Audit the Fed, Then End It!

[galtgulch]

Following from the Campaign For Liberty site this morning. www.campaignforliberty.com

<<<"Audit the Fed, Then End It!

By Ron Paul

Published 05/19/09

I have been very pleased with the progress of my legislation, HR 1207, which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system. This bill now has nearly 170 cosponsors, with support from both Republicans and Democrats. Senator Bernie Sanders has introduced a companion bill in the Senate S 604, which will hopefully begin to gain momentum as well. I am very encouraged to see so many of my colleagues in Congress stand with me for greater transparency in government.

Some have begun to push back against this bill, and I am very happy to address their concerns.

The main argument seems to be that Congressional oversight over the Fed is government interference in the free market. This argument shows a misunderstanding of what a free market really is. Fundamentally, you cannot defend the Federal Reserve and the free market at the same time. The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money -- the lifeblood of the economy. In a free market, interest rates, like the price of any other consumer good, are decentralized and set by the market. The only legitimate, Constitutional role of government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters.

Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who, instead of stabilizing the economy, have destabilized it. It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930's. It has also inflated away the value of our currency by over 96 percent since its inception. It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts. It has predictably exacerbated the very problems it was meant to solve.

Detractors have also argued that the Fed must remain immune from the political process, and that that more congressional oversight would distort their very important decisions. On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High level officials routinely make the rounds between positions at the Fed, member banks, Treasury and back again, taking care of friends and each other along the way.

As far as the foolishness of placing complex monetary policy decisions in the hands of politicians -- I couldn't agree more. No politician or central banker, no matter how brilliant, is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over. It is frankly beyond me why we ever agreed to try it again.

To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so.

However, it is the responsibility of every member of Congress to represent the interests of the people that sent them to Washington and find out what has been happening with our money. As the branch of government with the power of the purse, we really have no other reasonable choice when the economy is in the shape it is in. ">>>

www.campaignforliberty.com 20May 6AM 153,375, 5PM 153,445

www.DownsizeDC.org to email your representatives in the Congress to encourage them to cosponsor HR1207 & S604

gulch

Edited May 20, 2009 by galtgulch

[BaalChatzaf]

With metal based currency the money supply can only be modified by increasing the velocity of exchanges. What kind of money supply would be needed to accomodate an economy which is growing rapidly or needs large amounts of capital to expand. Likewise how do you handle an economy in which technological innovation is proceeding apace and needs large amounts of capital to realize new ideas and techniques. There is just so much gold, silver and platinum. Exchanges can be sped up just so much and do not answer the needs for new capital completely.

In theory a fiat money could do the job provided the money supply were not increased out of proportion to the underlying economic activity and were not jiggered just to enable debtors to repay their loans with debased money. Unfortunately fiat money is rather susceptible to political hanky-panky. To fund capital needs some form of credit (which implies debt) has to be incorporated into the money system. How do you propose to do this on a metal based system. They system has to allow for borrowing capital and repaying when the investment produces revenue and profits so there must be a time delay between a capital infusion (even if it is an instrument of credit/debt) and its repayment.

Ba'al Chatzaf

[Selene]

Gulch: I still receive my e-mails from the Virginia folks.

Chris! make some phone calls lol.

May 20, 2009

Greetings Fellow Campaign for Liberty Patriots,

You are receiving this email because you live in the 2nd, 3rd, or 4th Congressional District and are registered member of Campaign for Liberty in the Commonwealth of Virginia.

As you may know, Campaign for Liberty has been making exceptional progress with "Audit the Fed," and its momentum is continuing to grow.

I'm pleased to inform you that Representative Randy Forbes (CD-4) has finally co-sponsored H.R. 1207!! Make sure to call or write his office to thank him for his support of this legislation.

However, Representatives Bobby Scott (CD-3) and Glenn Nye (CD-2) have yet to show any support to "Audit the Fed."

In two weeks, June 2nd at 6:30pm, I will be holding a meeting at the Virginia Diner in Wakefield, Virginia to discuss the Federal Reserve Transparency Act of 2009 and explain how we can make an impact to forward the progress of this legislation.

It's crucial that we act now to "Audit the Fed." The globalists and central banksters are running scared in our wake of the energy behind H.R. 1207.

If we continue to apply pressure on our Representatives in Congress, our work will bear fruit and the Federal Reserve's authority as the central economic planner of our society will be compromised.

I will help equip you with the tools and knowledge to fight for sound money and financial liberty.

Feel free to contact me by e-mail or phone if you have any questions.

I look forward to seeing you in two weeks!!

In Liberty,

J. Christopher Stearns

Virginia Campaign for Liberty

Region 4 Coordinator

c4lvirginia@gmail.com

(757) 609-1301

[galtgulch]

With metal based currency the money supply can only be modified by increasing the velocity of exchanges. What kind of money supply would be needed to accomodate an economy which is growing rapidly or needs large amounts of capital to expand. Likewise how do you handle an economy in which technological innovation is proceeding apace and needs large amounts of capital to realize new ideas and techniques. There is just so much gold, silver and platinum. Exchanges can be sped up just so much and do not answer the needs for new capital completely.

In theory a fiat money could do the job provided the money supply were not increased out of proportion to the underlying economic activity and were not jiggered just to enable debtors to repay their loans with debased money. Unfortunately fiat money is rather susceptible to political hanky-panky. To fund capital needs some form of credit (which implies debt) has to be incorporated into the money system. How do you propose to do this on a metal based system. They system has to allow for borrowing capital and repaying when the investment produces revenue and profits so there must be a time delay between a capital infusion (even if it is an instrument of credit/debt) and its repayment.

Ba'al Chatzaf

You said "There is just so much gold, silver and platinum." Well that is a good thing! It wouldn't make sense to use sand on the beach as money would it?

One adds to the money supply by digging, mining for gold then minting coins. The value of the unit of money does vary with supply and demand. Under a fiat system such as we have now there is nothing to prevent the central bank from counterfeiting the paper currency as it is doing which decreases the purchasing power of every dollar those who have worked, earned and saved the legal tender dollars. Under a metallic standard the government couldn't counterfeit which is one of the main reasons to have a gold standard.

Demand for capital will also be dealt with in the free market with appropriate interest rates coming into play. I think you are imagining a problem where there isn't one. Are you trying to make a case for legal tender laws and paper currency?

www.campaignforliberty.com 20May 10PM 153,492

gulch

[BaalChatzaf]

Demand for capital will also be dealt with in the free market with appropriate interest rates coming into play. I think you are imagining a problem where there isn't one. Are you trying to make a case for legal tender laws and paper currency?

www.campaignforliberty.com 20May 10PM 153,492

gulch

No. I am looking for an orderly and sane way of introducing credit into the system to meet the capitalization needs of new business and new technologies without producing ruinous inflation. If it can be done with a metal based system, then fine. If it cannot, then what? Even before the Federal Reserve, banks were using fractional asset reserve to increase the amount of currency in the system to meet capitalization needs. If you don't like the the Fed, and you don't like fractional reserves, then what? And please be specific. Don't wave the hands and chant "Market, market, market...." That is just an expression of faith. I want a particular and concrete methodology.

Delenda Cartago est

Ba'al Chatzaf

[BaalChatzaf]

Demand for capital will also be dealt with in the free market with appropriate interest rates coming into play. I think you are imagining a problem where there isn't one. Are you trying to make a case for legal tender laws and paper currency?

www.campaignforliberty.com 20May 10PM 153,492

gulch

No. I am looking for an orderly and sane way of introducing credit into the system to meet the capitalization needs of new business and new technologies without producing ruinous inflation. If it can be done with a metal based system, then fine. If it cannot, then what? Even before the Federal Reserve, banks were using fractional asset reserve to increase the amount of currency in the system to meet capitalization needs. If you don't like the the Fed, and you don't like fractional reserves, then what? And please be specific. Don't wave the hands and chant "Market, market, market...." That is just an expression of faith. I want a particular and concrete methodology.

Delenda Cartago est

Ba'al Chatzaf

[galtgulch]

Demand for capital will also be dealt with in the free market with appropriate interest rates coming into play. I think you are imagining a problem where there isn't one. Are you trying to make a case for legal tender laws and paper currency?

www.campaignforliberty.com 20May 10PM 153,492

gulch

No. I am looking for an orderly and sane way of introducing credit into the system to meet the capitalization needs of new business and new technologies without producing ruinous inflation. If it can be done with a metal based system, then fine. If it cannot, then what? Even before the Federal Reserve, banks were using fractional asset reserve to increase the amount of currency in the system to meet capitalization needs. If you don't like the the Fed, and you don't like fractional reserves, then what? And please be specific. Don't wave the hands and chant "Market, market, market...." That is just an expression of faith. I want a particular and concrete methodology.

Delenda Cartago est

Ba'al Chatzaf

Ba'al,

I have a copy of Ludwig von Mises' Theory of Money and Credit which might hold the solution but I have to do my P90X extreme fitness routine and then go to work. I promise I will endeavor to see if the answer is in there. I am sure that a search on either www.mises.org or www.cafehayek.com might generate the answer too. Be patient! I am not an economist myself but you are correct that I am confident that there would be a rational, peaceful market solution short of printing up a paper currency. Maybe using copper which has been done.

www.campaignforliberty.com 21 May 5AM 153,543

gulch

[RidleyReport]

175 reps back Ron Paul Fed audit

From RidleyReport.com -

Powerful Democrat Alan Grayson joins "Dr. No's" quest for transparency at America's most dangerous governing institution. But what would be the concrete benefits of an audit?

Plz Digg it at:

http://digg.com/politics/175_reps_back_Ron_Paul_Fed_audit

[Christopher]

One reason for The Fed is to reduce inflationary waves such as were observed in the 19th century. It might be true as Galt stated earlier that there was no average inflation before The Fed, but I have read there were huge fluctuations between inflation and deflation. Therefore, Fed can theoretically offer stability to markets run on emotion and temporary events. Although many economists claim that inflation also spurs economic growth, at present I'm going to put my faith behind Hazlitt - who argued that inflation merely increases the production of some industries temporarily, which in turn results in long-term market inefficiencies.

God, I feel like such an amateur at economics despite all my econ reading and philosophy.

Christopher

[anonrobt]

One reason for The Fed is to reduce inflationary waves such as were observed in the 19th century. It might be true as Galt stated earlier that there was no average inflation before The Fed, but I have read there were huge fluctuations between inflation and deflation. Therefore, Fed can theoretically offer stability to markets run on emotion and temporary events. Although many economists claim that inflation also spurs economic growth, at present I'm going to put my faith behind Hazlitt - who argued that inflation merely increases the production of some industries temporarily, which in turn results in long-term market inefficiencies.

God, I feel like such an amateur at economics despite all my econ reading and philosophy.

Christopher

A good book to read is Israel Kirzner's The Economic Point of View...

Edited May 22, 2009 by anonrobt

[Selene]

175 reps back Ron Paul Fed audit

From RidleyReport.com -

Powerful Democrat Alan Grayson joins "Dr. No's" quest for transparency at America's most dangerous governing institution. But what would be the concrete benefits of an audit?

Plz Digg it at:

http://digg.com/politics/175_reps_back_Ron_Paul_Fed_audit

If that is the Florida Congressman, watch our back. This character just came out for all businesses being mandated to have guaranteed two weeks of paid, I believe, sick leave.

Dangerous person.

Adam

[RidleyReport]

I'm sure Grayson is awful. And probably they will tack on an unrelated section to the bill that has funding for bridges to nowhere...

But it's nice to see Dr. Paul getting support on a good idea. He's becoming the real leader of the opposition.

[RidleyReport]

Ron Paul is up to 200 co-sponsors now. I heard 218 allows them to bypass committee; but I don't know if that's accurate.

[galtgulch]

One reason for The Fed is to reduce inflationary waves such as were observed in the 19th century. It might be true as Galt stated earlier that there was no average inflation before The Fed, but I have read there were huge fluctuations between inflation and deflation. Therefore, Fed can theoretically offer stability to markets run on emotion and temporary events. Although many economists claim that inflation also spurs economic growth, at present I'm going to put my faith behind Hazlitt - who argued that inflation merely increases the production of some industries temporarily, which in turn results in long-term market inefficiencies.

God, I feel like such an amateur at economics despite all my econ reading and philosophy.

Christopher

Chris,

I imagine there were variations in prices but since the money supply or paper currency in circulation remained stable that there was no significant inflation caused by printing presses rolling as occurred in virtually every hyperinflation we know of such as the Weimar in the early twenties in Germany or the current Zimbabwae phenomenon with 100 trillion dollar notes being issued.

I recall posting here that it would take $22 to buy in early twentieth century what it took only $20 to buy a hundred years before.

Who knows how much currency has been printed and released into circulation since Bernanke made the remark that he would print as much as it took to solve the recession. Once the HR1207 passed the GAO will be mandated to perform a comprehensive audit of the Fed in 2010 and then we will know just what the Fed is keeping secret. Keep in mind that the taxpayer has to pay interest to the Fed for the paper the Fed generates and loans to the govt!

After all the Fed is a private bank.

HR1207 has at least 208 cosponsors now and only 218 are needed to get the bill out of committee.

www.campaignforliberty.com 11 Jun 5 PM 157,849 thus over 250 new members in the last twelve hours. 8PM 157,943

gulch

June 11, 2009

<<<"Audit the Fed Bill Reaches Crucial Benchmark

Washington, D.C. - Congressman Ron Paul's Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.

The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.

“The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” said Congressman Paul. “I look forward to this issue receiving greater public exposure.”

Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee's series of hearings on regulatory reform.">>>

Edited June 12, 2009 by galtgulch

[galtgulch]

<<<"Who knows how much currency has been printed and released into circulation since Bernanke made the remark that he would print as much as it took to solve the recession. Once the HR1207 passed the GAO will be mandated to perform a comprehensive audit of the Fed in 2010 and then we will know just what the Fed is keeping secret. Keep in mind that the taxpayer has to pay interest to the Fed for the paper the Fed generates and loans to the govt!

After all the Fed is a private bank.

HR1207 has at least 208 cosponsors now and only 218 are needed to get the bill out of committee.

www.campaignforliberty.com 11 Jun 5 PM 157,849 thus over 250 new members in the last twelve hours. 8PM 157,943

gulch

June 11, 2009

Audit the Fed Bill Reaches Crucial Benchmark

Washington, D.C. - Congressman Ron Paul's Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.

The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.

“The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” said Congressman Paul. “I look forward to this issue receiving greater public exposure.”

Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee's series of hearings on regulatory reform.">>>

<<"Sen. Jim DeMint (R-SC) today became the first cosponsor of S 604, H.R. 1207's companion legislation. We still have a long way to go before we pass real legislation to Audit the Fed, but this is yet another major step toward our ultimate goal.

Sen. DeMint is highly respected and one of the most principled conservatives in Washington. Bernie Sanders (I-VT), 604's lead sponsor, is a firebrand Independent progressive. To see these two guys on a bill together has to tell you that something special is going on.">>

www.campaignforliberty.com 12 Jun 4 AM 158,101, 13 JUN 1 AM 158,497

This achievement regarding HR1207 receiving such overwhelming cosponsorship is primarily a result of the efforts of the membership of the Campaign For Liberty in petitioning their Congressmen. Their effectiveness is helping to recruit others to the cause of taking back our country from the oppressive politicians and counterfeiters.

gulch

Edited June 13, 2009 by galtgulch

[BaalChatzaf]

Audit it, end it and replace it by what and how. How do we make the transition? Details please. No hand waiving and invoking The Free Market like some magic spell. Step by step, in detail complete with a time-line, thank you.

Ba'al Chatzaf

[galtgulch]

Audit it, end it and replace it by what and how. How do we make the transition? Details please. No hand waiving and invoking The Free Market like some magic spell. Step by step, in detail complete with a time-line, thank you.

Ba'al Chatzaf

BA'AL,

I am not an economist but as you know I know enough to know that the Austrian school is the closest to the valid free market system.

Here is a link to a lengthy article which does explain in detail how to get from here to there:

http://mises.org/story/3386

now it is just a matter of getting enough guys together to implement this. That is precisely what the Campaign For Liberty is all about.

www.campaignforliberty.com 14 Jun 10 PM 159,387; 15 Jun 8AM 159,545 and counting. (158 JOINED OVERNIGHT!) 10AM 159,601, 10PM 159,783

gulch

Edited June 16, 2009 by galtgulch