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Audit the Fed (98 hits)

About the Audit

The Federal Reserve, the unelected central bank of the U.S., enjoys a monopoly over the flow of our nation’s money and credit but has never been completely transparent and accountable to Congress since its creation in 1913.

Over its nearly 100 year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar while Congress has kept its hands off and its eyes closed. Since 1913, the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy.

During the current economic crisis, Congress, the Treasury, and the Fed have put us on the hook for over $12 trillion in bailouts and loans. This is in addition to our almost $12 trillion national debt. When testifying before Congress, Fed Chairman Ben Bernanke has refused to disclose which institutions have received trillions of dollars in these bailouts and loans or to give our representatives details about what deals are being made with foreign banks.

Although the Fed is currently audited by outside agencies, these audits are not thorough and do not include monetary policy decisions or agreements with foreign central banks and governments.

The crucial issue of Federal Reserve transparency requires an analysis of 31 USC 714, the section of US Code which establishes that the Federal Reserve may be audited by the Government Accountability Office (GAO), but which simultaneously severely restricts what the GAO may in fact audit. Essentially, the GAO is only allowed to audit check-processing, currency storage and shipments, and some regulatory and bank examination functions, etc. The most important matters, which directly affect the strength of the dollar and the health of the financial system, are immune from oversight.

Currently, the GAO is prohibited from auditing:

1. transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
2. deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations
3. transactions made under the direction of the Federal Open Market Committee; or
4. a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection of US Code.

The GAO is also prevented from conducting on-site examinations of banks or bank holding companies without the written consent of the appropriate regulatory agency.

HR 1207, The Federal Reserve Transparency Act, and S 604, The Federal Reserve Sunshine Act, would eliminate these restrictions and mandate a GAO audit of the Fed to be completed by the end of 2010, finally delivering answers to the American people about how our money is being spent.

Many politicians like to constantly laud the benefits of transparency but fail to turn their campaign rhetoric into results. With trillions of dollars and our nation’s monetary system at stake, the time to take action is now.

In less than six months since its introduction, every Republican and nearly one hundred Democrats in the House of Representatives have cosponsored HR 1207, and a growing bipartisan coalition in the Senate for S 604 illustrates that momentum for both bills shows no signs of slowing down.

By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, HR 1207 and S 604 would result in an historic level of transparency and accountability from the Federal Reserve.

A petition can be found to support this bill at:

http://www.auditthefed.com

The text of the petition:

An Open Letter to the
US House of Representatives

Whereas: Congress, the Federal Reserve, and the U.S. Treasury have put the American taxpayer on the hook for over $12 trillion in bailouts and loans; and

Whereas: Federal Reserve Chairman Ben Bernanke recently refused to tell Congress who has received trillions in these funds from the Federal Reserve; and

Whereas: Allowing the Fed to operate our nation's monetary system in almost complete secrecy leads to abuse, inflation, and a lower quality of life for every American; and

Whereas: HR 1207, the Federal Reserve Transparency Act, and S 604, the Federal Reserve Sunshine Act, would require a full audit of the Fed for the first time in its history and would provide answers to the American people about how our money is being spent;

Therefore: It's time to hold the Federal Reserve accountable to Congress and the American People. I urge you to do everything in your power to pass the Audit the Fed bill!

Posted By: Steve Williams
Wednesday, August 19th 2009 at 8:53AM
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I'm pretty sure they've printed more money than we have gold in Fort Knox (Earl could tell us). And yes they can print money as fast as they can, but the price we will pay is in inflation. This was a lesson we learned right at the beginning of the country, right after the war for independence, when it came time to pay the continental army.
Wednesday, August 19th 2009 at 11:02AM
Steve Williams

...Meanwhile the value of Continental paper currency had started its precipitous decline to almost complete worthless. During the first half of 1778, when Greene was reorganizing his department, Continental money had been fairly stable at a ratio, with respect to gold, of about four to one; by December this ratio was down to nine to one. By April 1779 it had reached twenty to one, and by November, forty-five to one. In April 1780 the ration was sixty to one, and from that date until May 1781 the decline continued at an accelerated pace. At that time the ratio reached the figure of approximately 1,000 to 1, indicating runaway inflation, and circulation of Continental currency virtually ceased.

This development had disastrous effects on Quartermaster operations. Farmers and merchants were naturally loath to sell their goods to a government whose currency might lose half its value overnight. They much preferred barter, but the Continental Army had nothing to barter. By the summer of 1778 Greene had no credit, and his money was almost unacceptable. Only by making immediate payments was he able to buy any horses, wagons, and forage or hire any artificers for the innumerable tasks for which, in the absence of Quartermaster units, civilians were of necessity employed. Even then scarcely any artificers or supplies could be procured. The few wagoners willing to serve insisted on advance payment of their wages, and the few farmers who might consider hiring or selling their wagons and horses to the Army demanded spot cash.

By fall Congress virtually gave up the effort to use its credit or paper bills and adopted the "specific supplies'' system, under which the States, instead of making money payments to the Continental Congress, furnished specific quotas of forage, wagons, and other designated supplies. This system, though perhaps preventing a complete breakdown of supply, did not provide Quartermaster items in the required quantities. States were tardy in filling their quotas, did not meet their quotas in full, and sometimes did not meet them at all. If a State's quota called for the provision of certain items, the Quartermaster General's Department was usually forbidden to use such meager resources as it might command for the procurement of these items in that State. This restriction repeatedly handicapped its operations, and impressment of supplies often bad to he resorted to in the end-a procedure that could not help but make quartermasters unpopular.

The plight of the Continental Army encamped at Jockey Hollow, near Morristown, New Jersey, in the winter of 1779-80 was as bad as, or even worse than, it had been at Valley Forge. In the middle of December, Washington informed the Continental Congress that his men had been on half rations for the past five weeks and that his magazines were "absolutely empty every where." ''We have never," he continued, "experienced a like extremity at any period of the war." Greene manfully struggled against these adverse conditions, and though the winter was more severe than that of Valley Forge and roads were almost constantly snow-bound, he utilized his limited resources so skillfully that a complete breakdown of supply was averted. Debarred from procuring forage and other supplies even had he possessed the money and credit to do so, Greene time after time had to beg New Jersey to meet a crisis in the supply of grain, without which horses could not haul the food that sustained the Army. New Jersey, though its resources had been practically exhausted by years of almost constant procurement not only by the American Army but also by the large British garrison which had held New York since 1776, responded with sufficient supplies to keep the Jockey Hollow encampment from dispersing in search of provisions.

When the spring of 1780 came and forage could once more be brought from areas to the south over snow-free roads, the crisis in the Continental Army passed, but Greene's relations with Congress remained strained. Early in the year he and Washington worked out a comprehensive plan for the operation or the Quartermaster General's Department. Congress ignored these suggestions and further irritated Greene by issuing orders direct to his subordinates and by appointing, in the face of his opposition, ill-qualified men to important Quartermaster posts. In August, worn out by the trials of the past two and a half years, Greene submitted his resignation as Quartermaster General. But he quitted his post knowing that Washington felt he had done an excellent job under the most unfavorable conditions. At Valley Forge he had rehabilitated a department fast becoming inoperative; at Jockey Hollow he had kept that department in operation under almost impossible handicaps; it other times he had always so administered affairs that the Continental Army could take the field when and where tactical situation demanded it. He left the Quartermaster General's Department, then, with enhanced reputation among his fellow officers, and shortly afterwards, as commander of the Southern Army, came to be recognized as second only to Washington among the field commanders of the American Revolution. While his fame as a battle leader has since remained secure, Nathanael Greene's services to the cause of American independence as Quartermaster General during the darkest period of the Revolution have been almost forgotten.

(From the Archives of the U.S. Army Quartermaster Museum, Fort Lee, Virginia)

Wednesday, August 19th 2009 at 11:41AM
Steve Williams

It is interesting, I signed the petition to audit the fed, then was taken to a page that pulled up my representative and senators and had sample letters to send and links to their email forms. So it was easy to send emails to all three. I don't know if barackobama.com has that feature for health care - there is a form to call on congress to support the reform, but I don't know what would be called up after that. I'm not ready to do that yet as fiscal responsibility, and our debt, is a greater concern to me and I've yet to understand the costs associated with the plan. But maybe others have signed their support and could say whether a similar feature is to be found there.
Friday, August 21st 2009 at 12:20PM
Steve Williams

I can't say how many times I wanted to write my representatives but didn't because it was time consuming. I respect you Irma for doing it all these years. I noticed on one of the Senator's website a note that due to security concerns, physical mail could be delayed. What a sad thing. But I have hope that the current generation will make good use of technology, as the politicians have. And this is why I keep bringing up the issue of availability of technology for young disadvantaged black people to make their voices heard and for information to their benefit.
Saturday, August 22nd 2009 at 5:17PM
Steve Williams

Thanks Steve although I am unable to understand too much of this infomation it does my heart good that questions are being asked about our may not be able to help our country if China calls in those loans. I also rest assured that China will not be able to call Mr. Obama with a threat to call in the loan if he did not do their biddings as the last administration did.

This question of money enough to cover our dollar has been haunting me for many years. This haunting began when a caller on a radio talk show asked if our government could go broke as congress was saying about some or other thing they were trying to get passed at that time.This makes it more urgent that we have not printed more money than we have gold in Fort Knox!!!!!

The answer to this question is our government will never go broke because they can print money 24 hours a day if they want to do so...
Thursday, April 10th 2014 at 6:47PM
ROBINSON IRMA

And, here is some more very little known American History.It is so little known because America has this habit of teaching us how not to think logically...

The 'due process' was directly put in as the law of the land because of chattel slavery in this country. Those fighters in this war demanded to be paid and when they could not pay there was a rebellion named for the leader.(almost the first civil war in America) The Shah rebels was created in order to take the only actual property of those running this country...their salves...therefore it became illegal to do this by this new addition to our Constitution(smile)
Thursday, April 10th 2014 at 6:47PM
ROBINSON IRMA

Remember me always saying about how we know or have any way to find out who owns what or how, is responsible for what?!?

I can't tell you how much "I" learn from watching these people on the floor of congress on the C-Spans. but, to too many this is boring...now I will give you all one guess why news is more entertain ment for ratings to daythan actual news that is needor even true.today it is who is the fasted with the ability to creat the biggest media frenzy today(smile)

Today using social networking and the full use of our own powers to T-H-I-N-K on those things we agree on as well as those we do not is the best way, "I" believe until we get change in the way we get news over our public air waves that is of real and true interest to all...YES WE CAN(smile)
Thursday, April 10th 2014 at 6:47PM
ROBINSON IRMA

As for me, because I am restricted to only going to my own representives in my area on too many things I want to say directly to those in Washington, d.C. "I" make full use of my phone and the postoffice to find out what is important to me for a variety of the chairperson of said commities. I usual get back cover letters but "I" am content that "I" have spoken my interest.I also write letters to the editor of my local paper and sometines to major news papers all over the country.

but, then "I" have been at this for so many years now in good as well as bad time, it is now almost automatic for me to do this.(smile)

I know that this new generation must find a way that is best for them. I respect that they just have taken such interest in our government's behavior.Much love and respect to all of you that came after my generation...YES WE CAN...
Thursday, April 10th 2014 at 6:47PM
ROBINSON IRMA