A weekly column
On Transparency of the Fed
This week the Federal Reserve responded to the American people's increased concerns over our monetary policy by presenting new initiatives aimed at enhancing the Fed's transparency and accountability. As someone who has called for more openness from the Fed for over 30 years, I was pleased to see the Fed acknowledge the legitimacy of this need.
The Federal Reserve controls the flow of money and credit in our economy because Congress has abdicated its responsibility over the nation's currency. This process therefore occurs centrally, and almost completely outside the system of checks and balances. Because of legal tender laws, people are left with no real choice, except to build their lives and futures around this monopoly currency, vulnerable to powerful central bankers. The Founding Fathers intended only gold and silver to be used as currency, however, inch by inch over the decades, this country has backed away from this important restraint. Our money today has no link whatsoever to gold or silver. For many reasons, this is extremely dangerous, and has a lot to do with the boom and bust cycles that have resulted in the crisis in which we find ourselves today.
The Fed is now pledging to reveal to the public more about its economic predictions, and calls this greater transparency. This is little more than window-dressing, at best, utterly useless at worst. Many analysts, especially those familiar with the Austrian school of economics, saw the current economic crisis coming years ago when the Federal Reserve was still telling the American people their policies were as good as gold. So while it might be nice to know what fantasy-infused outlook the Fed has on the economy, I am much more interested in what they are doing as a result of their faulty, haphazard interpretation of data. For instance, what arrangements do they have with other foreign central banks? What the Fed does on that front could very well affect or undermine foreign policy, or even contribute to starting a war.
We also need to know the source and destination of funds provided through the Fed's emergency funding facilities. Information such as this will provide a more accurate and complete picture of the true cost of these endless bailouts and spending packages, and could very likely affect the decisions being made in Congress. But with so much of the Fed's business cloaked in secrecy, these latest initiatives will not even scratch the surface of the Fed's opaque operations. People are demanding answers and explanations for our economic malaise, and we should settle for nothing less than the whole truth on monetary policy.
The first step is to pass legislation I will soon introduce requiring an audit of the Federal Reserve so we can at least get an accurate picture of what is happening with our money. If this audit reveals what I suspect, and Congress has finally had enough, they can also pass my legislation to abolish the Federal Reserve and put control of the economy's lifeblood, the currency, back where it Constitutionally belongs. If Congress refuses to do these two things, the very least they could do is repeal legal tender laws and allow people to choose a different currency in which to operate. If the Fed refuses to open its books to an audit, and Congress refuses to demand this, the people should not be subject to the whims of this secretive and incompetent organization.
Posted by Ron Paul (02-23-2009, 11:58 AM) filed under Monetary Policy
rate
email
print
link to this page
Comments: 13
The Fed is a great institution for funneling money into the pockets of a few bankers and removing all risk (to themselves) from their operations. It was designed as a means gaining wealth for the bankers and has served nobly in that cause.
Unfortunately, the rich and powerful will not allow you to stop the gravy train. They like things the way they are. Even if you did succeed at getting Congress to pass your law little would change. The rich and powerful will continue to have so much influence over government and the economy that you cannot restrain them. They will do as they like.
This is true no matter whom we elect and no matter what line they are selling whether conservative, liberal, socialist, communist, or anarchist. The result will be the same as it always has been.
If you want a real change that gets rid of the rigged game we all play today please read
Invisible Hand here on Gather or at
www.nopom.info
where you can listen to the complete book on MP3 or read it all without those Gather ads that take so long to download.
That is probably one of the primary reasons for mandating that Congress coin the money with Gold and Silver to back it.
Larry we had an agreement that you would not hawk your book on my articles. What that book espouses is pure Communism and ignores one vital thing. It is not Money that is the problem. It is the LUST for money and that includes any form or shape of money. Credits in a bank account included.
Great article!
~M
Paul has it right - Congress and the White House (either party-this is not a partisan issue) don't want us to know what happens to our tax dollars after they give them away!
With all of our debt, including SS, Medicare, Medicade, bailout, stimulus, etc, the total is 78.8 TRILLION dollars. To put that in perspective, the global GDP was 78.2 trillion last year.
We have and have had, a bunch of morons spending our money. When we will we learn?
~M
I agree that we need the Gold/Silver Standard back, as Government has shown it cannot handle this, and is destroying this country.
~M
Yes Dan, Just exactly what Ron Paul has been saying for 30 years.
Michael, yes "lying less" is more accurate.