Saturday, August 08, 2009
The Fed Rules All
Despite the fact that more than half of the House of Representatives signed on as co-sponsors, and despite the efforts of Senators as disparate as Jim DeMint and Bernie Sanders, the Senate still managed to block a bill to audit the Federal Reserve on procedural grounds.
In July, the Senate brazenly chose not to have the Government Accountability Office increase its scrutiny of the Federal Reserve by auditing it and then issuing a report with its conclusions.
It's worth noting that DeMint is a southern, Christian conservative, and the liberal Sanders is a self-described socialist. The two rarely agree on anything, except that the Fed needs to be audited for the good of the nation.
As DeMint put it, " The value of our dollar, our whole economic system, rides on this unelected, secret agency called the Federal Reserve. We're not sure what they're doing right now.... Frankly, a lot of us here in this country, and around the world, are concerned that we're going to destroy the American dollar and the worldwide reserve currency."
DeMint said that he and some of his colleagues are concerned that the Federal Reserve will monetize the debt (by printing more money), buy our own debt, and ultimately devalue the dollar in the process.
Yet, despite the Fed's utter lack of transparency, the Obama administration has proposed giving it the power to regulate all financial institutions — banks, insurance companies, brokerage houses, etc.
And now we have seen a concerted effort to keep the GAO, and the Congress, from taking a look at the Fed's books. Clearly, the Fed fears oversight. It must feel quite relieved that it will continue operating in secrecy.
The fact hat a bill with 250 co-sponsors in the House could still fail in the Senate says a lot about the awesome power of the Fed.
For what it's worth, DeMint says he will keep bringing the bill up as an amendment to other Senate bills, hopefully getting it passed that way.
Why should you and all Americans care?
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. That's what Jim Grant, editor of Grant’s Interest Rate Observer, recently told CNBC.
With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.
In other words, it's all a giant charade.
Perhaps Americans are finally getting hip to the Fed's smoke and mirrors act.
According to a recent Gallup Poll, the Federal Reserve has the lowest approval rating of nine various federal agencies -- including the IRS.
In the July poll, only 30% of respondents gave a thumbs up to the Fed, while 40% said the IRS was doing an excellent or good job. A majority of the public (57%) sees the Fed’s current performance as either poor or fair.
That amounts to a serious public relations problem for the Fed.
But why should they worry? They've got the Senate under their thumb and on their side.
This is beyond politics. "We the people", and our interests, are not being represented. Instead, we are being blinded and then robbed.
"To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so." - Rep. Ron Paul