Jun 30 2009
Will We Finally Know What The Fed Is Doing With All That Money?
Rep. Ron Paul introduced a bill in February that would require the GAO to audit the Federal Reserve by the end of 2010. Although Paul wants to get rid of the Fed all together, he has received 245 co-sponsors for the bill.
With the Federal Reserve holding interest rates at rock-bottom levels, pumping trillions into the economy and now poised to have new powers to oversee the financial system under President Obama’s proposed regulatory overhaul, Paul said lawmakers want transparency.
“If they give them a lot more power and there’s no more transparency, that’ll be a disaster,” he said.
The bill would call for the comptroller general in the Government Accountability Office to audit the Fed and report those findings to Congress. The GAO’s ability to conduct such audits now is severely restricted.
A slew of top Republicans are backing the bill, as are many Democrats.
There is a similar bill in the Senate:
Sen. Bernie Sanders, I-Vt., introduced a bill similar to Paul’s in the Senate in March, which so far has attracted just three co-sponsors — DeMint and Republican Sens. David Vitter of Louisiana and Mike Crapo of Idaho.
But DeMint told FOX News last week that the measure would have a good chance of passing the Senate if supporters can push Paul’s to a vote, which he said would be successful, in the House.
The House bill is being held up in the House Financial Services Committee which is chaired by Barney Franks. This is the type of transparency that we need and that Obama promised in his campaign. Its time to make our voices loud and clear that this is what we want!
DJStrata
Well, 6 out of 11 VA Congressmen are co-sponsors!!
It is easy to see what the fed is doing from the money supply figures. M0 has skyrocketed while M1 and M2 have risen by a much smaller amount. This means the money is sitting in the bank vaults as reserves against loan defaults. The cash is just sitting there in reserves not doing anything. We don’t need a Ron Paul witch hunt.
This is actually money that was supposed to be in reserve all the time but some guy named Geithner who was in charge of the NY Fed ruled that reserves didn’t need to be held against government guaranteed (Fannie May, Freddie Mac, FHA) loans provided they carried default insurance (AIG). And he further ruled that since the loans were “riskless”, that AIG didn’t need to hold any reserves against default either.
So when they started to default, NOBODY had the reserves to cover them and banks started going broke. The fed has injected reserves so the financial companies can lend to keep business going.
The cash is just sitting there in the vaults.