Audit Bernanke by Ron Paul

[bobbyw24]

Before the US House of Representatives, Committee on Financial Services, Subcommittee on Domestic Monetary Policy and Technology Hearing on: "Audit the Fed: Dodd-Frank, QE3, and Federal Reserve Transparency," October 4th, 2011

In his 1974 Nobel Prize address, the late Austrian economist Friedrich von Hayek attacked the pretense of knowledge, the idea that policymakers have sufficient knowledge and power to shape society as they wish. Our political leaders failed to take Hayek's message to heart, as succeeding generations have continued to allow this intellectual arrogance to continue unabated. Just as the New Mandarins squandered America's wealth, resources, and young men during the 1960s, today's economic Mandarins seem hell-bent on destroying every last vestige of the free market and driving the economy into ruin. Congress has abdicated its oversight over these "expert" economists at the Federal Reserve, to the detriment of the economic well-being of the American people. Despite overwhelming grassroots support behind auditing the Fed, only incremental progress has been made toward unmasking the Federal Reserve's activities. Full transparency of the Fed's operations remains an elusive goal, but one towards which I intend to devote my remaining time in Congress.

http://ts4.mm.bing.net/images/thumbnail.aspx?q=1169389914939&id=362a42e296af342c6f618e1896aa978e&url=http%3a%2f%2fcache.gawker.com%2fassets%2fimage s%2f7%2f2009%2f12%2foriginal.jpg
The Fed has been given a monopoly by Congress to conduct monetary policy, and in so doing it tinkers with the most important price of all, the rate of interest. Interest rates reflect the price of time, and changes in the interest rate affect the structure of production. Forcing changes to the interest rate, as the Fed does, has a more pronounced effect on the economy than any law Congress has ever passed. Interest rates are used by individuals to make decisions about what type of investments they undertake, how much money they invest, and for how long. The higher the interest rate, the more likely an individual is to save money; the lower the interest rate, the less likely he is to save. Borrowers take the interest rate into account when borrowing money to buy a house, pay college tuition, or start or expand a business. The lower the interest rate, the cheaper it becomes to borrow money and the more likely individuals are to borrow; the higher the interest rate, the less likely they are to borrow. In a free market, some people will want to save while others will want to borrow, and the interest rate is the price that coordinates the actions of borrowers and savers.

http://lewrockwell.com/paul/paul769.html

[green73]

bump

[bobbyw24]

Conflicts of interest remedies, further and faster audits on GOP wish list

WASHINGTON (MarketWatch) — Republican lawmakers led by Rep. Ron Paul of Texas on Tuesday praised a recent audit of the Federal Reserve’s crisis-response emergency lending programs.

“We’ve made a lot of progress,” said Paul, the chairman of the Domestic Monetary Policy subcommittee at a hearing on the new audit. “More people now are starting to realize that the Fed isn’t independent of political independence because indirectly and some times more directly it is involved in political decisions or at least private decisions to serve some political interest.”

At issue is a one-time Government Accountability Office audit of the Fed’s emergency loan programs and other emergency loan programs during the financial crisis of 2008. The audit was required as part of the Dodd-Frank Act, signed into law in July, 2010. There is a follow-up report that the GAO says will be sent to Capitol Hill later this month.

http://www.marketwatch.com/story/republicans-praise-audit-of-fed-crisis-response-2011-10-04

[bobbyw24]

Federal Reserve Open Market Committee Chairman Ben Bernanke's told the congressional Joint Economic Committee of Congress October 4 that he has the remedy for the ailing economic recovery he admits is "close to faltering": More of the same deficit spending, monetary stimulus and work to re-inflate the housing bubble.

Bernanke acknowledged to Congress that deficit spending is out of control. "One crucial objective is to achieve long-run fiscal sustainability. The federal budget is clearly not on a sustainable path at present," he told members of the House-Senate joint committee. The Fed Chairman termed the work of Congress' other joint House-Senate "Super-Congress" committee, charged with cutting some $1.5 trillion of the estimated $8-9 trillion in expected deficits over the next 10 years, "a substantial step; however, more will be needed to achieve fiscal sustainability.... In sum, the nation faces difficult and fundamental fiscal choices, which cannot be safely or responsibly postponed."

By those remarks, Bernanke didn't mean that federal, state, and local governments should balance their budgets and stop using deficit spending to continue their strangle-hold on the credit markets. To the contrary, Bernanke's prescription for the faltering economy is more of the same. Governments must, Bernanke contended, continue deficit spending and hire more people while the Fed tries to re-inflate the housing bubble and loosen credit markets with more "quantitative easing" and interest rate suppression.

http://goo.gl/skczA