Show: Dylan Ratigan Show
Dylan Ratigan: Finally, auditing the Fed. Senator Bernie sanders of Vermont has an amendment that would reveal to us how our Federal Reserve is being used as a multi-trillion dollar piggy bank by the bankers to cash in their loosing bets as they perpetuate this system of extraction against the American people and its future.
This amendment would require the Fed to name the big banks who would continue to take those trillions in secret subsidies, counter to the claims that they’ve “already paid back the bailout money”. So the next time you read some journalist or hear somebody telling you how they paid it back, you ask them about the $4.6 trillion at the Federal Reserve, or maybe they just don’t know what they’re talking about.
This amendment is deeply opposed by the Fed and the White House because they don’t want to admit to the fact that they’re running a basically fraudulent banking system with the fraud being hidden at the Federal Reserve. However, our representatives, who are the ones that allow them to tax our money to support this fraud, have started to gain bi-partisan support. 5 Democrats and 10 Republicans, including Senator John McCain, Jim DeMint, Chuck Grassley, all in the Senate, are all pushing to audit the Fed.
The measure’s twin was proposed in the House by libertarian Ron Paul, and liberal progressive Alan Grayson, only to be stripped down in the House by the likes of pro-bank Democrat, Mel Watt of North Carolina, who effectively castrated the Grayson-Paul amendment. [Correction: the Grayson-Paul amendment passed both in the House Financial Services Committee and in the House]
But do any of these three proposals have a chance of becoming law of any kind? That is not yet clear; whether it’s transparency for derivatives, breaking up the banks, or auditing the Fed, they offer all of us an opportunity to evaluate our political leaders to see where they stand and did they vote for the bailout and are they now refusing to vote for things like this that would prevent future bailouts. Do our politicians indeed work for the banks? You want an easy way to score your politician and vote them out in the fall, there you go. Kaufman/Brown, derivatives, and audit the Fed.
Joining us now are Democratic Congressman from Florida, Alan Grayson, and live via Skype, Republican Congressman from Texas, Ron Paul. Congressman Grayson, I will begin with you. Why do we find a libertarian and a conservative like Congressman Paul who’s on the screen next to a progressive like yourself? And we see a similar combination developing in the Senate, why the combination?
Alan Grayson: Because we’re all interested in fighting unbridled government power. Ben Bernanke has the powers as the Federal Reserve chairman to hand out half a trillion dollars to foreigners with a rubber stamp approval from the Open Market Committee and nobody else. Nobody should have that kind of power. He did it before, he’ll do it again. That’s not the way things should work in any republic, in any democracy. That’s why.
Dylan Ratigan: Congressman Paul, who is really the man who started this conversation some time ago, how do you view the accelerating momentum around the idea of both the bill with you and Congressman Grayson, but also in the Senate? How do you view the momentum?
Ron Paul: Well, I think the momentum is against us, but I have to make a bit of a correction, because our bill actually did pass in the Senate [House]. It is in the House version. So Mel Watt tried to undermine it, but we beat him in the committee with the help of Alan. We got enough Democrats and all the Republicans supported my position on that, and our position.
But the big question comes up very soon, possibly tomorrow, when Bernie Sanders offers his amendment and my understanding is it will be the same as our amendment. So that will be the real key test. But even if Bernie’s amendment passes, it’s a long way from over. We still have the president who needs to sign this, and then we need the courts. And traditionally on monetary issues, over the centuries, the courts always rule in favor of big government and government control of the monetary system, not free market banking.
Dylan Ratigan: If you were to look, Congressman, at the White House’s vehement refusal or opposition to Senator Sander’s amendment, and if you were also to look at the use of the Federal Reserve as a multi trillion dollar piggy bank to cash out too-big-to-fail banks gambling with America’s money, why do you think the White House is not aggressive in trying to root out this problem as you and Congressman Paul are, and instead are defending it? Go ahead, Congressman Paul.
Ron Paul: I think there is too much at stake, and its power. And they have powers through the control of money. And I think this is going to end. I think what we’re doing is very, very, important and is brought to the attention of the millions of Americans about how important the Federal Reserve is.
But quite frankly, I think they’re going to destroy the dollar before they wake up, because everything is dependent on their ability to print money when they need it. Congress spends money, the deficits are run up, we get into a crisis, everybody gets bailed out, and if you couldn’t print the money and you couldn’t bail out your friends, the whole thing comes crashing down. But if we continue to print this money where we are, it’s going to come crashing down anyway and it’s going to be a lot worse than if we bit the bullet and changed our ways.
Dylan Ratigan: Congressman Grayson, I look at this like we’re a man who’s certain to have a heart attack 5 years from now, who refuses to acknowledge that fact or do anything to change his or her behavior in advance of that heart attack. It’s as if changing your diet to not eat sugar should do it. Getting the transparency at the Federal Reserve, posting collateral in the derivatives market, and ending too-big-to-fail, which would reveal the fraud that is the massive banking system that is supported at the Federal Reserve.
Instead of our politicians addressing that fraud now so that we can avoid the apocalyptic version of events, which is the utter collapse of all paper assets in this country as a result of the money printing, which is the future alternative. What can we do to make people understand the future alternative so that making the modest dietary changes, if you will, and stop eating sugar and actually make the change we need actually happens, Congressman Grayson?
Alan Grayson: I think what you said is true, but I actually think it’s far worse than that. What we’re seeing is, under the guise of monetary policy, a vast transfer of wealth from the taxpayers to private interests. And that is accomplished through guarantees by the Federal Reserve that are undisclosed, through loans that are undisclosed, through massive multi-billion dollar transactions, that there is no accountability for. Take the half a trillion dollars in foreign currency swaps that I just described. One man says he wants to do it, ten others say its okay with them, and over a thousand dollars for every man, woman and child in this country is transferred overseas.
And I asked the chairman, “Who got that money?” He said, “I don’t know.” That was his answer; “I don’t know who got the money.” What we’re going to see is that as the Federal Reserve asserts itself and hands out more and more money to its friends through guarantees and loans and otherwise, every dollar in your pocket becomes less valuable. Everyone’s 401k, everyone’s checking account, everyone’s investments; they all become trash.
And that’s the result of this policy the Federal Reserve has been adopting to help its friends in the name of saving the system, when in fact we need to reform the system so it doesn’t need to be saved. We need to end the possibility of too-big-to-fail, we need to end the possibility of bailouts, and that’s the direction we need to go to survive as a country and to survive as a civilization.
Dylan Ratigan: Speaking of auditing the Fed – and then I’ll wrap this up. But I’d love to get your reaction before I go, Congressman Paul, on some of the disclosures from March of 2004, because right now if we want to audit the Fed we have to wait 6 years and then we get partially released emails that we get to read to politicians six years after the fact, which is where we find ourselves relative to 2004. Bear in mind, of course, as we all know, the housing bubble really began its explosion between 2004, 2005, 2006, 2007.
This is from Alan Greenspan, chairman of the Federal Reserve, March of 2004, and I am quoting,
Alan Greenspan: “We run the risks by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand.”
He’s referring specifically there to the housing finance and the financing of housing. Also in the room, Jack Guynn, former Federal Reserve Bank president, member of the Fed, effectively a contemporary of the Fed chairman. And I quote him, he’s talking about South Florida real estate at the exact same time that the Fed chairman is saying, “Make sure nobody hears about this, because only we understand”. And clearly based on the 23 trillion that we’ve given them and all the money that the banks continue to take out of the system, they clearly do understand.
Fed Governor Guynn: “Buyers are freely admitting that they have no intention of occupying the units or building on the land, but rather are counting on ‘flipping’ the properties – selling them quickly at higher prices.”
Is this compelling evidence for the case to audit the Fed that we’re seeing this sort of email and this sort of dissent being hidden from the American people?
Ron Paul: Absolutely, that makes our point on why it’s necessary for us to know what they’re doing and thinking. You know, in spite of all the secrecy, there were some economists even back in the early part of this decade that saw it coming and knew it was coming, saw the bubble, predicted it and acted accordingly.
But you know what bothers me now is those economists who knew it was coming and predicted the crash, they’re not asked anything. I mean, they’re not being interviewed by the commission to figure out how this bubble occurred and what happened. So I think we’re locked in on this course.
And one of the other reasons why I think nothing ever changes is even though they want to, the real problem is it’s like an addiction. It’s like taking a person off drugs. And you do have withdrawal systems. For us to argue the case they shouldn’t do this and they shouldn’t do that, when you have the bubble to walk away and let the bubble do what it’s supposed to do, that is correct itself, there is some pain, but it’s shorter lived than it is when you prop it up, add more regulations and more control and more inflation and more spending. We just compound it.
But the withdrawal symptoms are such that the politician never votes to have withdrawal symptoms. Politically he’s much safer by saying, “Let’s vote for the bail out” because they only think about a day or two ahead and maybe to the next election at the most. But that’s another reason why we have much trouble in bringing about decent changes.
Dylan Ratigan: I got to wrap this up, Congressman Paul, but do you think it’s a decent evaluation of a politician to see how they vote on the too-big-to-fail amendment, how they vote on the audit the Fed Bill, and how they vote on derivative transparency? Is that a decent way for the average American to judge their district?
Ron Paul: It’s not going to go by without people knowing. With the Internet and the grassroots movement that’s going on right now, everybody is going to know what they do. And I think it’s great.
Alan Grayson: Dylan, it’s very simple; if you vote for these amendments, you’re for the people. If you vote against them, you’re for the banks. People will remember.
Dylan Ratigan: Alright listen, I can’t thank both of you enough for the conversation today, hopefully we’ll do more of it. Congressman Grayson, Congressman Paul, thank you gentlemen.