Ron Paul: Audit the Fed, Before It’s Too Late!

by Ron Paul

While the Fed has recently released an unprecedented amount of information on its activities, there is still much that remains unknown. Predictably, every push towards transparency has been fought tooth and nail. It took disclosure requirements enacted within the Dodd-Frank Act to get the Fed to provide data on its emergency lending facilities. It took lawsuits filed by Bloomberg and Fox News to provide data on discount window lending during the worst parts of the financial crisis. And it will take further concerted action on the part of Congress, the media, and the public to keep up pressure on the Fed to become and remain transparent.

Transparency is not a panacea, however, as a fully transparent organization is still capable of engaging in all sorts of mischief. Ironically, one of the Fed’s more egregious recent actions, adopting an explicit inflation target, was hailed by many as another wonderful example of transparency. Yet if you think about what this 2% inflation target actually is, you realize that it is an explicit policy to devalue the dollar and reduce its purchasing power. And it adds up quickly over time. Two percent annual price inflation means that prices rise 22% within a decade, and nearly 50% within two decades.

It is worse than that, however. This explicit 2% target also fails to take into account that whatever measure is used to determine price inflation, be it CPI, core CPI, PCE, etc., will always be chosen with an eye towards underreporting the true rate of inflation and price rises. Pressure will be exerted on those calculating the price indices, so as not to alarm the public when prices begin to accelerate.

Of course, government officials claim that price increases do not affect the average American because they can always substitute hamburger for steak, or have cereal instead of bacon to protect their family budget as prices rise. But the American people don’t overlook the fact that their quality of life has suffered because of the Federal Reserve and price inflation. What will they substitute when hamburger and cereal go sky high?

The Federal Reserve continues to keep interest rates low in the hopes of boosting lending and consumption. But keeping interest rates at zero discourages saving. Why stick money in a savings account earning 0.05% if it is guaranteed to lose at least 2% every year? The Federal Reserve created the largest debt bubble the world has ever known with these sorts of policies. The extended zero interest rate policy only eviscerates thrift and savings—the true building blocks of prosperity. Capital will continue to be depleted, infrastructure will fall into disrepair, and the United States will be a mere shadow of its former self.

It is well past time to end the failed monetary policy that encourages this mistaken preference for cheap money now, rather than real wealth in the long run. Transparency and a full audit of the Federal Reserve is a start and something we must continue to pursue. And, if those in power don’t have the stomach to bring the Fed out into full daylight, the American people deserve at least the right to conduct their economic transactions in the medium of exchange of their choosing.

  • http://www.youtube.com/profile?user=thewikileaksfan thewikileaksfan

    this country will regret not taking Dr.Paul’s message. I’m so sad

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  • http://www.youtube.com/profile?user=2eelShmeal 2eelShmeal

    UNDERSTAND PEOPLE:

    If we take away the Fed TOMORROW the problem is still there. The problem tha needs to be fixed FIRST is to take from Congress the power to borrow what is not in the coffers. If they want new funds, they must bring it to the people. We decide what gets funded.

    If we abolish the Fed and leave Congress the power to borrow, they will borrow ELSEWHERE and we will have the same problem. The IMF, the World Bank, The Bank of England, China, etc

    Cut their feet out and kill borrowing

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  • http://www.youtube.com/profile?user=mitchie124 mitchie124

    Ron Paul 2012!!!!!

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  • http://www.youtube.com/profile?user=MTLN13 MTLN13

    I hope Ron wins at least one state today, I know it’s impossible the way the GOP Riggs the election, but maybe they’ll make a mistake and let slide:)
    Ron Paul 2012
    If not for president, for Sainthood.

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  • http://www.youtube.com/profile?user=jaimepanama jaimepanama

    I love Ron Paul, and agree with him in almost everything. The only thing I disagree with him is in his ignorance of the CPI. The CPI does not substitute steak for hamburger, when steak becomes too expensive, because they are in different Item categories, nor other items for cheaper ones. The CPI (Headline index that reports all items, not the Core CPI) does not substitute an item once it becomes too expensive, it only subsitutes the item, if the item is not available in the store.

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  • http://www.youtube.com/profile?user=matrixpwr1 matrixpwr1

    Rhode Island is on board with Ron Paul. When the government fears the people, then you have LIBERTY!!!

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  • http://www.youtube.com/profile?user=FinalBG FinalBG

    The one dislike was obviously Ben Bernake

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  • http://www.youtube.com/profile?user=FinalBG FinalBG

    The one dislike was obviously Ben Bernake

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  • Amer Ican

    https://www.youtube.com/watch?v=reCpV1YHuYs&feature=youtu.be
    Come on folks, get your Ron Paul comments on this video and vote thumbs up with your brothers and sisters to help send the RP message!
    DO IT NOW 😀

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  • K scott

    The 2% target inflation rate drives people to invest their money rather than just sit on it, because they know they have to grow their money to stay ahead of inflastion. It’s inconvenient, but it’s true. The gold standard that Paul wants causes people to hold on tp their money and not invest, because they know the money will increase in value as population grows while the money supply remains fixed. That’s why all nations got off the gold standard during the Great Depression. The ones who left it first recovered first (England) and those who left last (France) recovered last.

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    • Douglascllc

      If we had constitutional monetary policy it would represent the workers or laborers, that which in the end gives the true value to all mediums of exchange. When a Private Bank gives out credit it is backed by assets that already exist. These assets represent people who work for a living and in the end make things happen. So, what system do we really live by and how does it truly work. Pyramid debt is a great power that currently owns and controls many Nations of the world. Think people Think.

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      • Douglascllc

        We can get away from this. However, this will once again be a great fight. Thus a power that represents the eternal expansion of the universe. As fighters of the truth we have the backing of greater forces.

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  • http://www.youtube.com/profile?user=Angsc09 Angsc09

    Come on people just do it, I know is very hard to understand and let you all know. But Please, if you want a better future and brightest places to live. JUST DO IT GO OUT AND AGAINST THEIR FED THAT DESTROY YOUR DREAM and continue to support this man since it is your only chance, otherwise you all will go back into dark ages and mostly the 1933 of Germany.

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  • http://www.youtube.com/profile?user=bodhisattvajihadi bodhisattvajihadi

    Throwing rocks in the grand canyon isnt going to save the criminal empire known as the US. Sober up, make yourself worth saving, so few people are.

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  • http://www.youtube.com/profile?user=SmokeAlexOut SmokeAlexOut

    Idaho has it’s first ever caucus tomorrow, and i’m voting Dr. Paul!

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  • http://www.youtube.com/profile?user=nightwatcher2012 nightwatcher2012

    Dr. Paul, I know your an incredibly busy man. You have a wonderful supporter in Missourri, Joyce Riley from that Power Hour. You were a guest on her show a couple years ago and I would love to hear you pop on there and say hi. She probably has talked about you on her show for 30 to 50 minutes a week, every week for the last 12 to 14 months or maybe even more. If you get a moment would love to see you guest on there again. Thank you. Great job. Am so proud of you and your son. Great job.

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  • http://www.youtube.com/profile?user=ElCabo23 ElCabo23

    Go Senor Paul. You’re our only hope, Obi-Wan

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  • http://www.youtube.com/profile?user=herbalist2993 herbalist2993

    but honestly, HOW do we audit the FED

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  • http://www.youtube.com/profile?user=herbalist2993 herbalist2993

    but honestly, HOW do we audit the FED

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  • http://www.youtube.com/profile?user=BigT27295 BigT27295

    In the beginning of a change the patriot is a scarce man, and brave, and hated and scorned. When his cause succeeds, the timid join him, for then it costs nothing to be a patriot.

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  • http://www.youtube.com/profile?user=MrKiesersose MrKiesersose

    Am I missing something here? This isn’t even Ron Paul’s voice.!! Nice speech tho

    Ron Paul 2012

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  • http://www.youtube.com/profile?user=yugofaith123 yugofaith123

    all i hear is blah blah blah blah, but fuck it, RON PAUL 2012!!!

    legalize my weed nigguhhhh

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