do. Since there is no provision saying they can create a central bank or delegate their authority to the Fed, they are in violation the Constitution.

        • Dave

          I think its a sticky point given how law is normally executed in the US. There is no explicit or implicit statement in the Constitution saying that a branch can grant a seperate group the ability to make decisions on its behalf. It is explicit that the other groups cannot be the other branches of gov’t.

          Most of our forefathers were against a central bank, except for the our first treasurer, but saw it fit not to explicitly prohibit its establishment nor to spell out the statement of coining money.

          While I think the Fed is an abomination to our liberties and to the Constitution, I think it is definitely not illegal in its establishment. I believe there is alot of legal merit to the coining term in the Constitution as well as serious issues on the non elected status of the Federal Reserve, and the lack of required responsibility back to Congress.

          In my personal view, the Fed should be a government group of appointed by Congressional advisors to the Financial Services Comittee which would give input that the FSC would issue as legislation for Congress to vote on. This way the ultimate responsibility is on Congress and those who do not vote in favor to the country can be removed.

          I would love to see an amendment to the Constitution forcing that no powers explicitly derived from Constitution can be delegated without a means of voting on the decisions made by that deligate in the responsible body of gov’t. This would allow for full transparency and reduction of finger pointing in all branches.

          • Nate Y

            Well yeah. It’s sticky because so many people abuse and ignore what the Constitution actually says and do not understand that the federal government is only allowed to do what the Constitution says it can do. If an action is not mentioned, it is prohibited and falls to the states or the people.

            Your desired amendment is not needed.

    • Sean

      We can’t have sound money. We got rid of sound money because there was not enough of it to fund our oil needs.

      • Nate Y


      • Peter

        wait a minute. I’m trying to understand what you’re saying.The excuse for printing money with nothing backing it up is the need for more money?

        Recently, Glenn Beck did an excellent job of mimicking the way our current government handles money:
        “Ok here’s our budget,$30.00 for the Military, $20.00 for Highways,$10.00 for Education, but it looks like we’re about $40 dollars short.”” So John, you pretend that you’re China and loan me five.” (John hands Glenn 5 bucks) “Ok now we’re still $35.00 short.” “Oh I know, wait a minute!” (Glenn pulls out some Monopoly fake money) “Here, we’ll just add make believe money to the pot!” Yeah,we have the power to make some money out of thin air!.””$20.00, $25.00,$30.00, here we go $35.00 dollars of play money!” “Now we’re getting somehwere!.” -Glenn Beck

        “And that, boys and girls is how you make ends meet in Government!” “You have to be able to use play money!” -Glenn Beck

        He’s absolutely right. So Sean, what you’re saying is: sound money cannot work because we would not be able to purchase things like oil. So we have to use money out of thin air?

        But what if I start printing my own money so I can buy a new riding lawnmower? Against the law? Who’s law? Who wrote it? It’s not in the Constitution. I never voted on it. Well, it’s the same thing isn’t it? But I don’t have the authority. Printing money is only allowed by those who know what they are doing? Really?

        I don’t get it. I still agree with the Founding Fathers. I still agree with Ron Paul as well as JFK,Andrew Jackson, Lincoln and the rest. Sound money is not only possible, in fact it is the only solution PERIOD.

        If we can’t afford to purchase things that we need then we need to budget ourselves. Such as reduce government spending.

        So if I want a new riding Lawnmower, I have two choices. Well, actually three. Cut my spending and save up for it. Put it on a Credit Card and pay for it later with interrest. Or print fake money.

        Now which of the above three would any of you chose? Better have a good lawyer if you try to mimick the Government.

        • Sean

          ok well you couldn’t buy a home. you couldn’t buy a car. you couldn’t go to school, or start your own business. Its hard to save up money for a home when you can’t get a good education.

          • Sean

            do you have 100k saved up so you can buy a little home down the street?

          • BT

            Home prices ARE far too high even still, but that is really beside the point. As far as I know, nobody here is trying to say that credit should be abolished…But fractional reserve banking and the fact that our currency has no backing makes it so banks can loan out money they don’t, and never have had.

            A central bank is NOT needed in order to create credit…General store owners used to keep tabs (I bet some local businesses might still) for different people they were confident enough would pay them back eventually, and they didn’t require the central bank to allocate or regulate it.

          • Nate Y

            Indeed. Credit comes from savings. That’s the only possible way credit can be created. When a central bank creates credit, it is just a euphemism for inflation.

          • Sean

            hahahahahaha!!! nate.. credit does not come from savings. Its created out of thin air. credit is debt.. You dont even know what everyones fighting for. The federal reserve controls credit through interest rates. WOW! you really are oblivious.

          • Sean

            if we had credit without the federal reserve, we would experience out of control inflation and our money would become worthless. the reason why the federal reserve raises interest rates is to slow down loans which contracts the money supply. Whenever there is too much money out there, there is too high of a demand for goods and inflation takes place.

          • Nate Y


            I’ll just let Peter Schiff do the work for me. You claim to be a fan of Schiff. Well, watch as he destroys your position.

            February 27, 2009

            Obama Puts the Economic Cart Before the Horse

            In his first televised speech before Congress, President Obama asserted that prosperity will return once the government restores the flow of credit in the economy. It may come as a surprise to him, but an economy cannot run on consumer loans. Furthermore, credit stopped flowing in the U.S. for a very good reason: there was no more savings left to loan. Government efforts to simply make credit available, without rebuilding productive capacity or increasing savings, are doomed to destroy what’s left of our economy.

            The central tenets of Obamanomics appear to be that access to credit will enable people to borrow money to buy stuff, the spending will spur production and employment, and thus the economy will grow. It’s a neat and simple picture, but it has nothing whatsoever to do with how an economy works. The President does not understand that consumption is made possible by production and that credit is made possible by savings. The size and complexity of modern economies has obscured these simple concepts, but reducing the picture to a small scale can help clear away the fog.

            Suppose there is a very small barter-based economy consisting of only three individuals, a butcher, a baker, and a candlestick maker. If the candlestick maker wants bread or steak, he makes candles and trades. The candlestick maker always wants food, but his demand can only be satisfied if he makes candles, without which he goes hungry. The mere fact that he desires bread and steak is meaningless.

            Enter the magic wand of credit, which many now assume can take the place of production. Suppose the butcher has managed to produce an excess amount of steak and has more than he needs on a daily basis. Knowing this, the candlestick maker asks to borrow a steak from the butcher to trade to the baker for bread. For this transaction to take place the butcher must first have produced steaks which he did not consume (savings). He then loans his savings to the candlestick maker, who issues the butcher a note promising to repay his debt in candlesticks.

            In this instance, it was the butcher’s production of steak that enabled the candlestick maker to buy bread, which also had to be produced. The fact that the candlestick maker had access to credit did not increase demand or bolster the economy. In fact, by using credit to buy instead of candles, the economy now has fewer candles, and the butcher now has fewer steaks with which to buy bread himself. What has happened is that through savings, the butcher has loaned his purchasing power, created by his production, to the candlestick maker, who used it to buy bread.

            Similarly, the candlestick maker could have offered “IOU candlesticks” directly to the baker. Again, the transaction could only be successful if the baker actually baked bread that he did not consume himself and was therefore able to loan his savings to the candlestick maker. Since he loaned his bread to the candlestick maker, he no longer has that bread himself to trade for steak.

            The existence of credit in no way increases aggregate consumption within this community, it merely temporarily alters the way consumption is distributed. The only way for aggregate consumption to increase is for the production of candlesticks, steak, and bread to increase.

            One way credit could be used to grow this economy would be for the candlestick maker to borrow bread and steak for sustenance while he improves the productive capacity of his candlestick-making equipment. If successful, he could repay his loans with interest out of his increased production, and all would benefit from greater productivity. In this case the under-consumption of the butcher and baker led to the accumulation of savings, which were then loaned to the candlestick maker to finance capital investments. Had the butcher and baker consumed all their production, no savings would have been accumulated, and no credit would have been available to the candlestick maker, depriving society of the increased productivity that would have followed.

            On the other hand, had the candlestick maker merely borrowed bread and steak to sustain himself while taking a vacation from candlestick making, society would gain nothing, and there would be a good chance the candlestick maker would default on the loan. In this case, the extension of consumer credit squanders savings which are now no longer available to finance other capital investments.

            What would happen if a natural disaster destroyed all the equipment used to make candlesticks, bread and steak? Confronted with dangerous shortages of food and lighting, Barack Obama would offer to stimulate the economy by handing out pieces of paper called money and guaranteeing loans to whomever wants to consume. What good would the money do? Would these pieces of paper or loans make goods magically appear?

            The mere introduction of paper money into this economy only increases the ability of the butcher, baker, and candlestick maker to bid up prices (measured in money, not trade goods) once goods are actually produced again. The only way to restore actual prosperity is to repair the destroyed equipment and start producing again.

            The sad truth is that the productive capacity of the American economy is now largely in tatters. Our industrial economy has been replaced by a reliance on health care, financial services and government spending. Introducing freer flowing credit and more printed money into such a system will do nothing except spark inflation. We need to get back to the basics of production. It won’t be easy, but it will work.

            President Obama would have us believe that we can all spend the day relaxing in a tub while his printing press does all the work for us. The problem comes when you get out of the tub to go to dinner and the only thing on your plate is an IOU for steak.

          • Sean

            wow, this supports so much of what i’ve been saying.. We consume so much oil that we can’t produce enough to pay for it, so we have to create credit. Thats what happens when a country can’t produce enough to match consumption, it has to borrow money to be able to afford it.

          • Sean

            don’t pretend like you understand any of this.. “Credit comes from savings. That’s the only possible way credit can be created” – nate

          • Nate Y

            No. Good lord man can you not follow a simple chain of logic? People can only afford something if they DO NOT have to borrow to purchase it. You are playing a language game without even realizing it. People borrow precisely because they CANNOT afford an item. If I get a credit card with a $25,000 limit and run up a bunch of bills, I didn’t increase my wealth. I didn’t increase my productive capacity or enhance my purchasing power. It doesn’t mean I can afford $25,000 of goods and services. All it does is make it easy to overextend myself and throw myself into debt.

            Seriously, did you not read Schiff’s article? You obviously do “not understand that consumption is made possible by production and that credit is made possible by savings.” –Schiff

            “Credit is made possible by savings” –Schiff

            “Credit comes from savings. That’s the only possible way credit can be created” – Nate

            Tell me how these two statements are at odds with each other.

            Moving on…

            When we started going into debt (expanding the money supply/printing money) in order to consume oil and other goods, we sowed the seeds for this current mess. Of course, the Austrians were sounding bells and whistles the entire time stating that this would happen. But since, like you, so many people focus only on the short term effects for one (or a few) groups and do not consider the longer term and unintended effects for all groups, the Austrians were ignored and now we have to suffer the consequences. The best way to stop this madness? You guessed it. We must make our way back to sound money.

            Unbelievably, you wish to continue the failed policies and practices of the past. Specifically, the practice of printing money (issueing debt) to consume oil and other goods.

          • Nate Y

            Just for good measure…

            “Credit is made possible by savings” –Schiff

            “Credit does not come from savings” -Sean

            You lose.

          • Sean

            That is a HUGE misconception. Credit is made out of thin air. Why do you think all legal tender is considered debt? All money starts out as debt, as loans, as credit.


          • Sean

            you do have to deposit 10% of savings, but 90% comes out of thin air. THats probably what schiff meant by credit is made possible by savings. But credit does not come from savings. 90% of credit is made out of thin air… you lose.

          • Sean

            Do you seriously think credit is all about credit cards? You don’t even understand the basic concepts of money. credit cards main intention is to build credit so you can buy a home. I guess you’ve never owned your own house. You sit on the sideline. Maybe thats why you rebel so much. When you buy you a home with credit or debt, you pay it back and that home becomes value. You put equity into that home and you can turn around and sell it for how much money you put into it. Most people’s life savings are invested in their home..

          • Sean

            The fed only creates 5% of the money in circulation. Banks create the other 95%. All your trying to do with this bill is to give corrupt banks ultimate power to set interest rates and create money for the interest of big business with even more booms and busts..

          • Sean

            You won’t ever be able to afford a home without credit. I would like to see you save up 200k… You should watch that new south park where they make fun of people like you who thinks we can run an economy without spending money. .

          • Nate Y

            No. Schiff’s plain words as well as his “butcher, baker, and candlestick maker” analogy clearly demonstrate that “credit comes from savings”. All you are doing is describing our current fractional reserve banking system. Of course, panics, runs, bubbles, etc are all inherent to this system precisely because it requires the creation of credit out of thin air (inflation). What Schiff (and all those of the Austrian school) articulate is a different system. A system that is in line with economic law and reality. Seriously dude, can you not imagine a different world than the one in which we currently live?

            Yep. I think credit is all about credit cards. In fact, it was impossible for people to buy houses before credit cards were invented. And now that you mention it, I can’t think of any other way in which credit could be established between two parties. (/sarcasm)

            I saw that South Park. It was pretty funny even though they got the economic diagnosis exactly wrong.

            “All your trying to do with this bill is to give corrupt banks ultimate power to set interest rates and create money for the interest of big business with even more booms and busts..” -Sean

            This is complete nonsense. That is certainly not the point of the bill. But yes, banks should be able to set their own interest rates. And they should be allowed to fail if they set them too low. Free market discipline: it’s a good thing.

          • Sean

            Bubbles are inherent to all systems. We had booms and busts when we didn’t have central banks.

            You need a credit score for anyone to loan you a large amount of money. Without credit scores, people would not have faith to lend money.

            Banks would give large businesses loans before small businesses and that would destroy the free market.

          • Sean

            I’m trying to imagine a country where every home and car is self sufficient for energy.. A country that builds on wealth instead of spending it overseas on coal to heat our homes, on gasoline to drive the economy, and steel to construct our buildings.. I don’t want to be dependent on other countries and that has nothing to do with our system of money and will not change from changing money backed by goods to money backed by gold.. And yes, money is backed by goods because money is created to buy goods. Thats what business loans are for that represent 95% of our money. The problem is, we consume too much from other countries so that money isn’t going into “savings” here. It goes into other countries “savings.” If you want sound money and loans based on “savings,” than we would have to produce here so we can “save” the money from going overseas.

          • Nate Y

            It has everything to do with our monetary system. Our money is not backed by anything tangible at present. That is the definition of a fiat currency. You are again being very dishonest.

            You speak of the importance of savings. Unfortunately, the gov/fed’s monetary policy actively discourages savings and production while encouraging debt and consumption. Indeed, the government/fed makes it near impossible for people to save. They actively loot the nations’ savings via inflation. Sound money is the answer. Sound money is a vital check on government expansion.

          • Sean

            Well you can’t convert fiat into anything tangible, but fiat is allocated to tangible items thru loans. Thats what gives it value..

            I do speak of the importance of savings. our government trade policies have made it impossible for our money supply to build up. Thats why the fed has to create additional money.. Lets say we switched to the gold standard and we have ten trillion dollars worth of gold. Well our country loses one trillion dollars a year because of trade.. We would run out of money and gold in ten years.

          • Nate Y

            No. What gives fiat money value is government decree (fiat).
            Your hypothetical gold standard is so absurd and lacking in content I can’t even comment on it. All it does is replace fiat dollars with gold conjured from nowhere (which is impossible). It ignores all the steps that would have to take place to bring about a new gold/commodity money. It also ignores all the consequences of a new gold/commodity money being introduced. You don’t even realize that a gold standard encourages production. Why? Because gold/commodities are not nearly as easily created as fiat (physical or electronic) dollars. We’d actually have to produce so we could have something to trade back for the gold/commodity. Stop listening to your Keynesian professors. They are destroying your mind.

            Anyway, I’m just gonna post this. It’s by another person from another thread but it is relevant.

            NotRocketScience Apr 30th, 2009 at 6:56 pm

            The theory and history of fiat money (which is also largely the theory and history of banking) must always focus on the ever-present problem of redemption. Emphasis on the noun “problem” is warranted, because a fiat money is, by definition, a promise to pay the real, commodity money of the country.

            A piece of commodity money – typically, a silver or gold coin – is itself payment because it contains a fixed weight of precious metal. But a unit of fiat money – typically, a bank or government-treasury note – is only a contingent and uncertain payment that depends upon the ability or the willingness of the issuer to redeem. And there always exists a temptation for issuers to renege on their promises to redeem.

            Thus, fiat money always threatens to become fraudulent money. Not surprisingly, therefore, the history of fiat money has been more or less the history of monetary fraud, both economic and political.

            Also, the danger of fraud in the issuance of fiat money becomes particularly acute in the case of modern “fractional-reserve banking”.

            Under fractional-reserve banking, the bank always issues more units of fiat money, supposedly “payable on demand”, than it has units of commodity money available for redemption, counting on the unlikelihood that the majority of its customers will ever seek redemption at one time. Thus, modern fractional-reserve banking is inherently fraudulent, because:

            1. For the bank simultaneously to fulfill all its promises to redeem its outstanding notes “on demand” is impossible.

            2. The bank’s managers know that complete redemption “on demand” is impossible, and therefore that the bank’s promises to pay are false. And,

            3. The bank’s customers, by and large, are ignorant of how the fractional-reserve scheme works, and the dangers it poses to them.

            So it is doomed to fail just like every other time.

            Historically every major fiat money have self-destructed in what is popularly called “hyperinflation” (that is, extreme decreases in purchasing-power) caused by either unlimited increases in the supply of that fiat money by the issuer or accelerating loss of public confidence in the continued value of the money or the economic or political fortunes of its issuer, or both.