Not all of the news out of Washington, D.C., is bad. Despite the Republican flirtation with earmarks, the tax deal that increases the federal deficit and the speedy betrayal of the tea party by new South Dakota Rep. Kristi Noem (she’s already endorsed ethanol subsidies), the indefatigable Ron Paul, sound money champion and author of “End the Fed,” has been named chairman of the House subcommittee for monetary policy.
Note to Paul: I am your biggest fan at WorldNetDaily, but put up or shut up time has now officially arrived. There is no time for meandering lectures on the theoretical advantages of a gold standard or esoteric soliloquies regarding the correct definition of money. The American people just want the facts about their money and where it has gone. They need the facts. And then they need action.
Some facts are already indisputable. It is a confirmed fact, for example, that the American public cannot rely upon Ben Bernanke to tell the truth, which raises serious questions about the wisdom of trusting him at the controls of the economy’s money supply. Milton Friedman argued against the idea of trusting anyone to manage the growth of the money supply, but it would appear to be a particularly bad idea to trust a man who blatantly contradicts himself regarding his own actions from one appearance on “60 Minutes” to the next. John Stewart skewered the Fed chairman recently by utilizing the simple tactic of comparing clips from his recent interview, in which he denied printing money, to the previous one where he explained how what the Fed was doing was “much more akin to printing money.”
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But the semantics of what “printing money” is in a system that utilizes electronic currency notwithstanding, it is clear from the M2 statistics that the Federal Reserve has been creating money. Since the crisis began in September 2008, the M2 money supply has risen from $7.9 trillion to $8.8 trillion, an increase of $873 billion. This means that the central bank has been creating money at an annual rate of 5.1 percent, which is significantly in excess of the 0.8 percent economic growth that has been reported in terms of nominal GDP over the same period. The difference, 4.3 percent, is what is considered to be inflation by most mainstream economists.
And yet Bernanke asserted just last month in an opinion piece published in the Washington Post that inflation is “too low” and that fears of inflation are unnecessary.
“Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run. Although low inflation is generally good, inflation that is too low can pose risks to the economy – especially when the economy is struggling.”
– Ben Bernanke, the Washington Post, Nov. 4, 2010
So, it is eminently obvious that Ben Bernanke cannot be trusted to tell the truth, regardless of his choice of venue. Only last week, it was revealed that the majority of the trillions of dollars that were loaned out by the Federal Reserve didn’t even go to American banks or corporations as had previously been supposed to be the case, but were funneled to banks in Germany, Switzerland and even the Cayman Islands instead. There are still massive amounts of American taxpayer money that are completely unaccounted for, and there can be no question that the Federal Reserve has abused its prized independence or that it cannot be permitted further benefit of the doubt.
As anyone who has witnessed a congressional hearing knows, it is not going to be easy to get direct answers out of Bernanke. Like his predecessor, Alan Greenspan, he is a master of obfuscation and evasion. So perhaps the new chairman of the House subcommittee for monetary policy should keep in mind that waterboarding has been deemed a legal and constitutional form of interrogation. And it might be helpful to remind the central bankers at the Federal Reserve that it will be easier to avoid a banking panic if the answers to the questions that are sure to be raised by Rep. Paul’s congressional audit are provided in a timely manner by the bank itself rather than dumped on the public without warning by WikiLeaks, or worse yet, Anonymous.