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.

326 Comments:

  1. Ha sean you have not read the KJV Bible.David a man after Gods own heart was a murderer and adulterer.Paul was a man of God and look what he was guilty of.Peter denied Christ and yet went on to be a God called Apostle and the 12 were called sons of thunder because they were men of God with an attitude.

    Moses killed an egyption and Solomon had over 700 wives and yet was the wisest man in the OT that ever lived.Noone is perfect and God in Christ saves through faith and not of anyones good works {Eph 2:8-9}.

    No faith in Christ for salvation means a road to hell.

    Yet in 43 years my Saviour has never failed me once.

    Amen.

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  2. Sean you can mock Christ all you want.I have witnessed the power of God through Christ like money blessings and healings and mass deliverance and demons cast out when every other name as a test failed.

    You need to get saved or face the fires of eternity and being a JEW means nothing except there will be more JEWS in hell than gentiles.

    Amen.

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  3. Yes earth google shows sean as the bald bastard Barnanke pretending to be someone named sean.

    You sorry shit.

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  4. I hear you. I wasn´t suggesting forcing anyone to do anything. It´s a matter of choice if people see that there is a better alternative. Admittedly we are creatures of habit, but habits change if there is no other alternative, and I hope that habits change once people can intellectually comprehend that the path they are on is wrong. You can´t spend more than you have for ever. You wind up in the mess the US is in, and as longshotlouis rightfully said, you can´t SPEND yourself out of debt. That defies logic, or? Can you really not see that? The system that is in place with the Fed suggests we do just that.

    @Amen. I get your drift even if you do exaggerate a tad…;-)

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  5. Sean you will find out if Gods a fake when you die.

    Also what are you doing by whining about the trade deficit?

    Focusing on the trade deficit as the supposedly major problem of the US economy only diverts the attention from the real culprit, which is the US central bank.

    Sean what is the US Central bank?

    You goof ball.

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    • Its funny how every religion plagiarizes the first original Egyptian religion.

      We are dependent on the central bank because we are dependent on foreign oil. It is plain and simple, for all those besides fake Christians.

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      • Horus 10,000 BEFORE CHRIST

        Conception:
        Horus: By a virgin. There is some doubt about this matter.
        Jesus: By a virgin.

        Father:
        Horus: Only begotten son of the God Osiris.
        Jesus: Only begotten son of Yehovah (in the form of the Holy Spirit).

        Mother:
        Horus: Meri.
        Jesus: Miriam (a.k.a. Mary).

        Foster father:
        Horus: Seb, (Jo-Seph).
        Jesus: Joseph.

        Foster father’s ancestry:
        Horus: Of royal descent.
        Jesus: Of royal descent.

        Birth location:
        Horus: In a cave.
        Jesus: In a cave or stable.

        Birth heralded by:
        Horus: The star Sirius, the morning star.
        Jesus: An unidentified “star in the East.”

        Method of death:
        Horus: By crucifixion.
        Jesus: By crucifixion.

        Accompanied by:
        Horus: Two thieves.
        Jesus: Two thieves.

        and much much much much more….

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  6. Sean! I´m back! So you´re not for the Fed? Could have fooled me.

    Dealing with the trade deficit means start living within your means. I´m not naive enough to think this is done in 1 or 2 years, but put a system in place that forces people, companies and organizations to live inside their means and the transformation starts to happen. That´s what Ron Paul is suggesting. Pegging currency to the amount of Gold and Silver a country has, and you force it to live within its means. Put a debt driven system in place and all sorts of problems happen. We are living that reality today. That´s the point. Yes the mess is hard to reverse, but surely you don´t think the remedy is more of the same?

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    • You can’t force us to stop buying oil and expect that we can drive to work everyday.

      If we wanted to start producing more, we should make it cheaper to produce here than elsewhere. We still wont be able to export as much as 10 million barrels of oil that we import every single day.. I can’t even imagine how many ships or freight carts it would take to transport 10 million barrels every day.

      I’m not for the fed at all. I’ll defend some of their actions, but I would much rather have it done correctly. By correctly I mean, stop importing goods and start living lower standards of living.

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      • As a result of the current system, a lower standard of living will be imposed on the majority of Americans while the political class will enjoy extraordinary wealth. This is always the result when power comes to be concentrated in the hands of a few.

        Keep hoping for the right philospher kings to find their way into the fed.

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        • actually, the fed props up the living standards of our whole country. The fed is the reason why we can import oil and cheap goods.. For some reason you are for importing oil and cheap goods, but against the fed. I think you are a confused little puppy.

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  7. haha no, i’m not for the fed. God is a fake by the way.

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    • Don’t lie. You are for a system that can simply print money to pay for oil and other goods. The Federal Reserve System is such a system.

      Also, you have one more god to slay before you can call yourself an atheist. You call this god “The State”.

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      • OKay, i’ve been sitting here explaining what we should do to live within our means and stop importing oil so we can get rid of the fed… I think you are the liar.

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        • No you haven’t. In some posts you argue that we HAVE to keep printing money to pay for oil. Other times you state that we should stop importing oil and start living within our means. We’ll ignore the contradiction for a second and say you agree with us here that the US must live within its means. Good.

          However, you do not propose any monetary method of achieving this noble end. If we stay with the current system (Deficit financing and fiat currency) we will not guide ourselves back to living within our means. If we keep doing what we’ve been doing, we will eventually have a currency crisis.

          You argue that once we have our house in order we can transistion to sound money. But this is backwards.

          If we make our way back to sound money, it will give us the means to put our fiscal/monetary house in order.

          It’s interesting to note that although you don’t believe in any god(s), you believe in the fairytales of fiat currencies and centrally planned economies.

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        • We can’t just stop printing money because we have to pay for oil. We should find ways around oil and stop importing it. I’m sorry if that confused you.

          How will sound money help rid us of our oil dependence? Please explain.
          You need to improve your critical thinking. You can’t just say something will lead to something without knowing how.

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        • “We can’t just stop printing money because we have to pay for oil.”

          Here is a perfect example of your economic ignorance. Printed fiat bills of credit (Federal Reserve Notes called “dollars”) do not pay for imports (oil in this case). Imports are ultimately paid for by exports. Learn some basic economics.

          Moving on, you have (perhaps unwittingly) strawmanned the argument. The argumment is not “Sound money will rid us of our oil dependence”, rather, the argument is “sound money will reduce the trade deficit over time”. This is because sound money cannot be printed into existence. Unlike the current system of fiat currency which you claim we need to “let work a little longer”. If giant bubbles, enormous trade deficits, and an ever widening gap between the rich and poor is what you define as “working”, well then the current system works quite well.

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  8. I’m very happy to see other posters refusing to let sean get away with his abuse of language and reason. I find his strawmanning of arguments to be the most annoying tactic he employs.

    Reason has been tried. Time for ridicule.

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  9. Keep your wits around you Sean. Reversing a negative trade deficit is doeable. What Ron Paul is suggesting is biting the bullet now, so that the US gets back on a level playing field and then learns to live within its means. That´s just palin old common sense. The Fed is an elaborate plan to keep trigger happy gamblers (major banks and investmant firms) happy.

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  10. People Paying Their Bills

    OOOOOOOOOOOOOOOOH, The Humanity !!

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  11. Impossible is nothing my friend. It might be a task, and it might not happen overnight….

    So the dependence on foreign resources and goods is the enemy in your mind then, yeah?. Do you think the US can´t produce enough domestically to reverse the balance? Lift your eyes from the 8 trillion dollar debt for a minute and ask yourself what the character of the US is.

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  12. C´mon now Sean. Don´t YOU start arguing now….!

    Ron Paul thinks the US can beat the world in a free market economy without the crutch of the Fed. That´s his point!! He seems to have more faith in the country than you do… Aw, look at that… I´ve started arguing too…;-))

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    • It’s impossible. We have had an 8 trillion dollar trade deficit bc of oil and other goods we depend on. You can’t have a hard currency and give away 8 trillion dollars, it just wont work. It’s funny how I look like the bad guy whenever I point out ADDITIONAL problems to our economy.

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      • Did someone say to pay off the entire debt on Day 1?

        More of your extremely laughable fear-mongering.
        B. S. Bernanke would be soooooooo proud.

        [Hail Obama]

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        • It’s funny how I look like the bad guy whenever I point out ADDITIONAL problems to our economy, just because you don’t have a full understanding.

          How will you pay back debt? We are 11 trillion dollars in debt. There isn’t even 11 trillion dollars in the economy. We would have to stop importing oil first, pay off the debt, and THEN move to a hard currency.

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      • Since you are representing the problem (The FED), I suggest that while you point that finger that you should note where the rest of your fingers are pointing. We don’t even let our children pull that shit.

        Can I get an autographed poster of Ignorant Traitorous Marxist Bastard Comrade Sean?

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        • good way to avoid my question.. Again, how can we pay off an 11 trillion dollar debt without printing money when we don’t have close to 11 trillion dollars?

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          • What exactly is our current GNP?

            Somehow we had a balanced budget just 10 years ago. And our deficit was far less than it is now.

            There has to be a way to pay off the deficit.

            First,try cutting spending tremendously. Close most all U.S. Military bases throughout the world except for the ones most needed.

            2nd,immediately remove any tariffs or taxes that suffocate domestic production of oil. My family suffered first hand when the U.S. Goverment passed a tax to prevent any production of oil more than a barrel a day back in the late 60’s. We, as many others, went from riches to rags.

            Imagine that? The U.S. Government deliberately shutting down domestic production of oil. Which resulted in the loss of thousands of jobs,lowering the economy and empowering our enemies.

            3rd NO MORE BAIL OUTS. We could have knocked off a good Trillion on our deficit had we not bailed out banks that still are not loaning any money.

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  13. Masochist Ignorant Traitorous Marxixt Bastard, Comrade Sean says we must worship the god of Debt. Bend over, nose to knees !!

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  14. Knee high in dung, huh? And too far gone to reverse the trend? How could it have come to this in the name of productivity….

    Man, I admire you sticking to your guns. I don´t agree with you, but I admire your resolve. You´ve taken some flack in here….

    BTW – This is a Ron Pauls site, you know that don´t you? He champions hard currency.

    I´m out.

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  15. Ok then. How should other countries view the US then? As an example to follow?

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  16. So Sean, the US can not perform in a free market economy and build a surplus? It has to be propped up by the Fed? Is that what you´re saying?

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  17. I really don’t know what planet Sean lives on. He says if there is no federal reserve, the banks will have too much power and inflate the currency??? The banks control the federal reserve!! That is the point of the audit. This independence crap that Bernanke is feeding you is pure propaganda. The President appoints his position and the banks control the federal reserve. But the federal reserve is independent of the the banks and the executive branch. Please! He is a presidential appointee!

    The monetary policy is done for the benefit of the banks, not for the people. The way Sean, talks I think he was a banker protecting his turf. Spitzer had it right. It is a big ponzi scheme. The great thing about people getting publicly disgraced is that they are not afraid to speak truth any more. When the Fed gave 80 billion dollars to AIG, it stole from the American public. They printed that money. More currency in circulation means the dollar has less value. So people with savings accounts who live within their means, get artificially low returns and on top of that their accounts might actually lose value, when you take into account the hidden inflation of the purchasing power of that dollar being diluted by the Fed. People who are not accountable, spend like crazy and live beyond their means are constantly rewarded with these artificially low rates being sent by the fed. Until this country wakes up and I believe with the help of Paul it is starting to, the government will stop punishing the people who save, our accountable and don’t need bailouts, and live within their means and stop rewarding bad behavior, which they did with these horrific bailouts the bad and destructive behavior will continue. The people that created this mess have learned nothing and the pattern will happen again, because these businesses were not allowed to fail. The first step is to reduce the deficit. It is not all the Fed’s fault. Deficit spending, was and will continue to be a big contributing factor. Paul has said this countless times. I am thankful that he is fighting for us. If this bill passes, he really should go down in history as one of the great leaders of our time.

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    • 60% of our countries assets do NOT belong to the federal reserve or banks. It is an entirely different system comprised of investment firms which have NO government oversight or involvement in any way. It has nothing to do with the fed. This is the system that crashed…

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      • Do you understand that whomever controls the money supply, be it in a household or a nation, that they control everything else. If a wife/husband/FED operate in secret withthe checkbook, strategically putting money where they wish, strategically spending or lending money where they wish, they have the ability to control the outcome.

        A former American president gave these investment firms the right to operate without oversight. Collusion in a network that only “uses” Americans and other countries strategically, their investments and their assets as a means to accomplish their goal.

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  18. And after the second great depression, if the US stuck to hard currency principle, what would happen?

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  19. Sean,
    just for arguement’s sake. And please, spare me the Doomsday Scenario. No one can assume anything in today’s World. Obama, Pelosi and Reid have ran the old scare tactic ploy into the ground.

    What exactly would happen in today’s world without a Federal Reserve?

    Forget your own philosophy, just be truthful, unbias and specific if possible.

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    • Well, unfortunatly, the most harmful tool the fed has is the best tool from stopping inflation. Monetary policy is too important. Congress would pick it up but congress aren’t bankers, they are lawyers, that’s why they created the fed. They would probably adopt some other form of bureaucrat and you would still have “centralized economic planning” and manipulation in the markets.

      If your talking about getting rid of the fed and monetary policy altogether, banks will have the power to lend too much money and inflate the currency too much, unless we switch to a hard currency.

      But under our economic condition, if we switched to a hard currency, we couldn’t hold a steady money supply because we spend almost a trillion dollars overseas more than we receive every year. We would end up with a deflationary spiral like the great depression when the money supply continued to dwindle away.

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      • This reads just like all other forms of postmodernist garbage. Complete nonsense.

        A total misunderstanding of economics, history, and reason. Demand your money back from whatever school you attend. They have done a terrible job.

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        • Correct me. You keep saying i’m wrong but I really don’t know where you stand.

          So you think all we have to do is switch to a hard currency and our trade deficit will improve?

          Or do you think we can continue to spend trillions of dollars overseas with a hard currency and limited amount of money?

          Or do you think we can trade commodities that we don’t have for goods?

          I would like you to FULLY explain your distorted understanding about our trade deficit, answering one of these questions. If not, you should probably go to school.

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          • I think you need a history lesson.

            “You only have to look at history to see what would happen without the Federal Reserve.

            1. There would be no nationally controlled monetary policy. Each bank would expand or contract credit based on their immediate business needs, not the nation’s or economy’s requirements.

            2. Before 1905, many banks were allowed to issue their own bank notes. These acted as circulating currency and many were easy to counterfeit. There were approximately 30,000 different designs of bank notes in circulation.

            3. Smaller banks would be dependent on larger banks for credit extensions, currency, etc. History has shown that larger banks often consider smaller banks as competition and didn’t care if they failed. (After 1935, the Fed was charged with looking after the overall health of the system)

            4. In international monetary matters, the nations largest private banks would represent America.

            5. There would be no elasticity to the currency. You would see more cycles of inflation/deflation, and boom/bust as we saw in the 1800s. The national banking era is considered to be the time period between 1863 and 1913. During that 50 year period, the nation suffered many financial crises. The most severe ones occurred in 1873, 1884, 1890, 1893, and 1907.

            6. In the national banking era, banks were basically unregulated and mostly acted within their own shareholder’s interests. Also, during the national banking era, bank failures were a common occurrence. In fact, there was at least one bank failure every year between 1865 and 1913. Several times, more than 100 banks would fail in a single year. That makes the current credit problem seem like an extremely tame year.

            7. There are many services that the Federal Reserve performs that would have to be taken over by the large, private banks. These services, instead of being impartially administered, would revert to being performed at the best interests of the largest banks.

            So we really don’t need a Federal Reserve if you prefer what the historical record has shown us.”

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          • Yepper, Lord knows we don’t want the government to live within their means like ordinary Americans (sarc).

            Comrade Sean, The Commisar says that you need to upgrade your representation of the Ignorant Traitorous Marxist Bastards, or you will get one of those underground desk jockey positions.

            Hail Obama

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          • Everbody hush. It’s time for Comrade Sean’s ‘Daily Revisionist History Lesson’.

            Long Live Our Ignorant Traitorous Marxist Bastards

            Hail Obama

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      • The Political Economy of Moral Hazard
        http://mises.org/story/2935

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  20. Paul Krugman explains the crisis, after the fact

    http://www.reinventmyhistory.com/watch?v=4XhvG_fD0HA

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