Audit Fed Bill Vote Slated for January 12; We Really Don’t Need the Fed
• Voters from both parties encouraged to contact Congress and urge audit.
By Mark Anderson —
As this newspaper announced in issue No. 49 & 50 in 2015, United States Senator Randal Howard “Rand” Paul (R-Ky.) is still floating legislation to audit the Federal Reserve System. We asked readers to contact Capitol Hill and urge a vote, and it appears our efforts, with other Fed foes, have paid off.
A Senate Fed-audit vote has been scheduled for January 12. The most viable of Paul’s two audit bills introduced in 2015 is S. 2232, the Federal Reserve Transparency Act of 2015. One year ago, in January 2015, he introduced S. 264, which carries the same name, but that bill, according to the Library of Congress, never left the Senate Banking Committee.
Paul, who’s also a Republican presidential candidate, announced on his Facebook page: “I’ve . . . been told that when the Senate returns on January 12th, we will vote on auditing the Fed. I’ve been fighting for years to get this vote. This is a huge victory for us. But it’s still an uphill battle from here to get full transparency from the Fed. Let’s gear up and let’s really fight to make this important change.”
The House on several occasions has passed Fed-audit bills over the last few years, though the secretive, privately owned and controlled Fed is supremely adept at sidetracking such moves. Federal Reserve Bank of Richmond President Jeffrey M. Lacker, showing how jealously the Fed guards its century-long racket, has called the idea of an audit, “high-frequency harassment of our decision-making process—our monetary policy decision-making process.”
Among the 24 all-GOP official co-sponsors, according to the Library of Congress as of December 26, are Paul’s rival Republican presidential candidates, Senators Marco Antonio Rubio (Fla.) and Rafael Edward “Ted” Cruz (Texas). It’s apparently unheard of for three presidential hopefuls to call for legislation targeting the Fed, be it an audit or anything else.
Cruz’s fellow Texan, Senator John Cornyn III (R), also is on board. The other states with both senators aboard are Idaho (Republicans Michael Dean “Mike” Crapo and James Elroy “Jim” Risch) and Georgia (Republicans David Alfred Perdue Jr. and John Hardy “Johnny” Isakson).
On a video accompanying his Facebook announcement, regarding who’s “on board” for this vote, Paul noted: “We don’t have all the Republicans yet, much less all the Democrats.”
The S. 2232 text states that its purpose is: “To require a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve banks by the Comptroller General of the United States, and for other purposes.”
If the bill becomes law, an audit would be required within 12 months after enactment. A report on the audit’s results would be required within 90 days after the audit is done.
Voters from either major party should call Capitol Hill and get more senators on board. Independent voters should do the same. Unity across party lines is possible.
An audit may be a worthwhile way to help break the Federal Reserve’s stranglehold on the nation’s monetary policy and on the greater economy, because a proper in-depth audit could reveal Fed manipulations that would shock more lawmakers and citizens out of their complacency toward the central bank. However, ending the Fed must remain our goal.
When private bankers steal the critically important sovereign function of creating money, and then are allowed to regulate the banking system on top of that, drastic restorative measures are needed to divorce the Fed, terminate its debt-based money system and publicly re-issue interest-free United States notes—much like President Andrew Jackson did when he terminated the private Second Bank of the United States in 1836 and moved money creation back to the sovereign government.
Paul noted on his presidential campaign website: “The Federal Reserve was created by Congress and is supposed to be overseen by Congress. The Fed is now in every nook and cranny of banking with unprecedented regulatory powers and no congressional oversight. I believe the . . . regulatory power should be placed back under the control of Congress.”
Notably, there was little evidence at press time of Senate Democrats publicly supporting this legislation. When the earlier bill (S. 264) first came up, even so-called banking watchdog Senator Elizabeth Ann Warren (D-Mass.) did not support it while pathetically parroting the Fed’s official line that any monetary-policy oversight by Congress would “politicize” the Fed’s decisions, typical “codespeak” the Fed uses to deflect deeper oversight. Warren would simply allow the already required basic audit of the Fed’s balance sheets to continue without a deeper look at the all-important monetary policy.
To ask for any Senate or House member by name, call Capitol Hill’s switchboard at 202-224-3121 or 225-3121. Standard mail can be addressed: “Name of legislator,” followed by Senate Office Building, Washington, D.C. 20510, or “Name of legislator,” House Office Building, Washington, D.C. 20515.
Mark Anderson covers the annual Bilderberg meetings and is chairman of AFP’s new America First Action Committee, designed to involve AFP readers in focusing intensely on Congress to enact key changes, including monetary reform and a pullback of the warfare state. He and his wife Angie often work together on news projects.
We Really Don’t Need the Federal Reserve
• Secretive central bank’s ability to manipulate money supply must be restricted
By former Representative Ron Paul
Stocks rose on Wednesday, December 16, following the Federal Reserve’s announcement of the first interest rate increase since 2006. However, stocks fell just two days later. One reason the positive reaction to the Fed’s announcement did not last long is that the Fed seems to lack confidence in the economy and is unsure what policies it should adopt in the future.
At her Wednesday press conference, Federal Reserve Chair Janet Yellen acknowledged continuing “cyclical weakness” in the job market. She also suggested that future rate increases are likely to be as small, or even smaller, than Wednesday’s. However, she also expressed concerns over increasing inflation, which suggests the Fed may be open to bigger rate increases.
Many investors and those who rely on interest from savings for a substantial part of their income cheered the increase. However, others expressed concern that even this small rate increase will weaken the already fragile job market.
These critics echo the claims of many economists and economic historians who blame past economic crises, including the Great Depression, on ill-timed money tightening by the Fed. While the Federal Reserve is responsible for our boom-bust economy, recessions and depressions are not caused by tight monetary policy. Instead, the real cause of economic crisis is the loose money policies that precede the Fed’s tightening.
When the Fed floods the market with artificially created money, it lowers the interest rates, which are the price of money. As the price of money, interest rates send signals to businesses and investors regarding the wisdom of making certain types of investments. When the rates are artificially lowered by the Fed instead of naturally lowered by the market, businesses and investors receive distorted signals. The result is over-investment in certain sectors of the economy, such as housing.
This creates the temporary illusion of prosperity. However, since the boom is rooted in the Fed’s manipulation of the interest rates, eventually the bubble will burst and the economy will slide into recession. While the Federal Reserve may tighten the money supply before an economic downturn, the tightening is simply a futile attempt to control the inflation resulting from the Fed’s earlier increases in the money supply.
After the bubble inevitably bursts, the Federal Reserve will inevitability try to revive the economy via new money creation, which starts the whole boom-bust cycle all over again. The only way to avoid future crashes is for the Fed to stop creating inflation and bubbles.
Some economists and policy makers claim that the way to stop the Federal Reserve from causing economic chaos is not to end the Fed but to force the Fed to adopt a “rules-based” monetary policy. Adopting rules-based monetary policy may seem like an improvement, but, because it still allows a secretive central bank to manipulate the money supply, it will still result in Fed-created booms and busts.
The only way to restore economic stability and avoid a major economic crisis is to end the Fed, or at least allow Americans to use alternative currencies. Fortunately, more Americans than ever are working to change our monetary system.
Thanks to the efforts of this growing anti-Fed movement, Audit the Fed had twice passed the House of Representatives, and the Senate is scheduled to vote on it on January 12. Auditing the Fed, so the American people can finally learn the full truth about the Fed’s operations, is an important first step in restoring a sound monetary policy. Hopefully, the Senate will take that step and pass Audit the Fed in January.
Ron Paul, a former U.S. representative from Texas and medical doctor, continues to write his column “Texas Straight Talk” for the Foundation for Rational Economics and Education.