Congressman: Audit the Fed's books

U.S. Rep. Ron Paul, who is seeking to abolish the Federal Reserve, has stepped up his attack, introducing an interim plan that would require the private agency to open all of its books for examination.

U.S. Rep. Ron Paul, R-Texas

Paul has pursued his plan to eliminate the Fed for years, arguing Congress should "reassert its constitutional authority over monetary policy."

The Constitution, he said, gives Congress, not the private Federal Reserve, "the authority to coin money and regulate the value of the currency."

Now he's introduced another new plan, 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."

The new plan, H.R. 1207, may seem a little vague, but there was nothing left to the imagination when he spoke on its behalf in the U.S. House.

"Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar," the Texas Republican said. "Since 1913 the dollar has lost over 95 percent 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," he said.

Paul called oversight of the Fed "long overdue."

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"Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations," he continued.

"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?"

The legislative proposal, which has been referred to the House Committee of Financial Services and already has about a dozen cosponsors, would "achieve much-needed transparency of the Federal Reserve," Paul said.

Paul recently talked at the CPAC event about his concerns regarding the Fed. A video is embedded here:

In his weekly online column, Paul also said the Founding Fathers intended "only gold and silver to be used as currency," but that long since has been abandoned in favor of a monetary system essentially orchestrated in secret.

"People are demanding answers and explanations for our economic malaise, and we should settle for nothing less than the whole truth on monetary policy," he said.

WND reported a few days ago on Paul's continuing effort to just abolish the institution.

Paul said every problem in the economy, "from the Great Depression, to the stagflation of the '70s, to the current economic crisis caused by the housing bubble," can be traced to Federal Reserve policy.

Paul's abolition plan calls for the director of the Office of Management and Budget to "liquidate" Fed assets "in an orderly manner so as to achieve as expeditious a liquidation as may be practical while maximizing the return to the Treasury."

Columnist and commentator Chuck Baldwin believes it's about time.

"'We've seen money go out the back door of this government unlike any time in the history of our country,' Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor. 'Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?'" he wrote.

"Senator Dorgan is exactly right. No one oversees the Fed. The Fed is held accountable to absolutely nobody. But Senator Dorgan (as with everyone else in Congress) has no one to blame but himself. Ever since the Marxist, E. Mandell House, convinced President Woodrow Wilson to create the Federal Reserve in 1913, the Congress of the United States has had virtually nothing to do with the way our fiscal policies are managed. The Fed (which is not even a government agency, but rather a private corporation consisting of mostly foreign bankers) dictates America's financial policies," Baldwin said.

Baldwin cites the U.S. Constitution itself. In Article I, Section 8, Paragraph 5, it states Congress has the authority to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."

Columnist Jacob Hornberger last year noted that while Paul's abolition plan is considered "wacky" by some, at least two Nobel Prize-winning economists have agreed.

Economists Milton Friedman and Friedrich Hayek called for the abolition of the Fed during their careers, Hornberger notes.

"While Friedman spent much of his life advocating externally imposed constraints on the Fed's power to expand the money supply, his first wish was to have the Fed abolished, as he pointed out in a 1995 Reason magazine interview. In his book, 'Denationalization of Money: An Analysis of the Theory and Practice of Concurrent Currencies,' Hayek advocated a free-market monetary system of competing currencies," said Hornberger.

"Most Americans probably still believe that the Great Depression was caused by 'the failure of the free-enterprise system.' It is a false belief. The truth is that the worst economic disaster in American history was caused by the Federal Reserve. Give current Fed Chairman Ben Bernanke credit for publicly acknowledging that fact in a speech delivered in 2002 commemorating Friedman's 90th birthday," Hornberger said.