With Representative Thomas Massie reintroducing Audit the Fed yesterday, today seems like a good time to bring back Campaign for Liberty Chairman Ron Paul’s official statement on the Audit the Fed bill from 2009. You can read Dr. Paul’s statement here and below:
THE FEDERAL RESERVE TRANSPARENCY ACT
______
HON. RON PAUL
of texas
in the house of representatives
Thursday, February 26, 2009
Mr. PAUL. Madam Speaker, I rise to introduce the Federal Reserve
Transparency Act. Throughout its nearly 100-year history, the Federal
Reserve has presided over the near-complete destruction of the United
States dollar. Since 1913 the dollar has lost over 95% of its
purchasing power, aided and abetted by the Federal Reserve's loose
monetary policy. How long will we as a Congress stand idly by while
hard-working Americans see their savings eaten away by inflation? Only
big-spending politicians and politically favored bankers benefit from
inflation.
Serious discussion of proposals to oversee the Federal Reserve is
long overdue. I have been a longtime proponent of more effective
oversight and auditing of the Fed, but I was far from the first
Congressman to advocate these types of proposals. Esteemed former
members of the Banking Committee such as Chairmen Wright Patman and
Henry B. Gonzales were outspoken critics of the Fed and its lack of
transparency.
Since its inception, the Federal Reserve has always operated in the
shadows, without sufficient scrutiny or oversight of its operations.
While the conventional excuse is that this is intended to reduce the
Fed's susceptibility to political pressures, the reality is that the
Fed acts as a foil for the government. Whenever you question the Fed
about the strength of the dollar, they will refer you to the Treasury,
and vice versa. The Federal Reserve has, on the one hand, many of the
privileges of government agencies, while retaining benefits of private
organizations, such as being insulated from Freedom of Information Act
requests.
The Federal Reserve can enter into agreements with foreign central
banks and foreign governments, and the GAO is prohibited from auditing
or even seeing these agreements. Why should a government-established
agency, whose police force has federal law enforcement powers, and
whose notes have legal tender status in this country, be allowed to
enter into agreements with foreign powers and foreign banking
institutions with no oversight? Particularly when hundreds of billions
of dollars of currency swaps have been announced and implemented, the
Fed's negotiations with the European Central Bank, the Bank of
International Settlements, and other institutions should face increased
scrutiny, most especially because of their significant effect on
foreign policy. If the State Department were able to do this, it would
be characterized as a rogue agency and brought to heel, and if a
private individual did this he might face prosecution under the Logan
Act, yet the Fed avoids both fates.
More importantly, the Fed's funding facilities and its agreements
with the Treasury should be reviewed. The Treasury's supplementary
financing accounts that fund Fed facilities allow the Treasury to
funnel money to Wall Street without GAO or Congressional oversight.
Additional funding facilities, such as the Primary Dealer Credit
Facility and the Term Securities Lending Facility, allow the Fed to
keep financial asset prices artificially inflated and subsidize poorly
performing financial firms.
The Federal Reserve Transparency Act would eliminate restrictions on
GAO audits of the Federal Reserve and open Fed operations to enhanced
scrutiny. We hear officials constantly lauding the benefits of
transparency and especially bemoaning the opacity of the Fed, its
monetary policy, and its funding facilities. By opening all Fed
operations to a GAO audit and calling for such an audit to be completed
by the end of 2010, the Federal Reserve Transparency Act would achieve
much-needed transparency of the Federal Reserve. I urge my colleagues
to support this bill.
____________________
Print 
PDF