Monday, June 22, 2009

Fed Up

Audit the Fed Bill Reaches Crucial Benchmark
Washington, D.C. - Congressman Ron Paul's Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members. ...

Ron Paul in Forbes magazine:
Audit the Federal Reserve

The Federal Reserve's recent and unprecedented actions in the realm of monetary policy have provoked a backlash among the American people. Trillions of dollars worth of loans and guarantees have been provided to Wall Street firms, while Main Street Americans suffocate under harsh taxation, the prospect of higher debt levels and increasing inflation. ...

One of the fallacies of modern economics is the idea that a central bank is required in order to keep inflation low and promote economic growth. In reality, it is the central bank's monetary policy that causes inflation and depresses economic growth. Inflation is an increase in the supply of money, which in our day and age is directly caused or initiated by central banks.

While there currently is a limited audit capability, the important parts of the Fed are exempt from a real external audit. As this Bloomberg document attests, the Fed routinely ignores Congressional requests for information.

... The Fed “refused” to provide the documents, resulting in the subpoena, California Representative Darrell Issa, the panel’s senior Republican, said in an e-mailed statement today.

In an April letter to Kucinich, Bernanke said the Fed “acted with the highest integrity” during its discussions with Bank of America on Merrill Lynch and didn’t seek to withhold any information from the public on Merrill Lynch’s losses.

Bernanke said in the letter that information collected by the Fed up to that point consisted of “confidential supervisory information or confidential business information, both of which have traditionally been regarded as material that should not be made public, especially in the case of institutions that continue to operate. ...”

The Federal Reserve's balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant's Interest Rate Observer, told CNBC. ...