DW June 8, 2009 5:07 am

Ron Paul has introduced a new bill to the House of Representatives titled HR 1207 which calls for transparency in the Federal Reserve, and a full audit of their operations. This would include a full list disclosing what companies are seeking, and receiving, loans of tax payer dollars from the Fed Res.

The main problem is that while the government is already bailing out Wall Street firms and troubled lenders, insurance companies and manufacturers across the nation, the Federal Reserve, shrouded in secrecy, is simultaneously loaning trillions in tax dollars as well. The American public, burgeoning with investors is being hoodwinked into investing with many companies absent any transparency concerning their stability or operational benefit within this country.

The Federal Reserve, created in 1913, has complete control over the United States’ creation of money, yet it is protected from audit, and has never been fully accountable to Congress. It releases details of its meetings on its own timetable, and as well these details are edited and highly censored. The Fed Reserve also is not required to fully answer queries by Congress when they are brought before the House.

HR 1207 will remove the current restrictions now placed on the General Accounting Office’s audits of the Fed Reserve. The critical issue of the bill allows Congress to take a look at 31 USC section 714, the section of US code which establishes that the Fed Reserve may be audited by the GAO, but at the same time establishes strict restrictions on just what portions of the Fed’s practices the GAO may audit. These restrictions include the following.

1. Transactions for or with a foreign central bank, government of a foreign country, or non-private international financing organizations.

2. Deliberations, decisions or actions on monetary policies 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.

These activities of the Federal Reserve are by law, and have been for decades, off-limits to auditing by Congress, and are what enables the Fed to essentially print counterfeit currency and consistently increase inflation in this nation, while fleecing the citizenry, decimating the working class, and transferring the wealth from the middle class to the rich.

These restrictions pretty much encompass just about everything the Federal Reserve does as far as monetary policy, Open Market Operations and Quantitative Easing. Essentially the only things the GAO can audit are some of the check processing, currency storage shipments, and portions of the regulatory bank examinations and functions. The most important matters which directly affect the strength of the dollar and the health of the economy and financial system are immune from oversight.

So basically the American people are not getting any of the important details of just what this agency is doing. We may know how much money the Federal Reserve has on hand, and we know how much they have spent in retirement funding for their employees. But we are not allowed to know what‘s going on concerning their decisions on monetary policy.

Recently Fed Chairman Ben Bernanke was brought up in front of the Senate and senator Bernie Sanders confronted him on the issue of what institutions were getting the trillions in tax payer dollars they have doled out lately, and Bernanke was allowed to refuse to disclose this information. His reason was that the businesses getting the money would then be afraid to come back for more. However, this is precisely why the American people need to know, so that these companies and financial institutions do not abuse the process and at the same time continue to present a fraudulent balance sheet that goads investors into buying into these failing companies, and creating even bigger bubbles that will further decimate the economy in the future because they will be allowed to take a lot more investors down with them. Businesses should be cautious about receiving tax payer monies because it signals trouble and warns investors.

So essentially the Fed Reserve’s claims that they are doing all of this to bring stability to the economy, while simultaneously refusing to inform the American people of just what institutions are in financial trouble, is completely preposterous, and calls into question the veracity of its intentions and credibility. Not to mention its patriotism.

Contrary to Bernanke’s claims that HR 1207 would further destabilize the economy, it would have the opposite effect and would actually bring more stability to the economy.

Truly, does anyone believe that the creation of this nation’s money supply being a secretive operation is healthy for the economy and investors? Any idiot knows that accountability is the only way to ensure fiduciary stability in our financial sector and abrogation, or at least reduction, of corruption in business. It should be up to the tax payers to decide what companies should be allowed to continue doing business in this country, and the only way to allow them to do that properly is to inform them of which companies are healthy and which are in trouble. Adherence to such a policy would bring the nation out of its current financial crisis much sooner, and stronger. It is time to end the secrecy and lies, or this nation will continue to experience financial recessions, depressions and excessive inflation.

Furthermore, the nation truly has no information as to just where the trillions of dollars are coming from, and the likelihood is they are being created out of thin air. There is also another disturbing trend, and that is the close cooperation between the Fed Reserve and the Treasury absent any oversight, which allows the Treasury to directly funnel money to troubled Wall Street companies who are politically favored. Moreover, they can do this in unlimited amounts since they can also create money…absent any oversight once again.

These activities are what is diluting the money supply in this nation, and will lead to massive inflation and the implosion of the dollar, and those who are exacerbating the matter are the ones who get to use the money first, thus insulated from the effects of the inflation. However, the money becomes essentially worthless by the time it eventually trickles down to the average consumer.

Unfortunately, the Obama administration is parroting the Bush administration in calling for the Federal Reserve to take an even more direct and substantive role as the guarantor of market stability at the same time as their operations grow ever larger, opaque and corrupt.

Many opponents of Federal Reserve transparency will claim that any attempt to oversee or regulate them endangers their independence. However, the Federal Reserve is not independent. It does the bidding of its masters in the government and the banks, devalues the dollar, which allows the government to issue debt in order to fund its imperialistic ventures abroad and the corporate welfare state aims here at home.

Congress makes a big deal of having to approve $700 billion in loans, and meanwhile the Federal Reserve is loaning out over $9 trillion that the American tax payer is on the hook for, with absolutely no oversight. This agency does not even have to inform Congress of what deals it is making with foreign governments and foreign central banks.

Bernanke often travels to Europe to meet with foreign counterparts and the government only hears about these meetings by accident. Earlier this year there was a hearing in the first session of Congress, where Bernanke was supposed to testify on the Hill, but the hearing had to be rescheduled because he was traveling to Switzerland for meetings with the Bank of International Settlement’s, where it is headquartered. The only reason Congress learned of the meeting is because of his needing to reschedule. The BIS falls under the heading of an international non-private lending institution and therefore the Federal Reserve’s activities concerning them are, at this time, immune to oversight. Any deals or agreements with the BIS are off limits to the GAO and any audit it may desire to perform.

If the state department or defense department were able to make deals with foreign governments with no oversight or congressional authorization, we would call these rogue agencies. So essentially the Federal Reserve is, and has been since 1913, acting like a rogue agency. It is high time that Congress correct this mistake and pass HR 1207. At present this bill has over 140 cosponsors, both conservative and liberal, and will ultimately need 218 votes to pass through the House.