10/25/13. Rand Paul: ‘Audit the fed’ before new chief approved. Bob Unruh, wnd.com
“Sen. Rand Paul, R-Ky., who already has called several times for a full audit of the Federal Reserve, the quasi-public organization that largely controls U.S. monetary policy, now is tying his effort to Obama’s nominee to the Fed chairmanship.
Paul, whose father, former congressman Ron Paul, sought for years an audit of the Fed, confirmed Friday that as “part of Senate consideration of the Janet Yellen nomination to be chair of the Fed,” he will ask for a positive response to his “Transparency Act.”
The Fed’s current chairman, Ben Bernanke, is expected to step down Jan. 31. Yellen now is the vice chairman.
She needs Senate confirmation, however, and now the senator is linking her prospects to garnering more information about the Fed, which largely has operated behind a screen of secrecy since it was created almost 100 years ago.
While Democrats, who presumably would support their president’s choice, are a majority in the Senate, it would require 60 votes to break a senator’s hold on a candidate. So such a move would require support from at least a handful of Republicans.
The senator’s statement said, “The American people deserve transparency from the Federal Reserve and the federal government as a whole.”
Ron Paul said in an interview with John Stossel on the Fox Business Network that the Federal Reserve has extraordinary power, and Americans at least should be informed of what it’s doing.
He said the Constitution requires that the U.S. monetary system be based on gold and silver, not the fiat currency currently issued.
“No secret cabal … should have the authority to create money out of thin air, because they will,” he said.
He said the Fed builds a bubble in the economy and takes credit for raising the money involved in, for example, the housing industry. Then when a bust takes place, the Fed pumps more money in and takes credit for trying to create a recovery.
The Federal Reserve, in fact, has an ongoing program to simply create money, buying up to $85 billion in bonds each month to stimulate the U.S. economy.
The bottom line, Ron Paul said, is that such actions inevitably hurt the middle class, injure the poor and create more money for the wealthy.
“The middle class is getting wiped out,” he said.
It was former Fed chairman Alan Greenspan who admitted, also in an interview this week, that the experts knew there was a bubble in the economy just before the market crashed in 2008.
He said the episode convinced him that there was something “fundamentally wrong” with the way he was looking at the economy.
Sen. Rand Paul has followed in his father’s footsteps, introducing an audit-the-Fed bill to Congress, where a similar plan previously passed the House.
Rep. Paul Broun, R-Ga., was a staunch ally of Rep. Ron Paul’s legislation to audit the Fed and sponsored a bill identical to the one that easily passed the House in the 112th Congress.
“I’m an original intent constitutionalist, as was Ron Paul while he was here,” Broun told WND. “We should audit the Fed. Hopefully we get rid of the Fed, and I introduced a bill to do that also.”
Broun said it’s remarkable that the public knows virtually nothing about an institution with so much power over the economy.
“Congress has basically abdicated its duty to control money and the monetary supply and control of our money supply as a nation over to this semi-governmental agency that’s not really governmental,” he said. “In reality, we have had no auditing. We have absolutely no idea what they’re doing over there.
“We’ve had this quantitative easing now into the third time, which has been totally unproductive in trying to get our economy going. The Fed housing policy was part of the reason we had the housing bubble and crash. They’re still managing our monetary supply. They’re creating more and more dollars that have no or very little value behind them. Our dollars are becoming worth less and less. As time goes on, they’re going to be worthless.”
Broun said it’s “absolutely critical that we audit the Fed so the American people can see what’s going on over there.”
“Do it from top to bottom so that we can have transparency in this entity called the Federal Reserve,” he said. “Hopefully, the American people will see that we need to go back to the gold standard, which I’ve introduced, and get rid of the Fed.”
Some of Ron Paul’s concerns about the Federal Reserve were based on Article 1, Section 8 of the Constitution, which assigns to Congress the right to coin money.
There is no mention in the Constitution of a central bank, and it wasn’t until the Federal Reserve Act of 1913 that the Fed was created.
Ron Paul previously has said: “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 percent of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy.”
He proposed repeatedly the idea of auditing the Fed to determine exactly what it has been doing and then begin making corrections. With a book titled “End the Fed,” he’s made no secret of his ultimate goal.
That the Fed is at least partly to blame for the financial problems that have developed in the U.S. seems not to be in dispute.
It was longtime Fed Chairman Bernanke who admitted as much.
Bernanke said it was the Fed that caused the Great Depression. It was the longest and worst depression ever experienced by the industrialized Western world. While originating in the U.S., it ended up causing drastic declines in output, severe unemployment and acute deflation in virtually every country on earth.
History records that in 1913 President Woodrow Wilson approved the Federal Reserve Act but later reflected that his actions “unwittingly ruined my country.”
Wilson said that since the U.S. system of credit is concentrated in the hands of a few, “we have become … one of the most completely controlled and dominated governments in the civilized world.”
Ron Paul was named WND’s “Man of the Decade” for his work on the audit plan and other efforts.”
10/25/13. Senator Rand Paul Is Right To Hold Up Janet Yellen’s Federal Reserve Nomination, And Democrats Should Support Him. forbes.com
“Senator Rand Paul is shrewd to attempt to delay the confirmation of Janet Yellen to become Chairperson of the Federal Reserve – a tactic which seeks a bipartisan vote on his Federal Reserve transparency bill, S. 209.
Not only should he be commended for the step by Republicans but he should be supported by as many Democrats as possible – which would only be in keeping with the 89 Democrats who contributed to the bi-partisan support of H.R. 459 in 2012 which simply sought to “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,” the exact same language as Rand Paul’s S.209 — Federal Reserve Transparency Act of 2013.
There is no way to justify opposition to S. 209 and support of H.R. 459. But I wonder – will Democrats still try to find a way?
There are two principled arguments against the Federal Reserve System that any American should entertain subscribing to – one is monetary in nature and the other regulatory.
Republicans and Democrats have diverse points of variance on whether the medium of exchange of this country should be backed by gold or exist as a fiat currency. Fine, as a gold-standard advocate who wants stable money, I don’t mind settling that disagreement at another time. We can bifurcate that temporarily from the regulatory issue.
However, the argument that the Federal Reserve system should be exempt from any kind of audit can only be viewed as benefiting the elite interests of a banking sector that both sides of the aisle should agree enjoys a privileged monopoly only because Congress erroneously (but not permanently) forfeited its Constitutionally-mandated authority over the nation’s finances.
The argument that an audit would somehow interfere with the ‘independence’ of U.S. monetary policy is a shell game which obscures the point that all forms of independence are not equal. It is ironic to hear the Right whine over the ‘independence’ of the State to ‘control their lives’ (Obamacare) yet have nothing to say about a Fed that truly operates above the law. So, the electorate is told the subject is off-limits and ideologues on both sides and those who follow them like sheep, accept it on face value either because ‘Big Government’ is the supreme evil (if you are Republican) or because a left-alone Fed Chair Alan Greenspan supposedly aided the ‘Clinton Boom’ (isn’t that essentially what the anemic Democratic defense of the Fed boils down too?).
Rather than get caught in the matrix of chasing the convoluted arguments of both sides let’s focus on two basic questions designed to encourage Republicans and Democrats to think more deeply: 1) why is there so much confusion over whether the Federal Reserve is a privately-owned and controlled system of banks or whether it is a government agency, when the original Federal Reserve Act (now partly omitted from U.S. Code) clearly states in Section 4 that a stock certificate for each of the 12 Federal Reserve Banks exists with lists of the private banks which hold it ? And 2) if the Fed is a ‘government agency’ why aren’t any of the 12 Federal Reserve Banks operating under the Freedom of Information Act (FOIA)?
Though this seems simple, I try not to be too strident because the confusion is due to the fact that part of the Federal Reserve System is governmental in nature – the Federal Reserve Board of Governors based in Washington, D.C.. But most Fed-defenders don’t realize that the real power in the system is skewed toward the 12 Reserve Banks and the New York Fed in particular. In that regard Janet Yellen’s powers don’t hold a candle to those of New York Fed President William C. Dudley.
Still more don’t realize that Federal Reserve monetary policy is not executed by the Board of Governors. It is executed by the Federal Reserve Bank of New York directing the action of over 20 privately-owned commercial and investment banks in the open market. Though this is denied by Fed-defenders it is detailed by the Federal Reserve .
As of today here is the list of the 21 banks who according to the Federal Reserve (and not a conspiracy theorist) “(i) participate consistently in open market operations to carry out U.S. monetary policy pursuant to the direction of the Federal Open Market Committee (FOMC); and (ii) provide the New York Fed’s trading desk with market information and analysis helpful in the formulation and implementation of monetary policy.”
Bank of Nova Scotia, New York Agency
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities USA Inc.
Morgan Stanley & Co. LLC
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
SG Americas Securities, LLC
UBS Securities LLC.
Yes, your eyes do not deceive you. Many of the same banks responsible for the mortgage crisis, securitization fraud, LIBOR improprieties and manipulation of the price of gold are responsible for carrying out U.S. monetary policy and the analysis and information which informs it!
That any self-respecting Democrat or Republican can argue for Fed-independence in light of this is startling.
Independent Senator Bernie Sanders brought more of the shenanigans involved in the New York Fed, FOMC, Federal Reserve Bank relationship to light with an amendment over two years ago that resulted in a minor Federal Reserve audit conducted by the Government Accountability Office (GAO).
Any reasonable person who has gone through the entire GAO document would be forced to conclude that the American people desperately need to know much more about the decisions of the body entrusted with making and regulating monetary policy in this country.
In a provocative challenge to both the Left and the Right Sen. Sanders concluded, “As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world. This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
And progressive icon former Rep. Dennis Kucinich supported H.R 459 with his co-sponsorship, vote and passionate defense. He further released a statement of support with these words, “The Fed should not be permitted to operate in the dark without oversight by Congress and accountability to the people. The American people deserve no less than a full and complete audit. The Federal Reserve wants to stay independent; independent of the Constitution, independent of Congressional oversight and independent of the rule of law. We can’t let that happen. It’s time to audit the fed.”
Democrats during and since the government shutdown have rightly exposed the intransigence of some Republicans toward bipartisanship.
But a refusal to support Senator Paul’s S. 209 would belie their argument and once again expose partisanship in full view.
Senator Paul should hold up the nomination of Janet Yellen until a necessary critical mass in support of his audit bill is achieved. He wouldn’t be costing the federal government a dime in doing so and anyone who says this jeopardizes the world economy should consider what CNBC’s Rick Santelli suggested today in reaction to Sen. Paul’s bold move – that Fed policies which currently weaken the dollar may already be costing Americans too much in terms of competitiveness in a global economy.
The only improvement Sen. Paul might consider to his piece of legislation is an amendment which authorizes the Comptroller General to present to Congress the original stock certificate of at least the Federal Reserve Bank of New York, which by law was to have been filed with the Comptroller of the Currency. Section 4 Part 3 of the Federal Reserve Act states, “The said organization certificate shall be acknowledged before a judge of some court of record or notary public; and shall be, together with the acknowledgment thereof, authenticated by the seal of such court, or notary, transmitted to the Comptroller of the Currency, who shall file, record and carefully preserve the same in his office.”
It is past time the American people saw the “organizing certificate” of each Federal Reserve Bank for themselves.
It seems like Senator Rand Paul is the man to get the job done but he can only do so with well-deserved Democratic support.”