Expose The Fed

The idea for the Federal Reserve Bank may have been hatched at a very secret and exclusive tycoon's retreat held on Jekyll Island in November 1910, but it was codified in 1913 under the Federal Reserve Act. By creating this private organization, Congress shunted its constitutional authority to print, mint and regulate US currency to an organization independently operated by a bunch of big, private banks.

This is what Thomas Jefferson said in 1802 about just such an arrangement:

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."

Sound familiar? The Fed was created 17 years before the onset of the Great Depression expressly to avert that kind of financial calamity as well as the one we are in today. Despite that the Fed has repeatedly failed in its fundamental task, neither citizens nor their representatives in Congress are allowed to examine Fed operating records.

Congress fostered today's economic disaster by forcing banks to make mortgage loans to people who could not afford them. The Fed failed to detect and correct this financially incompetent policy as surely as the Securities Exchange Commission failed to scuttle Bernie Madoff's colossal Ponzi scheme.

So the "Troubled Asset Relief Program" was sold to taxpayers as an absolute necessity intended to excise these "toxic assets," such remedy to be dispensed by the Federal Reserve. But as soon as he got the TARP money, Fed Chairman Ben Bernanke unilaterally changed his mind and simply threw hundreds of billions of US dollars at a bunch of banks. Who gave him the latitude to do that? Congress.

In December 2008 many of the TARP-fortified banks declined to say what they'd done with the money. About the same time, the Fed refused to divulge what happened to an additional two trillion US dollars, to whom it was lent and what, if anything, was accepted as collateral.

Now, right after China expresses concern about buying any more US debt, the Fed decides to print yet another trillion bucks, coincidentally on the very same day that Jimmy "Double-digit Inflation" Carter is photographed skulking out the back door of the White House. This trillion will be filtered into the banks through Treasury bills, bonds and mortgage-backed securities. I'm not sure how that works. It has something to do with water boarding the banks with cash until they agree to resume extending credit.

However, I do know that the national debt, squarely the responsibility of Congress and the Fed, now tops 11 trillion US dollars and must be repaid, literally, by generations of Americans yet to be born. Why? Because at 36,000 US dollars for every American soul alive today, no single generation could possibly pay off that debt themselves in the absence of slavery.

In a refreshing turn of events out of Washington, Rep. Ron Paul is sponsoring a bill, HR 1207, "The Federal Reserve Transparency Act," which seeks to open the Fed to Congressional oversight.

Dr. Paul says, "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?" Why, indeed?

Signing this bill should be a litmus test for any federal official intent on reelection. And this should be only a first step toward rescuing our country from the utter debasement we are suffering at the hands of an amateurish government in bed with financial predators. Now that is the kind of change I could believe in.