BREAKING: RON PAULS AUDIT THE FED BILL NOW HAS 242 CO-SPONSORS!!!

[link to www.govtrack.us]

Exclusive Conversation With Ron Paul: The Future Of The Federal Reserve
June 24, 2009 10:21 AM ET | Matthew Bandyk | Permanent Link | Print
President Obama's financial regulatory plan has created controversy over the role of the Federal Reserve in our economy like rarely before. The person in Congress with perhaps the most unconventional point of view on these issues in American politics is Congressman and former presidential candidate Ron Paul (R-TX), a longtime critic of the very institution of the Fed and fractional reserve banking. He has recently sponsored a bill that would audit the Fed, which has attracted cosponsors such as Dennis Kucinich (D-OH).

I talked to Congressman Paul about his unique perspective and why the Fed is controversial again.

Me: Do you think the Fed is the main culprit behind the current economic crisis?

Paul: I don't believe you can have financial bubbles without artificially expanding the supply of money and credit, and only the Fed can do that in collusion with the banks, who can operate under fractional reserve banking. So that's where the financial bubbles come from, whether it's housing or the stock market or the bond market. That's the source of the bubble, and that's what has to be addressed, and yet the Fed has been able to operate in secrecy on exactly how they allocate credit and what they do with international markets. So yes, the Fed is the number one culprit.

I guess the response from defenders of Greenspan would be that to jack up interest rates enough to defuse the housing bubble would have been really bad for growth and unemployment, and that was unacceptable at the time.

Yes, and that's why he inflated it instead. It's like a drug addiction. Nobody wants the pain that comes with getting off the drug. But it's more than the pain of avoiding addiction that drives Bernanke. It's a deep-seated philosophy that inflation is the cure, and that it can prevent the correction. But the correction has been locked in place. In the year 2000 it was locked in place. The market was trying to tell us we needed a correction. But it was prolonged so the bubble was made even bigger. This bubble has been going on since 1971 when the dollar became fiat and we had international reserve currency without backing. Ultimately, no matter what the Fed does, you can't prop up a bad system, and that's why this one is different than any recession we've had since 1971.

So that's where your bill to audit the Fed comes in?

In a way it's a mini-step, but it's also the reason I have a lot of co-sponsors because I haven't gotten into the controversy of fractional reserve banking and the issue of monetary policy per se. My main goal is to find out exactly what the Fed has been doing, especially in this crisis. Since the crisis has hit, there's been this whole idea of transparency about what the Treasury does with the TARP funds. So now the American people want to know what the Fed does. I believe that reform is inevitable, and that's the second step.

What do you mean by "what the Fed is doing"?

What they're doing with foreign governments, international financial organizations, what they buy and sell, and what markets they interfere with... how decisions are made. We don't have absolute figures, but it's estimated that they might have a guarantee of 3 or 4 or 5 trillion dollars. It doesn't have to be on the books because it might just be guarantees. This is big stuff and the Congress should know about it.

What do you mean by reform of the Fed?

This system has failed in a financial sense. I believe the dollar will fail too. We are going to have very high interest rates and price inflation rates. Finally, they will have to stop. That's why I want to see what the Fed is talking about and what they're saying to the central banks in other countries. They know that reform is coming--they're looking to the IMF, and Obama's on that side of the argument. That's exactly the opposite type of reform that free-market and strict-constitutionalist people don't want. We want reform toward honest money and sound money, rather than looking to internationalism propping up the flawed system just by changing it from a dollar-run system to an international system. Debate has to come on what types of reform are necessary.

Why audit the Fed if the goal is to end it?

To expose them, and then people will be convinced of what the problems are. A lot of people don't know too much about the Fed. If we audited the Fed, I would learn a whole lot. I think we'd learn that there's a lot of special-interest financing going on. We saw with the TARP funds--which were more open--these go to certain corporations but not others, some had to go bankrupt, some people got huge bonuses. I think we would see a lot of that in the way the Fed runs their finances.

Tim Geithner has said in statements defending the Obama administration's plan that the Fed is the only player big enough to defend against systemic risk.

I wouldn't be surprised to hear him say that, coming from someone who's been the ultimate insider. When he was at the New York Fed, he was a permanent member of the FOMC [Federal Open Market Committee], so therefore he's going to protect that whole institution. In an interview not long ago, he was quite frank that the Fed kept interest rates down too long and too low. I think he was caught off-guard. But he was telling the truth.

People who don't always see eye-to-eye with you on the role of government in the economy have signed on to the bill, like Dennis Kucinich, what do you think is going on there?

The person who introduced my bill in the Senate is Bernie Sanders, a so-called socialist. They're opposed to special-interest corporatism. They don't like corporatism anymore than I do. I don't like welfare for anybody, let alone corporations.

The Republicans in the Financial Services Committee have floated a plan that would also promote the Fed as a guard against systemic risk.

I understand what they're doing, and it's not knock-down, drag-out battle. Actually, if I had my druthers, I wouldn't advocate closing the Fed tomorrow. It'd be much better to work out a transition. What I want is competition in money--to have two circulating currencies in the United States, just like you have dozens of currencies circulating around the world, instantaneously adjusting value, and you can do that domestically. In some ways it helps my bill because I can say, look: the American people want transparency, and if you're going to give [the Fed] more power, it's important that we act in our capacity for oversight. People who might be supporting more power for the Fed still are receptive to the idea that we should know what they are doing.

[link to www.usnews.com]

I would imagine that would be tied up in court for so long that it won't make a difference. It would nice, I guess, I know I don't want to see the real Fed numbers, but it will never happen. They may audit themselves and report, but they will never allow an outsider in.

I don't know much about it but if Ron Paul goes missing will the bill be squashed? ... I think he is making too many waves for the big boys ...i hope it gets passed ..Go Ron Paul

bernanke and the whole shabang is going down

long live ron paul

No, not with that many co-sponsors.

Besides, the Fed may actually WANT to be audited. It might serve their agenda.

ITS A SHAME! The IMF will be doing the audit. You people are thick. Its all scripted.

wow neat

make it know, far and wide

Correction, 243 co-sponsers

H.R.1207
Title: To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.
Sponsor: Rep Paul, Ron [TX-14] (introduced 2/26/2009) Cosponsors (243)
Related Bills: S.604
Latest Major Action: 2/26/2009 Referred to House committee. Status: Referred to the House Committee on Financial Services.

How many votes in the Senate does he need?

My Rep Mark Schauer is already on board.

I emailed the shit out of Eric Cantor and recieved multiple form letters from his office all saying the same thing.He has now signed on,but it looks weak here's the part that concerns me.."This legislation would reform the manner in which the board of governors would be audited by the comptroller general and the manner in which such audits are reported".BULLSHIT.

Ron Paul will go down before the Federal Reserve. Expect Ron Paul to die soon. Could be the usual mysterious plane crash or car accident, although since he's old they may chemically induce cardiac arrest.

for sure, otherwise this bill would have never been heard of.

Ron Paul’s Bill Would Put Fed on the Hot Seat

Meanwhile White House, Treasury looking to expand autonomy of Federal Reserve


By Christopher J. Petherick

Treasury Department Secretary Timothy Geithner is calling on Congress to hand the privately owned and controlled Federal Reserve even more power to regulate financial markets at a time when there is growing support among legislators to put Fed bankers on the hot seat by giving federal officials the authority to audit the central bank.

In the June 29 edition, AMERICAN FREE PRESS reported that the Federal Reserve Transparency Act (H.R. 1207) introduced by Rep. Ron Paul (R-Texas) had picked up “enough sponsors to get it out of committee and onto the floor of the House of Representatives.”

The bill gives the federal government the power to audit the privately owned and controlled Federal Reserve and its various funding arms, which have loaned, given out or guaranteed trillions of dollars to various Wall Street pals and financial institutions. At that time, the bill had 226 co-sponsors—more than half the entire membership of the House. Since then, however, the number has grown to 243, with more joining every day.



The rising popularity of Paul’s bill contrasts sharply with recent statements made by Geithner, who wants to give Federal Reserve bankers even more power to regulate financial institutions. The problem for Geithner is that it was former Federal Reserve chairman Alan Greenspan’s loose fiscal policies that have largely been to blame for the economic woes facing the country. For decades, Greenspan flooded the world with U.S. dollars, creating the perfect environment for Wall Street speculators and bankers to dig themselves a financial hole so deep that they took Main Street with them.

Now, as part of a sweeping financial overhaul proposed by the Obama administration, Geithner wants to give the Fed even more power to oversee the largest financial firms such as Citigroup and Bank of America. It’s the equivalent of putting the fox in charge of the brooder after he’s already eaten most of the chickens in the henhouse.

During a recent hearing on the matter, Sen. Jim Bunning (R-Ky.), a longtime critic of the Fed, grilled Geithner: “What makes you think the Fed will do better this time around?”

Geithner could only respond that empowering the Fed “made the most sense, given the circumstances.”

It should be no surprise that Geithner continues to side with the central bank given the fact that he served as the head of the Federal Reserve Bank of New York from 2003 to 2009. The New York Fed is considered the most powerful of the regional central banks due to its location near Wall Street and the leadership role it plays in setting monetary policy.

Meanwhile, Paul’s call to audit the Fed continues to make headlines across the country.

In mid June, CBS News reported in depth on Paul’s measure, which “mandates a thorough audit of the Federal Reserve.”

“The tremendous grass-roots and bipartisan support in Congress for H.R. 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” Paul said.

“I look forward to this issue receiving greater public exposure.”

auditing the fed is like remodeling your bathroom, it seems like a good idea at first, then you realize you can't take a dump!