Posted on 05/05/2009 6:14:34 AM PDT by AmericanHunter
From time to time, a few members of Congress—as many as 10, sometimes fewer—gather with Rep. Ron Paul (R-Tex.) to eat lunch and hear from an author or expert whose opinion he thinks is worth promoting. They grab something to eat off of a deli plate. They take notes. They loosen up and ask questions.
“It’s not all that easy for the other members to get here,” said Paul in an interview with TWI, sitting just outside of his office before heading back to Texas for a few days. “It’s just that there’s so much competition. Once they get here and they get going, they all seem to enjoy it.”
A funny thing has started happening to Paul since his long-shot presidential campaign ended quietly in the summer of 2008. More Republicans have started listening to him. There are the media requests from Fox Business and talk radio where he’s given airtime to inveigh on sound money and macroeconomics. There is HR 1207 , the Federal Reserve Transparency Act of 2009, a bill that would launch an audit of the Federal Reserve System, and which has attracted 112 co-sponsors. When Paul introduced the Federal Reserve Board Abolition Act just two years ago, no other members of Congress signed on.
And then there are the luncheons. The off-the-record talks have brought in speakers such as ex-CIA counterterrorism expert Michael Scheuer, libertarian investigative reporter James Bovard, iconoclastic terrorism scholar Robert Pape, and George Washington University law professor Jonathan Turley. Perhaps the most influential guest has been Thomas Woods, a conservative scholar whose previous books include “The Politically Incorrect Guide to American History” and “Who Killed the Constitution?: The Fate of American Liberty from World War I to George W. Bush,” and whose current book “Meltdown” has inspired Rep. Michele Bachmann (R-Minn.) to question Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner about economic fundamentals.
Paul’s unexpected and sudden clout with his fellow Republicans — even some of Paul’s staff have been surprised with the momentum of his “Audit the Fed” bill — come as the GOP engages in a tortured internal dialogue about its future. Since January, no small number of new coalitions have formed between current members of Congress, former advisors to President George W. Bush, and perennial party leaders such as former Gov. Mitt Romney (R-Mass.) and former Gov. Jeb Bush (R-Fla.). Few of those conservatives, however, have spent much time criticizing the very foundations of America’s modern economic system and worrying about a 1929-style crash. Few of them had a drawer stuffed with off-brand economic ideas and forgotten libertarian texts, ready to explain what needed to be done. Ron Paul did, and as a result the ideas that made the Republican establishment irate enough to bounce him from a few primary debates are more popular than ever.
“There’s a growing recognition that the GOP is intellectually bankrupt and morally bankrupt,” explained Bovard. “Most of these Republican ‘rebranding’ efforts amount to a group of overpaid consultants getting detached from reality, but I’m glad that Paul is putting together these meetings. I hope the battle of ideas is changing.”
The success of Paul’s events, however under-the-radar, have been a pleasant surprise for the experts. “I’ll admit it,” said Thomas Woods. “I was dead wrong in my first reaction when I heard Ron talking about the Fed on the campaign trail. I said, ‘This is too complicated for most Americans. This isn’t going to galvanize people.’ I was wrong! He’s taken an issue that wasn’t even an issue, and he’s got a lot of Americans suddenly fascinated by the Fed, by monetary policy, by the Austrian business cycle theory,” economic ideas promoted by thinkers like Ludwig von Mises and Murray Rothbard that blame central banks for painful business cycles.
Since his congressional comeback in 1996 — after a long stint as a Libertarian Party politician, and after only narrowly defeating a Democrat-turned-Republican that Newt Gingrich’s Republican leadership supported — Paul has maintained a small circle of allies in Congress. Some of them, like Rep. Walter Jones (R-N.C.), are regular guests at the expert luncheons. But the most prominent new face is Bachmann, the rising conservative star who left C-Span and YouTube watchers scratching their heads with a grilling on the Constitution that seemed to puzzle Geithner. “What provision in the Constitution could you point to to give authority for the actions that have been taken by the Treasury since March of ‘08?” asked Bachmann during a hearing on March 24. “What in the Constitution could you point to to give authority to the Treasury’s extraordinary actions that have been taken?”
Bachmann “goes to these luncheons on a weekly basis,” said Debbee Keller, Bachmann’s press secretary. Keller noted that Bachmann was reading “Meltdown,” which argues that the New Deal failed and that the Federal Reserve is responsible for the current economic crisis. “Just as Austrian theory suggests,” wrote Woods, “the Fed’s mischief was responsible for the Great Depression.”
“I had a feeling she’d have some interest in the book,” said Woods, “because she asked some good questions. She was taking notes. She was asking if this or that point could be found in the book. I thought I recognized a sincere person who wanted knowledge, not the usual politician who couldn’t care less about what the truth is and just wanted to propagandize.”
Paul didn’t take credit for turning Bachmann on to Austrian theory (”He’ll give credit to everyone on the planet except himself,” laughed Woods) but said he was pleased to see more members of Congress delving into economics. “She’s very open to studying,” said Paul. “In fact, she’s been working really hard to get me back to Minneapolis. She says, ‘You’ll get such a great reception there!’”
Paul’s other influence has reached further across the aisle. Since he introduced the Federal Reserve Transparency Act of 2009, he has locked in the support of a majority of the Republican conference as well as 13 Democrats, for a bill that would mandate an “audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks” before the end of 2010 to reveal how the board makes it decisions and moves around money. “As Congressman Paul pointed [out] many times,” said freshman Rep. Alan Grayson (D-Fla.) after co-sponsoring the bill, “the Federal Reserve should have come clean with the American people a long time ago. The Fed is disbursing trillions of dollars and the taxpayers have a right to know who is getting it.”
It’s been a rapid rise for an idea that, only months ago, was located firmly in the political fringe. The John Birch Society, the far-right group that Paul has often defended from media criticism, was one of the first groups to encourage members to contact their members of Congress to support an audit of the Fed. Paul’s own coalition, the Campaign for Liberty, has engaged in a months-long grassroots campaign for the bill, something that Paul credited for a surge in support unlike anything he’s introduced in his second stint in Congress.
“People today are clamoring for transparency,” said Paul, “and there is more awareness of the Federal Reserve. I do think it has something to do with the focus we put on this during the campaign. It’s not so much that I’m personally converting people, it’s that we’ve got people at the grassroots converting their members of Congress.” Rep. Zach Wamp (R-Tenn.), a conservative who is running for governor of Tennessee next year, has told Paul that his support for the Fed audit and his condemnation of a Missouri law enforcement policy to watch out for cars with Ron Paul bumper stickers get some of his loudest, most positive reactions on the campaign trail.
Paul has remained surprised and bemused at his new influence. “I was talking with one of the other Republicans on the floor,” he remembered, “one of the types that had been voting with Bush, for big spending and all of that. I asked him: ‘Are you voting with me now or am I voting with you?’ They just laugh. They know what the situation is.”
Seems to be that some ‘squishy-middlers’ are listening to Ron Paul, too.
My Husband for one. He’ll listen to Ron Paul, but not me? LOL! No matter. As long as the message is delivered. :)
...Bravo, Finally, someone is taking time to look at Pauls opposition to the Iraq war and his stand on foreign policy, instead of dismissing it without even reading it...
I can’t wait until Henry the K bites the big one at last. He’s been wasting my air ever since he sold out all of the MIAs just so he could get his Nobel Peace Prize. What a disgusting waste of protoplasm!
Yes, they are "audited" by whom they wish, in areas they wish, and release the info that they chose to, but there are major areas like their relationships to foreign banks and currency issuance that are completely off-limits to that audit. HR 1207 would remove those restrictions and give Congress transparency in those areas that are now off-limits.
The way you continually defend the Fed Reserve on this issue, you'd think that you work for them -- do you?
Yes, audits look at flow of funds, loan agreements, earnings etc.
You don't think the audits show that stuff?
The way you continually defend the Fed Reserve on this issue
Pointing out Ron's idiocy means I'm defending the Fed? LOL!
you'd think that you work for them -- do you?
No. Just tired of all the ignorance on FR about them. Makes the rest of us look bad.
gold ownership? gold trading?
Why not?
I’ve never seen it printed up in a Fed report, have you?
I don't think they trade gold. Do you? Why?
Former Fed Chairman Paul Volker wrote the following in his memoirs: “Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.”
So they didn’t trade gold.
FEDERAL RESERVE statistical release
H.4.1
Factors Affecting Reserve Balances of Depository Institutions and
Condition Statement of Federal Reserve Banks
April 30, 2009
1. Factors Affecting Reserve Balances of Depository Institutions
Millions of dollars
Reserve Bank credit, related items, and Averages of daily figures
reserve balances of depository institutions at Week ended Change from week ended Wednesday
Federal Reserve Banks Apr 29, 2009 Apr 22, 2009 Apr 30, 2008 Apr 29, 2009
Reserve Bank credit 2,087,578 - 81,542 +1,222,561 2,049,958
Securities held outright 976,811 + 22,765 + 428,131 983,358
U.S. Treasury securities (1) 543,009 + 14,319 - 5,671 549,046
Bills (2) 18,423 0 - 51,894 18,423
Notes and bonds, nominal (2) 479,039 + 14,007 + 44,093 485,057
Notes and bonds, inflation-indexed (2) 40,976 + 215 + 2,434 40,976
Inflation compensation (3) 4,571 + 97 - 304 4,590
Federal agency debt securities (2) 66,074 + 3,317 + 66,074 68,158
Mortgage-backed securities (4) 367,728 + 5,129 + 367,728 366,153
Repurchase agreements (5) 0 0 - 107,536 0
Term auction credit 403,573 - 52,226 + 303,573 403,573
Other loans 104,538 - 163 + 74,355 101,531
Primary credit 44,788 + 1,676 + 33,200 45,261
Secondary credit 40 - 21 + 40 0
Seasonal credit 1 0 - 24 1
Primary dealer and other broker-dealer credit (6) 5,479 - 3,735 - 13,092 700
Asset-Backed Commercial Paper Money Market
Mutual Fund Liquidity Facility 3,362 + 2,412 + 3,362 3,699
Credit extended to American International
Group, Inc. (7) 44,489 - 494 + 44,489 45,492
Term Asset-Backed Securities Loan Facility 6,379 0 + 6,379 6,379
Other credit extensions 0 0 0 0
Net portfolio holdings of Commercial Paper
Funding Facility LLC (8) 222,920 - 17,977 + 222,920 181,795
Net portfolio holdings of LLCs funded through
the Money Market Investor Funding Facility (9) 0 0 0 0
Net portfolio holdings of Maiden Lane LLC (10) 26,484 + 39 + 26,484 26,502
Net portfolio holdings of Maiden Lane II LLC (11) 18,264 + 27 + 18,264 18,328
Net portfolio holdings of Maiden Lane III LLC (12) 27,432 + 18 + 27,432 27,449
Float -2,241 + 111 - 567 -2,345
Central bank liquidity swaps (13) 250,215 - 36,059 + 214,215 249,513
Other Federal Reserve assets (14) 59,582 + 1,924 + 15,291 60,254
Gold stock 11,041 0 0 11,041
Special drawing rights certificate account 2,200 0 0 2,200
Treasury currency outstanding (15) 42,290 + 14 + 3,555 42,290
Total factors supplying reserve funds 2,143,109 - 81,528 +1,226,116 2,105,489 Right above the bottom. See it now?
Apparently not in the 1970’s
You think they’re doing it now? Why?
Has the price of gold stayed the same all these years?
Yes, the price that they mark it on their books has stayed the same all these years.
They would be following Volker's advice that he learned in the 70's which is that the price of gold is often an indicator of future perceived inflation. Keeping the gold price suppressed helps dispel inflation psychology. That leaves them with the simpler problem of deflation psychology and they have plenty of tools for that (e.g. debt monetization). Their goal is a balance somewhere in the middle.
A rising price of gold should kill deflation psychology.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.