Ron Paul-Alan Grayson Fight to Audit the Federal Reserve Victory!

Ron Paul-Alan Grayson Fight to Audit the Federal Reserve Victory!

What is the Federal Reserve? The Federal Reserve has the power to conduct the nation’s monetary policy by influencing monetary and credit conditions in the economy, provide financial services to the U.S. government, and foreign institutions and acts as the U.S central bank. The Fed also allows emergency loans to member banks and creation of money out of thin air via a printing press not backed by any type of hard asset or commodity.

The Federal Reserve is controlled by private bankers which have permission to run their policies without revealing any information about their operations and aren’t obligated to take into consideration the opinions of our citizens’ input, nor do they need to go through Congress in order to run their policies.

During its creation it was with faced heavy opposition from various states because they feared the system would become a tool of specific rich and powerful financiers in New York City. In its 96 years of existence the Fed has never been audited once.

Why should this concern you? Ultimately the massive printing of money backed by no hard asset or commodity is one of the main reasons leading to hyperinflation and you the taxpayer ends up suffering the consequences as you see the prices of goods rise and your purchasing power decrease.

The Emergency Economic Stabilization Act of 2008 commonly known as the 2008 bailouts allowed the Federal Reserve to fund the U.S. Treasury up to $700 billion in order to make capital injections into banks. After receiving bailout funds, major banks and Wall Street corporations gave multimillion dollar bonuses to their executives and are continuing to do so currently. In addition to the bailouts hundreds and hundreds of other banks worldwide were given money from the bailouts. Why did they get that money? Whose money is it? Yours! Billions of our taxpayer dollars were just forked over to foreign banks with no explanation. Since then Federal Reserve Chairman Ben Bernanke has been under scrutiny in several Congressional meetings in 2009.

In one hearing Congressman Alan Grayson asked which foreign institutions got the money and Bernanke replied he didn’t know. In another hearing Senator Bernie Sanders demanded to know the same, which foreign institutions got the money and this time Bernanke refused to tell Sanders. Even former Federal Reserve Chairman Alan Greenspan even openly admitted,

“There is no other agency of government that can overrule actions that the Fed takes. So long as that is in place and there is no evidence that the Administration or the Congress or anybody else is requesting that the Fed do things other than what they think is the appropriate thing, then what the relationships are frankly don’t matter.”

Over the past several years Congressman Ron Paul has predicted and has been correct about various economic bubbles that have occurred in the U.S. He has spoken out about the decline of the U.S. dollar’s purchasing power and sound money legislation. Perhaps the most challenging and important bill he is trying to propose is The HR 1207 Audit the Fed Amendment 2009 which will allow a complete audit of the Fed. He as well as other Congressmen and economists have argued that the Federal Reserve is unconstitutional and corrupt.

Ron Paul and Alan Grayson have been fighting to have an amendment passed in order to fully audit the Fed. As the bill gained support in the House of Representatives the Fed hired lobbyist Linda Robertson, the former head of the Washington lobbying office of Enron who many believe influenced a block of votes in the House of Representatives opposing Ron Paul’s bill.

Later, Mel Watt’s gutted version of Paul’s bill proposed an amendment to NO LONGER allow an audit of the Fed and gives Congress NO CONTROL over the Fed’s authority to make monetary policy and doesn’t require any transparency over the Fed’s secrets to push out money to foreign central banks as well as our own central banks.

On 11/19/09 in a heated debate between Congressman Alan Grayson and Congressman Mel Watt, Grayson outlined how Watt’s amendment does quite the opposite of what the original Federal Transparency Act of 2009 does. In fact it adds more 4 more limitations to the GAO’s already existing 2 limitations in its ability to conduct audits of the Fed. So if Watt’s amendment passed there would be 6. So not only is Watt’s amendment the opposite of the Paul-Grayson amendment it also adds new limitations. In Grayson’s closing argument he states,

“I think we have a choice to make and it is a very deeply and important one. The choice is this. What kind of country are we going to have? Over the past few weeks and months and the past few years we’ve seen the Federal Reserve hand out half a trillion dollars worth of money to foreign central banks, our money, money that cheapens the value of every dollar that’s in our pocket, every dollar that’s in our bank account, every dollar that’s in our 401k.”

“If we go on with an organization that is not responsive, that is secretive, is more secretive in fact than the CIA, if we go on with a situation like that where an organization is simply handing out our money, the U.S. dollar to private entities and to private interests then the whole system will collapse therefore I cannot support the Watt amendment, I do support its alternative the Paul-Grayson amendment.”

In response Watt’s states, “I practiced law for a long time and every time I walked into court, if I didn’t have a case then I’d try to muddy up the waters as much as I could, so the arguments which have been made try to do an effective job of muddying up the waters, they talk about the Paul amendment which we’re not debating right now, they talk about Vietnam War, they talk about secret bailouts, they talk about handing out money to foreign central banks, ugh give me a break! Does anybody in here think we’re handing out any money to foreign central banks? I mean those are things that really shouldn’t be part of this debate! I want to make it clear that when we talk about an audit by the GAO it is a lot more intrusive unless we say otherwise than a general CPA audit.

The question is do we want another non-elected government entity the GAO to be second guessing this or is that our responsibility using the numbers that my amendment would make available to all of us to exercise our responsibility as members of Congress. If these guys don’t trust the Fed, the next thing we’re going to be doing is auditing the GAO because they’re not going to trust the GAO because they’re not going to trust the GAO! They are not anymore accountable or any more transparent! I agree that it’s time to do a major look at the operations of the Fed.

I would like my subcommittee the domestic monetary policy subcommittee and the house oversight committee to undertake that extensive review because what’s happening now is the public doesn’t trust the Fed anymore because of the structure of the Fed, these 12 banks that aren’t answerable to anybody, there’s all kinds of questions being raised about the integrity of the Fed. The question is in the interim between now and the time that evaluation that overall analysis gets made, until we make a record are we going to sole substantially castrate the Fed, so that it cannot do what it was set up to do, which is make independent monetary policy decisions without everybody and their brother being able to be in the room second guessing every decision that they make.

I want the public to have every number, including those secret handing out of money that Mr. Grayson talked about if there is such and that I assure you will be under my amendment. What I don’t want is for us to be second guessing, or the GAO another non-elected body to be second guessing daily, weekly, or monthly the decisions that the Fed has made it would be counterproductive to our economic system, it would increase our cost of doing business, it would increase our interest rates, it would diminish the amount of capital we have in our system and I think it is a serious bad public mistake to do that.”

Congressman Neugebauer briefly speaks stating “Many of us think the Fed has gone way beyond making monetary policy and that this whole bailout situation we’ve gotten into has gotten us to believe that the Federal Reserve are doing things that are unprecedented and I think we need some sunlight on those activities.”

It then yields to Congressman Paul, “I want to re-address the subject that keeps coming up and that is whether or not we should have transparency of the Fed and independence. The argument goes that if the Fed is audited and we know what they’re doing and we know who benefits then they no longer have independence in their monetary policy. But what I say is they have secrecy in their monetary policy. The gentleman from North Carolina resists the fact that we would like to know who benefits. Up until now, in the past year, the mortgage backed security purchase program was done through the open market committee through the discount window and we don’t know which banks benefited.

We have a right to know, we have an obligation to know, we have a responsibility to know. Why in the world would this be kept secret? His bill doesn’t allow this to happen. He refers to 714B as the audit authority on the books. That’s about a half truth because as I’ve explained 714B came about because we wanted in the 70’s to audit the Federal Reserve. But instead of giving audit authority they did the opposite. They put restrictions on the audit authority so the Fed actually ended up with more secrecy and that is my claim with the legislation of his that mine corrects and that is, that what we want to do is get rid of all those exemptions not put them back in and add the exemptions.

To reinstate also we don’t want to monitor monetary policy, we can’t be more explicit. We removed the suggestion that the GAO makes suggestions on what to do, we have indicated that we are not involved, we don’t want to look at any of the minutes and transcriptions for 180 days so that is not the issue. The real issue is where the money goes. This is significant, it’s significant to the American people not only because some people benefit and other people suffer, but the way this comes about. It’s not appropriated! Can you think of this? Think of the Fed being able to create a trillion dollars outside of the appropriations process?! We should be aghast over that amount of power!

You know if we want the Fed and we want them to do it, why don’t we authorize their money or something? But to give them secret authority to create money out of thin air, make deals with foreign central banks, deals with foreign governments, international financial institutions, and corporations and buy assets and not be monitored? This is unbelievable! Yet people argue that we have to have independence of the Fed. If they’re independent just remember every time the word independent is used it means secrecy the American people aren’t allowed to know!

Even Congress has given up their prerogative of their responsibility of auditing that which they created. The Federal Reserve was created by the Congress. They have the moral authority, the constitutional responsibility and we should be able to audit and monitor and know what is going on without making an attack on monetary policy. Quite frankly, many supporters of this bill are across the political spectrum support this. Not because we have a consensus on monetary policy, no way! Because I would not at this moment say oh yea let’s have the system that we have now, let’s turn over monetary policy to a majority vote in the Congress that’s not what this is all about. We’ve gone out of our way to make it explicitly clear that that is not it. It’s assuming the responsibility that we have to know where the money is going!”

On 11/29/09 the HR 1207 Audit the Fed Amendment Passed and calls for a comprehensive audit of the Fed and replaces the opposing amendment proposed by Mel Watt.

There’s a lot to think about on this topic. Why did the Fed hire a lobbyist? Why so much opposition on the Fed’s part if they have nothing to hide? First Ben Bernanke doesn’t know who got the money and then now he knows but refuses to reveal any information. Certainly the public has a right to know where our money is going. Why so secretive? Why so much authority to create money supply at whatever amount arbitrarily under no scrutiny? Mr. Watt’s say when he was a lawyer and he didn’t have a case he’d always try to muddy up the waters. As if Paul and Grayson didn’t have a significant argument.

He said the talks about secret bailouts and handing out money to foreign central banks shouldn’t be part of the debate. I thought that was one the main reasons behind Paul-Grayson’s amendment, to find out which foreign central banks the money went to during the bailouts and where the money goes period. He also was concerned about Paul-Grayson’s amendment preventing the Fed from making its independent monetary policy which, as Paul said, they went out of their way to make it explicitly clear that was not the case. Watt’s also says he wants made available including the ones of the secret bailouts if there is such a thing. I don’t understand what he means, one of the main points of Paul-Grayson’s amendment is to find out WHO the money went to of the foreigner’s that Bernanke admitted to giving, only that he didn’t reveal the names and specific details of those groups. So the only one who seems to not to have much of a case is Mr. Watt and as he’s said in the past when he entered into court and didn’t have a case he’d try to muddy up the waters as much as he could. Guess history repeats itself…