Friday, July 10, 2009
The Fed's main argument against an audit by Congress is that it would interfere with the Fed's "independence".
For example, in his Congressional testimony yesterday - entitled "Federal Reserve independence" - the vice chair of the Fed used the "i" word 30 times.
What Does Fed Independence Mean?
The Fed is pretending that it is merely trying to insulate itself from political pressure, and that politician's re-election concerns should not interfere with sound "monetary policy".
That sounds good, doesn't it?
But it is a red herring.
Congress is elected by the people, and the people can throw the bums out if they don't listen to the people's demands. So even though most congress members are political hacks, they are subject to at least some accountability.
The Fed, on the other hand, is subject to no accountability. The Fed is refusing to provide Congress any information on where the trillions of dollars it has handed out have gone. The Fed is also refusing to disclose what toxic assets it has taken from the banks and put om its own books.
And there are a few congress people who actually have the best people's interests in mind, and want to hold the Fed accountable - on behalf of the people.
What the Fed is really arguing is that it should not have to answer to the American people.
Because if the American people knew what the Fed was really doing, they would demand that it be terminated immediately.
What is the Fed Hiding?Remember, As the Fed itself admits, the Federal Reserve Banks are private organizations owned and controlled by their private member banks.
According to many PhD economists (such as Marc Faber), the Fed caused this economic crisis, as well as the Great Depression.
The Fed has also replaced assets with some real value with toxic derivatives on its balance sheet, in order to act as a giant garbage disposal for the big-stakes gamblers at the giant banks.
And the Fed makes trillions of dollars in profits for its member banks by creating credit which the U.S. government has every right under the Constitution to create itself. In other words, the Fed's member banks get trillions in interest charges from the U.S. government and the taxpayer which would not be incurred if the government created the credit and money itself.
The Fed has also violated the Federal Reserve Act and other laws. In what ways? Well, I can guess at probably 10 or more categories of unlawful activity off the top of my head.But we'll have to await a real audit to get the full list.