Fed Audit Will Show What They’re Hiding

In this speech to Congress, Ron Paul refutes Ben Bernanke’s interpretation of HR 1207, the bill to audit the Federal Reserve, and explains why only an audit will protect the public’s interest.

Date: 7/30/2009

Ron Paul: Mr. Speaker, the big guns have lined up against HR 1207, the bill to audit the Federal Reserve. What is it that they are so concerned about? What information are they hiding from the American people? The screed is: transparency is okay except for those things they don’t want to be transparent.

Federal Reserve Chairman Ben Bernanke, argues that HR 1207, the legislation to audit the Federal Reserve, would politicize monetary policy. He claims that monetary policy must remain independent, that is; secret. He ignores history because chairmen of the Federal Reserve in the past, especially when up for reappointment, do their best to accommodate the president with politically driven low interest rates and a bubble economy.

Former Federal Reserve Board Chairman Arthur Burns, when asked about all the inflation he brought about in 1971 before Nixon’s reelection, said that the Fed has to do what the president wants it to do, or it would lose its independence. That about tells you everything.

Not by accident Chairman Burns strongly supported Nixon’s program of wage and price controls the same year, but I guess that’s not political. Is not making secret deals with the likes of Goldman Sachs, international financial institutions, foreign governments and foreign central banks politicizing monetary policy?

Bernanke argues that the knowledge that their discussions and decisions will one day be scrutinized will compromise the freedom of the Open Market Committee to pursue sound policy. If it is sound and honest and serves no special interest, what’s the problem?

He claims that HR 1207 would give power to Congress to affect monetary policy. He dreamt this up to instill fear, an old statist trick to justify government power. HR 1207 does nothing of the sort. He suggested that the day after an FOMC meeting, Congress could send in the GAO to demand an audit of everything said and done. This is hardly the case. The FOMC function under HR 1207 would not change.

The detailed transcripts of the FOMC meetings are released every 5 years, so why would this be so different and what is it that they don’t want the American people to know? Is there something about the transcripts that need to be kept secret, or are the transcripts actually not verbatim?

Fed sycophants argue that an audit would destroy the financial markets’ faith in the Fed. They say this in the midst of the greatest financial crisis in history brought on by none other than the Federal Reserve. In fact, Chairman Bernanke stated on November 14th 2007, “A considerable amount of evidence indicates that Central Bank transparency increases the effectiveness of monetary policy and enhances economic and financial performance”.

They also argue that an audit would hurt the value of the U.S. dollar. In fact, the Fed, in less than a 100 years of its existence, has reduced the value of the 1914 dollar by 96%.

They claim HR 1207 would raise interest rates. How could it? The Fed sets interest rates and the bill doesn’t interfere with monetary policy. Congress would have no say in the matter and besides, Congress likes low interest rates.

It is argued that the Fed wouldn’t be free to raise interest rates if they thought it necessary. But Bernanke has already assured the Congress that rates are going to stay low for the foreseeable future. And again, this bill does nothing to allow Congress to interfere with interest rate setting.

Fed supporters claim that they want to protect the public’s interest with their secrecy. But the banks and Wall Streets are the opponents of HR 1207, and the people are for it. Just who best represents the public’s interest?

The real question is: why are Wall Street and the Fed so hysterically opposed to HR 1207? Just what information are they so anxious to keep secret? Only an audit of the Federal Reserve will answer these questions.

  • Greg

    Sean, I implore you to do some research before shooting off your mouth. True, everyone is entitled to their opinion, but that doesn’t make everyone’s opinion equally valuable. Your opinion is that of an imbecile. Perhaps you could read a little and gather some knowledge before you spout off and show what a fool you are?

    Since you have no understanding of inflation, the theory of the business cycle, or the Federal Reserve, how about doing a little reading on it before running your mouth and illuminating your lack of knowledge to all of cyberspace?

    Here’s a primer:


    That thread right there will correct you of most of your illusions. If you want to know what Ron Paul believes, you’ll find it in there and other works of the ‘Austrian Economists.’

    Please don’t take my sharp tone the wrong way. If I were to ever act like such a fool, I’d hope someone would straighten me out as quickly as possible as well, by whatever means necessary. I would be grateful even. After you learn a bit, I’m sure you’ll be quite embarrassed by your stupidity which you’ve put on display for the entire world to see. Hopefully you’ll educate yourself a bit and come back here as someone with a valuable opinion to share instead of someone to mock and dismiss.


  • kim

    The Fed is the supreme instrument of usury. They pick the winners and losers in this world. They [the Fed] threw the American public a “bone” to chew on to make us happy and somewhat distracted after 9-11, with very low interest rates and banks encouraging easy credit utilization. Like giving an injured child some candy to distract him from his discomfort, this free flowing easing of credit was done to stimulate the U.S. economy and thus offset the destabilizing economic effects created by terrorism. Doing this “dropping money out of helicopters” served two purposes: The “bone” I mention above, and another purpose being the reckless creation of massive wealth for those on Wall Street who were in the position to take full advantage of the easing of credit and massive banking deregulation. This quasi government/ corporate entity known as the Fed, indirectly created the mess we are in today with Alan Greenspan keeping interest rates too low for too long. The obvious and foreseeable result of this was the bubble in housing especially.

    Enter pretty baby Ben who early into his new job, thinks he smells a whiff of inflation in the air and capriciously decides he needs to be proactive and stop inflation before it starts. He raises interest rates 25 times and in doing so “pops” the housing bubble and unleashes a cascade of unintended consequences. In desperation pretty boy Ben (whom I think he is not that handsome– ever notice the reptilian look his lips make when he is talking– sort of like a turtle?), anyway I digress; in desperation Ben baby realizes he screwed up, and tries to stop the Titanic [American economy] from hitting the iceberg by throwing the engines in full reverse, but to no avail. The “Titanic” hits the credit default swap iceberg and as the first casualty, takes out all the Lehman Brothers that were drinking dancing on the deck near the bow. Just imagine what a great movie Hollywood could make if the producers could get the transcripts and e-mails pertaining the back door deals the government, the treasury, the Fed, and the Wall Street gang made to keep this ship from sinking. Ben to Hank; “I know you don’t have any Jewish buddies at Lehman anymore and Goldman will do better if we let them fail, what do you think?” Hank to Ben; “Well, we threw a lifeline to save the Bear, but the world has to know we are not going to save em all– you know– all that stuff they taught us in business school about moral hazard etc.” Hank to Ben; “Yeah, I guess you are right, but don’t look now,– shit– Ben, the credit markets are now frozen solid, damn we probably should have thrown a lifeline to Fuld.” Ben to Hank; “Ooooops!”

    Audit the Goddamn Fed now, so all the truth can be known.

  • Doulgas

    America has archived its humanitarian goal with only one new lesson to be learned. That lesson is how to properly implement a medium of exchange. This battle goes back to the very cause of the American revolution. Sadly the battle was lost to the Federal Reserve System. This hard lesson will provide the necessary data of why monetary policy must be regulated by the commonwealth of citizens in order to provide a stable economic system.

  • Doulgas

    A central system of issuing a constitutional medium of exchange is essential to an advanced civilization. How it is represented by the Commonwealth of citizens is in direct relations to products and services currently available.

  • Doulgas

    The new one is the work of divine conspiracy and forever shall be.

  • JCDP

    Amen. Learn from history so that we won´t have to repeat it.

    I believe that is why the founding fathers were so against a central bank. They wanted to avoid what was happening in Europe (power being concentrated in the hands of a few as opposed to the people), to happen in the US. Look at us now….

    • Doulgas

      This is an important debate. The constitution allows for congress to issues NEW medium of exchange. This is a central government practice that must take place. The issuance of new mediums of exchange must be done within consideration to the commonwealth of citizens represented. Thus their respective economy will not be raped.

  • JCDP

    @Douglas: “The true power of the people is within education, understanding and practical comprehension.” Roger that. How do you suggest we reach “critical mass” of a population with that capability, when we have a weak public school system and families whos parents seem so caught up in the rat race that they neglect their kids? In my book, that is a greater task than reversing the trade deficit. But that´s another discussion….

    • Doulgas

      Yes Sir. I am very troubled and have many spouts of anxiety over this. The answer is in understanding the rise and fall of previous civilizations. This is the key for though’s who want to populate the new civilization that will be born after this one bites the dust. The new one is the work of divine conspiracy.

  • Doulgas

    Understanding how constitutional monetary policy would have changed the outcome of the past 100 years of industrial and service industry would teach you why most of the population is running in a spinning cage like a rat to keep things going. In other words, if the US Government was constitutionally running a medium of exchange there would never be periods of deflation or inflation, cut throat competition, freed trade, natural resource abuse, massive waist dumps; over population or terrorism.

    Sadly, all these things that have come to pass are simple unconstitutional stumbling blocks. Implementing sound constitutional money would require a Great Reconciliation and a highly educated population. To bad the public school system has be modified by the share holders of the Feds through bogus foundations.

    The true power of the people is within education, understanding and practical comprehension. America has become immobilized by ludicrous monetary policies that resulted in the destruction of US manufacturing, innovation and sustainability.

    Yea, the Government will send in the FBI, CIA and SWAT to confiscate all corruption corporations without a flinch. But to get a descent audit from the Feds they become chicken shit. Because they know the Feds own them, their country and the World Government. Perhaps China and Russia know this too?

    So what game do they play with the World Gov?

  • JCDP

    I hear you again Sean! We (you and I) may actually be able to reach some kind of common ground. You seem to be saying that we have to invent the technology to replace oil addiction BEFORE we drop the current monetary system, correct? I agree with you about the time frame, it´d take about a decade. OK, I argue that dropping the system will force/enhance the creative process and “keep us honest”. So now our discussion has turned into a chicken or egg thing. We can stop discussing as long as we are in agreement that what the Fed represents is detrimental to the country long term. Again, I believe this is why Ron Paul advocates scrapping the whole darned thing.

    @Peter: Nice post!

  • Christine

    Sean, consider spending your time making a bunch of youtube videos explaining your beliefs and understandings. We could then do a search to find them, watch the “views count” for popularity and read the comments below each video.

    We are a much smaller audience. I think you’ve advanced to the level that requires a much broader group that can give you all the attention you require.

    • Nate Y

      You speak much too kindly.

    • Peter


    • Christine

      You have to be smarter than the cat.

      • longshotlouie

        Heheheheheehee, love it

  • Peter

    You see, this is what frightens me the most.The possible handing over of all of our Gold. I’m concerned that the current Fed strategy is going to lead to this anyway.

    China may demand all of our Gold in Fort Knox.But I seriously doubt that any President would abide by any demands for gold since it could be considered a threat to National Security.

    I guess it could happen but only if:

    a) we were to go default on interrest payments to China. (unlikely)

    b) we were to continue deficit spending (unlikely)

    c) we were to continue bailing out private industry and China were to lose confidence in our ablity to pay them back (we can longer afford it)

    d) the dollar would lose complete value ($0.00)

    Think about it: “Shut down the Fed and China could demand all of our Gold” – Sean

    “Keep printing and devaluing the dollar to the point of $0.00 value and they will demand it anyway.” – Peter

    So what in God’s name do we have to lose?

    As you say, “look at history.” Well I’m looking Sean. And I’ve noticed that the value of the dollar has been on a steady decline. Some occasional highs here and there but still a steady decline and it’s not going back up unless,….unless,…what? That is the Trillion Dollar question isn’t it?.(pun intended)

    What could possibly increase the value of the dollar other than a complete 180 degree about face towards a more solid currency? “Historically” The Fed does’nt seem to want to do this. Or more than likely CAN”T do this. Why? Probably because of the very thing that Bernanke is claiming would happen with an Audit. Political Pressure from Presidents. That’s why.

    Something has to give. Spending or Printing? Spending or printing?So what’s it gonna be?

    The Federal Reserve, with all of it’s advantages, it’s history, it’s maneuvering and power is losing control.It may have served a sound purpose long ago not today. With Washington’s ever growing power and out of control spending a whirlpool is being created. And it’s dragging everything within reach down with it.

    And if and when (God forbid) the value of the dollar is $0.00. Then what? Our Central Banking system will be rendered powerless. Print more useless paper? What then?

    If we switch over to a new foreign currency that’s being printed by some off shore entity THEY will become the new Fed.And now we(America)will no longer be in control of monetary policy.

    Talk about winning a war against America without even firing a shot. This is it.

    Thanks for the reply.

    • Peter:

      I hate to break the bad news, but it is highly doubtful
      that there is any gold held by the U.S. government.
      There has not been an audit of the gold in this country
      since 1954 under Eisenhower. The U.S. mint recently
      ran out of gold blanks needed to strike gold coins (coins
      for collectors), and had to suspend striking gold coins.
      Ron Paul has said in an interview I saw, that it is very
      doubtful that there is any gold left. It has been
      speculated that the Federal Reserve has moved it to
      European central banks. This has all happened while
      the American sheeple were not paying any attention. It
      appears now that the people are finally waking up; but
      I hope it is not too late!

      • longshotlouie

        Just give us an accounting. All options are on the table.

  • JCDP

    Turn the criminals at the Fed over to the chinese and japanese…. Wouldn´t that be a sight….

  • Stewart

    Point 1:
    The Bakken Formation in North Dakota is just one region that holds vast amounts of oil, plenty of oil to get us off of Mid-eastern oil. The corporatists that run the U.S. would rather make money with oil AND bombs, keeping oil a precious commodity.
    Point 2:
    The average citizen is not indebted to China. The criminals in the Federal Reserve along with their co-conspirators in the federal government, have been operating outside of the law, and are thus solely responsible for these thefts. Americans need to simply turn them over to the Chinese/Japanese to answer for their crimes.
    Point 3:
    Show up at your congressman’s next “town hall” meeting. Organized labor and the socialist/progressives are gearing up to silence you.

    • sean

      The protests at town halls are about oil addiction and our trade deficit? I wish, that would silence me.

      The protests at town halls are about health care which has nothing to do with what we are talking about.

      • longshotlouie

        Thanks for the MSM version of the town hall meetings.
        You can be commended for not playing the race card.

      • Ross

        More Cyber clutter Sean? Why are your posts so prolific? Don’t you have a real job? In the depravity of your avarice,do you not see that our wealth is in our common humanity,and not in the illusion of inflationary Fed money.

  • T. Hammer


    Your #8 sounds like what Ron Paul is stating in the video. If the Fed is doing nothing wrong at all, then it doesn’t matter what is on their books. They need to be transparent to congress and the people. If the Fed doesn’t have to answer to the Congress, which is elected by the people, then that is saying that the Fed has to answer to no one. Common sense dictates that secrecy breeds corruption.

  • JCDP

    “His plan will cause harm to other parts of the economy, once our money starts to dwindle” Initially yes, but that is the cost of correcting the mess. Like anything in lifem the correction comes at a price.

    Ridding us of the depenecy of foreign oil: R&D in alternative energy. Again, this is not an overnight answer, but it will generate real jobs in the process while supplementing the domestic output of oil. (R&D won´t supplement oil, the results of these efforts will)

    When I say you suggest spending, it is because you seem to be saying that we have to stick with the Fed. The Fed supports spending, or am I wrong? Again, the Fed´s failed policies is what got us in this mess.

    • sean

      Government trade policies have contributed a great deal to our deficit. The Fed is the government’s puppet money machine supporting our oil addiction.

      It will take at least ten years to make a switch off oil and rid us of our addiction. Why put our economy into shock with a much larger unemployment rate for 10 years, when we can let the system work for a little bit longer so we can accomplish what needs to be done. We have thousands of scientists working on the problem right now.. We are going to have to change our whole economy before we change our financial system.. Our financial system is designed to fit our economy, not the other way around.

      • sean

        I think the reason why ron paul doesn’t talk about our oil addiction is because he knows it will take the government to stop it.

      • Nate Y

        Our financial system is a vampire sucking the blood from our economy.

        • sean

          No. Our trade deficit is a huge cut that is losing blood. The fed are like white blood cells trying to heal the cut and supplying our body with more blood.

  • JCDP

    Ron Paul focuses on the big picture. Change the system and the defict corrects itself. Your suggestion implies that we just keep on doing more of the same and dig ourselves a deeper hole. I still can´t get my head around that you think we can SPEND our way out of this mess. The math doesn´t add up….

    • sean

      I never said we can SPEND our way out of this mess. I said we have to STOP SPENDING money on oil and foreign goods. Ron Paul’s plan is not going to rid us of our DEPENDENCE on foreign oil. His plan will cause harm to other parts of the economy, once our money supply starts to dwindle.

      I support Ron Paul and the whole philosophy of limited government and sound money. I’m just trying to be real.