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Ron Paul: Don’t Believe “Anti-Audit” Propaganda From Federal Reserve

“THE FEDERAL RESERVE HAS OPERATED IN SECRECY – TO THE BENEFIT OF THE ELITES AND THE DETRIMENT OF THE PEOPLE” || By RON PAUL || In recent weeks, the Federal Reserve and its apologists in Congress and the media have launched numerous attacks on the Audit the Fed legislation.  These…

“THE FEDERAL RESERVE HAS OPERATED IN SECRECY – TO THE BENEFIT OF THE ELITES AND THE DETRIMENT OF THE PEOPLE”

ron paul revolution|| By RON PAUL || In recent weeks, the Federal Reserve and its apologists in Congress and the media have launched numerous attacks on the Audit the Fed legislation.  These attacks amount to nothing more than distortions about the effects and intent of the audit bill.

Fed apologists continue to claim that the Audit the Fed bill will somehow limit the Federal Reserve’s independence.  Yet neither Federal Reserve Chair Janet Yellen nor any other opponent of the audit bill has ever been able to identify any provision of the bill giving Congress power to dictate monetary policy.  The only way this argument makes sense is if the simple act of increasing transparency somehow infringes on the Fed’s independence.

This argument is also flawed since the Federal Reserve has never been independent from political pressure.  As economists Daniel Smith and Peter Boettke put it in their paper “An Episodic History of Modern Fed Independence,” the Federal Reserve “regularly accommodates debt, succumbs to political pressures, and follows bureaucratic tendencies, compromising the Fed’s operational independence.”

The most infamous example of a Federal Reserve chair bowing to political pressure is the way Federal Reserve Chairman Arthur Burns tailored monetary policy to accommodate President Richard Nixon’s demands for low interest rates.  Nixon and Burns were even recorded mocking the idea of Federal Reserve independence.

Nixon is not the only president to pressure a Federal Reserve chair to tailor monetary policy to the president’s political needs.  In the fifties, President Dwight Eisenhower pressured Fed Chairman William Martin to either resign or increase the money supply.  Martin eventually gave in to Ike’s wishes for cheap money.  During the nineties, Alan Greenspan was accused by many political and financial experts — including then-Federal Reserve Board Member Alan Blinder — of tailoring Federal Reserve policies to help President Bill Clinton.

Some Federal Reserve apologists make the contradictory claim that the audit bill is not only dangerous, but it is also unnecessary since the Fed is already audited.  It is true that the Federal Reserve is subject to some limited financial audits, but these audits only reveal the amount of assets on the Fed’s balance sheets.  The Audit the Fed bill will reveal what was purchased, when it was acquired, and why it was acquired.

Perhaps the real reason the Federal Reserve fears a full audit can be revealed by examining the one-time audit of the Federal Reserve’s response to the financial crisis authorized by the Dodd-Frank law.  This audit found that between 2007 and 2010 the Federal Reserve committed over $16 trillion — more than four times the annual budget of the United States — to foreign central banks and politically influential private companies.  Can anyone doubt a full audit would show similar instances of the Fed acting to benefit the political and economic elites?

Some fed apologists are claiming that the audit bill is part of a conspiracy to end the Fed.  As the author of a book called End the Fed, I find it laughable to suggest that I, and other audit supporters, are hiding our true agenda.  Besides, how could an audit advance efforts to end the Fed unless the audit would prove that the American people would be better off without the Fed?  And don’t the people have a right to know if they are being harmed by the current monetary system?

For over a century, the Federal Reserve has operated in secrecy, to the benefit of the elites and the detriment of the people.  It is time to finally bring transparency to monetary policy by auditing the Federal Reserve.

Ron Paul is a former U.S. Congressman from Texas and the leader of the pro-liberty, pro-free market movement in the United States. His weekly column – reprinted with permission – can be found here.

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12 comments

The Colonel March 9, 2015 at 4:15 pm

I see we have another “blind squirrel finds the nut” article from Ol’Ronbo.

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tomstickler March 9, 2015 at 4:26 pm

That depends: is the “nut” in question Ronbo’s spawn, Rand?

Here is a good argument against Rand’s “audit” bill: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/11/16/heres-whats-wrong-with-rand-pauls-audit-the-fed-bill/

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REP Holt March 9, 2015 at 9:55 pm

Absorb Milton Friedman: “Any system which gives so much power and so much discretion to a few men, [so] that mistakes ?? excusable or not ?? can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic ?? this is the key political argument against an independent central bank. . .To paraphrase Clemenceau: money is much too serious a matter to be left to the Central Bankers.”

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Augusto Pinochet March 10, 2015 at 8:43 am

Milton Friedman, what a good guy.

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REP Holt March 9, 2015 at 10:00 pm

You are as ancient and senile as your picture depicts!! Way past your bedtime grampy!

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The Colonel March 9, 2015 at 11:01 pm

We’re that it was true.

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REP Holt March 9, 2015 at 9:57 pm

Supporters of auditing the Federal Reserve rightfully so point to the central bank’s wild schemes amid the economic crisis to create trillions of dollars out of thin air in order to bailout: big banks, big US corporations, cronies, foreign corporations, and even banks owned by hostile foreign powers. Even more of a reason to audit the Fed is to bring visibility and a check on its blatant and well-documented manipulation of markets, its distortion of interest rates leading to widespread malinvestment, its outlandish expansion of the currency supply, the steady erosion of the value of the U.S. dollar, the enabling of exploding government deficits, and much more…

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REP Holt March 9, 2015 at 10:04 pm

In regards to all those calling Ron Paul a blind squirrel for investing in gold:
DJIA Yr. 2000 approx. $12 thousand. DJIA today approx $18 thousand.

Gold Yr. 2000 approx $285. Gold today approx $1,300.

Yes gold went down recently, but really! How many years do you think Ron Paul has been going long in gold? How do you compare over 400% appreciation for 15 years and say he missed out on that 50% appreciation he could have had with stocks?

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FastEddy23 March 9, 2015 at 10:19 pm

The Gold problem is currently not under world market pressures to “float” to the world price, as it was then.

The tresury and the fed and the current administration have been and are in collusion to manipulate the world market price of Gold. Admin/treasury/fed “loan” Gold to the IMF for bailout of EuroTrash economies like Greece and Spain, then the IMF “gets paid” back in green backs or Gold or whatever the stupid administration allows … and which ever is required to clamp down US inflation.

Yes, there is a serious need to audit the fed reserve taxpayer owned Gold.

And another thing. In the basement of the twin towers (remember 9/11/2001?) … is where a huge amount of taxpayer owned Gold was stashed … No one in Gruberment has ever said what happened to all of that NY Fed controlled Gold.

Big Ben and Tiny Timmy know …

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M2000 March 10, 2015 at 10:18 am

Didn’t Dr. Paul sit down with former FED Chairman Ben Bernanke for breakfast once? Yea why sit down with the enemy? Oh wait Paul is a fraud.

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REP Holt March 12, 2015 at 10:19 pm

That’s kind’ve a silly comment. Almost every modern president has sat with opposing “enemy” leaders. FDR sat with Stalin, Clinton met North Korean Officials, Obama sat with Putin, does that make these Presidents now enemies? Just a preposterous comment.

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M2000 March 13, 2015 at 12:34 pm

So why did Dr. Paul have breakfast with Ben Bernanke if he wanted to oppose the FED? Didn’t his son accept his successor by confirming her?

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