By Jeff Berwick
Ron Paul’s Federal Reserve Transparency Act (H.R. 459), or “Audit the Fed,” passed Wednesday July 25, 2012 in the U.S. House of Representatives by a wide margin of 327-98, exceeding the two-thirds majority needed. It had 274 cosponsors. But, by the evening of the same day, mainstream press around the country was already preparing the people for the bill’s fate in the Democrat-controlled Senate. As the Chicago Tribune and others reported, it had little chance of passing in the Senate, let alone being signed into law by the President. In fact, Senate Majority Leader Harry Reid has already said that the Senate will not even consider the bill, because, as Ron Paul told CSPAN, he didn’t have the “guts.” With this in mind, as well as their own reputations, Romney, Boehner and Cantor backed it. Even Harry Reid backed it… in 1987 and 2010, but now he has changed his mind on a Fed audit for some reason.
But, here is the plain fact of the matter. We already know what the Federal Reserve is doing. Sure we may not know exactly which banks get exactly which graft, which may be of some interest. But for the most part we know exactly what they are doing. They are artificially price-fixing/manipulating interest rates at 0% through to 2014… which will be six years of ZIRP. And they are counterfeiting as much money as is necessary to support the massive trillion+ dollar deficits that the US Government has been doing for the last five years and with no end in sight in an unprecedented amount of money printing that has never been surpassed in Federal Reserve history.
And, any audit that uncovers these two facts will do nothing to change anything. The western world’s propaganda campaign to teach only Keynesian economics, which are pro-money printing and deficit spending, have enveloped all levels of society now. It is all that is taught in the economics department of almost every university in the west including Harvard and Oxford. So, will auditing the Fed change anything? Of course not.
Not to mention, even if the bill did pass Senate and mass murderer Barack Obomber signed the bill into law it is unlikely that the regulators assigned to the task of auditing the fed would really have the “guts” to properly audit the public-private institution. The Fed is above-and-beyond the rest of the financial industry insofar as it submits to no regulatory oversight. But, this regulatory oversight of the financial industry has done nothing to stem the moral hazard and abuses of power that plagues the sector. The same would be true of the Federal Reserve. With two sets of books, a bribe and a threat here-and-there, the malfeasance can be made to disappear. We’ve seen it before and we will see it again.
This would lead to an audit of the forged set of books the Fed keeps which supports the evidence that the Fed is doing what it can do to achieve the objectives of its “light”, impossible mandate – maximum employment, stable prices, and moderate long-term interest rates – as enunciated by the Federal Reserve Act. The set of books which support the evidence that the Fed is doing what it can do to achieve the objectives of its “dark” mandate – pillaging the planet of its every last vestige of wealth - would be safely kept far away from the Fed’s auditors.
That means that the real success of the bill, as even Ron Paul has argued, has been the light it has shone on the secretive Federal Reserve. As Paul said on the floor on Tuesday, the American people are “sick and tired of what happened in the bailout and where the wealthy got bailed out and the poor lost their jobs and they lost their homes.” Since the crisis, Fed asset purchases have swollen the bank’s balance sheet to $2.8 trillion from around $800 billion. For three-and-a-half years it has kept interest rates at nearly zero, as well as pledged to keep them at these levels at least until late 2014.
Among Federal Reserve policies that would be scrutinized under the bill are monetary policy, deliberations and decisions, agreements with foreign central banks, foreign governments, finance capital and international organizations like the International Monetary Fund. These are areas of the Federal Reserve that were made illegal to audit in the 1970s. Paul’s bill would remove these prohibitions.
Paul’s bill would require the Government Accountability Office to conduct a full Fed audit. Paul’s son, Republican Senator Rand Paul, has introduced a companion bill in the Senate, but, as Reid has said, Democrats in control of the Senate will most likely not bring this to a vote. Rand Paul was expected to try to force a vote on it as an amendment to other legislation. There are hints that the bill could resurface in 2013 if Republicans win control of the Senate this November, as Rand Paul is set to succeed his father as Congress’ top Federal Reserve critic. But, it is clear that Rand Paul has not been as stalwart as his father when it comes to libertarian and constitutional principles, which leaves the bill prone to a further watering down under Rand’s watch.
Nonetheless, Ron Paul has once again been successful- and no, not in the sense that his bill passed. But, instead, in the sense that the headlines across the nation yesterday were swirling with news of the bill’s passing, bringing the Federal Reserve once again into the limelight for all to see. With the paramount help of Ron Paul and the financial crisis, the Federal Reserve has gone from a mystery to the American people to an entity that 75% of Americans are in favor of publicly auditing. As Paul says, “I like to think of it more as verifying my approach is a little bit different than just becoming a powerful player and having influence, versus really changing people’s minds.”
Nevertheless, that we do not know certain things about the Fed is not the problem, it’s the fact that central banking at its core is criminal and does nothing but impoverish people and economies. Auditing the Fed is like auditing GOSPLAN, the Soviet State Planning Commission, a very important institution in Soviet Russia. Throughout numerous “reformations” of the soviet economy, GOSPLAN maintained its central role in determining production and investment decisions until the disintegration of the USSR in 1991. No matter how many more left shoes were made than right shoes, GOSPLAN endured.
The mentality in US politics towards the Fed is similar to the mentality towards GOSPLAN in the Soviet Union: economic central planning is not up for debate – we just would maybe like to tinker with it a bit.
But the reality is that auditing the Fed is akin to auditing a mafia counterfeiting operation. We know they are doing it and the great majority of people approve of them doing it.
Auditing the Fed, while maybe a small step for mankind, does nothing to really end the crime of central banking. All auditing does is ask the man who robbed your house what he did with the proceeds and then letting him go on about his business.
Until people realize that nothing will change for the better. Unfortunately, very few in the world have any critical thinking abilities, again thanks to the government indoctrination centers and fascist media propaganda. Therefore, central banking, like Soviet style central planning, will only end once they destroy themselves because all artificial, criminal systems are unsustainable.
As dollar vigilantes we await their demise with great pleasure. But it won’t come at the hand of a government auditor. (my emphasis)
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By Jeff Berwick for The Dollar Vigilante
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