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.
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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:
http://lewrockwell.com/rothbard/rothbard202.html
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.
»crosslinked«
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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.
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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.
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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.
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The new one is the work of divine conspiracy and forever shall be.
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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….
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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.
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