Free Republic
Browse · Search
GOP Club
Topics · Post Article

Skip to comments.

The Fed Fires Back at Rand Paul
The Hill ^ | Feb. 5, 2015 | Fred Cirilli

Posted on 02/05/2015 4:16:22 PM PST by SatinDoll

The Federal Reserve is lashing out at Sen. Rand Paul’s plan to give Congress more oversight over the central bank, a proposal that could gain traction in the new Republican-led Congress.

The Kentucky Republican reintroduced his “Audit the Fed” legislation last month with 30 co-sponsors, including other potential 2016 GOP hopefuls, Sens. Ted Cruz (Texas) and Marco Rubio (Fla.).

[snip]

On Wednesday, Cleveland Fed President Loretta Mester criticized the legislation as “misguided” during public remarks in Columbus, Ohio.

“They really are about allowing political considerations to influence monetary policy decisions,” Mester said in her speech. “This would be a tremendous mistake, because it would ultimately lead to poorer economic performance.”

[snip]

(Excerpt) Read more at thehill.com ...


TOPICS: Issues; Parties
KEYWORDS: audit; fed; federalreserve; money; randpaul; thefed; transparency
Navigation: use the links below to view more comments.
first previous 1-2021-4041-42 next last
To: Lurker

‘There’s no prohibition on Congress creating one’

“Yes there is, actually. Please see Amendment the Tenth.”

When Hamilton proposed the First Bank of the United States in 1790 both Jefferson and Madison argued that it was unConstitutional. Madison used the 10th Amendment argument.

Hamilton’s rebuttal included the argument that the government was sovereign and unless it was specifically prohibited it had the right to use various means to enable it to govern. The government already allowed persons to incorporate and it should allow “artificial persons”, corporations, to have the same rights. The First Bank was a private corporation, as all of our central banks have been.

President Washington weighed the arguments, decided the Bank Bill did not violate the Constitution, and signed it into law in February 1791. President Washington was aware of your argument. You lost.


21 posted on 02/05/2015 8:17:41 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 16 | View Replies]

To: Pelham

It wasn’t just I who lost.


22 posted on 02/05/2015 8:19:51 PM PST by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
[ Post Reply | Private Reply | To 21 | View Replies]

To: entropy12; Flick Lives

Maybe you just don’t know where to look? Barron’s used to publish a report of the Fed’s holdings every week. Apparently they still do since I just found the latest report online:

http://online.barrons.com/public/page/9_0210-fedresdatabank.html


23 posted on 02/05/2015 8:22:10 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 20 | View Replies]

To: Pelham; Flick Lives

It is not so much what they do is a mystery....
It is why they do it is baffling.

Take QE 1, 2 & 3 for example. How did all that money creation helped the main street economy and the middle class? It benefited the bankers and their rich friends alright. They could borrow cheap money and buy stocks and other assets and create a bubble level prices in them.

If that same amount of money was given to small businesses and medium businesses and large businesses in the form of tax reduction, capital investment credit, etc. we would have lot more jobs and a much better economy.

Who are the people running the Fed? They are academics, having never worked for a main street business which actually produce and manufacture something.

How has keeping interest rates artificially near zero helped? In reality it has reduced buying power of savers and seniors, and reduced demand for goods.

It is akin to giving enema from the wrong end. Sure if you pump enough water through the mouth, eventually the poop will come out. But it is much more effective when done right.


24 posted on 02/05/2015 9:00:32 PM PST by entropy12 (Dumb and Dumber to borrow money from China to protect oil flow to China from middle-east.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: entropy12

“Take QE 1, 2 & 3 for example. How did all that money creation helped the main street economy and the middle class?”

Actually we were helped by something that didn’t happen, namely a collapse in the banking system. I know that the Fed was very worried about the potential for that to happen and QE was one of the tools they were using to prevent it.

It was all a consequence of the housing bubble. When the housing bubble popped prices fell and people began walking away from their loans. That set in motion a vicious cycle where each further drop in prices put more people underwater and then they would default as well. Defaulted loans blow holes in a bank’s balance sheet. If that wasn’t stopped there could have been widespread bank failures and a resulting collapse in the money supply. That was the vicious cycle that made the Great Depression what it was, when one third of American banks went under from 1930-33. No one wanted a repeat of that situation, it would make our current malaise look like nothing.

“If that same amount of money was given to small businesses and medium businesses and large businesses in the form of tax reduction, capital investment credit, etc. we would have lot more jobs and a much better economy.”

That wouldn’t have prevented a collapse in the banking system which was the number one worry.

“Who are the people running the Fed? They are academics, having never worked for a main street business which actually produce and manufacture something.”

There’s five on the current Board of Governors with two vacancies. They all have academics in their background but three have some private sector experience.

“How has keeping interest rates artificially near zero helped? In reality it has reduced buying power of savers and seniors, and reduced demand for goods.”

Well I don’t like it for the very reasons that you cite, but the reasoning is that it props up asset prices and makes loans more available than they would be otherwise.


25 posted on 02/05/2015 9:51:47 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 24 | View Replies]

To: Pelham

When things come to ‘money’ it all flows through the Fed Reserve which is actually/in fact a European entity from it’s establishment. Check out the history of Pres. Wilson who was the patron of the Fed. Reserve. Pres. Kennedy tried to set up a competing financial system for the US and history gives the result of that endeavor.


26 posted on 02/05/2015 10:19:59 PM PST by noinfringers2
[ Post Reply | Private Reply | To 25 | View Replies]

To: noinfringers2

“When things come to ‘money’ it all flows through the Fed Reserve which is actually/in fact a European entity from it’s establishment. “

Thanks for that update from the Land of Tinfoil.


27 posted on 02/05/2015 10:26:41 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Pelham

I grant that the Fed. Reserve is generation of tin foil government.


28 posted on 02/05/2015 10:31:38 PM PST by noinfringers2
[ Post Reply | Private Reply | To 27 | View Replies]

To: noinfringers2

” Check out the history of Pres. Wilson who was the patron of the Fed. Reserve”

Woodrow Wilson had nothing to do with creating the Fed other than signing the bill, and in fact in 1912 the Democrats had specifically run against creating a central bank.

The events that set in motion the creation of the Fed were the Panic of 1907 and Congress passing the Aldrich-Vreeland Act of 1908 to create the National Monetary Commission. The Commission went to Europe to study their banking systems for ideas on how to modernize our own, a fact which gives modern crackpots all sorts of fodder for lunacy.

The true “patron” if any was JP Morgan, whose own bank used to backstop the American banking system during panics, but he made it known after 1907 that that role was too big even for his bank to handle anymore.

“Pres. Kennedy tried to set up a competing financial system for the US and history gives the result of that endeavor.”

One of the Tinfoil Crowd’s golden oldies. Once upon a time a ‘foiler ran across a US Note, and not having the faintest idea of what it was he invented the cock and bull story that you have mentioned above. The US Notes of Kennedy’s time were nothing less than the continuation of Abe Lincoln’s Greenback Issue, which the Bureau of Printing and Engraving had continued to issue ever since the Civil War. In 1963 US Notes were accounted for separately, just as Silver Certificates were. Once minor American coinage had its silver removed both the Silver Certificate and the US Note currencies were absorbed into the Federal Reserve Note currency. Not nearly as much fun as the explanation that the tinfoil crowd invents, but sometimes actual history is pretty boring.


29 posted on 02/05/2015 11:05:15 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Pelham

I gather that for you it all depends on who wields the real economic power. As for me I view the history as to which POTUSA acted for and in the interests of the US populace. As you noted it was Pres. Wilson who supposedly had the power of the people who signed the bill creating the Fed.Reserve for the benefit of the likes of banking interests. There are people in this world who find a good substitute for tin foil is stiff cardboard.


30 posted on 02/06/2015 9:37:39 AM PST by noinfringers2
[ Post Reply | Private Reply | To 29 | View Replies]

To: noinfringers2

“I gather that for you it all depends on who wields the real economic power.”

You gather wrong. I just like to deal in factual history and have little patience for conspiracy nonsense. Central banks are found in all developed economies because they can’t function well without one. Read Vera Smith’s “The Rationale of Central Banking and the Free Banking Alternative” and get some background.

“As for me I view the history as to which POTUSA acted for and in the interests of the US populace”

Which is what Woodrow Wilson imagined that he was doing. “Acting in the interests of the people” is always the subjective judgement of whoever is making the decision. Wilson had to be talked into signing the Federal Reserve Act because he and his Democrats had run against a central bank. The Republican Party was promoting the Fed, not the Democrats.

“who signed the bill creating the Fed.Reserve for the benefit of the likes of banking interests.”

It always amuses me to see the idea that “the Fed was created for the benefit of banking interests” as if that meant something. The reason you can say that is because you haven’t any idea of what American banking was like prior to the Fed.

John Pierpont Morgan and his bank had been performing the functions of the Fed without any government oversight at all. Creating the Fed took that away from one man and one bank and at least made it the responsibility of of a committee of banks with the oversight of the Treasury Department. Morgan was glad to share the burden because stopping panics wasn’t why he was in the banking business in the first place, and the Panic of 1907 had shown him that the US economy had become far too big for one private to bank to backstop anyway.


31 posted on 02/06/2015 5:59:58 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 30 | View Replies]

To: Pelham
Central banks are found in all developed economies because they can’t function well without one.

By "developed", read "socialist". And, yes, socialist economies can't function well without such abominations.

Plank 5 of the Communist manifesto:

"Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly."

Inasmuch as the US has veered into the same foolish territory as these other "developed" nations in Europe, that is why such a ridiculous system exists here as well.

Deficit spending via fractional reserve banking is an indispensable tool for advancing socialism, but I fail to see its necessity in any economy where government spending is under any kind of reasonable control.

In the absence of such a system, government spending simply could not be as runaway as it is.

That is why such a system exists, along with the added benefit of enriching those who are collecting the interest on the loans.

Fractional reserve banking is the most ludicrous thing I've ever heard of in my life, and there is no reason for it other than to rationalize the unending and unchecked expansion of government.

32 posted on 02/06/2015 6:35:21 PM PST by sargon
[ Post Reply | Private Reply | To 31 | View Replies]

To: sargon

“By “developed”, read “socialist”.

Countries with central banks. England in 1690. William III was a Socialist, who knew?

France, Canada, Japan, New Zealand, Germany, Australia, Columbia, Mexico, Chile... good grief, the Soviet Union was surrounded by Socialists! Good thing Gorbachev didn’t know!

“Deficit spending via fractional reserve banking”

Deficit spending is possible without fractional reserve banking, contrary to your fantasy that the two are necessarily linked. Deficit spending means nothing more than spending in excess of tax revenues and borrowing to cover the difference.

“That is why such a system exists, along with the added benefit of enriching those who are collecting the interest on the loans.”

Gosh. I guess the fact that widespread bank failures occurred during economic downturns in countries without central banks, and far fewer bank failures occurred in countries with them had nothing to do with the decision to adopt them. Just one of those amazing coincidences.

“Fractional reserve banking is the most ludicrous thing I’ve ever heard of in my life, “

Probably because you’re completely ignorant about banking. Fractional reserve banking is the very definition of banking as von Mises points out in his “Theory of Money and Credit” which I’m certain you’ve never read and likely never even heard of. Fractional reserve banking dates back to 15th century Germany and the beginnings of banking. You can cure your confusion by reading Ehrenberg’s “Capital and Finance in the Age of the Renaissance: A Study of the Fuggers, and Their Connections” which is still in print.


33 posted on 02/06/2015 7:31:26 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 32 | View Replies]

To: Pelham

Among other accounts of history you allude to I don’t believe Wilson Acted independently of European interests and financial powers. The Fed Reserve was set up by an Austrian banker who became the power behind it by appointment of Wilson.


34 posted on 02/07/2015 11:22:57 AM PST by noinfringers2
[ Post Reply | Private Reply | To 31 | View Replies]

To: noinfringers2

“The Fed Reserve was set up by an Austrian banker who became the power behind it by appointment of Wilson.”

The Fed was the result of a report by the National Monetary Commission established by Congress in 1908. Wilson was a university president in 1908 and had no say in it.

Moreover the National Monetary Commission was the brainchild of Republicans and Wilson was a Democrat. The Democrats had been running against the banking interests for more than a decade with William Jennings Bryan making it one of his main platform planks. Wilson never indicated any dissent on the subject.

The most powerful man at the Fed upon its creation wasn’t some nameless Austrian it was Benjamin Strong, President of the New York Fed from 1914 until his untimely death in 1928.


35 posted on 02/08/2015 3:45:47 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 34 | View Replies]

To: Pelham

You must not be of knowledge concerning Paul Warburg a German-Austrian who was really the architect of the Fed. Reserve. He was associated with the high financiers such as Aldrich, Andrew, Norton, and Benjamin Strong who was an aid to J. P. Morgan. There is much history associated with the financial wheeler dealers. Such did not start in 1912 but certainly was part of the historical history of the Rothschild’s. This is the same money changers that set up the fall of Russia to communists in 1917. History has it’s special events and documentation including even for Obama.


36 posted on 02/08/2015 10:14:43 PM PST by noinfringers2
[ Post Reply | Private Reply | To 35 | View Replies]

To: noinfringers2

Warburg was one of many people consulted by the National Monetary Commission. As a one time German banker he was familiar with the operations of the Reichsbank which had been Germany’s central bank for over 30 years.

But Warburg wasn’t on the Commission, he didn’t have a vote, and he couldn’t write its papers. He likewise wasn’t on the staff of the Congressmen who used the Commission’s report when they drew up the Federal Reserve Act.

But if you want to believe that Warburg had the ability to control the Commission and the Congress then go for it. Flimsy evidence and magical thinking are what good Federal Reserve conspiracy theories are made of anyway.


37 posted on 02/08/2015 11:04:17 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 36 | View Replies]

To: Pelham

You were there so your rational comes from the real truth of events? I suspect after all has been said between us that you are very touchy for whatever reasons about this subject. My university science education and nearly 90 years of living including responsible public service don’t encourage ‘flimsy evidence or magical thinking’. Neither does such make me squeamish about honest, no-ax-to-grind debate.


38 posted on 02/08/2015 11:25:39 PM PST by noinfringers2
[ Post Reply | Private Reply | To 37 | View Replies]

To: noinfringers2

And were you there? I didn’t think so. That makes us even. Funny how that argument cuts both ways.

The “touchiness” is nothing more than my impatience with conspiracy thinking. If you have a science education then you have little excuse for wandering in those swamps. There’s plenty of writing on the Fed and it’s origins that don’t resort to nonsense:

http://eh.net/book_reviews/the-great-debate-on-banking-reform-nelson-aldrich-and-the-origins-of-the-fed/

http://eh.net/?s=federal+reserve


39 posted on 02/08/2015 11:43:31 PM PST by Pelham (WWIII. Islam vs the West)
[ Post Reply | Private Reply | To 38 | View Replies]

To: Pelham

I will take that your comment as to ‘conspiracy thinking’ applies particularly/especially to the matter being discussed, otherwise we are to far apart as to existence of conspiracies to continue any discussion. My scientific education and related work experience were in a real world not some fantasy world of make believe that is made up of personally selected/preferred events. Just as a matter of further interest I would ask if you ever had military service.


40 posted on 02/09/2015 10:53:30 AM PST by noinfringers2
[ Post Reply | Private Reply | To 39 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-42 next last

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.

Free Republic
Browse · Search
GOP Club
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson