For the past 30 years, Ron Paul has worked tirelessly to bring much-needed transparency and accountability to the secretive bank. And in 2009 his unfaltering dedication showed astonishing results: HR 1207, the bill to audit the Federal Reserve, swept the country and made the central bankers shudder at their desks. The bill passed as an amendment both in the House Financial Services Committee and in the House itself.

But the usurpers of America’s future won’t take it lying down. They don’t want their secrets exposed and at this very moment, they are working frantically behind the scenes to quietly derail all efforts to open up the Federal Reserve to independent scrutiny.

A handful of Fed-loving U.S. senators are currently rewriting the Financial Reform Bill to strip out Ron Paul’s Audit the Fed amendment and actually expand the Fed’s power over banks, lending and money.

Action Alert: Call your senators today and demand that they…

1. Stand with the nearly 80% of Americans who support a FULL audit of the Federal Reserve.
2. Withdraw their support for ANY effort to strip the bill of the Audit,
3. Oppose all efforts to grant the Fed more power under the guise of so-called “reform.”

Enter your zip code to look up your senators and their previous position on S 604, the Audit the Fed bill:

Continue reading for more on Audit the Fed…

02/2009: Ron Paul Introduces Bill to Audit the Federal Reserve

On February 26, 2009, Ron Paul introduces HR 1207, the bill to audit the Federal Reserve:

“I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.”

After a groundswell of grassroots support, HR 1207 and its counterpart in the Senate, S 604, attract 317 and 32 co-sponsors respectively.

10/2009: Mel Watt Introduces Competing Placebo Amendment

With HR 1207 gaining momentum, Congressman Mel Watt introduces a competing banker-approved “placebo” amendment that would replace HR 1207 and actually increase the Federal Reserve’s secrecy and power.

11/2009: Mel Watt Amendment Defeated

On November 19, 2009, after several hours of heated debate, Ron Paul’s and Alan Grayson’s “Audit the Fed” amendment passes 43-26 in the House Financial Services Committee. The amendment calls for a comprehensive audit of the Federal Reserve and replaces the opposing “placebo” amendment proposed by Mel Watt.

12/2009: Audit the Fed Passes in the House

The Audit the Fed amendment is attached to Barney Frank’s HR 3996, also known as the “Financial Stability Improvement Act of 2009″. That bill is later combined, along with several other bills, into “The Wall Street Reform and Consumer Protection Act of 2009 – Financial Stability Improvement Act of 2009″ (HR 4173). The House passes the new bill on December 11, 2009 on a vote of 223-202.

Remaining Milestones Still Ahead

According to Ron Paul’s video update, now that the bill has passed the House, the following milestones are still ahead of us:

• “It has to go through the Senate; it’s going to have a harder time in the Senate.
• Then it has to go to a conference committee and that’s another problem.
• And then it has to go to the President.
• And even if it goes through all that, we still have the courts to deal with, and courts have never been friendly to those of us who want honest money.”

03/2010: Treasury Officials Still Support Mel Watt Amendment!

On March 8, 2010 Huffington Post reporter Sam Stein participated in a bizarre meeting with high level treasury officials:

The Treasury Department is vigorously opposed to a House-passed measure that would open the Federal Reserve to an audit by the Government Accountability Office (GAO), a senior Treasury official said Monday. Instead, the official said, the Treasury prefers a substitute offered by Rep. Mel Watt (D-N.C.), and would like to see it enacted as part of the Senate bill.

The Watt measure, however, while claiming to increase transparency, actually puts new restrictions on the GAO’s ability to perform an audit.

Campaign for Liberty Action Alert

Campaign for Liberty President John Tate sent out the following email action alert:

Dear Supporter,

Our battle to Audit the FED has reached a crisis.

Right now, a handful of Fed-loving U.S. Senators, led by Bob Corker (R-TN), Richard Shelby (R-AL), Chris Dodd (D-CT) and Judd Gregg (R-NH), are reportedly working to rewrite from the Financial Reform Bill to strip out Audit the Fed and actually EXPAND the Fed’s power over banks, lending and money.

I need you to contact your senators today with an urgent message: Audit the Fed and DON’T increase the Fed’s power.

As you know, Audit the Fed is currently in H.R. 4173, a financial “reform” package that has passed the House.

The Senate will unveil its version soon, which means you and I have to work fast.

In addition to stripping out transparency and accountability, the Senate version is set to grant the Fed broad NEW powers over our economy by putting the Consumer Financial Protection Agency under the Fed’s purview.

Seriously? The same Fed that won’t tell us where our trillions of dollars went is going to be put in charge of “consumer protection?”

It would be funny if it weren’t so dangerous.

You and I must turn up the heat on the Senate TODAY.

Please contact [your senators] at once!

Of course, as you know, over two thirds of the House of Representatives, almost a third of the Senate and nearly 80% of the American people support a FULL Audit of the Federal Reserve.

So the establishment has no choice but to attempt to fight us in secret.

That’s why they’re trying every trick in the book to make sure they kill a full-scale Audit of the Fed.

And that’s why it has never been more important that you call [your senators] and DEMAND that they withdraw their support for ANY effort to strip the bill of the Audit, and oppose all efforts to grant the Fed more power under the guise of so-called “reform.”

It’s clear that passage of this bill would pretty much guarantee that the FED is never audited, allowing the banksters to continue to rob and loot the American people.

And this sounds like something taken directly out of the Ben Bernanke playbook.

You see, Ben Bernanke and his buddies have been claiming the need for Fed “independence” for some time now.

But what they’re really talking about is independence from accountability…

…Independence to keep printing money out of thin air without any oversight from the American people, further destroying our savings and wiping out the middle class.

That’s why it’s vital you take action IMMEDIATELY.

Please call [your senators] and demand that they stand with the nearly 80% of Americans who support a FULL audit of the Federal Reserve.

You and I are now very close to allowing the American people to have the first ever COMPLETE audit of the Federal Reserve, and without your efforts, Ben Bernanke and his cronies would have nothing to worry about.

But I’m afraid if you and I don’t act right away, all of our efforts up until now will be rendered useless.

And that’s something I’m not going to sit idly by and allow to happen.

If we’re going to stop this attempt to gut Audit the Fed, we must act before it’s too late.

So please, right now, call [your senators] and demand that they support a FULL audit of the Fed and OPPOSE all attempts to broaden the Fed’s power.

And if you can, please make your most generous contribution to help Campaign for Liberty alert millions of Americans to this battle.

But most importantly, please contact [your senators] TODAY.

Sincerely,
John Tate
President

P.S. Fed-loving Senators are working behind closed doors to strip Audit the Fed out of the Financial Reform Bill while granting the Fed even more power.

That’s why it’s vital you IMMEDIATELY call [your senators] and demand they stand with the nearly 80% of Americans who support a FULL audit of the Federal Reserve.

Related posts:

1. Critical Vote on Audit the Fed Today! by John Tate A few weeks ago, the Campaign for...
2. Audit the Fed: A Major Triumph for Transparency and Accountability Audit the Fed Attached as an Amendment by Ron Paul...
3. Senate Leadership Blocks Federal Reserve Audit Senator Jim DeMint (R-SC) was blocked by Senate Democrat Leadership...

Location: Congress
Date: 01/20/2010

Transcript

Ron Paul: I thank the speaker and I rise at this time to talk about a piece of legislation that I’ve recently introduced. That legislation is HR 4248, it’s called The Free Competition In Currency Act.

I believe that in the long-term this is a piece of legislation that will play an important role in the monetary reform that will be a necessity if we continue to do what we have been doing with our economy and our financial system.

We’re in the middle of a financial crisis today. Some people think we have turned the corner, but quite frankly I do not believe that has occurred. Recently, though, we have just had the opening bells of an inquiry into what the cause of the crisis has been. That’s the Financial Crisis Inquiry Commission, and this is a takeoff of the Pecora Commission that was established in the 1990s when the crash occurring then.

Of course, that commission met, they talked to people, they tried to figure what was the matter, and from my viewpoint, they came down with all the wrong conclusions. They said that the Federal Reserve was involved, but the Federal Reserve didn’t print enough money fast enough. They didn’t have a big enough bailout package, and they needed a lot more regulations.

So they did all those things for the first time in our history under the two administrations: the Hoover and the Roosevelt administration. And what happened was they prolonged the depression, they took a one year depression/recession and turned it into a 15 year depression.

So I believe what we’re going through right now is the same old song and dance. We’re doing the same thing again. We have this new enquiry, and the members of the commission are people who didn’t see it coming, didn’t explain it and didn’t anticipate it. And the people who are coming before the commission, as I can see so far, had no anticipation or were acting surprised that the crisis came, that there was a bubble. So I can hardly see any good results coming from this.

My position over the many years has been that the Federal Reserve is a dangerous organization because it creates the bubble. Our country would be better off without a strong central bank like the Federal Reserve. I argue from a moral, economic and a constitutional viewpoint that it has no right to exist and it’s very dangerous to us.

I am very pleased, though, that one piece of legislation I introduced, HR 1207 to audit the Federal Reserve, has met with a large amount of support. We have 316 co-sponsors of that bill. And I think that is a major step in the right direction: looking to the Federal Reserve for the cause of our problems. The easy money system, the easy credit system, the fixing of interest rates too low.

Now, the reason why I’m addressing this is I believe the correction has a long way to run and that eventually we’ll have to have monetary reform. Now, in spite of my position being that we don’t need the Federal Reserve, I’m not in favor of closing the Federal Reserve down in one day or two. But I do believe the monetary system will close down this government and the monetary system and the Federal Reserve and a lot of other things if we continue on our profligate ways of spending and borrowing and inflating the currency and regulating the currency and this will get much worse until we have a total collapse of the system.

So, what my bill does is it introduces competition; competition in currencies. The Federal Reserve System and the dollar standard are run by a cartel; a monopoly. They don’t allow competition because they know they can’t compete. Just as we have competition in the post office with FedEx and UPS, I think that the Federal Reserve deserves a little competition. The public school system has competition with private schools, it has competition with homeschooling. And there is no reason in the world why we can’t enforce the Constitution, legalize the Constitution, and say that we can have competition in currencies.

But there are three major things that we must do to do that, and the bill does this. We repeal legal tender laws and we remove the monopoly control of the Federal Reserve. We legalize private mints so that mints can mint coins, and they will be controlled by fraud laws and anti-counterfeit laws. Today, our government commits fraud and counterfeit by just printing money at will. If a private organization did that, they would be in prison for the fraud that they are causing.

But the other important reform that would have to occur for money to circulate and compete against the monopoly control of the Federal Reserve, would be to take taxes off money. And the Constitution said only gold and silver can be money and only that can be legal tender. So you can’t tax it and allow it to be competitive.

So, these three things could occur and if nobody wanted to use it, they wouldn’t have to and everybody could be happy with the Federal Reserve. But, if the conditions get so chaotic and the people are looking for an alternative, they can go over and start operating in another currency.

So this, to me, could provide a smooth transition, it would not be chaotic, it would be legalizing the Constitution, it would be good sound economics, and eventually, the most important thing it would do is it would restrain the spending of this Congress. Because as long as you have a Federal Reserve over there willing to print up the money, anytime we spend more money than we don’t have and we can’t borrow, then the Federal Reserve will accommodate us.

Therefore, I argue the case for competition in currencies and strictly limited government.

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The Fed’s Money Monopoly

by Ron Paul

Last week, in the name of protecting the little guy from Wall Street, the House passed HR 4173 to increase the little guy’s false sense of security in the financial system. This mammoth piece of legislation would massively increase government regulation and oversight in the banking industry under the misguided reasoning that more government could have stopped faulty lending practices, when in actuality it caused them. This bill would also greatly increase the powers of the Federal Reserve, which too many in Congress still see as savior rather than perpetrator in this mess.

One silver lining is that the amendment to audit the Fed is still attached to the bill, and if it survives the Senate, the Fed will no longer operate in secrecy. If any version of HR 4173 becomes law, the Fed will be intervening and bailing out more rather than less, as it will gain enormous new powers in addition to those it already has. Whatever happens, the Fed and its defenders have seen that people are becoming very wary of its methods of operation, and many are downright angry at its very existence. Never again will the Fed be immune from the scrutiny of its critics. This is very positive.

Because of legal tender laws that force acceptance of the dollar, the Fed has absolute power over the currency. This absolute power is leading to the absolute corruption of our currency. The money supply has doubled in the last year or so, which is extremely dangerous. The banks seem to be hoarding liquidity now but once these dollars make their way into the economy, hyperinflation and economic chaos will be a real possibility.

Every time hyperinflation rips through an economy, the middle class gets completely wiped out. It is very alarming to watch the purchasing power of an entire life savings reduced to that of a few pennies. Those savings represent years of real labor, real time, effort and sacrifice exchanged for corruptible pieces of paper that politicians and bankers can destroy at whim.

Legal tender laws force the people to become subject to this risk for the benefit of the rulers. Artificial demand for currency allows the authorities to create arbitrary amounts of it to pay for wasteful projects, like frivolous wars and an ever-expanding public sector. This saps the private economy of jobs and purchasing power, yet the temptation proves too great for politicians, time and time again. Our government is no different. Although our dollar has taken nearly a century to lose 98% its purchasing power, the fact that we are all obliged to participate in this slow burn of the economy on pain of imprisonment is anathema to the principles of liberty.

I introduced the Free Competition in Currency Act last week to free the people from these governmental threats. HR 4248 would repeal legal tender laws, prohibit taxation on certain coins and bullion, and repeal certain laws related to coinage. The prospect of people turning away from the dollar towards alternate currencies should provide incentive for Congress to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government’s ability and incentive to inflate the currency and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system.

Related posts:

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2. Ron Paul on the Value of Money Venue: Joint Economic Committee Hearing Date: 10/22/2009 Transcript Ron...
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Rasmussen Survey of 1,000 Adults
November 29-30, 2009

“A proposal has been made to audit the Federal Reserve and make the results available to the public. Do you favor or oppose auditing the Federal Reserve?”

Favor: 79%
Oppose: 7%
Not sure: 14%

This telephone survey of 1,000 Adults was conducted by Rasmussen Reports on November 29-30, 2009. The margin of sampling error for the survey is +/- 3 percentage points with a 95% level of confidence (see methodology).

More at Rasmussen.com…

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Venue: Congress
Date: 12/01/2009

Transcript

Ron Paul: Thank you, Mr. Speaker. Federal Reserve Chairman, Ben Bernanke, does not want us to know any of the details of the Fed’s secret operations. This position is not surprising and has been typical of all central bank chairmen. Bernanke’s stated goal is, “To design a system of financial oversight that would provide a robust framework for preventing future crises”.

During its 96 years of existence, the Federal Reserve has played havoc with our economy and brought great suffering to millions through unemployment and price escalation. And it has achieved what only a central bank can – a steady depreciation of our currency. Today’s dollar is now worth 4 cents compared to the dollar entrusted to the Federal Reserve in 1913. 96 years should have been plenty of time for the Fed to come up with a plan for preventing economic crises.

Since the Fed is the source of all economic downturns, it’s impossible for any central banker to regulate in such a manner to prevent the problems that are predictable consequences of his own monetary management. The Federal Reserve fixes interest rates at levels inevitably lower than those demanded by the market. This manipulation is a form of price control through credit expansion and is the ultimate cause of business cycles and so many of our economic problems, generating the mal-investment, excessive debt, stock, bond, commodity and housing bubbles.

The Federal Reserve’s monetary inflation indeed does push the CPI upward, but concentrating on the government’s reports of the CPI and the PPI is nothing more than a distraction from the other harm done by the Federal Reserve’s effort at central economic planning through secret monetary policy operations.

Real inflation, the expansion of our money supply is greatly undercounted by these indices. In response to our latest financial crisis the Federal Reserve turned on its printing press and literally doubled the monetary base. This staggering creation of dollars has yet to be reflected in many consumer prices, but will ultimately hit the middle class and poor with a cruel devaluation of their savings and real earnings.

The Fed has clearly failed on its mandate to maintain full employment and price stability. It’s time to find out what’s going on. Instead of assuming responsibility for the Fed’s role in the crisis, Bernanke brags about “arresting” the crisis. I would suggest to Mr. Bernanke that it’s too early to brag. Bernanke decries any effort to gain transparency of the Fed’s actions to find out just who gets bailed out and who is left to fail. Instead, he proposes giving even more power to the Fed to regulate the entire financial system.

What he doesn’t recognize, nor does he want to admit, is that he is talking about symptom while ignoring the source of the crisis: the Federal Reserve itself. More regulations will never compensate for all the distortion and excesses caused by monetary inflation and artificially low interest rates. Regulation distracts from the real cause while further interfering with the market forces, thus guaranteeing that the recession will become much deeper and prolonged.

Chairman Bernanke’s argument for Fed secrecy is a red herring. It serves to distract so the special interests that benefit from the Fed’s policy never become known to the public. Who can possibly buy this argument that this secrecy is required to protect the people from political influence?

My bill, HR 1207, has nothing to do with interferences in monetary policy. This was explicitly stated in the amendment voted on in the Financial Services Committee. Bernanke’s argument for protecting the independence of the Fed is his argument for protecting the secrecy of the Fed.

Chairman Bernanke concludes that “America needs a strong (think cartel) non-political (think Goldman Sachs) and independent (think secret) central bank with the tools to promote financial stability in the midst of a horrendous financial crisis and to help steer our economy to recovery without inflation.”

This belief is a dream that one day will become a nightmare for all Americans unless we come to our sense, stop our wild spending, runaway deficits, printing-press money, massive bureaucratic regulations and our unnecessary world empire.

A crucial step towards fixing these problems will be transparency of the Federal Reserve.

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

Transcript

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.

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by Ron Paul

I was pleased last week when we won a vote in the Financial Services Committee to include language from the Audit the Fed bill HR1207 in the upcoming financial regulatory reform bill. As it stands now, if HR 3996 passes, because of this action, the Federal Reserve’s entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.

Finally, the blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed. All items on the Fed’s balance sheet will be auditable, including all credit facilities, all securities purchase programs, and all agreements with foreign central banks. To calm fears that we might be trying to substitute congressional action for Fed mischief in tinkering with monetary policy, we agreed to a 180 day lag time before details of the Fed’s market actions are released and included language to state explicitly that nothing in the amendment should be construed as interference in or dictation of monetary policy by Congress or the GAO. This left no reasonable objections standing and the amendment passed with a vote of 43 to 26.

This was a major triumph for transparency and accountability in government. With unprecedented turmoil in the financial markets, the people are demanding to know and understand the extent of the Federal Reserve’s involvement in the creation of out-of-control business cycles, who they are helping, and how. We need information. The excuses for not giving out this information are flimsy at best, and the passage of this amendment is a major step to finally getting at the truth.

Of course I could not have done this without the help and support of many other members who have been strong allies in this fight. Having over 300 cosponsors was obviously helpful.

However, as great as this victory is, we have to remember that this amendment is attached to a bill that would give sweeping new powers to the Federal Reserve. The Fed has taken its mandate to maintain stable prices and full employment and used its immense power to help elite friends at the great expense of everyone else. The answer is not to increase their powers and ability to interfere in the economy, but that is what the legislation will do. It is a disaster waiting to happen, and unfortunately it looks as if it will pass.

At least with the Audit the Fed amendment attached to the bill, the Fed will not be able to do its destructive work in secret. The people will know exactly who the beneficiaries are of this immoral system of money management.

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But the battle is far from over. The enemies of transparency and those who benefit from the Fed’s secret dealings will do everything in their power to stop the audit from happening.

Barney Frank already indicated to a staffer “that he will continue to look for opportunities to alter the Paul amendment.” And Fed-funded “economists” will try to convince the public of the importance of Fed “independence” (that is, secrecy), and threaten us with economic disaster in case the Fed is opened up to independent scrutiny.

It’s time to remind ourselves of what we are up against. The Federal Reserve banking monopoly has the power to create money out of thin air, and as Mayer Amschel Rothschild, a prominent 18th century European banker, said: “Permit me to issue and control the money of a nation and I care not who makes its laws.”

What we have on our side is each other, the Constitution, the Internet, a growing percentage of Congress, public opinion, and the unshakable determination to succeed against all odds in this monumental battle of historic proportions.

The first round has gone to us. On October 31, Ron Paul described the remaining milestones to be achieved:

Ron Paul: “Like I said, I’m not surprised [Mel Watt's attempt to derail HR 1207] has happened, but let’s say we are successful and we get it amended [we did!], we still ought to:

• bring it to the House floor, and then they’ll have a chance to water it down again.
• It goes through rules committee, that’s another place.
• It has to go through the Senate; it’s going to have a harder time in the Senate.
• Then it has to go to a conference committee and that’s another problem.
• And then it has to go to the President.
• And even if it goes through all that, we still have the courts to deal with, and courts have never been friendly to those of us who want honest money.”

Add in the fact that Barney Frank’s HR 3996, the “Financial Stability Improvement Act of 2009″ the Audit the Fed amendment is attached to, hasn’t even come up for vote yet in the Committee (the vote was scheduled for yesterday but was postponed to early December).

Keep spreading the message about Audit the Fed and stay tuned for further action alerts from Ron Paul and the Campaign for Liberty.

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A few weeks ago, the Campaign for Liberty sent out an alert that Representative Mel Watt was attempting to water down HR 1207 in the House Financial Services Committee.

The latest reports we have received have informed us that a vote on the Watt amendment could come today!

There’s still time for us to stop this attack on Audit the Fed! Click here to get a full list of Financial Services Committee members, along with their contact information.

Financial Services leadership seems determined to include Audit the Fed as part of a regulatory reform package instead of passing it as a standalone bill.

While C4L will still do everything in its power to fight for a standalone vote on Audit the Fed on the House floor, it is critical we challenge Watt’s amendment in Committee.

It will become much easier for our representatives to claim they still support Audit the Fed on the House floor if the Watt version passes, when, in reality, Representative Watt’s amendment puts restrictions on Government Accountability Office audits of the Fed.

For example, Watt’s amendment prevents the GAO from auditing or reviewing decisions to authorize, modify, extend, or terminate loans or liquidity facilities.

Congressman Paul will offer an amendment in Committee restoring an audit of the Fed’s entire $2 trillion balance sheet, but we have received word that some of the Democrat members may be waffling on their support for his amendment.

Help us turn up the pressure on these members! Below is the list of Democrats on the committee who have cosponsored H.R. 1207. Please call them and urge them to vote “Yes” on Ron Paul’s amendment. Click on their names to get their web contact information.

1. Rep. John Adler, NJ (202) 225-4765

2. Rep. Travis Childers, MS (202) 225-4306

3. Rep. Steve Driehaus, OH (202) 225-2216

4. Rep. Alan Grayson, FL (202) 225-2176

5. Rep. Rubén Hinojosa, TX (202) 225-2531

6. Rep. Suzanne Kosmas, FL Toll Free: 1-877-956-7627

7. Rep. Dan Maffei, NY (202) 225-3701

8. Rep. Brad Miller, NC (202) 225-3032

9. Rep. Walt Minnick, ID (202) 225-6611

10. Rep. Ed Perlmutter, CO (202)-225-2645

11. Rep. David Scott, GA (202) 225-2939

12. Rep. Brad Sherman, CA (202) 225-5911

13. Rep. Jackie Speier, CA (202) 225-3531

When contacting these members, remember that up to this point, they have been allies on this issue. A civil yet firm tone should be kept during these calls. They should be thanked for their cosponsorship, told that Mel Watt’s changes to the bill are unacceptable, and urged to hold the line and honor their promise to support transparency at the Fed by voting “Yes” on Ron Paul’s amendment.

And don’t forget to click here to get a full list of Financial Services Committee members.

For more information on the Watt amendment, check out this article by The Huffington Post’s Ryan Grim.

We are continuing our work to achieve a standalone vote on H.R. 1207 on the House floor, but we must first stop the Watt amendment in the Financial Services Committee.

Make sure the Financial Services Committee members hear from you as soon as their offices open Thursday morning!

A vote could come any time today. Call, email, and fax the Financial Services Committee members to vote “Yes” on Congressman Ron Paul’s amendment.

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by Ron Paul

There has been a lot of talk in Washington recently about senior citizens, mostly about how various healthcare reform models would help or hurt them. But there is another critical issue that has quietly devastated seniors financially over the last few decades. It concerns how the cost of living is calculated. How does the administration justify not giving a cost of living increase to Social Security recipients this year?

According to the official Consumer Price Index calculation, life has gotten cheaper for the first time in decades. If the government can show statistically that the cost of living has gone down, not up, then they can make the case for not giving a cost of living increase to social security recipients. But does this match reality? Using older calculations of CPI, the cost of living has actually increased – by roughly 5 percent!

The CPI (Consumer Price Index) is a calculation based on the average price of a fixed basket of goods that was initially designed to help businesses adjust for inflation. The government eventually started using it to determine cost of living adjustments for entitlement programs. Couple that with politicians’ discovery that they could raid the social security trust fund to pay for new spending programs, and you have a perfect storm to deny seniors what they were promised, while hiding the true size of the deficit. For politicians, it is a win-win.

For seniors, it is a different story. Economist John Williams of Shadow Government Statistics has estimated that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today. This represents a lot of money that politicians have been able to literally steal from seniors, to spend on their own wasteful programs. One example of how they do this is to substitute hamburger for steak, which lowers the average price of that basket of goods. But living on hamburger, or maybe dog food, instead of steak does not represent a constant standard of living. This renders the measurement virtually meaningless, even though politically it comes in very handy.

I have introduced legislation to keep politicians in Washington from ever raiding the Social Security trust fund again. HR 219 The Social Security Preservation Act would assure that all monies collected by the Social Security Trust Fund would only be used in payments to beneficiaries, or be placed in interest bearing certificates of deposit. This would at least stop the bleeding of the fund, and take away some incentive to tease and torture the numbers in order to give seniors the minimal amount. This would also cut off a source of funding for government growth, so it is not likely to get easy support from many politicians.

It is bad enough that Washington imposes high payroll taxes on American workers. The least Congress could do is use the tax dollars for their stated purpose. Instead, seniors will have a harder and harder time trying to survive on a fixed income in an economy based on variables and deception. For them, it is too late to start over. Today’s young people will be forced to pay into the system for years to come. The first step towards solving the impending crisis facing Social Security is to stop politicians from raiding the trust fund and to significantly cut federal government spending.

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