The Fed: Mighty, but Flighty!

Audit the Fed

Washington is a land of hypocrites.  You probably don’t need any convincing but let me give you one example because it is relevant today.

In 2010, Congressman Ron Paul’s bill to audit the Federal Reserve had 320 sponsors in the House of Representatives.  No surprise that it had so many sponsors.  Their constituents were losing their homes and jobs right and left, while the Wall Street cronies were getting bailed from the latest Fed-created market collapse.  

So, the Audit the Fed bill had a lot of sponsors.  But when the vote finally came up, it only received 198 votes and so it failed to pass.

Sponsors voted against their own bill.  The Fed, said Dr. Paul afterwards, “is a very powerful institution.”  It had gone to work and stopped the measure dead in its tracks.  

We later learned that during the Great Recession, while Americans were losing their homes and savings, the Fed had secretly loaned more that $16 trillion to some of the largest and most powerful banks and financial institutions in the world, including foreign banks and governments.

No wonder the Fed so desperately resists an audit.

I have written lately (see here) about the way the Fed quietly booms and busts the economy for its own purposes.  A small example of that power was on display on Friday, January 4, when a word or two from Chairman Powell sent the stock market climbing for several consecutive days. 

Our economy is made to rock back and forth on the words of unknown, unelected, and mostly invisible bureaucrats.  The financial community and the markets ricochet around waiting for the next throat clearing from some Fed official in the Marriner Eccles building.  

America used to be on the gold standard.  Now, says Jim Grant, we are on “the PhD standard.”  

Speaking of the PhD standard, the head (another PhD, of course) of the New York Fed, the most influential of the Fed regional “banks,” recently announced that inflation is too low!  Sure, just print a few trillion more and watch what happens.  They still haven’t figured out how to dispose of the previous trillions they printed.  The PhDs can’t even agree among themselves on what to do.  There is nothing objective about monetary meddling.  

It is little more than whim and caprice cross-dressing as rationality.

No wonder paper money always comes to a bad end.

No wonder we prefer the impartiality of gold.  

By the way, a new bi-partisan audit the Fed bill has just been introduced in this session of congress by Representative Thomas Massie, H.R. 24, the Federal Reserve Transparency Act.

Take a listen to our latest commercial, although it’s nothing new to readers who have already been listening for the past several months…