Fri Post #1: Meet the chief obstacle in the Senate to Ron Paul's effort to audit the Federal Reserve. What did he say in 1995?

Yesterday the above clip was posted regarding Ron Paul's success at seeing an 'Audit the US Federal Reserve' bill passed in the US House of Representatives.

It is a landmark achievement but only the first step in the process to see the action become reality.

The next hurdle is the US Senate. Leading the opposition to prevent the Bill from even being introduced in the chamber is Senator Harry Reid. Ron Paul describes this opposition in the above clip.

Paul is confident that if the Bill can be introduced in the Senate, public pressure will see it passed.

And that pressure is starting to ramp up with the circulation of the clip below. It shows Harry Reid from 1995 making a speech in the Senate calling for - of all things - an audit of the Federal Reserve!!!

Oh the hypocrisy!

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Mon Post #2: Ron Paul explains how America shifted away from 'debt' money after the Civil War and can do it again

Ron Paul continues to lay out his platform calling for the end of the Federal Reserve and returning America to sound monetary policy.

"We know what to do - we did it once after the Civil War period, we went from a paper standard back to the gold standard, and the event wasn't that dramatic. But today the big problem is that both the conservatives and liberals have an big apetite for big government for different reasons, therefore they need the Fed to tie them over and monetize the debt. So if you don't get rid of that appetite it's going to be more difficult, but the transition isn't that difficult. You have to get your house in order; you have to balance the budget, you have to not run up debt, and you have to promise not to print any more money..."

"I am quite convinced that the system we have will not be maintained - that's what these last 4 years was all about, and that's what the turmoil in Europe is all about. The question is are they going to move toward a constitutional form of money. or are we going to go another step further into international money - instead of having an international gold standard based on the market, are we going to go toward a UN, IMF standard where they are going to control with the use of force another fiat standard. I consider that a very, very dangerous move."

Paul's comments come a day after more secret Fed bailouts were publicized.

Bloomberg reported yesterday that Secret Fed Loans Gave Banks $13 Billion.

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

Is there anyone who still really believes we shouldn’t be taking a closer look at the Federal Reserve’s activities?

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Ron Paul on the US Federal Reserve: "It is immoral"

Congressman Ron Paul (and candidate for the US Republican 2011 presidential nomination) delivered a speech for the National Association of Home Builders at the 29th Annual Cato Monetary Conference yesterday.

The key topics were the US monetary policy and the US Federal Reserve.

"I think there is no doubt that the Federal Reserve is immoral, it's unconstitutional, it's a disaster and we don't need it... The Federal Reserve is an institution that was created by the Congress and the Congress has been totally derelict in their duties as far as oversight of the Federal Reserve."

In the middle of an election campaign, here you have a man who is speaking consistently with everything he has said about monetary policy for the last 30 years. He refuses to pander to the electorate and change his opinions to garner votes. Ron Paul tells you exactly how it is in this excellent speech.

This is the man who 'should' be the next president of the United States.

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Ron Paul's message to Occupy Wall Street: End the Fed

The 8:00 mark to 9:00 contains the meat of the message and the 'End the Fed' pledge.

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Fractional Reserve Banking: "We pay tax for the privilage to have currency."

Michael Maloney, CEO and Founder of goldsilver.com speaks at the Casey Research/Sprott Summit When Money Dies.

Maloney explains how currency is created, "fractional reserve banking," and why our banking system is a pyramid scam of epic proportions.

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US Republican Presidential Candidate says " Blame the Fed"

US Republican Presidential Candidate, Ron Paul, has written an Op Ed piece for the Wall Street Journal reinforcing the theme we have carried for the past week - that the root of our problems lie with Central Banks and the US Federal Reserve.

Here is what he had to say:

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Blame the Fed for the Financial Crisis

The Fed fails to grasp that an interest rate is a price, the price of time. Attempting to manipulate that price is as destructive as any other government price control.

By Ron Paul

To know what is wrong with the Federal Reserve, one must first understand the nature of money. Money is like any other good in our economy that emerges from the market to satisfy the needs and wants of consumers. Its particular usefulness is that it helps facilitate indirect exchange, making it easier for us to buy and sell goods because there is a common way of measuring their value. Money is not a government phenomenon, and it need not and should not be managed by government. When central banks like the Fed manage money they are engaging in price fixing, which leads not to prosperity but to disaster.

The Federal Reserve has caused every single boom and bust that has occurred in this country since the bank's creation in 1913. It pumps new money into the financial system to lower interest rates and spur the economy. Adding new money increases the supply of money, making the price of money over time—the interest rate—lower than the market would make it. These lower interest rates affect the allocation of resources, causing capital to be malinvested throughout the economy. So certain projects and ventures that appear profitable when funded at artificially low interest rates are not in fact the best use of those resources.

Eventually, the economic boom created by the Fed's actions is found to be unsustainable, and the bust ensues as this malinvested capital manifests itself in a surplus of capital goods, inventory overhangs, etc. Until these misdirected resources are put to a more productive use—the uses the free market actually desires—the economy stagnates.

The great contribution of the Austrian school of economics to economic theory was in its description of this business cycle: the process of booms and busts, and their origins in monetary intervention by the government in cooperation with the banking system. Yet policy makers at the Federal Reserve still fail to understand the causes of our most recent financial crisis. So they find themselves unable to come up with an adequate solution.

In many respects the governors of the Federal Reserve System and the members of the Federal Open Market Committee are like all other high-ranking powerful officials. Because they make decisions that profoundly affect the workings of the economy and because they have hundreds of bright economists working for them doing research and collecting data, they buy into the pretense of knowledge—the illusion that because they have all these resources at their fingertips they therefore have the ability to guide the economy as they see fit.

Nothing could be further from the truth. No attitude could be more destructive. What the Austrian economists Ludwig von Mises and Friedrich von Hayek victoriously asserted in the socialist calculation debate of the 1920s and 1930s—the notion that the marketplace, where people freely decide what they need and want to pay for, is the only effective way to allocate resources—may be obvious to many ordinary Americans. But it has not influenced government leaders today, who do not seem to see the importance of prices to the functioning of a market economy.

The manner of thinking of the Federal Reserve now is no different than that of the former Soviet Union, which employed hundreds of thousands of people to perform research and provide calculations in an attempt to mimic the price system of the West's (relatively) free markets. Despite the obvious lesson to be drawn from the Soviet collapse, the U.S. still has not fully absorbed it.

The Fed fails to grasp that an interest rate is a price—the price of time—and that attempting to manipulate that price is as destructive as any other government price control. It fails to see that the price of housing was artificially inflated through the Fed's monetary pumping during the early 2000s, and that the only way to restore soundness to the housing sector is to allow prices to return to sustainable market levels. Instead, the Fed's actions have had one aim—to keep prices elevated at bubble levels—thus ensuring that bad debt remains on the books and failing firms remain in business, albatrosses around the market's neck.

The Fed's quantitative easing programs increased the national debt by trillions of dollars. The debt is now so large that if the central bank begins to move away from its zero interest-rate policy, the rise in interest rates will result in the U.S. government having to pay hundreds of billions of dollars in additional interest on the national debt each year. Thus there is significant political pressure being placed on the Fed to keep interest rates low. The Fed has painted itself so far into a corner now that even if it wanted to raise interest rates, as a practical matter it might not be able to do so. But it will do something, we know, because the pressure to "just do something" often outweighs all other considerations.

What exactly the Fed will do is anyone's guess, and it is no surprise that markets continue to founder as anticipation mounts. If the Fed would stop intervening and distorting the market, and would allow the functioning of a truly free market that deals with profit and loss, our economy could recover. The continued existence of an organization that can create trillions of dollars out of thin air to purchase financial assets and prop up a fundamentally insolvent banking system is a black mark on an economy that professes to be free.

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Some words of understanding from Occupy Wall Street

They say that the protesters in the Occupy Wall Street movement don't understand why they are protesting.

As part of that understanding, I have been posting a series on the history of the US Federal Reserve and Central Banks.

I hope you have taken time to check out Part's 1, 2 and 3.  Part 4 is coming.

Central Banks are at the heart of our economic problems and this protestor at Occupy Wall Street in New York captures the essence of the problem succinctly.

As he says, "in 1913 this country died."

He understands. Make sure you do.

History of Central Banks and why we must End the Federal Reserve

Part 1 (48 B.C. - 1791)
Part 2 (1791- 1865)
Part 3 (1865- 1913)

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The Battle for the Message Begins

I suspect over the next few weeks we will see a theme appear in some of the media coverage of the Occupy Wall Street protests as they spread across North America.

And the theme will focus on the one like in this story, How silly are the End the Fed signs at Occupy Kansas City?

Adbusters, the Vancouver-based anti-consumerist magazine, called on people in July’s 97th issue to flood into Lower Manhattan on September 17 to “occupy Wall Street for a few months.”

Obstentially the movement is to protest against corporate greed. But 'End the Fed' is an important component of real solutions for 'Occupy Wall Street'.

And I would suggest that a titanic battle is now underway to try and extinquish the 'End the Fed' component.

Articles in support of the movement are starting to pop up as well, like this one: Ron Paul and Occupy Wall Street should jointly call for full public disclosure of all Fed bailout money.

US Republican Presidential candidate Ron Paul Supports the ‘Occupy Wall Street’ Movement and there are a great many who do not want the two messages linked.

Understanding the role of central banks is our current economic situation is crucial.

And driving a wedge between the protestors and this concept is going to be a major theme in the coming weeks.

As Ralph Nader said on CNN...“The Federal Reserve is now a government within a government. It is totally out of control. Congress doesn't control it. It's funded by the banks and we either have constitutional government or we don't."

The power elite DO NOT WANT the 'Occupy Wall Street' movement to get anywhere near embracing this message because it is within this message that real reform and real solutions lie.

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