Last Thursday, the House Finance Committee, by a vote of 43-26, voted to approve an amendment to finally audit the Federal Reserve.
The Paul/Grayson amendment, HR 1207, is attempting to audit the Fed, which would mean a public disclosure of all its most recent economic activity, especially what it has done with TARP funds.
Ryan Grim at The Huffington Post sums up the importance of this vote very well.
The measure, cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), authorizes the Government Accountability Office to conduct a wide-ranging audit of the Fed's opaque deals with foreign central banks and major U.S. financial institutions. The Fed has never had a real audit in its history and little is known of what it does with the trillions of dollars at its disposal.
It may seem like a small battle that has been won, but what this vote can possible represent is the slow, but necessary, exposure of the Federal Reserve, which is one of the, if not the most, corrupt government institutions in the US.
Created in 1913, the Federal Reserve is a quasi-private bank with virtually no oversight that has the ability to control the flow of credit (through the manipulation of interest rates). By lowering interest rates, the Fed's policies create an economy drunk on credit, and many businessess or ventures that would have never been started suddenly start popping up all over the place. When this artificial bubble pops, as it did in 2008 (and in 1929), the painful bust ensues.
This expansion of the monetary supply is essentially inflation, which is a hidden tax, directly harming the poor and middle-class the hardest. In almost 100 years, the Fed-induced inflation has caused our money to lose almost 95% of its value.
The Fed is also a tool of the schemers and central planners that always tend to gravitate towards DC. Without a central bank that can literally create money out of thin air, wars would have to be funded through direct taxation, which might cause many more Americans to grab pitchforks when handed the bill for empire. Welfare, too, becomes much easier to fund when there is no limit to the goodies that can be spread around.
The existence of a centralized bank whose strings are pulled by the government is absolutely incompatible with a free society. Karl Marx once wrote that there are two crucial things to destroying a market based economy: the levying of an income tax and the centralization of credit into state hands. As a firm defender of free markets and the sovereignty of every individual, the very existence of the Fed is an institutionalized evil that I oppose unconditionally.
So it's no surprise then that all of the influential Beltway types are opposing this amendment. From the war-mongering "conservatives" at the Heritage Foundation to former Wall Street crooks Fed chairmen Alan Greenspan and Paul Volcker, the DC establishment is shaking.
The Paul-Grayson bill, with over 300 trans-ideological co-sponsors in the House, will hopefully be the first of the Federal Reserve's many corrupt bricks to fall.
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This article originally appeared in SF's (d)N0t blog.
Comments
So have you thought about what happens if the information comes back showing the Federal Reserve can account for its actions? While I can see Congress changing the Fed, I don't think that Congress would actually get rid of it.
Also treating the free market as if it is perfectly innocent of any wrong doing is just wrong. One of the base desires that makes free markets work is greed. Given a little bit of effort one can manipulate your argument and make it look like free markets are horrible and government is the night in shining armor.
MN- Show me this mysterious "free market" anywhere (above-ground, at least) in America before you place blame on it for anything. The truth is, the free market is not allowed to "legally" exist in the US. Instead there is a governmentally controlled, regulated, and corrupted "corporatocracy" that is destroying the American economy.
The only way the Fed will be abolished is if the audit discovers systemic fraud. In my opinion, this is the only reason why this type of bill, which has no language in it that would manage the Fed's affairs, would be considered the politicizing and repudiation of the Fed; criminal activity found within this central banking system would mean its destruction.
As for the comments on the Free Market, there is no such thing in America. Our economy has been centrally planned since the Fed's inception in 1913. What appears like it, is merely a distortion, one that is exacerbated by corporate and public entitlement programs. And to correct a very prevalent misconception of the Free Market, those who support its true form know that fraud must be punished in a court of law; the term 'regulation' is equally misused and also misapplied.
The corporations enjoy the benefits of capitalism, but when it comes back in the form of bankruptcy, they're the first to demand their mistakes by socialized
If a full, complete and regular audit of the Federal Reserve’s balance sheet exposes favoritism, collusion or similarly inappropriate actions involving monetary or credit policies, I believe the citizenry will be appropriately outraged and demand a reckoning.
The arguments that defenders of the FED have made, in an effort to retain the system, as it currently exists, strongly suggests unspoken and hidden fears. Their fears are not limited to that of a losing their unrestrained power and so-called independence, but for the possible discovery and revelation of information that may infuriate the American people.
It is unlikely the FED would be abolished in the short term, no matter what information is revealed. However, it is likely that the absolute power and secrecy of the FED would be swiftly restricted or eliminated.
True Capitalism places the trust of the people in the people themselves. Every other form of state or economic system, concentrates the control, the decision making process, the trust, in a handful of distant and unaccountable people.
When you say the words "the Economy", you are always referring to yourself and your neighbours, no matter the nature of the system in place. When you say the words "the Market", you are also referring to yourself and your neighbours.
For either of these two entities to function as our creator (whichever one you believe in) intended, then they must have the freedom to decide. That means every single entity within each system, every individual, must be free to decide.
Central banking, central government, centralised control of any kind is anti-freedom, directly opposed to the needs of the individuals within the system.
When all of the individuals within a society are free to make their own decisions, they are more trust-worthy, than any "auth
You mean one step closer to politicizing the money supply. They loved that in Weimar Germany. Maybe that's why Ron Paul and other nutty goldbugs love it.
To the ironically named "Sanity:"
A central bank is inherently the "politicization of the money supply." Weimar Germany experienced what will likely be the fate of the US: hyperinflation due to the massive printing of paper money.
A gold standard is the proper backer of money because it is scarce, it is valuable, relatively cheap to mine, and most importantly, it evolved to be the preferred medium of exchange spontaneously by free people.
Like everything the state touches, it has manipulated and controlled our currency to the point of virtual worthlessness. For a great account of this, I suggest reading Murray Rothbard's "What has government done to our money?"
Federal Reserve notes do not conform to Title 12, United States Code, Sections 411 and 418. Title 31 USC, Section 462, insofar as it attempts to make Federal Reserve Notes and circulating Notes of the Federal Reserve Banks and National Banking Associations a legal tender for all debts, public and private, it is unconstitutional and void, being contrary to Article 1 Section 10, of the Constitution of the United States, which prohibits any State from making anything but gold or silver coin a tender, or impairing the obligation of contracts.
The Precedent: State of Minnesota County of Scott
In Justice CourtTownship Of Credit River
Martin V. Mahoney, Justice
Thank you Robert.
"Sanity", the hands are typing, but the cognitive powers have long since ceased. Unaccountable bankers controlling the country's currency you think is a good thing. You must love the current economic climate and have fond memories of the Great Depression. Once you hand over all your assets to a bank and ask them to take care of you with it, your input might acquire some credibility. But that's a far cry from validity.
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