Ron Paul: We need to audit the Federal Reserve, now more than ever!

Show: Morning Meeting
Channel: MSNBC
Date: 11/05/2009


Dylan Ratigan: The bill no longer audits the Fed. In fact, the legislation gives Congress no control over the Fed’s authority to make monetary policy. That, perhaps, is a worthwhile debate, but it does not require any transparency either in the Fed’s secret agreements with foreign central banks, not to mention the monies that are pushed out to our own banks. Committee chair Barnie Frank told his constituents back in August that Congressman Paul’s plan would pass, likely in October. For the record it is now November and there is still no vote and if there were to be a vote it would be on a gutted version of the bill! Thirteen committee Democrats currently signed on to this shell of the Fed audit bill and now we’ll wait up and see if they’ll stand up for real change or just push through more false solutions in Washington DC.

Joining us now is Republican Committee member Ron Paul who originally proposed Audit the Fed. He will present and amendment before the full vote to get real reform back into the legislation. Chrystia Freeland is also here.

Representative Paul, in brief explain to all of us why you think it is so important that the American taxpayer be able to see what is going on inside of the Federal Reserve? Why does that matter, why should we care so much?

Ron Paul: It’s because everybody uses dollars as our currency and it’s an international currency. So it is very, very important, and yet it’s managed by a small group of people really run by the Federal Reserve board chairman and they decide each and every day how much money there should be printed that week and what the interest rates should be. So they are the central economic planners. And since they can create credit out of thin air and take care of their friends and buddies, which means that the burden is placed on the taxpayers… not directly with a tax but indirectly by devaluing their money. And that means that every time a price goes up, whether it’s medical care cost or education, you’re really paying a tax.

But the thing that gripes me most is it’s done secretly and they’re supposed to be like they’re sacred and never have their books opened. But one thing good has come out of this crisis; that the American people are demanding transparency and I think that’s why I’ve gotten so many co-sponsors on this bill. We do have a 130 Democrats on this, 308 total total supporters of this bill. So it will be a shame if we don’t get this through and it is true, it is going through the committee right now and today or tomorrow I might have my chance to offer my amendment and put it into the bill.

Chrystia Freeland: Congressman Paul, who is opposed to your push for transparency, who’s fighting it?

Ron Paul: The Fed. The Fed has actually, I think for the first time in their history, hired a lobbyist and the lobbyist used to work for ENRON. So they’re diligently pumping up the fear. You know, “Oh, if we know what was going on with the Fed it would causes tremendous inflation, it would cause interest rates to go up and all sorts of things. You know, if we knew what was going we might create a financial crisis.” It’s the Fed and the banks and the big corporations and some of the politicians are in the know and getting benefits. But the system depends on the control of money. But this is not new, this is historic.

The king in the old days always had control of the money, they did it in different ways. They clipped coins, diluted the metal, printed money. Today it’s really sophisticated; it’s done secretly with a computer and that’s why it has made it so much more dangerous than ever before.

Dylan Ratigan: Let’s just back away for a second because the Fed lobbyist some of the CEOs, some of the bank CEOs quite honestly might have a point. What if we were to look inside the Federal Reserve as you suspect, I certainly suspect it and I think Christian Freeman suspects it, anybody who understands how our financial system was built over the past 10 years suspects, that all those trillions of dollars that the Federal Reserve… that were collateralized… they’ve taken from the banks, is worth far less than it’s currently been represented as. So let’s say that that the 8 trillion of the Fed may be only worth 4 trillion. And everybody is basically trying to cover up the fact that there is this huge hole, this huge fraud has been perpetrated by the banks and the fraud would reveal itself truthfully if they were to audit the Federal Reserve and that would cause panic. Let’s assume they’re right, let’s assume that you’re right, let’s assume that this is worthless crap at the Fed, how do you deal with that fallout if, in fact, we get what we want and they open the closet. And what do you think is in there is in there, which is nothing?

Ron Paul: But pretending it’s worth 8 trillion is worth 2 trillion or even less doesn’t solve our problems. It just delays the agony. For me it would be like in medicine someone had cancer and we treated him with aspirin and we said, “Oh you don’t want to know the truth, and we don’t give you a real treatment”. You have to know the truth and you have to have a real treatment and today they won’t look at the real truth and the cause of the business cycle and the cause all the financial bubble and then the bursting of that bubble. What they’re doing is they’re saying, “Oh, all we need are more regulations, and what we need to do is prop up all the bad debt. We don’t want liquidation of debt, we don’t want the prices down, let’s stimulate housing” and on and on. So they’re doing everything that caused the bubble before to try to re-inflation the bubble, and believe me, they’re not going to be able to do it this time.

Chrystia Freeland: Congressman Paul, I agree with you that there is a little bit of an irony in the fact that in curing a crisis which was cause by too much money pumped out, one of the cures turns out to have been spending more government money. But don’t you have to agree that that cure has turned out to be pretty effective? We haven’t had a second great depression, the financial crisis has more or less been resolved. Isn’t that better than having a total freezing of the financial system, which it looked as if we might face last fall?

Ron Paul: Not long term. What if it turns out that we’re in 1930 and we have another 15 years of problems ahead of us. So, no. I think we’re still kidding ourselves. They say the GDP is up, but they printed money and they spent the money and when government spends money the GDP goes up.

Chrystia Freeland: Isn’t that better than the alternative of the entire economy just screeching to a halt?

Ron Paul: No, it really isn’t. You have to bite the bullet, you have to admit the truth, you have to make the right corrections. We used to do this. We’ve never had a perfect system; there was always abuse of the gold standard, but when they got out of whack they allowed the correction to occur rather quickly. The best example is the depression of 1920 and 1921. It lasted about a year and people did go bankrupt and it was really tough, but it’s not even an historical event. It was the introduction by Hoover and Roosevelt that the politicians can’t have hands off; you have to, “now that you have this sophisticated Federal Reserve, we’ll never allow recessions to occur.” They took the recessions of the early 1930 and turned it into a depression. So though you can do it is better. It is kind of like getting somebody off drugs. What you’re talking about is you don’t want the withdrawal symptoms, and I admit there will be withdrawal symptoms. But, keeping them on the drug which is easy money, easy spending and huge deficits and all that, that will kill the patient. And the patient remains the dollar and we’re going to be on the verge of killing the patient and when you see gold up at $1100 an ounce, that is a little bit of a warning sign. That might only be the beginning of what we’re going to see.

Dylan Ratigan: But what if you just decided is that you didn’t care about the children? If you don’t care about children, isn’t it better just to ignore it? To heck with the kids, it’s easier for me to just print the money and go out to dinner, don’t you think?

Ron Paul: Well, yea. That is live high on the hog, and maybe the bankers won’t come and get us. But the bankers always come, and in this case it’s the market that is coming. When an individual lives beyond his or means, they must be forced to live below their means. When a country does it, they will be forced to live below their means. And I believe that the lowering of our standard of living actually has been going on for about ten years, because the good jobs have been disappearing. The standard of living isn’t really going up. So we’re holding back the correction and it doesn’t look so bad. So yeah, we didn’t crash into a depression but what we’re doing is preventing the good policies to come back which means free markets, sound money and limited government, balanced budgets. All these things are totally rejected here because this place in Washington DC is run by Keynesians. Keynesians leaning towards socialism now because we’re buying up the companies. No, it cannot solve our problems.

Dylan Ratigan: It’s also easier to print money. You will appreciate this story, Congressman Paul, and then I’m going to let you go. I was talking to a couple of bankers the other day as to why it is that they’re still trying to keep 80% of their swap market, which is the crooked insurance market, in private? And they said, “Well, because if we bring it into public then we’ll have to post collateral, and we don’t have any collateral”. And so it’s easier just to keep it in secret than to bring the entire credit default swap market into public and reveal that there is actually nothing there for the market that is 9 times the size of the global economy.

Ron Paul: But you haven’t learnt the language yet. They’re just illiquid, temporarily illiquid. But if you use ‘worthless’ instead of ‘illiquid’ then why should the taxpayer ever be stuck for something that is worthless, and that is what’s happening.

Dylan Ratigan: Well, listen, keep us posted. I think that the most interesting part in this context and the context of the conversation at MSNBC and the political context, because there is such self-evident aspect to this point is why are our politicians so hesitant to get their hands dirty and do the hard work, as troubling as it may be? And why do they continue to indulge the political expedience of money printing because it’s quite simply an easier road to take?

Ron Paul: I think you got it there.

Dylan Ratigan: Alright Congressman Paul, thank you. Keep us posted.

  • Dfens

    Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.

    “There is a strong case to be made that we are already at ‘peak gold’,” he told The Daily Telegraph at the RBC’s annual gold conference in London.

    “Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore,” he said.

    Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa’s output has halved since peaking in 1970.

    The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India’s central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt. – Telegraph

    Let’s go on a gold standard! Because it is such a great idea to pay digits on an electronic ledger with an actual commodity. And let’s make sure to keep those borders open for “free trade”, because we can never outsource too many jobs.

    This message brought to you by the traitors of the United States of America.

    Like or Dislike: Thumb up 0 Thumb down 0

  • Stacy Alderman

    Interesting questions and good insight from the host and his shill sidekick, they must have been given the green light to be honest for a segment.

    Makes you wonder why MSNBC spends the other 99.9% of the day sewing ignorance for major issues like the Fed’s secrecy.

    Somebody probably put a gun to Mel Watt’s head, otherwise why would he oppose something like this? Its a Congress of Cowards!

    Like or Dislike: Thumb up 0 Thumb down 0

  • mike

    Like or Dislike: Thumb up 0 Thumb down 0

  • Nate D

    Call these people or H.R. 1207 will go in the garbage.

    Rep. Barney Frank: (202) 225-5931
    Speaker Nancy Pelosi: (202) 225-0100
    Rep. John Adler, NJ (202) 225-4765, fax: 202-2250778
    Rep. Travis Childers, MS (202) 225-4306, fax: 202-225-3549
    Rep. Steve Driehaus, OH (202) 225-2216, fax: 202-225-3012
    Rep. Alan Grayson, FL (202) 225-2176, fax: 202-225-0999
    Rep. Rubén Hinojosa, TX (202) 225-2531, fax: 202-225-5688
    Rep. Suzanne Kosmas, FL Toll Free: 1-877-956-7627, fax: 202-226-9299
    Rep. Dan Maffei, NY (202) 225-3701, fax: 202-225-4042
    Rep. Brad Miller, NC (202) 225-3032, fax: 202-225-0181
    Rep. Walt Minnick, ID (202) 225-6611, fax: 202-225-3029
    Rep. Ed Perlmutter, CO (202)-225-2645, fax: 202-225-5278
    Rep. David Scott, GA (202) 225-2939, fax: 202-225-4628
    Rep. Brad Sherman, CA (202) 225-5911, fax: 202-225-5879
    Rep. Jackie Speier, CA (202) 225-3531, fax: 202-226-4183
    And last, but certainly not least, Rep. Mel Watt. DC: Tel. (202) 225-1510, Fax (202) 225-1512
    Charlotte, NC: Tel. (704) 344-9950, Fax (704) 344-9971
    Greensboro, NC: Tel. (336) 275-9950, Fax (336) 379-9951

    Don’t call and don’t take a stance and the Ron Paul’s bill will fail.

    Please call, I did, it’s easy.


    Like or Dislike: Thumb up 0 Thumb down 0

    • Lindsey

      I e-mailed Watt and told him he was a traitor.

      Like or Dislike: Thumb up 0 Thumb down 0

    • Perception

      Why was Alan Grayson’s name mentioned.I would think that his integrity is unquestionable.Why bother calling the converted?

      Like or Dislike: Thumb up 0 Thumb down 0

  • Lindsey

    We need a modern day Andrew Jackson!

    Like or Dislike: Thumb up 0 Thumb down 0

  • http://ThomasPaineReturns.Net ThomasPaineReturns.Net

    These are the times that try men’s souls.

    This short motto has echoed for centuries. It gave strength to American patriots in 1776 as it propelled them to liberty. This motto is alive and just as appropriate today as it was at the beginning of the Revolution.

    Freedom was won, but corruption soon crept in. What was once a proud banner now often strikes terror in the hearts of people.

    Have people become too complacent with modern living? Have people forgotten the tyranny of subjugation to a king? Have people forgotten the horrors of slavery? Will they wake up before it is too late?

    When the new nation was a toddler, it took on a national bank. Jefferson caused that bank to be closed down, but others kept bringing it back. Today, the national bank is called the Federal Reserve. It should never have existed centuries ago, and it certainly should not exist today.

    The present world economic crisis can be traced right to the Federal Reserve. So many nations are linked to the American economy that they are now victims of the Federal Reserve’s manipulation.

    Most people mistakenly think that the Federal Reserve is a government bank. If it were, then all the interest it earns would be ploughed back into the American system, hence the national debt would be zero. That is, the Americans would only owe the interest to themselves. However, the interest is collected by individuals and groups. Those who own the Federal Reserve Bank collect the interest for themselves, and make themselves extremely wealthy at the expense of American taxpayers.

    The Federal Reserve charges interest on every dollar in existence, whether paper or otherwise. The owners rake off this interest. Many banks have failed, are failing or will soon fail in America. They are failing because the Federal Reserve has become so greedy that banks can barely operate in the environment. The Federal Reserve takes almost all the profits from the banking industry and only provides scraps to its subservient banks.

    The banks have to scrape and maul their customers to survive in this critical time. So, the banks become ruthless. Nobody cares for the banks because they are ruthless. Further, many of the banks have turned to unlawful activities just to stay afloat. The cause of all this disarray is the Federal Reserve.

    Shut the Federal Reserve down tomorrow and things will begin to improve. Ban any national banks, and it will be a long-term solution. The small group of people who are taking all the interest from the Federal Reserve should be charged and tried for their horrible crimes against all the people in the world.

    Not only is America affected, but the entire world is being fleeced by the Federal Reserve, because the whole world is impacted by American commerce and banking.

    In these times that try men’s souls, those without souls need to be tried and convicted. They are the culprits. They are the criminals. They are the evil slave masters.

    Like or Dislike: Thumb up 0 Thumb down 0