His position is to be expected and wise. What we should pay attention to are his reasons. Very good reasons I should say. He points out that the Fed is already very thoroughly audited and the audit results are public. The activities of the Federal Reserve System are highly transparent and have been particularly so under Bernanke and Yellen's leadership. So, this "audit the fed" movement in Congress can be nothing other than yet another time wasting, populist, political exercise designed to pander to the ill informed tea party and libertarian constituents of the far right wing of the Republican party. If such a mislabeled attempt to interfere with Fed operations were to actually emerge from committee and pass in the House, it surely would not go further. Nevertheless, this is a radical, dangerous and misleading movement that must be exposed for what it is, and promptly killed. The Fed, like any human institution, is not perfect, but the last thing any of us should want is for Congress to interfere with monetary policy. As Powell points out, this could be the unintended, or possibly even intended, consequence, should somehow this overt political pandering to far right constituents, by diabolical twist of fate, become law.
One underlined and italicized sentence deserves another. If the Federal Reserve was already audited in the manner in which the bill required, there wouldn't be any issue with the bill. The problem is that the current audit is selective and doesn't go far enough, and with a shadowy institution that runs pretty much the entire economy, full transparency is required. If the people want it, it should happen - that is point of democratically elected politicians - to do what their constituents want. No cartel that you support should be able to overrule it. The good thing is that cronyist dinosaurs such as yourself are on your way out. As time goes on, more and more people are getting wise to the Federal Reserve and the idea to audit - if not end them. The Libertarian footprint continues to grow, Paul's ideas (the older, less so on the younger) continue to resonate and gain support. Your precious Federal Reserve might just escape the audit this time around, but the days of shining light on that group of unelected academics who are appointed for political and corrupted reasons are around the corner. People are tired of an institution that exists to create wealth disparity, punish responsibility, and bailout corrupt institutions on the public dollar. It can't come soon enough. Your days are numbered.
Sen. Rand Paul: Audit the Fed by Sen. Rand Paul (R-KY)10 Feb 20151 If the Federal Reserve was a real bank, without extraordinary powers, it would be insolvent. The Fed has $4.5 trillion in liabilities and only 57 billion dollars in equity. It is leveraged at 80:1, nearly three times greater than Lehman Brothers when it failed. Nearly 40 percent of the Fed’s liabilities are said to be mortgage-backed securities – the question needs to be: How many are distressed home loans? What does that mean? It means the dollar that was once as good as gold ultimately became backed by the full faith and credit of the U.S. government. And since the panic of 2008, your dollar is now backed by bad home loans, bad car loans, and derivatives. Is anyone comforted? Over the past one hundred years the dollar has lost 96 percent of its value. If the Fed were forced to do, what every ordinary bank must do—take its “assets” and mark them to their current market value—many believe the Fed would be insolvent. So, after the banking crisis of 2008, we got alarmed and we passed regulations. The only problem is, we passed regulations on the banks that weren’t involved and gave more power to the bank that was involved—the Fed. No bank in Kentucky failed during this crisis, yet Dodd-Frank pummeled our small community banks with crippling regulations. What we really needed was more oversight of the Fed, not small community banks. If the Fed has purchased more than $2 trillion dollars of “distressed” assets, don’t taxpayers deserve to know what they bought? Did they buy the assets of friends and acquaintances? Did they buy any liabilities from companies they used to work for? Maybe someone should ask about the revolving door from Wall Street to the Treasury to the Fed and back again. Are there any conflicts of interests? Sen. Bernie Sanders (I-VT) and I don’t agree on much, but I thought he did a great job of describing the Fed and the bank bailouts as: “A clear case of socialism for the rich and rugged, you’re on your own individualism for everyone else.” Some say the Fed is already audited. Well, when the auditor came to Congress, she was asked the identity of the debt bought by the Fed. She didn’t know. When pressed on the case she responded, “We do not have the jurisdiction to directly go and audit reserve bank activities.” Some worry about Fed independence. I do too. I worry about the Fed’s independence from the Executive branch. The Fed is supposed to be overseen by Congress. Congress created the Fed. The Fed is now in every nook and cranny of banking regulation since Dodd-Frank and it is a necessity that we not let the Executive branch gain unlimited power. With Dodd-Frank, we created the Consumer Financial Protection Bureau, an agency with unprecedented regulatory powers and no Congressional oversight. Any audit of the Fed should attempt to bring regulatory power back under the control of Congress. Some worry that an audit would reveal which banks are shaky and lead to a panic. The audit doesn’t occur until a year after the bill passes. When the 2011 audit occurred, no bank-runs ensued. It is alarming that the Federal Reserve, which was granted Monopoly money-making power, is now specifically trying to stop my legislation. The Fed, with unlimited ability to print money, now prints that money to lobby against Congressional oversight. It is a disgrace and every citizen in the land should rise up and say: We the people are in charge and we demand an audit! Peter Bernholz writes that public deficits have frequently been the reason for hyperinflation. The fight is twofold. Audit the Fed is about transparency, but the fight is also about restoring fiscal sanity to our nation’s checkbook.
I would have to side with Piezoe here. Enron was audited, congressional insider trading was audited, the NSA is audited, and the Fed is audited. So auditing will not solve the issue necessarily. I think Fort Knox was audited as well. Now that S&P was punished for the downgrade of the USD in some people's opinions, and Arthur Anderson was dealt with, we can count on much better auditing instead of potential continuing "control fraud". Auditing the FED won't help until the people gain control of their government first IMO. The usual argument would be that independence is necessary. The people bailed out the large US banks with TARP, the Fed (a private concern -look at their own website) pays 6% (if I recall correctly) dividend to their shareholders. I think the FED is bankrupt already anyways since they reportedly paid top dollar for worthless CDOs etc. and helped fund bonuses to boot. To whom do they sell those to? If they can't sell them, how do they ever get their own finances whole? Who pays above market price? I have heard that the CBO already admits that there is no way out for the US paying its debt down, a report was released in the Bill Clinton's era that said the US was bankrupt from the FED itself - St Louis if I recall correctly, unless certain actions were taken immediately and Bill Clinton to his credit did take some actions. The FED did what any bank would do given a non-performing loan - hand out more credit! The curious thing, is that nobody seems to notice or care as the average wage drops, more and more people are not counted in unemployment stats, pot smoking legalization abounds (helps to swallow the truth IMO), and everybody looks for the financial system to pay their social security over the next few decades. I am sure Canada is just as bad in their counting. With oil prices dropping, we are told that housing is doing just fine thank you ..... Bread and Circuses, bread and circuses ....
Would you care to disclose exactly what information you want that is not disclosed in the current audit?
I will just mention a few things in your post that may not be quite correct or could be misleading to others. Some audits may be unreliable when the auditor's pay, or contract, depends on the outcome of the audit. This is far more likely to occur when both the auditor and the client are for profit businesses. The Federal Reserve is not a for profit business. No one owns the Fed other than the American people. All net Fed profits flow directly back to the U.S. Treasury. The Fed's website makes it abundantly clear that the Fed is NOT a private concern. Publicly owned banks do participate in Fed operations and decision making if they choose too. There are no privately owned banks, to the best of my knowledge, that are part of the Federal Reserve system! The Fed does pay a fixed dividend for use of the capital that a bank wishing to become a part of the federal reserve system must provide in return for special stock. This "stock" is nothing like the stock that imparts ownership rights in publicly held corporations. The stock does not impart ownership rights and it is not marketable. Many people do not realize that the Federal Reserve System is just an independent branch of the U.S. Treasury Department that happens to have been given, by Congress, specific tasks. The federal reserve and the treasury department are in daily contact and work hand in glove. Sadly, neither the Treasury, nor the Fed, seem capable of instant miracles. The Fed is not responsible for wages, but they are, according to Congress, supposed to be responsible for maintaining "full employment", without a definition of "full Employment" having been given them. The Fed is not responsible for legalizing, or not, pot smoking, nor are they responsible for Social Security payments over the next few decades.
I never realized, until just now, how little knowledge of the Federal Reserve System and how it operates, is possessed by Senator Rand Paul. I thought, until now, he was one of our more knowledgeable Senators. I am rather shocked at his lack of understanding of Fed operations. The Fed is not a bank in the ordinary sense, and it is not without extraordinary powers. What is his point? Is he daft?
You can't possibly be this naive. Did you listen to Jerome Powells remarks? The Bill ISN'T about auditing the Fed!!!