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Ron Paul: Bill To Audit Fed Would Pass Tomorrow If It Was Given The Opportunity

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Congressman says powers that be are working frantically to stave off inspection

Steve Watson
Friday, Nov 13, 2009

Congressman Ron Paul appeared on CNBC’s Squawk Box this morning, cramming a mountain of information into a ten minute interview during which he was given the floor.

The CNBC analysts were so enamored with the Congressman’s analysis that they invited him back to talk for two hours, to which he quipped, “I don’t know if I could stand you guys for two hours!”

Paul opened with his opinion on the Geithner plan to increase the regulatory powers of Fed:

“It was terrible because I start with the idea that regulations won’t solve our problem,” The Congressman said. “So no, Washington’s only choice is who’s going to be the big regulator? That’s not much of a choice for me, but I certainly don’t want to give the Federal Reserve more power.”

“The problem is that we have a flawed system,” The Congressman continued. “We have artificially low interest rates, we have the lender of last resort, we have this horrendous moral hazard in our system. Instead of correcting the problems and changing policy, what we do is we say we can tinker with the symptoms with regulations, but that even further interferes with the market forces.”

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“We need the market to work and we have not allowed the market to work for many many decades.” The Congressman asserted.

“It’s much easier for the Congress to assume the responsibility of oversight if it’s outside the Fed. For some reason up until recently, the Fed was sacred, you weren’t even allowed to ask questions, let alone get the answers.” Paul stated, referring to his many attempts to prize information out of Ben Bernanke during Congressional hearings, only to be met with blanket refusals and denials on behalf of the Fed chairman.

Now, of course, the momentum is in the direction of even the Fed ought to be transparent, and I think that is very important.” Paul added.

When asked about the progress of HR1207, the Congressman’s bill to audit the Federal Reserve, Paul echoed the recent sentiment that there have been attempts to water down the legislation:

“At one time they said they would put it into Barney Franks’ bill, it never actually got in there, so the plan now is to get an audit put into the bill, but it will be a pseudo audit, it won’t amount to much.” The Congressman said.

Paul pointed out that his bill has 309 co-sponsors, every Republican as well as around 130 Democrats. He also cited national poll figures indicating 75% of Americans wish for the Fed to be audited.

“This bill would pass tomorrow if we brought it up under suspension, but the powers that be, The Fed, is working frantically, they are editorializing, they have hired a lobbyist, they do not want us to know what they’re doing and they use all kinds of frivolous arguments while the Congress is not allowed to know what they’re up to.” The Congressman said.

The Congressman pointed out that Congress does not have enough power of oversight with regards to the Fed when it comes to activities that impinge upon the lives of every American:

“You’re not allowed to ask the right questions, you’re not allowed to know what kind of arrangements they have made with a foreign bank, the foreign central banks or a foreign government, or international financial organizations, or the detail of the discount window and which companies got their benefits, so no, we are not really allowed to.”

The Congressman also spoke at length regarding the history of the Fed, and how fractional reserve banking has negatively impacted the market economy:

“I really like the idea of letting the market define what backs the currency, make sure there are no fraud laws, and really look into the matter of whether or not we should have fractional reserve banking. Yes you have the Fed creating money out of thin air, but this is magnified by fractional reserve banking, which is really fraudulent, because all it does is build financial bubbles, guaranteeing the business cycle and the collapses as you patch it together. the longer you do that, the bigger the bubble, and now we’re in the midst of the big correction.”

“The Fed creates a trillion, in a few months, it’s nine trillion, and that’s where the distortions come from.” Paul continued.

“Of course, everybody loves it when it’s going up because the price of houses are going up and everything is happening that seems to please a lot, until the correction comes. Politicians love it, you can fight wars that you don’t have to pay for, you can run the welfare state that you don’t have to pay for. So if you believe in limited government, you have to look at monetary policy and decide that you just can’t create money out of thin air. That is the culprit, and you can’t solve that problem by regulations.” The Congressman stated.

Watch the entire interview below:

This article was posted: Friday, November 13, 2009 at 10:22 am

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