WASHINGTON, January 2, 2014 — Auditing the Federal Reserve: It’s an idea that just won’t die.
Incoming Republican Senate Majority Leader Mitch McConnell said the Republican Controlled Senate will have a chance to vote on a comprehensive audit of America’s super-secretive national bank.
Such an audit was proposed by Congressmen Ron Paul of Texas and Bernie Sanders of Vermont as a rider to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
The very idea was anathema to Fed Chairman Ben Bernanke.
“If the GAO [Government Accountability Office] is auditing not only the operational aspects of our programs and the details of the programs, but is making judgments about our policy decisions, that would effectively be a takeover of monetary policy by the Congress,” said Bernanke, viewing the move as “a repudiation of the independence of the Federal Reserve, which would be highly destructive to the stability of the financial system, the dollar and our national economic situation.”
Unfortunately, the U.S. Senate scaled back the scope of that audit.
The Fed’s unprecedented purchase of toxic mortgage-backed-securities from financial institutions and quantitative easing, under the Troubled Asset Relief Program, was intended to prevent the collapse of America’s financial system.
“Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009,” wrote Andrew Huszar, the former Fed official charged with purchasing toxic debt from the nation’s banks, in the Wall Street Journal. “The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.”
“Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long?,” asked Huszar.
The 2010 limited audit of the Federal Reserve proved how shaky our debt-based Keynesian economy truly is. From 2007 through 2010, the Fed issued $16 trillion in secret bailouts to banks and corporations, from New York to France and beyond. The question the Fed has never answered is: What metrics determine which institutions are worthy of saving and those that are not. Are these metrics fiscal, political or both?
Like her predecessor, Fed Chairman Janet Yellen is not keen to see congressmen rifling through the bank’s secret papers.
“The ability of the central bank to make the decisions about monetary policy that it regards as in the best longer run interests of the economy free of short run political interference is very important,” Yellen told reporters. “History shows, not only in the United States but around the world, that central bank independence promotes better economic performance.”
Since Congress created the central bank a century ago, we have suffered through a Great Depression, countless recessions, battles with inflation, a savings & loan crisis, and a second great economic collapse; financial maladies beyond the Fed’s ability to predict, prevent or alleviate.
History, not audit proponents, is the Fed’s harshest critic.
Article I, Section 8 of the United States Constitution reads: “The Congress shall have Power to… coin Money, regulate the Value thereof, and of foreign Coin.”
There is no amendment to the Constitution relinquishing Congressional responsibility over the currency or handing said responsibility to a secretive national bank that grants financial favors to global elites at taxpayer expense.
In a 2008 syndicated op-ed column, Rep. Ron Paul wrote,
“Wall Street made a killing during the housing bubble, reaping record profits. Now that the bubble has burst, these same firms are trying to dump their losses on the taxpayers. This approach requires more money creation, and therefore debasement of all dollars in circulation… Centrally planned, government manipulated economies always fail eventually. The collapse of communism and the failure of socialism should have made this apparent.”
Big-government enablers fear a comprehensive Federal Reserve audit will reveal just how precarious the economy is under the control of clueless Washington masterminds.
It is at this point you may come to realize that the secretive global debt being accumulated in your name and at your expense, for the sake of the Fed’s power and “independence,” is in the final analysis “taxation without representation.”
A wrong that once rallied the American people around the cause of liberty and independence.