by Ron Paul

Last week at its regular policy-setting meeting, the Federal Reserve announced it would double down on the policies that have failed to produce anything but a stagnant economy. It was a disappointing, but not surprising, move.

The Fed affirmed that it is prepared to increase its monthly purchases of Treasuries and mortgage-backed securities if things don’t start looking up. But actually the Fed has already been buying more than the announced $85 billion per month. Between February and March, the Fed’s securities holdings increased $95 billion. From March to April, they increased $100 billion. In all, the Fed has pumped more than a half trillion dollars into the economy since announcing its latest round of “quantitative easing” (QE3) in September 2012.

Although many were up in arms when the Fed said it would buy $600 billion in government debt outright for the previous round, QE2, all seems quiet about the magnitude of QE3 because it doesn’t come with huge up-front total price tag. But by year’s end the Fed’s balance sheet could hit $4 trillion.

With no recovery in sight, where’s all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt. The national debt is fast approaching $17 trillion, with the Fed monetizing most of the newly issued debt. The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed’s easy money. After all, as long as the Fed keeps the spigot open, nominal profits are there for the taking. But this is a house of cards. Eventually, just like in 2008-2009, the market will discipline the bad actions of the Fed and seek to find the real normal.

In the meantime, real families are suffering. While Wall Street and the government take advantage of access to the Fed’s new “free” money, the Fed claims there is no inflation. But who hasn’t paid higher prices at the grocery store, the gas pump, for tuition, for insurance? It’s bad enough that household incomes have stagnated, but real purchasing power has declined so much that one in seven Americans, 47.3 million people, are on food stamps. Five million are collecting unemployment insurance with 21.5 million afflicted by unemployment according to the government’s own figures. That’s 13.9 percent — close to double the 7.5 percent unemployment number reported last week.

We are certainly not in a recovery. We don’t see the long unemployment and soup kitchen lines like in the Great Depression, but that’s just because the lines are electronic now.

It is not surprising the Fed has decided to hand the American people more of the same failed policies. But it is disappointing. We know what the real solution is: allow the marketplace to work. Allow entrepreneurs the chance to create instead of stifling innovation with arbitrary regulations. Allow interest rates to rise to equal the risks in the economy. Allow bad debts to be liquidated so we can build on a firm foundation. Stop printing money to benefit the government and big banks. Restore sound money to the economy and the American people. Sound money is the bedrock for prosperity and the best check on big government and crony capitalism.

Ron Paul: “I am very excited about Silver Circle, which spreads the message of liberty and sound money via an exciting tale of a future where the Federal Reserve has killed the dollar, the US economy has collapsed, and the federal government has slid into complete authoritarianism. Fortunately, a brave band of rebels works to restore liberty and undermine the Federal Reserve’s power via an alternative currency.

Using popular culture to spread our message is key to the long-term victory of our rEVOLUtion, as movies like Silver Circle enable us to reach audiences who otherwise might not be exposed to the ideas of liberty.”

Ron Paul most notably became connected with Silver Circle when he held up a one ounce Silver Circle round in front of Ben Bernanke in a financial committee testimony over a year ago. Now, just 24 hours before the official premiere of Silver Circle in New York City, Ron Paul has come out with supportive words about the indie film’s tackling of a very serious subject in an entertaining way.

Experience the rebellion tomorrow and into next week at Cinema Village in New York City for the premiere of Silver Circle. Click here to reserve your seats!

About Silver Circle

Why are gas prices are so high? Why is it getting harder to put food on the table? Some seek answers from government, but those who control the money control everything. Silver Circle is the story of our world in 2019, after the worst economic collapse in US history. Powerful players within the Federal Reserve use the crisis as an opportunity to grab power, forming the Department of Housing Stability (HousStab). Opposite them stands a group of Underground Rebels led by the tenacious Zoe Taylor (Philana Mia). As the Rebels put their lives and secret hideout on the line, Zoe confronts a vigilant federal agent, Jay Nelson (De’Lon Grant), asking him to question his own allegiance to the Fed and join their cause. This film represents a new venture in the liberty movement; educating and sharing ideas through pop culture and creative story-telling.

While the Fed has for several years criticized Congress’ inability to get its fiscal house in order – ignoring its own responsibility in enabling the government’s massive deficits and debt – the Fed is now alarmed about the across-the-board sequestration “cuts.” But the cuts that so worry Bernanke are not even real cuts, as, under sequestration, the Federal budget will still increase by trillions of dollars over the next ten years.

The Fed’s third round of quantitative easing amounts to asset purchases of $85 billion per month, yet the federal government cutting $44 billion* over one fiscal year is considered “restrictive fiscal policy” that might slow economic growth and job creation. One month of Fed money-printing undoes more than a year’s worth of sequestration, yet Chairman Bernanke expects us to believe that “monetary policy cannot offset a fiscal restraint of that magnitude.”

If $44 billion can’t be eliminated without raising alarm, then getting to long-term fiscal stability, as Chairman Bernanke frequently exhorts Congress to do, can never happen.

The Fed, on the one hand, says that the economy needs fiscal stability, while with the other hand it enables profligate government spending. Just since the beginning of the year, the Fed has purchased nearly half of the federal government’s monthly deficits as part of quantitative easing. During QE2, the Fed bought $770 billion of government debt. It has kept interest rates near zero for six years now, giving the government a free ride on the backs of savers and those who have been responsible with their money.

The Fed’s power over the dollar enables the government to keep spending and paying its debts with cheapened, devalued, debased dollars. And the American people suffer the consequences of high prices, distortions in the marketplace, and the aftermath of burst economic bubbles created by easy credit. It’s well past time to return to fiscal and monetary sanity. The Fed and Congress should be ashamed.

*According to the CBO, the sequester only reduces spending by $44 billion this year, with the rest of the reported $85 billion in cuts taking place in future years.

Source

by Ron Paul

Federal spending once again dominated the debate in Washington last week, as House Republicans and Senate Democrats began work on their ten-year budget plans. Contrary to claims, neither party’s budget reduces spending. While the Republican plan increases spending a little less than the Democrat plan, it would still spend $5 trillion in 2023, an almost two trillion dollar increase over this year’s budget.

Of course, these projections of future budgets are meaningless, as a current Congress cannot bind a future one. Therefore, the projected spending for next year is the only part of the budget with any significance. So is there a great gulf between the two parties’ budgets for next year? No. For fiscal year 2014, the Democrat budget proposes spending $3.7 trillion, while the “radical” Republican budget spends $3.5 trillion!

While the two parties bicker over minor differences in spending, the stock market, which many in Washington predicted would crash unless the parties reached a “grand bargain” on taxes and spending, seems unaffected by the various manufactured budget crises. Unfortunately, the market’s indifference to Washington spending games is based on the fallacy that the deficit does not matter as long as the Federal Reserve is willing to monetize the federal debt.

Federal Reserve Chairman Ben Bernanke is certainly doing all he can to facilitate deficit spending. The Federal Reserve’s desire to monetize the federal debt is a main reason for the aggressive program of buying federal debt via the continuous quantitative easing. Under Chairman Bernanke, the Federal Reserve is pumping as much as $85 billion a month into the American economy. This out-of-control monetary policy is largely conducted behind closed doors, yet it has much more effect on the do day-to-day lives of Americans than Congress’s phony budget debates. The Federal Reserve’s polices erode the value of the dollar, causing prices to rise, which in turn diminishes people’s standard of living. This inflation tax may be the most hideous tax of all because it is both hidden and regressive.

Of course, the Federal Reserve can only keep this up for so long before doing serious damage to the economy. The Austrian school of economics teaches that the Federal Reserve is responsible for the boom-and-bust cycles that plague modern economies. The Federal Reserve’s aggressive money pumping runs the risk of creating hyperinflation — especially once banks stop hoarding their reserves and began flooding the economy with Fed-created fiat currency.

Even though the economic crisis of 2008 proved the Austrians correct, there are still too many in D.C. and on Wall Street who believe the Keynesian fallacy that government and the Federal Reserve can spend-and-inflate our way to prosperity. But, as is the case with the narcotics addict, the longer the Federal Reserve enables Congress’s habit of deficit spending, the more painful will be the withdrawal when Congress is finally forced to kick the habit.

The role of the Federal Reserve in facilitating deficit spending by the US—and even foreign governments—means it is a mistake to segregate monetary and fiscal policy. Our nation will never get its fiscal house in order until we reform monetary policy. The first step is letting the American people know the real facts about the Federal Reserve’s actions.

The debate over the federal budget and even the battle over the Federal Reserve are ultimately arguments over symptoms rather than the cause. The root of the fiscal crisis is the belief that the federal government is qualified to manage the economy, provide for the people’s needs, and spread democracy throughout the world through either by foreign aid or by force of arms. Neither party in Washington questions the welfare-warfare state.

Until Congress begins debating questions such as whether or not we really need thousands of military facilities around the world, whether or not we should shut down the Education Department and return control to local communities and parents, and whether we should allow young people to completely op-out of the entitlement programs, the so-called debates in Washington, D.C. will continue to amount to nothing but sound and fury, signifying nothing.

The movie is packed with action, adventure, and romance and features a compelling storyline that appeals even to those who aren’t up-to-speed on the economic and political implications of central banking. Silver Circle seeks to entertain while also educating the public about the dangers of fiat currency and the Federal Reserve.

A Facebook page has been created for the NYC premiere, which contains further specifics and can be found below.

The premiere event will take place at Cinema Village East in NYC from March 22nd through March 28th. Showings will be held at 1:00pm, 3:00pm, 7:10pm, and 9:15pm on each day of the premiere event. After the 7:10pm showing on opening night (March 22), Austrian economist Peter Schiff will be conducting a Q&A along with the Silver Circle team. Tickets are available at this link.

Check out the trailer for Silver Circle:

In his Feb. 29, 2012 confrontation with Ben Bernanke, Ron Paul had waved one of the coins from the movie, a so-called Silver Circle, at the chairman.

Read the transcript here.

It is currently not known if Ron Paul plans on endorsing the movie.

Senator Rand Paul, the son of former Congressman Ron Paul, has introduced the bipartisan Federal Reserve Transparency Act of 2013. Known widely as “Audit the Fed,” the bill calls to eliminate restrictions on Government Accountability Office (GAO) audits of the Federal Reserve and mandating the Fed’s credit facilities, securities purchases, and quantitative easing activities would be subject to Congressional oversight.

“The Fed’s operations under a cloak of secrecy have gone on too long and the American people have a right to know what the Federal Reserve is doing with our nation’s money supply,” Sen. Paul said. “Audit the Fed has significant bipartisan support in Congress and across the country and the time to act on this is now.”

During the 112th Congress, Audit the Fed legislation (H.R. 459) passed the House of Representatives handily, 327-98.

Sen. Paul’s version, S. 209, currently has 19 bipartisan co-sponsors in the Senate and companion legislation was introduced earlier this year in the House of Representatives and currently has over 100 co-sponsors.

Below is text of Sen. Paul’s legislation:

S.209

A BILL to require a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve banks by the Comptroller General of the United States, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Federal Reserve Transparency Act of 2013”.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) IN GENERAL.—Notwithstanding section 714 of title 31, United States Code, or any other provision of law, an audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) of such section 714 shall be completed within 12 months of the date of enactment of this Act.

(b) REPORT.—

(1) IN GENERAL.—A report on the audit required under subsection (a) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

(2) CONTENTS.—The report under paragraph (1) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.

(c) REPEAL OF CERTAIN LIMITATIONS.—Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after ‘‘in writing.”.

(d) TECHNICAL AND CONFORMING AMENDMENT.— Section 714 of title 31, United States Code, is amended by striking subsection (f).

SEC. 3. AUDIT OF LOAN FILE REVIEWS REQUIRED BY ENFORCEMENT ACTIONS.

(a) IN GENERAL.—The Comptroller General of the United States shall conduct an audit of the review of loan files of homeowners in foreclosure in 2009 or 2010, required as part of the enforcement actions taken by the Board of Governors of the Federal Reserve System against supervised financial institutions.

(b) CONTENT OF AUDIT.—The audit carried out pursuant to subsection (a) shall consider, at a minimum—

(1) the guidance given by the Board of Governors of the Federal Reserve System to independent consultants retained by the supervised financial institutions regarding the procedures to be followed in conducting the file reviews;

(2) the factors considered by independent consultants when evaluating loan files;

(3) the results obtained by the independent consultants pursuant to those reviews;

(4) the determinations made by the independent consultants regarding the nature and extent of financial injury sustained by each homeowner as well as the level and type of remediation offered to each homeowner; and

(5) the specific measures taken by the independent consultants to verify, confirm, or rebut the assertions and representations made by supervised financial institutions regarding the contents of loan files and the extent of financial injury to homeowners.

(c) REPORT.—Not later than the end of the 6-month period beginning on the date of the enactment of this Act, the Comptroller General shall issue a report to the Congress containing all findings and determinations made in carrying out the audit required under subsection (a).

by Ron Paul

I recently held a hearing in my congressional subcommittee on the subject of competing currencies. This is an issue of enormous importance, but unfortunately few Americans understand how the Federal Reserve and Treasury Department impose a strict monopoly on money in America.

This monopoly is maintained using federal counterfeiting laws, which is a bit rich. If any organization is guilty of counterfeiting dollars, it is our own Treasury. But those who dare to challenge federal legal tender laws by circulating competing currencies — at least physical currencies — risk going to prison.

Like all government created monopolies, the federal monopoly on money results in substandard product in the form of our ever-depreciating dollars.

Yet governments have always sought to monopolize the issuance of money, either directly or through the creation of central banks. The expanding role of the Federal Reserve in the 20th century enabled our federal government to grow wildly larger than would have been possible otherwise. Our Fed, like all central banks, encourages deficits by effectively monetizing Treasury debt. But the price we pay is the terrible and ongoing debasement of our money.

Allowing individuals and business to use alternate currencies, especially currencies backed by gold and silver, would expose the whole rotten system because the marketplace would prefer such alternate currencies unless and until the Fed suddenly imposed radical discipline on its dollar inflation.

Sadly, Americans are far less free than many others around the world when it comes to protecting themselves against the rapidly depreciating US dollar. Mexican workers can set up accounts denominated in ounces of silver and take tax-free delivery of that silver whenever they want. In Singapore and other Asian countries, individuals can set up bank accounts denominated in gold and silver. Debit cards can be linked to gold and silver accounts so that customers can use gold and silver to make point of sale transactions, a service which is only available to non-Americans.

The obvious solution is to legalize monetary freedom and allow the circulation of parallel and competing currencies. There is no reason why Americans should not be able to transact, save, and invest using the currency of their choosing. They should be free to use gold, silver, or other currencies with no legal restrictions or punitive taxation standing in the way. Restoring the monetary system envisioned by the Constitution is the only way to ensure the economic security of the American people.

After all, if our monetary system is fundamentally sound– and the Federal Reserve indeed stabilizes the dollar as its apologists claim–then why fear competition? Why do we accept that centralized, monopoly control over our money is compatible with a supposedly free-market economy? In a free market, the government’s fiat dollar should compete with alternate currencies for the benefit of American consumers, savers, and investors.

As Austrian economist Ludwig von Mises explained, sound money is an instrument that protects our civil liberties against despotic government. Our current monetary system is indeed despotic, and the surest way to correct things simply is to legalize competing currencies.

Last week the House of Representatives overwhelmingly passed my legislation calling for a full and effective audit of the Federal Reserve. Well over 300 of my Congressional colleagues supported the bill, each casting a landmark vote that marks the culmination of decades of work. We have taken a big step toward bringing transparency to the most destructive financial institution in the world.

But in many ways our work is only beginning. Despite the Senate Majority Leader’s past support for similar legislation, no vote has been scheduled on my bill this year in the Senate. And only 29 Senators have cosponsored Senator Rand Paul’s version of my bill in the other body. If your Senator is not listed at the link above, please contact them and ask for their support. We need to push Senate leadership to hold a vote this year.

Understand that last week’s historic vote never would have taken place without the efforts of millions of Americans like you, ordinary citizens concerned about liberty and the integrity of our currency. Political elites respond to political pressure, pure and simple. They follow rather than lead. If all 100 Senators feel enough grassroots pressure, they will respond and force Senate leadership to hold what will be a very popular vote.

In fact, “Audit the Fed” is so popular that 75% of all Americans support it according to this Rasmussen poll. We are making progress.

Of course Fed apologists– including Mr. Bernanke– frequently insist that the Fed already is audited. But this is true only in the sense that it produces annual financial statements. It provides the public with its balance sheet as a fait accompli: we see only the net results of its financial transactions from the previous fiscal year in broad categories, and only after the fact.

We’re also told that the Dodd-Frank bill passed in 2010 mandates an audit. But it provides for only a limited audit of certain Fed credit facilities surrounding the crisis period of 2008. It is backward looking, which frankly is of limited benefit.

The Fed also claims it wants to be “independent” from Congress so that politics don’t interfere with monetary policy. This is absurd for two reasons.

First, the Fed already is inherently and unavoidably political. It made a political decision when it chose not to rescue Lehman Brothers in 2008, just as it made a political decision to provide liquidity for AIG in the same time period. These are just two obvious examples. Also Fed member banks and the Treasury Department are full of former– and future– Goldman Sachs officials. Are we really to believe that the interests of Goldman Sachs have absolutely no effect on Fed decisions? Clearly it’s naïve to think the Fed somehow is above political or financial influence.

Second, it’s important to remember that Congress created the Fed by statute. Congress therefore has the full, inherent authority to regulate the Fed in any way– up to and including abolishing it altogether.

My bill provides for an ongoing, thorough audit of what the Fed really does in secret, which is make decisions about the money supply, interest rates, and bailouts of favored banks, financial firms, and companies. In other words, I want the Government Accountability Office to examine the Fed’s actual monetary policy operations and make them public.

It is precisely this information that must be made public because it so profoundly affects everyone who holds, saves, or uses US dollars.