176 responses to “Ron Paul’s Bill To Audit The Federal Reserve Now Has 92 Co-Sponsors”

  1. Cartoon: You’re Going to Audit OUR Bank? | Austrian Economics Blog

    [...] Ron Paul’s Bill To Audit The Federal Reserve Now Has 92 Co-Sponsors Ron Paul’s bill to audit the Federal Reserve (HR… [...]

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  2. Cheryl A.

    Where are my posts?

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  3. Oscar_DeGrouch

    KIds, take it elsewhere.

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

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  4. 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.

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    1. 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

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  5. 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.

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  6. longshotlouie

    Break The Matrix
    http://www.youtube.com/breakthematrix

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  7. longshotlouie

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

    Any news for today?

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  8. longshotlouie

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

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  9. Ross

    Sean is the village idiot designed to distract us.Ignore him.
    See http://www.youtube.com/watch?v=8_tf25lx_3o

    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!

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    1. Sean

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

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    2. 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.

      lmao

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      1. Sean

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

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        1. 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?

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          1. 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.

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          2. 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?

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          3. 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.

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          4. longshotlouie

            suuuuuuuuuuuuuuure, we believe you.

            hehehehehehehheeeeee

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          5. 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.

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  10. 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 @ ronpaul.com?

    hmmmmmm.........

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    1. Sean

      wow. you really thought that thru

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    2. longshotlouie

      Still waiting for a significant response.

      ZZZZZZZZZZZZZ

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      1. 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?

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        1. 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.

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          1. 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.

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          2. 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

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          3. longshotlouie

            Sounds like transference to me.

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  11. 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.

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    1. 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.

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      1. 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.

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        1. 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.

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          1. 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.

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          2. 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.

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  12. 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?

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    1. 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.

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      1. 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.

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        1. 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.

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          1. 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.

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    2. 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.

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      1. Nate Y

        Nonsense.

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      2. Peter

        Sean,
        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.

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        1. 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.

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          1. Sean

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

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          2. 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.

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          3. 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.

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          4. 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.

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          5. 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.

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          6. Nate Y

            Wow...just...Wow!

            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.

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          7. 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.

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          8. 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

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          9. 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.

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          10. Nate Y

            Just for good measure...

            “Credit is made possible by savings” –Schiff

            "Credit does not come from savings" -Sean

            You lose.

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          11. 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.

            http://www.youtube.com/watch?v=sanOXoWl0kc&eurl=http%3A%2F%2Fvideo%2Egoogle%2Ecom%2Fvideosearch%3Fsourceid%3Dnavclient%26rlz%3D1T4RNWN%5FenUS257US257%26q%3Dmoney%2520as%2520debt%26um%3D1&feature=player_embedded

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          12. 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.

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          13. 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..

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          14. 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..

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          15. 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. .

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          16. 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.

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          17. 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.

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          18. 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.

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          19. 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.

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          20. 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.

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          21. 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.

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  13. B T

    This is to address the question Matt asked...

    What happens if the bill passes and the audit doesn't prove anything useful?

    Well it could mean a couple things in my mind. First, that the Fed Reserve managed to cover their tracks or that something caused the audit to be ineffective. It could also mean the Fed Reserve really had nothing to hide (given the information we DO know this seems unlikely, however).

    But regardless, what the Fed Reserve does with our money should be made public and transparent. At the very least we have the right to know that.

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    1. Sean

      I think the real question would be... What would happen if we do find some sort of wrong doing?

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      1. Sean

        are you going to set up a new federal reserve? are you going to let big banks take over? or are you going to nationalize the banks?

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        1. Sean

          at the least, we will follow the law and prosecute whoever did wrong, but its hard to do that because all decisions are voted on and its not against the law to make financial transactions if they consider it to be an important factor.

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          1. Sean

            The treasury pretty much told us what was going on after the g7 meeting last week. He said that we had been pumping money into the world bank so that other countries would buy goods from us.. Thats the whole idea of free trade... You can't be for free trade and against the federal reserve, so I think this message you all have been following is a little blur.

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          2. Nate Y

            Why do you think this? They ignore all types of laws as it is. It's going to be up to the people to make sure the government respects our laws.

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          3. Nate Y

            "You can’t be for free trade and against the federal reserve"

            Complete nonsense.

            If one is for free trade, one must be against central banking.

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          4. Sean

            central banks helps provide credit to growing countries which buy products from us. Your obviously not a smart one.

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          5. Sean

            Tell me what you want nate.. do you want to set up a new federal reserve? or let big banks take over? or do you want to nationalize the banks?

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          6. Nate Y

            None of those. I've already said what I would like to see happen. I would like to see the steps taken toward sound money and free banking in this country.

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          7. Sean

            whos going to pay for free banking? what good does sound money do when you buy everything from overseas?

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          8. Nate Y

            Who will pay for free (that is, free from government intervention/manipulation) banking ? Uhhh the same people who pay for any good/service...they're called consumers.

            What good does sound money do when you buy everything from overseas?

            You touch on one of the main virtues of sound money without even realizing it. One good thing sound money does is it prevents you from running such monstrous trade deficits in the first place. But now we find ourself in a difficult position because we abandoned sound money. Just like the drunk finds himself in a difficult position because he abandoned sobriety. The answer certainly isn't more alcohol (the increased deficits/inflation of the Gov/Fed). The solution is smaller government, decreased spending, no inflation, sound money, etc.

            Another advantage of sound money is it makes raw materials very very cheap. Then you develop (in our case redevelop) a manufacturing sector, make new products from the raw materials, and sell to other people at a profit. As a result, you don't have to buy everything from overseas.

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          9. Sean

            shows your lack of knowledge about economics. if the dollar was worth more, we would run up higher trade deficits because foreign products would be cheaper. everyone would own a 60" plasma and bmw. And you are wronggg again. Sound money makes our dollar worth more which makes our products more expensive. Other countries would buy goods from europe if we had a stronger dollar.

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          10. Sean

            and i don't know what you consider free banking. banks charge alot more than the fed does to lend money.

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          11. Nate Y

            My parenthetical clearly states what I consider free banking. Go ahead and read it.

            You obviously do not understand what sound money is. It is not simply a stronger fiat dollar in which everything else on the planet stays the same. If it was, then your points would be valid. Happily, that is not what sound money is and your arguments can safely be tossed aside.

            But I must admit, i am confused. In other posts you said you want sound money. I guess now isn't the right time?

            http://mises.org/story/2623

            http://www.jbs.org/index.php/news-feed-archive/3720

            http://www.freerepublic.com/focus/f-news/2235046/posts

            http://mises.org/story/2365#4

            If one values liberty, one must endorse sound money.

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    2. Matt

      Yeah, that is kinda what I am wondering. I mean, a lot of effort is going into this, so how do you ensure it is done correctly?

      What is even going to be audited?

      For example, is it to obtain the release of couterparty information? Is it to validate the accuracy of the information the Fed posts on its website? Is it to audit the accuracy of the balance sheet? I don't want my tax dollars to be wasted on an inefficient audit that fails to define the spirit of the bill. I want an audit that quells concern about the Fed, or exposes issues, so how do you do that in a manner that provides resolution for this conversation?

      The bill is very short and doesn't have much for details, for better or worse I understand. Additionally, I am skeptical about the effectiveness of any 'government audit'. Sarbanes-Oxley is a total joke, so if this is going to be done, it has to be done once and done right.

      Any information or clarification to that end would be greatly appreciated.

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      1. Sean

        I bet there is nothing really to expose except banking practices that none of us would understand. Every move they make will be justified one way or another.. It is not pratical that all the elected officals voted to give away this "trillion dollars" to some organization that the country would not benifit from.

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        1. Sean

          and you make a good point.. what exactly is the congress going to do? the same congress that let corrupt bonuses fly through the legislation process without any prosecution.. They don't have a clue what to do.

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        2. Nate Y

          They wouldn't have done it unless the country would benefit. Is that what you're saying? If so, you've sealed that circle quite well. Of course, everyone here will see right through such nonsense.

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          1. Sean

            You obviously didn't read what i just wrote. I said that the federal reserve has been giving money to the world bank so other countries can buy products from us. Most people would say that it was well intentioned.

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      2. Nate Y

        I don't understand. You don't want your tax dollars wasted on an an inefficinet audit. But you don't mind many, many more of your tax dollars wasted by the Federal Reserve system? That makes no sense. It's like saying "I don't want Dave to steal 5 bucks from me. But if John steals $50,000 from me I don't really care."

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        1. Matt

          No, I don't want my tax dollars wasted anywhere, or at anytime, i would assume you agree.

          I don't need rhetoric, I am actually asking a question related to this bill, as I am legitimately interested in educating myself, I think it is an applicable question and I am seeking to get an answer. Please let me know if this is not the correct forum for how I can find details that this bill is trying to implement.

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          1. B T

            Well I for one am no expert at auditing a financial institution, so I don't believe I'm qualified to lay out a plan for one..

            One thing you have to consider is that currently the law is written to exclude numerous transaction types that the Federal Reserve from being subject to audit by the GAO... As to how effective a full audit by them is, I really don't know... So it's a fair question to ask.

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          2. Nate Y

            Of course you don't need rhetoric. You provide plenty of it on your own.

            Based on your questions, you seem to be a pretty sharp guy and you probably went to college. I am a little puzzled as to what document(s) you seek stating the details of the bill. Such documents do not exist. You've obviously read the bill. That's as detailed as you are going to get. Your education is complete. What are your concerns? What would/wouldn't or could/couldn't be done according to the bill that is cause for concern?

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          3. Sean

            No nate, your education is complete. :)

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          4. Nate Y

            This is quite backwards. You're implying I think I'm smart. This could not be farther from the truth. I do not suffer from the fatal conceit which plagues central bankers, government planners, and adherents to Keynesian economics. THEY are the ones who think they can accurately fix prices (set interest rates) and coordinate entire economies. Their arrogance is incredible. I merely have the good sense and am humble enough to realize they are attempting the impossible. And we'd be much better off if they stopped trying so hard.

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          5. Peter

            HR 1207 is merely a stepping stone. Congressman Paul wishes to end the Fed entirely. And he is wisely taking baby steps with other members of Congress who are being pressured for more accountablity in Government spending.
            The Fed has had the luxury of obscurity for decades. But it's recent hyper activities have brought it squarely into the public spot light. Short of another 9/11-type of an attack or some other major distraction (Swine Flu Epidemic) there will be no going back now. The damage has already been done. Audit or no audit the public outrage will only worsen with every mistake that the Fed now makes.

            As for as how to go about auditing the Fed,well,if HR 1207 is passed we will just have to wing it. Learn as you go. The risk of tax money being wasted on an inefficient audit can't possibly compare to the waste of money that is taking place now. Wasn't it the Fed that just informed us that approximately 20% of the current bail out monies could be lost to fraud? That's a huge chunk of change. More than enough to cover the cost of an unprepared audit wouldn't you say?

            A mechanic simply cannot lay out in detail what it is that he's going to repair or even give an estimate of the cost until he's had the opportunity to at least open the hood of the car.

            Congress could quickly pass some more bills giving even more protection and power to the Fed. But the Fed already has maximum powers and protection. Any more would require flat out removal of the Constitution. The media could try doing it's part to distract the public but again short of another 9/11 I really don't know or see how HR 1207 can be stopped. Again, if the Fed would lay low for awhile and quit making mistakes the attention may go away. But the Fed appears to be too restless and too impulsive to do so.
            Right now The Fed is it's own worse enemy.

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          6. Matt

            Thing is though, if you are conducting an audit and don't really have a plan as to what you are auditing, i can pretty much guarantee you that your audit is destined to fail - as you aren't more capable than the party being audited. It would be like sending in a middle-school science team to audit the workings of the Manhattan project.

            Which unfortunately would then have the exact opposite effect as to what the bill is intended to do.

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          7. Sean

            actually nate, they tried to help us by keeping interest rates low and then the value of the dollar started to drop. If it was up to banks, the value of the dollar would have already been destoryed. And don't say that we can switch to sound money, because sound money doesn't work with large trade deficits. That is the reason why we got rid of sound money, because we couldn't afford to buy oil overseas.

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          8. Sean

            Matt, I believe if anything happens, we will find out that the M1 (money in circulation) is low because we spend so much overseas. Im sure this audit it will justify the bailouts and government spending.

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      3. John

        Hi Matt,

        What needs to be audited within the federal reserve is simple. They operate under a fractional reserve banking system. A .pdf file of the pamphlet entitled "modern money mechanics" can be found by using your preferred search engine. If you have an understanding of this pamphlet's content, then you will inherenetly understand that the nature of this bill is only the beginning of a much larger problem we are soon to face.

        1. Our entire economic structure is outlined within "modern money mechanics", as it very well should be. It was printed by the federal reserve. Here is one excerpt from this pamphlet that reveals the truth about our economic engine.

        " In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value.
        What, then, makes these instruments - checks, paper money, and coins - acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services whenever they choose to do so.
        Money, like anything else, derives its value from its scarcity in relation to its usefulness." - "modern money mechanics, Federal Reserve, Chicago.

        So with that being said, by the Federal Reserve, our money has no real value. It did have a gold standard value before the Federal Reserve came into existence.

        2. Under the FAQ section posted on the Federal Reserve Board's website. They define theirselves as follows. " The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

        As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government." - www.federalreserveboard.gov/faqs

        Now how can the Democratic process in America remain an effecitve governing instrument of the people of America if it is not truly soverign of influence. And what and who are these "Private" aspects within the federal reserve?

        Their argument to this is that they seek to keep politics out of money. However, keeping politics out of money does not effectively keep money out of politics.

        The last portion to the federal reserve that concerns me is the fact that they are not an elected entity that operates within our government. I dont know what your ideology is, but my political views will never accept such a power existing in my country that goes unelected. When Mr. Bernake told our congress that giving them fiscal information for review would be "counterproductive". My response is this. Bullshit! The Fed has gone too far.

        Only god can make something out of nothing.

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        1. Matt

          And that is where I am getting conflicting information. I understand the nature of a Central Bank, as well as RP followers' beliefs in not having one.

          Is this bill trying to audit the fundamental philosophy of *having* a Central Bank, or will it be to audit our Federal Reserve System and how well it adheres to it's stated purpose and responsibilities?

          Those are two totally different things.

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          1. Sean

            Well ron paul doesn't believe in central economic planning and his followers believe that the federal reserve is corrupt, so there are mixed messages. But all of this is blurred anyways, its really vague if u ask me.

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          2. John

            Hi Matt,

            From what I gather and hope for is that this bill will do both.

            If this bill passes and an audit is conducted of the federal reserve to disclose currently how well it adheres to it’s stated purpose and responsibilities than that will give our congress and our citizens with the accountability of which we are entitled.

            I think the philosophy of having a central bank will be determined after a solid physical audit is conducted.

            I'm not a Ron Paul follower, in fact, I'm not even a repbulican, but I do feel that this legislation is needed. My philosophy on this is simple. I'm confident that an audit will only give our country a small taste of an underlying truth that we will have to face as a country.

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          3. Nate Y

            We don't even need the audit to know that the Fed has failed in it's mission for price stability. Prices are merely a reflection of the strength of the currency. The dollar is worth 3-4 cents compared to the dollar the Fed inherited. Which is another way of saying prices have shot through the roof. The Fed has failed.

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          4. Sean

            you compare the dollar to other countries currencies to obtain the value. the last time i checked you could buy 10 double cheeseburgers for 10 dollars. thats price stability.

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          5. Nate Y

            No. That is not how prices are measured. If one could buy 10 double cheeseburgers for 10 dollars today, one would have been able to buy those same 10 double cheeseburgers for 30-40 cents in 1913.

            That is definitely NOT price stability.

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          6. Sean

            im pretty sure you will be able to buy 10 cheeseburgers for 10 dollars your whole life. And i'm pretty sure that you have been able to buy cheeseburgers for a dollar your entire previous life, unless your like some 35 year old dude.

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    3. B T

      Sean, the power of coining money was ennumerated to the Congress by our Constitution, and nowhere does it say the are free to hand it off to anyone else.

      As far as central banking is concerned, the founders were against it because it goes against free markets. Earlier you said something about the central bank providing credit for people to buy our goods, but in a free market there is no need to incentivize people to buy any products. If they aren't buying because the price is too high then the seller may have to reduce prices or risk his business failing. It could also be because they don't want or need what we're producing, so the market for that product doesn't exist and we should allow the reallocation of resources to productive sectors, rather than prop them up and bail them out with other peoples money (taxpayer dollars that could be used much more productively if allowed to be reallocated into a market that actually exists).

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      1. Sean

        we need people to buy our goods. In our "free market" we purchase hundreds of billions of dollars worth of oil a year.. The comparative advantage, or concept of free trade, is that we must export as much as we import. Either we export securities (government debt) or we export money so we can export goods.. Its either do this, or not drive cars.

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        1. Dave

          Sean,
          Suppose you have a lemonade stand and it costs you 10cents to make a glass of lemonade. Now you want to make big money and you think people will pay 1 dollar for your super special lemonade. Well if no one buys it, you have 2 choices: drop your price or close your door while absorbing your costs.

          The law of supply and demand works this way. Companies develop technologies that they want to sell, but many times they cannot be done efficiently to a level that there is a large market for them. Look at LCD/Plasma TVs. The technology came out and the cost of $30k. As the production lines got more effecient the costs drove down and the prices lowered. The margins became leaner but the volume of sales drastically increased. Using the example of the lemonade, if you found that iced tea was half the cost and sold for the same as lemonade would you make that instead?

          Your argument of government subsidies or sales of intrest to other countries to "help" has delayed the feasibility of alternate fuel technologies. If our gas costed us $9 a gallon 30 years ago, like Europe which is closer to the Middle East, we would have made SUVs the way we did in the early 90s? Again back to lemonade, if you got money from your mom to lower your costs by 9 cents and you could then lower your price below iced tea would you just keep selling lemonade? That is what we have gotten ourselves into.

          Everytime the government interveigns in existing markets not only is it taking from productive areas and distributing to that market, it effectively is killing an emerging market. I think staying out is the best option.

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          1. Sean

            you would see major inflation before that happened and everyones savings would become worthless. it is going to take 10 years for us to develop the technologies to get off fuel. maybe we just stalled that time frame and boosted the economy at the same time.. so now is the time to do exactly what we are doing. we are setting up a renewable resource power grid so we can run electric cars.

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          2. Matt

            Hello Dave,

            "Your argument of government subsidies or sales of intrest to other countries to “help” has delayed the feasibility of alternate fuel technologies. If our gas costed (sic) us $9 a gallon 30 years ago, like Europe which is closer to the Middle East, we would have made SUVs the way we did in the early 90s?"

            As a free-market adherent aren't you against the reallocation of resources via government involvement?

            Why should the United States government discourage the building of SUV's by raising tax rates on petrol? Conversely, if US tax rates are less than European counterparts, aren't SUV's then more of a product of free market enterprise than tiny little fuel-efficient cars?

            Look at tax rates for some of those countries you mention, compare it with ours, and let me know why you support extreme govt involvement in one aspect of central planning (energy in europe) and not another (finance in the US).

            Petrol Tax Rates
            Germany: approximately USD 6.28 per US gallon
            Netherlands: The 2007 fuel tax was € 0.684 per litre or $ 3.5 per gallon. On top of that is 19% VAT over the entire fuel price, making the Dutch taxes one of the highest in the world
            Norway: Even though Norway is the third largest oil exporter, the fuel is heavily taxed.
            United Kingdom: approximately USD$3.49 per US gallon

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          3. Dave

            Well I carefully was trying to dodge the issue of taxes on gas, and I will do so again by jumping to the main part of what I was driving at.

            The key issue is that government has stepped in at the corporate level to help subsidize many of these companies. Furthermore, they are now sponsoring them because they could not/ did not diversify their portfolio in advance of oil going up.

            By stepping in any fashion they effectively helped develop the waste that existed which help the companies along. Additionally, government involvement in helping the buy and sale of oil (which was later repealled which oil prices went up) before reaching the market assisted in driving oil prices up which then impacted the auto makers.

            It's one of those things that the gov't has been in so many aspects of the entire market that only a complete divestment would solve the issue. My previous example was to simplify the multitude of simple arguements that Sean makes with little to no justification, logic or explaination.

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      2. B T

        I can't exactly see what you're trying to say here. It's pretty simple, if you need someone to buy your goods, then maybe try producing goods that the people need or want to buy. We don't need a central bank or central economic planner to tell us what we want to buy. The same is true in foreign markets, produce something they need or want, and trade it to them for the goods YOU want. You make it sound like all we can produce here is debt (although as of late that is what has been driving our economy...). If we got back to actually producing goods with value instead of simply consuming while paying for it with debt, we'd be a lot better off.

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        1. Sean

          Your correct, if we actually produced more goods, than we we would be alot better off. But free trade makes foreign goods cheaper, so we purchase from them because everybody wants cheaper products.. Central banks don't tell us what to produce or purchase, they just allow businesses to borrow money so they can choose on their own what to purchase and produce according to the market.

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          1. Nate Y

            Your first sentence makes sense. The rest of it is gibberish.

            How can you not see that having a Central bank with these capabilities is a tremendous intervention into the market? The Central Bank, armed with a fiat currency, distorts the market and creates unsustainable misallocations of capital. It's possible to fool most of the people for a while and run enormous trade deficits but eventually it catches up to you. The market starts to self-correct. There's nothing the government/fed can do about it other than drag it out, postpone it, and prolong the pain. And that is exactly what they're doing.

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          2. Sean

            banks don't have the capital to lend to people. It is rare to find a bank that lends off of savings. how are you going to have an economic system with no loans. most loans are created through fractional reserve banking. money has to be created. We've grown twice the size since we got off the gold standard. There just isn't enough out there. Banks have to allocate money.

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          3. Nate Y

            There would still be loans even if we had full reserve banking and sound money. Seriously dude, you claim to be acquainted with Austrian economic theory but all of your questions suggest you haven't read a single page.

            "Money has to be created"

            Nonsense. Why? Because prices adjust.

            "We've grown twice the size since we got off the gold standard"

            Are you talking about population growth? If so, that's entirely irrelevant. Why? Again, because prices adjust.

            If you mean we've grown economically. Yes, but it was mostly an illusion. Like the dude who gets a few credit cards with $50,000 limits, the US has borrowed and spent itself into a giant financial/economic disaster. Time to shape up.

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          4. Sean

            there are different opinions on deflation. You dont know what inflation is so i dont expect you to know what deflation is.

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          5. Nate Y

            Again, very disingenous of you. You previously stated you would start using the proper definition of inflation. That is, the expansion in the supply of money/credit. Deflation, is the opposite. That is, a contraction in the supply of money/credit. Get your definitions straight.

            But let's say deflation is merely (as the misguided economists and media pundits say) a general fall in prices. This is not a bad thing. Of course it happens during debt obliterations like we are experincing now and the government/central banks should let it happen. But it is also a natural consequence of a productive economy anchored by sound money.

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          6. Sean

            plain and simple.. When deflation happens, jobs become lost because there isn't enough spending, unemployment rises and new businesses are not created to start new jobs because there is not enough spending.. Wheather deflation comes from contracting the money supply, or just less productivity in the economy, its creates a market freeze.

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  14. Kevin

    As much as I like Ron Paul. Progressives control everything, so this is a useless adventure.

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  15. Willis

    I asked my Rep. Ginny Brown-Waite (R-FL) to support Dr. Paul's Bill.
    Here's what I got in reply:

    Thank you for bringing your concerns to my attention. I appreciate the time you took to contact my office on this important issue and welcome the opportunity to respond.

    As you know, the recent bailouts of the financial industry, the auto industry, and the twin efforts to stimulate the economy have cost trillions of dollars. As I am sure you also know, the federal government was operating at a substantial loss before these expenditures. Those trillions must come from somewhere. If spending is not curtailed, or revenues are not increased, there are really only two ways the government can finance its deficit: First, the Department of Treasury can issue debt to investors around the world. Second, the Federal Reserve can "print money" and put it into circulation.

    Congress places a cap on how much debt the Treasury can issue, but it does not place a cap on how much money the Federal Reserve can "print". This is the main source of concern for critics of the Fed and increasingly investors as well. From August of 2008 to December of 2008, the Federal Reserve doubled the "monetary base", or the amount of money under its direct control. The Federal Reserve was designed to be as independent of politics as possible. The reason is simple: good politics doesn't necessarily equal good economic policy. The Obama "stimulus" plan, for instance, is a prime example of that.

    Yet despite this need for independence, it is important that Congress keep a close eye on the big picture, both in terms of economic security, and the relative power that this small groups of people has. Some critics argue that opening the Fed's books for public inspection would accomplish these goals. There is a concern, however, that revealing which banks are borrowing from the Fed on a short-term basis, or how much they are borrowing, would create uncertainty about those banks' health, and could create or spread a panic. There is legitimacy to those concerns, and Congress should approach the subject in a sober and deliberate way.

    Throughout my tenure in public service, I have always kept an open door and an open dialogue with my constituents. As Congress addresses the many challenges facing our nation, I hope you will continue to share your thoughts and views with me. Accordingly, I encourage you to visit my Web site at http://brown-waite.house.gov to email me and find useful information about our 5th Congressional District.

    It is my honor and privilege to serve the people of Florida's 5th Congressional District and my offices and staff are here to provide you with any assistance you may need.

    Sincerely,

    Ginny Brown-Waite
    Member of Congress

    I guess this means she won't be supporting it?

    She seems to be afraid it would cause a run on the banks?

    ( No surprise there, she has a history of not caring about Americans, I asked her to support American Engineers by opposing expanding H1-B visas and she told me how wonderful H1B's were.)

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    1. ExposetheFraud

      Expose that fraud and keep on her ass like white rice!!!!! Get them all sponsoring it, even Waite, sounds like another 100 year old incumbent.

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  16. Jack

    Makes me feel good inside that so many people are aware of whats going on in this country.

    If it werent for Ron Paul supporters and the like, I bet Whatever theyve been planning for us wouldve taken place soon after 9/11.

    I am glad this bought us some time and pray this bill passes and shows everyone how corrupt the FED is.

    But I think everyone should ask themselves... What do you guys think theyre going to do to stop this bill from passing? Or if it does pass then what will happen to them?

    If you guys are as serious as i think you all are about this (and you all do seem to be), then a good tip might be to start thinking ahead of time about what their likely reactions to this are going to be.

    Monsters dont go quietly when you try to kill them...

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  17. Ron Paul’s Bill To Audit The Federal Reserve Now Has 91 Co-Sponsors | kristopheR.derentZ

    [...] they will never be able to vote on it. You can get involved and help push this through by going here and following the steps listed on the [...]

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