Ron Paul: 313 Members of Congress Have Co-Signed HR 1207

Date: 11/23/2009
Channel: CNBC
Show: Squawk Box


Judd Gregg: For the Congress to get into monetary policy is just absolutely inexcusable. We can’t handle fiscal policy, but now we want to manage monetary policy? One of the great strengths of our nation is the independent Fed. And this idea which is coming out of the House, which is populous fervor … pandering populism is what it is … is absolutely wrong.

Joe Kernen: That was Senator Judd Gregg on Friday responding to Congressman Ron Paul’s efforts to impose tighter scrutiny on the Fed. Here now with more is Representative Ron Paul, a member of the Financial Services Committee.

Good to see you, Congressman. And Senator Gregg likes you, he says you guys are buddies and everything. The one thing it’s hard to disagree with is: look what the Congress has given us for fiscal policy; now you want to run monetary policy. That sounds insane.

Ron Paul: Well, that isn’t the purpose of the amendment; it had nothing to do with running monetary policy. It was trying to find out what the Fed has been doing and how they’ve been spending the money and who benefits. But if you want to be a strict constitutionalist, there is a lot more defense of the Congress being involved with defending the value of the currency rather than delivering this responsibility over to the Fed.

And pandering? Well, in the sense I do like pandering to the people because it’s the people that are behind this thing. I mean, 75% of the people right now want an audit. Because of the pressure of the people on the Congress we have 313 members of Congress who have co-signed this legislation. Even during the debate last week we had 4 new people sign on at the last minute, realizing that this is very, very important.

And the people deserve to know what’s going on, how they spend the money, what assets they buy, how much they pay, are they paying market rates, are they buying up illiquid assets that aren’t worth anything and dumping it on the tax payer through the creation of new money?

So I would say the momentum is on the side of the people, it’s against secrecy. The Federal Reserve says they want independence; every time they say independence everybody who defends the Fed when they say, “We need independence”, what they’re talking about is secrecy. And what I am talking about is transparency.

Joe Kernen: Well, I assume you’re going to be a big backer of this Barney Frank bill then, since that’s where your amendment is. You got to vote with a capital AYE.

Ron Paul: Well, if you look at my record, I don’t generally vote for bad stuff in order to hope to get good stuff in. But the process is that this bill had to go on to the major reform package and that’s where Barney Frank wanted it to be. But my record doesn’t show that I vote for bad things and hope that good things will happen.

Joe Kernen: So you’re going to vote against that bill even though it has your amendment?

Ron Paul: Well, that’s the way I’ve done in the past and I doubt very much if I’m going to change my tradition. If you think about it, though, as important as the Fed is to me and auditing to Fed is crucial … I’ve worked on this a long time … but if you look at the regulations in this bill, I mean, in the long term it’s going to take a long time to get the results of the audit.

A long time to me is a couple of years. Who knows what’s going to happen to the dollar and the crisis in a couple of years. And if the financial community gets hit with that regulatory bill, I mean, it’s going to be secondary. So I would say that the audit of the Fed can’t save us from super-regulations. Part of the reason we’re in this crisis is not only because we spend too much and borrow too much and print too much, but because we regulate too much.

Every time we have a crisis we say, “Oh, didn’t have enough regulation”. The Fed creates the problem with all their mischief and they cause all the imbalances and the malinvestment and encourages the debt. And we say, “Oh, if we just had regulations to tell the businessman what do to, we’re going to save ourselves from ourselves”. And you know, this is what we did after ENRON. ENRON failed so we passed Sarbanes Oxley, a horrible bill; three of us voted against that bill. Now the business community is complaining about it and what it did to undermine our businesses.

And we’re embarked on the same course again. More regulations, thinking regulations will compensate for the ill-advised Federal Reserve policy. I mean, how can the Federal Reserve deserve any credibility? Stable prices? Prices of medical care and education are stable? No. Are prices stable in stocks? I mean, it doesn’t make any sense and also, you know, full employment…

Rick Santelli: Ron Paul, Rick Santelli here.

Ron Paul: Hi Rick, how you doing?

Rick Santelli: They cut off Mr. Gregg’s next sentence when you heard that piece opening up. His next sentence was, “We have to maintain independence, otherwise how is the Fed going to protect the dollar?” I almost choked when I heard that.

Ron Paul: Yeah. Well, you ought to. I mean, look at what the dollar is doing. What kind of a record does the Fed have? And, of course, if you look at monetary history, not of the last year or 2 years or decade or 2 decades, but if you look at the monetary history of 6,000 years you’ll see that gold is money, gold measures the values of currencies and right now gold is telling us, in spite of the fact that the gold price is rigged by central banks and various entities, gold is telling us that the dollar is in danger; great danger. And we’re in worse shape than we were in the 1970s and it was rather chaotic then. So we’re moving into a very, very dangerous era according to what the gold price is telling us.

News Anchor 1: Congressman, I think you were quoted a while ago in The Wall Street journal saying that this bill here is a stepping stone to ending the Fed. Is that your intention here?

Ron Paul: Well, my intention is to get rid of the Fed. I don’t say this is the step. I mean the whole purpose is to expose it. But I have made the statement. If the American people are upset now, wait until they find out what the Fed has been doing, and wait until they destroy the dollar; I won’t end the Fed, they’re not going to pass a law to manage monetary policy or end the Fed. That’s not going to happen. But the Fed is going to self-destruct because they’re going to destroy the dollar. And they’re going to have to devise a new system and they’re going to have to either come up with something to restrain the monetary authorities from just creating money out of thin air.

Last week they bought up 75 billion dollars worth of treasury bills. And foreigners brought up 11 billion. I mean, this can’t continue. No wonder they’re losing confidence in the dollar and it’s going to continue. I think maybe people are buying stocks because they’re not confident in the dollar. They just go over and buy something that maybe has some real value.

News Anchor 2: Congressman, can I ask you, how do you respond to critics that say this would result in politicizing the Fed and interfere in their ability to manage the economy for long-term success?

Ron Paul: Well, I would say they’ve totally failed in managing the economy. They gave us the crisis. So no, they just want secrecy and if they talk about politicizing, you know, I’ve put two extra paragraphs in there to explicitly say that we’re not going to meddle; we don’t want to see any information for 180 days. If you want to talk about politicizing something, look at what they’re doing today. I mean, do you think Goldman Sachs would have any influence in the Federal Reserve and other companies? There is a tremendous … the president always has influence on the Fed because he appoints the chairman. And now we don’t know…

Becky Quick: I’m sorry, Congressman, it’s Becky Quick, I had a question for you. When you start thinking about the need to raise interest rates, the argument has always been that politicians would not do it because it’s never a politically popular decision to raise interest rates. It makes it more expensive to buy houses, to get a loan for a small business, to get a loan for a car. So if you have people who are standing for election trying to make those decisions, how are they going to get about their decision to do that?

Ron Paul: Well, you don’t think there is that type of political influence when Volcker raised interest rates? It was there.

Becky Quick: Sure, but because it was an independent Fed he did not yield to it. And that’s the question; will there be a Federal Reserve chairman who is just as strong and who will be willing to withstand popular opinion?

Ron Paul: But what makes you think that anything is different. I mean, we’re not changing anything, we’re not changing policy. The policy is still going to be devised by the Federal Reserve. We’re not going to know anything about it for 180 days.

News Anchor 1: Congressman, the concern is this: two days before the Fed meets to hike rates, some Congressman… and I wouldn’t think it would be you in this instance, I think this would potentially be your bill acting against what you want … which is two days before the meeting in which the Fed is expected to hike rates, some Congressman says, “Let’s audit that, because I really disagree, with the plan to hike interest rates”. And ultimately there are lots of audits when the Fed needs to hike rates but none when the Fed needs to lower rates.

Ron Paul: Yeah, but we can’t do anything. The Congress wont have any authority. They’ll raise rates and we’ll find out what they said 6 months later. I think we’re missing the real important part of politicizing the Fed. The people want stuff from the government, and the government doesn’t have any money. So the government gives it to people to get their votes and they run up the deficits. So it’s the deficit that puts the pressure on the Fed. So it’s not just the Fed printing money and all, it’s the system of runaway government and Congress in which people can get stuff for free.

News Anchor 1: That’s Congress, right. So Congress is destroying the dollar, not the Fed.

Ron Paul: I’m saying they have a lot of responsibility. What I’m talking about isn’t going to make it any worse; it’s already bad. Because if Congress didn’t produce any deficits, interest rates would probably be lower and there’d probably be savings. So it isn’t just the Fed, Congress created the Fed. So we should have responsibility and auditing authority over the Fed. But no, the way it is now, there is a lot of political pressure on the Fed. But we’re not even dealing with that; we’re dealing with the fact that I want to know the names of the companies who get the money from the Fed, the money they create out of thin air, and they buy up these securities, and how much they paid for them?

Rick Santelli: Congressman Paul, I don’t care if they raise or lower rates, I don’t want the audit to challenge that independence and nothing I’ve heard, other than frmo Steve, really is that vain. The vein is we want to follow the money. We want a financial audit, not a psychological audit, and I’ll take it a step further. How can they banter around the independence of the Fed? Let me ask you a real simple question, Congressman. If you were the treasury department and you had to issue the kind of debt we do, do you think the Fed should keep interest rates high or low? You know, just to prove that there isn’t a relationship here, just to prove there maybe some independence, this audit would go a long way because I think you’d have a hard time defending that the treasury and the Fed aren’t in cahoots right now.

Ron Paul: Well, I won’t presume what I think the Fed should do about interest rates, because I don’t believe the Fed should set interest rates. That’s price fixing and that’s how we have gotten into our mess, by thinking that a few men in a secret room have the magic knowledge of knowing what interest rates should be. That’s what creates the financial bubble. Interest rates are always artificially low, even when you’re coming out of a recession. The Fed always keeps interest rates artificially low.

News Anchor 1: Congressman, I don’t want to […] on this. But one of the things that the Fed probably complains about here is this issue: that when banks come to the window they want to remove the stigma of a failing bank or a bank in trouble which is not seriously failing and is in good standing, but needs to borrow and has a short term liquidity problem. Your bill would allow that name to be published, and that would kind of go against the issue of the anonymity that would remove the stigma out there. Is that what you want?

Ron Paul: Well, after 6 months. But if they’re in bad trouble and there is a responsibility of the government in this meddling, why should they hide the information that is valuable to the people?

News Anchor 1: Okay.

Ron Paul: I mean that’s deceitful and dishonest and immoral and corrupt to hide it. If it were private that would become known immediately on an ongoing basis. They would have a 3, 4, 5 star program to indicate how solvent a bank is and the people would know immediately about each single bank instead of waiting and hiding the ill-effects and making sure all the banks fail at one time and all the mortgage companies fail at one time. They collectivize all these programs, that’s why the financial bubble is so big and is actually international rather than just domestic, as we all know.

Joe Kernen: Alright, thanks Ron Paul. It’s great to see you, Congressman. Now I assume it you’re in Clute Texas, is it? I mean, it’s not “Cluté”, you don’t pronounce it like a French person, do you?

Ron Paul: No, no. It’s just Clute, Texas, one of my offices here in Texas.

Joe Kernen: Alright, I’m sorry, I just wanted to make sure. I didn’t want to mispronounce it like it was “Cluté”. I didn’t think it was. Thank you, Congressman Paul, and we’ll see you again soon, alright? I never got you to talk about healthcare. As a doctor you must love this healthcare bill, don’t you? Which version is your favorite?

Ron Paul: It’s wonderful because it’s going to reduce the deficit. That’s what I like about it.

Joe Kernen: Yeah, exactly.

Ron Paul: We’re going to get free medical care for 30 million people and it’s going to reduce the deficit.

Joe Kernen: It’s going to go down.

Ron Paul: So I think that really gives credibility to Washington.

  • Cory Macaul

    You are WONDERFUL, Dr. Paul. Keep up the GREAT work. We MUST END THE FED. Those who do not understand why … see “New World Order” video on youtube. All the best. You are the “David” against “Goliath.” You are brave and capable. Bill HR1207 … YES !!!


    • Cory Macaul

      Dr. Paul … You’re bringing light and REAL TRUTH to politics. Give me liberty or give me death. We are here, we are active and we are ALL behind you!!!

  • Perception

    Ron could save the US economy by issuing a new currency under the constitution that is backed by the land and resources owned by the American people.JFK was in the process of doing this when he was asassinated.

    Audit the Fed and you’ll find that they owe the US people $ trillions.The burden of debt on the US people can be vastly reduced under HR1207.

  • God bless you Dr. Paul. Thank you for your dedication to the ideals expressed in the U.S. Constitution, and all the good work you do. It is much appreciated.

  • shari hodges

    I am a corporate paralegal who worked with former White House cabinet. I did some research in 2003 on the Fed, on my own time. I went to the law library at Washington University Law School, and pulled up the Congressional Archives.

    You need to know that Congress held hearings on the FED in 1911 – the hearings were called the Pujo Hearings – Wilson called a halt to the hearings. The Pujo Committee was doing what you are doing right now – trying to put the brakes on the FED –

    If Pujo had continued, there wouldn’t have been a FED. Pujo knew it was a fraud. The banks involved with the FED had hijacked the U.S. Treasury, and were holding the funds in their vaults. Federal marshalls were trying to arrest the heads of the banks. Rockefeller took off for South America.

    Wilson called the whole thing off and Federalized them. I have tons of stuff about the FED and the fruad – they continued the fraud after Wilson federalized them.

    During the 1950’s, they met at U.C. Santa Barbara can came up with this whole credit scam. The FICO score is the key to the scam. They wanted to change the Constitution so that the FED was above the President. This agenda is still in play. They put the Agenda in the Congressional Records in 1971. I have to citations – but you can find them.

    They called it the “Economy Under The Law” where the FED rises to power and becomes a 4th branch of government. I had some mathematicians look at FICO’s scoring system – FICO does not calculate anything reliable – In fact, the original legislation for the Fair Credit Reporting Act of 1971, is unconstitutional and can be easily overturned by the Federal Courts as unintelligible and vague.

    It’s void on it’s face. But unless somebody gets in touch with me, I can’t provide anybody with the facts. I’m getting obliterated by the bureacracy. I’ve been trying to tell you for 5 years what they did – I predicted the crash – I called Trans Union in Chicago a few years ago – I told them – Marmon sold Trans Union before the crash – they knew that credit scoring is a scam invented by the FED

    You need to return to pre-1971 banking laws – and dump the individual credit score – it’s ok to score business – but when you score individuals, you’re playing into the scam

    Individual Americans are not responsibile for the economy of the United States – but an individual credit score, where entire classes of individuals are excluded, will crash the economy. You cannot exclude entire classes of people.

    Congress held hearings on this in 1967 – they called it the “Poor pay more economy” and they tried to stop the credit scoring scam.

    You’re just repeating the very same hearings – and you don’t have the original information unless you pull up the original hearings from the Congressional Records.

    • Dan Richardson

      Shari Hodges, Please forward any info on this to me!

      [email protected]


  • HackJack

    “News Anchor 1: Congressman, I don’t want to […] on this.”

    He said: “I don’t want to argue with you on this.”

  • trinityriver

    Cursed be the dirty sticking rotten Fed and the corporations. Praise be to Ron Paul and others that fight for liberty and justice. The Fed, though wicked and powerful, are few. The people of this country and the world are many and good. WE WILL defeat the bankers!!!

    • DanielL


  • DanielL

    With knowing some history and hippocracy of senator judd greg here in new hampshire and how he serve’s the people here. It comes to not surprise me thats a percision statement by him. Like in 2006 when he agreed to help hard workin immagrants in the process to obtain their work visa permits and then month later went public to inforce into law that if any company,business in the state hires immagrants in process will be fined some 250k per employee.
    Now I dont know and understand how our elected officials can sware in to protect and serve the law. He now states that “congress has no right in fiscal policy.” well he diffently needs to read & study the law he took oath of the constitution amendments and obeyed by them. Artle 1# Section 8# of the first ammendment states that congress shall have the right to; create and coin the value of the dollar theirof. not a private (federal reserve corp.)

  • The Yen is doing quite well! Meanwhile the Dollar and the Euro is in pretty bad shape which is the result of the ally of Wall Street The Fed is not doing a great job managing the money!
    I am in total agreement that the Government shouldn’t have intervene to bail out Wall Street, and the Fed didn’t watch for the collaps of our economy!

  • Nervous

    Makes me wonder if the fed will let the dollar fall, and attempt to push the Amero. They would also tell us that its what WE want im sure

    • Perception

      The dollar will fall no matter what they do.The damage is already done.They pumped more money into the derivative economy and now the real economy will suffer.

      Perhaps Ron Pauls sees a way out.I for one cannot.