By John Watts
Senator Rand Paul (R-KY) is continuing the fight against the United States’ inherently corrupt, obstinate cartel banking-system by re-introducing the Federal Reserve Transparency Act (S. 209).
Supporting the Federal Reserve Transparency Act is vitally important to the economic well-being of every American citizen. After all, the Fed’s policy of constant increase in the monetary supply has led to a drastic depreciation of the American dollar –which has lost over 90 percent of its value since the Fed was created in 1913. The relentless debasement of the dollar has been a slow (100 year-long) process. This gradual decline in the purchasing power of the dollar is especially pernicious in that Americans have slowly become de-sensitized to it.
The Federal Reserve operates in near total secrecy. Often we are told that the Fed must operate in a shroud of secrecy to ensure that it maintains a high degree of political independence.
This argument is specious. It pre-supposes that the Fed currently operates as a sort of apolitical organization of disinterested experts making decisions regarding monetary policy for the benefit of all. In reality, the Federal Reserve is a banking cartel that has a monopoly grant of authority to control monetary policy from the US Congress.
The key points are that it is the very essence of a cartel, and it has a prerogative established by law – it is a political organization by its very nature. The Fed’s recent history of bailing out massively overleveraged investment banks and surreptitiously facilitating the expansion of federal government intervention in every minute aspect of Americans’ lives proves this point.
Supposedly, the Federal Reserve is necessary to “stabilize” prices and “maximize” employment – this is its official, statutory mandate directed by Congress. Most people also believe that the Fed is everybody’s lender of last resort, in other words, during times of economic recession, the Fed will be there to print money and save everybody from collapse. The truth is the Federal Reserve is primarily there to bail out its member-client banks and dump gargantuan piles of debt off on taxpayers.
In what is perhaps a supreme twist of irony, the Federal Reserve, in its role as coordinator of fractional reserve banking, is the very root cause of the vicious boom-bust cycle. By maintaining an endless policy of artificially low interest rates, the Fed misguides entrepreneurial decision-makers into investing in longer-term, drawn out projects not all of which will be possible to complete. By keeping the interest rates lower than unhampered market conditions would otherwise dictate, the Fed leads these decision-makers into thinking that the public’s ability to consume in the future will be greater than their actual savings indicates.
A full, complete auditing of the Federal Reserve, especially the actions of the Federal Open Market Committee, is desperately needed if we are help the public understand the true nature of the Fed’s activities. Centrally directed economic planning is not practicable in any sector of the economy, and if we are intellectually consistent and honest, we must recognize it is grossly detrimental in monetary affairs as well.
Tags: Audit the Fed, Federal Reserve, monetary policy, S. 209, Federal Reserve Transparency Act, fractional reserve banking