Audit the Fed

unsung

Time to call Senators and apply the pressure.

MotoDC

In my head I want it, but in my heart I'm afraid.

Cosmo

Okay... we'll have the fed audit the Fed. Just like we have banking auditing banks and Wall Street auditing Wall Street.
They'll tell us, "Everything looks good to me."

MotoDC

Cosmo wrote:

Okay... we'll have the fed audit the Fed. Just like we have banking auditing banks and Wall Street auditing Wall Street.
They'll tell us, "Everything looks good to me."

You're probably just fooling around, but just so others aren't misinformed, that's not how it works. Independent specialized auditors audit the banks. The banks are Wall Street. Ergo Wall Street doesn't audit itself. Especially after the Enron fallout when Arthur Andersen went <pfft>, auditors have become very independent of their clients. Unfortunately risk mgmt, SOX controls, and external audits are only so valuable if there is a culture of deceit in place (a la GS issuing MBS out one door and shorting them out the other).

Cosmo

MotoDC wrote:

Cosmo wrote:

Okay... we'll have the fed audit the Fed. Just like we have banking auditing banks and Wall Street auditing Wall Street.
They'll tell us, "Everything looks good to me."

You're probably just fooling around, but just so others aren't misinformed, that's not how it works. Independent specialized auditors audit the banks. The banks are Wall Street. Ergo Wall Street doesn't audit itself. Especially after the Enron fallout when Arthur Andersen went <pfft>, auditors have become very independent of their clients. Unfortunately risk mgmt, SOX controls, and external audits are only so valuable if there is a culture of deceit in place (a la GS issuing MBS out one door and shorting them out the other).

...
So, they audit the Fed... then, what?
My guess, business as usual.

peacefrompaul

Cosmo wrote:

MotoDC wrote:

Cosmo wrote:

Okay... we'll have the fed audit the Fed. Just like we have banking auditing banks and Wall Street auditing Wall Street.
They'll tell us, "Everything looks good to me."

You're probably just fooling around, but just so others aren't misinformed, that's not how it works. Independent specialized auditors audit the banks. The banks are Wall Street. Ergo Wall Street doesn't audit itself. Especially after the Enron fallout when Arthur Andersen went <pfft>, auditors have become very independent of their clients. Unfortunately risk mgmt, SOX controls, and external audits are only so valuable if there is a culture of deceit in place (a la GS issuing MBS out one door and shorting them out the other).

...
So, they audit the Fed... then, what?
My guess, business as usual.

Business as usual, but, it's a step in the right direction. Assuming the audits are accurate it will certainly bring more light to what the Fed is doing with money... instead of just being completely left in the dark. Something with that kind of power needs to be held accountable in my opinion.

brianlux

I'm thinking of that book, Lying With Statistics...

.....

Jason P

Cosmo wrote:

...
So, they audit the Fed... then, what?

Then ... they wave the shiny objects to distract us. Abortion, gun control, gay marriage, border fence, etc.

mikepegg44

http://www.youtube.com/watch?v=6qSYhVMrSXI&feature=youtu.be

Paul explaining why we need to audit the fed on 7-24-12



If anyone is wondering why do it.

Basically, this isn't about taking over the Fed, it is about transparency. It is about knowing their thought processes behind the moves they make. the secrecy isn't necessary, it just makes it easier to not answer to the people their decisions affect every day



For those who don't like Paul. You may respect Kucinich.

http://youtu.be/H5vrlzbe1Zs

inlet13

Not completely related, but I really enjoyed Ron Paul's points yesterday to Geithner on LIBOR.

http://www.activistpost.com/2012/07/ron-paul-grills-geithner-on-libor-and.html

DriftingByTheStorm

Dear Sweet 9lb 8oz baby jesus in your little golden diapers,
PLEASE let the Senate KILL THIS BILL.

I don't want to go down in a blaze of glory.

[no good can come of this]

peacefrompaul

DriftingByTheStorm wrote:

Dear Sweet 9lb 8oz baby jesus in your little golden diapers,
PLEASE let the Senate KILL THIS BILL.

I don't want to go down in a blaze of glory.

[no good can come of this]

Explain

DriftingByTheStorm

peacefrompaul wrote:

DriftingByTheStorm wrote:

Dear Sweet 9lb 8oz baby jesus in your little golden diapers,
PLEASE let the Senate KILL THIS BILL.

I don't want to go down in a blaze of glory.

[no good can come of this]

Explain

You want to prove the system a farce,
you may get your wish granted if this bill passes.

If you got a REAL audit,
you would find the entire western world falling flat on its face
as treasuries and the dollar both synchronized nose dive in to an empty pool.

It doesn't really sound helpful to me.

If you want a portion of this in plain english, for example,
the bailout was performed under the EXPLICIT condition that the Fed NOT be required to disclose the recipients of funds, or that it NOT be required to disclose which "assets" (ie. bad debt) it was purchasing, and from whom.

To actually go ahead and disclose that data would be putting all parties involved in those transactions at the mercy of the reprisal of the markets.

In short, our markets continue to function ONLY because of "sleight of hand" and the smoke and mirrors of the fed. You want to remove those parlor tricks and lay the system bare, you will have a new house of horrors to behold. It won't be pretty. :(

inlet13

DriftingByTheStorm wrote:

peacefrompaul wrote:

DriftingByTheStorm wrote:

Dear Sweet 9lb 8oz baby jesus in your little golden diapers,
PLEASE let the Senate KILL THIS BILL.

I don't want to go down in a blaze of glory.

[no good can come of this]

Explain

You want to prove the system a farce,
you may get your wish granted if this bill passes.

If you got a REAL audit,
you would find the entire western world falling flat on its face
as treasuries and the dollar both synchronized nose dive in to an empty pool.

It doesn't really sound helpful to me.

If you want a portion of this in plain english, for example,
the bailout was performed under the EXPLICIT condition that the Fed NOT be required to disclose the recipients of funds, or that it NOT be required to disclose which "assets" (ie. bad debt) it was purchasing, and from whom.

To actually go ahead and disclose that data would be putting all parties involved in those transactions at the mercy of the reprisal of the markets.

In short, our markets continue to function ONLY because of "sleight of hand" and the smoke and mirrors of the fed. You want to remove those parlor tricks and lay the system bare, you will have a new house of horrors to behold. It won't be pretty. :(

Couple things...


1) Markets, in general, preceded the Fed and central banks. So, "markets" can and will function even if the Fed did not.

2) If the Fed was put under the microscope - The Fed "may" need to take a break from it's manipulation of markets. At worst, markets simply won't be propped up artificially via inflation or different forms of money printing and the giant shell game of loans/bailouts. That's if they stopped. At the end of the day, however, the real difference is truth. The citizen would know what's going on with their dollar.

3) We'll be just fine if people know what the Fed is doing with our currency. Anyone who says otherwise is too dependent on the Fed. In a lot of ways, I see the rationalization of those against a Fed audit as similar to those who didn't want the Penn State scandal to break.

markin ball

What are the reasons given by those in congress for voting
'no" on this? Surely, it cannot be "Well, if we really knew what the hell was going on, the whole system collapses and worldwide depression hits".

DriftingByTheStorm

inlet13 wrote:

Couple things...


1) Markets, in general, preceded the Fed and central banks. So, "markets" can and will function even if the Fed did not.

2) If the Fed was put under the microscope - The Fed "may" need to take a break from it's manipulation of markets. At worst, markets simply won't be propped up artificially via inflation or different forms of money printing and the giant shell game of loans/bailouts. That's if they stopped. At the end of the day, however, the real difference is truth. The citizen would know what's going on with their dollar.

3) We'll be just fine if people know what the Fed is doing with our currency. Anyone who says otherwise is too dependent on the Fed. In a lot of ways, I see the rationalization of those against a Fed audit as similar to those who didn't want the Penn State scandal to break.

Markets function WITHIN A POLITICAL CONTEXT.

If you consider a "bank holiday" to be "functioning" then sure.
But i don't consider a run on banks, followed by bank holidays, citizens unable to access funds, currency collapse, and US Treasury Bond Market Collapse to be "functioning" within an RATIONAL context of the word "functioning".

If you get shot in the head, you continue to "function" in that a function of being shot in the head is death, but ...

???

inlet13

DriftingByTheStorm wrote:

inlet13 wrote:

Couple things...


1) Markets, in general, preceded the Fed and central banks. So, "markets" can and will function even if the Fed did not.

2) If the Fed was put under the microscope - The Fed "may" need to take a break from it's manipulation of markets. At worst, markets simply won't be propped up artificially via inflation or different forms of money printing and the giant shell game of loans/bailouts. That's if they stopped. At the end of the day, however, the real difference is truth. The citizen would know what's going on with their dollar.

3) We'll be just fine if people know what the Fed is doing with our currency. Anyone who says otherwise is too dependent on the Fed. In a lot of ways, I see the rationalization of those against a Fed audit as similar to those who didn't want the Penn State scandal to break.

Markets function WITHIN A POLITICAL CONTEXT.

If you consider a "bank holiday" to be "functioning" then sure.
But i don't consider a run on banks, followed by bank holidays, citizens unable to access funds, currency collapse, and US Treasury Bond Market Collapse to be "functioning" within an RATIONAL context of the word "functioning".

If you get shot in the head, you continue to "function" in that a function of being shot in the head is death, but ...

???

Free-markets do not need to function within a political context. If I lived in a government-free island, when I buy a apple from my neighbor for one banana, there's no government involvement whatsoever. Yet, we made a market transaction. Markets are made up of supply and demand. Now, when discussing our current financial sphere, it's broadly become a situation that is bounded by government... and ummm... that's the problem.

You're simply upset because of "what you believe" to be the financial ramifications of seeing what they are actually doing. My response is - "IF" there were ramifications to this, they would only set in motion a chain of events that will eventually play out anyway. Basically, you're acknowledging that there's a house of cards and that if we don't show it anyone - we may be fine. I'd respond it is a house of cards - I agree. But, if we prolong it and keep it hidden, the zone of impact will simply build and build and the damage that will be caused by it's collapse will only be worse.

Fear-mongering over a bill to audit a bank that controls our money supply, our currency is irrational. If they were simply focused on fighting inflation, I think you'd may have a point (although I'd disagree). But, once they got involved in stabilizing the economy... ummm... no. That's our money. We're paying for them to do this shit. We deserve the right to see what they're doing.

But, continue with the fear-mongering if you wish...

I'll continue to say it though... those who line up against this bill are eerily similar to those who thought it was best to withhold scandal information at Penn State. In the long run, both camps only make the problems and (the quote unquote) "solutions" worse and more captivating to the general public's scrutiny.

DriftingByTheStorm

inlet13 wrote:

DriftingByTheStorm wrote:

inlet13 wrote:

Couple things...


1) Markets, in general, preceded the Fed and central banks. So, "markets" can and will function even if the Fed did not.

2) If the Fed was put under the microscope - The Fed "may" need to take a break from it's manipulation of markets. At worst, markets simply won't be propped up artificially via inflation or different forms of money printing and the giant shell game of loans/bailouts. That's if they stopped. At the end of the day, however, the real difference is truth. The citizen would know what's going on with their dollar.

3) We'll be just fine if people know what the Fed is doing with our currency. Anyone who says otherwise is too dependent on the Fed. In a lot of ways, I see the rationalization of those against a Fed audit as similar to those who didn't want the Penn State scandal to break.

Markets function WITHIN A POLITICAL CONTEXT.

If you consider a "bank holiday" to be "functioning" then sure.
But i don't consider a run on banks, followed by bank holidays, citizens unable to access funds, currency collapse, and US Treasury Bond Market Collapse to be "functioning" within an RATIONAL context of the word "functioning".

If you get shot in the head, you continue to "function" in that a function of being shot in the head is death, but ...

???

Free-markets do not need to function within a political context. If I lived in a government-free island, when I buy a apple from my neighbor for one banana, there's no government involvement whatsoever. Yet, we made a market transaction. Markets are made up of supply and demand. Now, when discussing our current financial sphere, it's broadly become a situation that is bounded by government... and ummm... that's the problem.

You're simply upset because of "what you believe" to be the financial ramifications of seeing what they are actually doing. My response is - "IF" there were ramifications to this, they would only set in motion a chain of events that will eventually play out anyway. Basically, you're acknowledging that there's a house of cards and that if we don't show it anyone - we may be fine. I'd respond it is a house of cards - I agree. But, if we prolong it and keep it hidden, the zone of impact will simply build and build and the damage that will be caused by it's collapse will only be worse.

Fear-mongering over a bill to audit a bank that controls our money supply, our currency is irrational. If they were simply focused on fighting inflation, I think you'd may have a point (although I'd disagree). But, once they got involved in stabilizing the economy... ummm... no. That's our money. We're paying for them to do this shit. We deserve the right to see what they're doing.

But, continue with the fear-mongering if you wish...

I'll continue to say it though... those who line up against this bill are eerily similar to those who thought it was best to withhold scandal information at Penn State. In the long run, both camps only make the problems and (the quote unquote) "solutions" worse and more captivating to the general public's scrutiny.

:roll:
please.
i don't want the sky to come crashing down unnecessarily and I am the one that is fear mongering?

Economies became Political-Economies a LONG time ago, before the Fed and before the foundation of the United States of America, to ignore that and preach about some theoretical island where government doesn't exist is ridiculous. Governments do exist. There ARE ramifications for actions taken, and the ramifications of a publicly disclosed audit on the Fed would be ... in as plain a language as possible ... disastrous ... not just for some large banks ... but to the entire United States system of government, and ultimately, TO THE PEOPLE THEMSELVES.

To address some of your specific points.
Yes, we live in a house of cards.
No, everything is not alright.
I do not wish to live with my head in the sand.
I believe that giving our leaders time to "figure out" a "solution" is better than pulling the rug out from underneath everyone and their grandmother.
I don't wish to sweep anything under the rug. I just don't want to pull it out from underneath us.
I believe that finding a CONSTRUCTIVE solution is far better than setting in motion a DESTRUCTIVE-NON-SOLUTION to make some stupid political point. "Nya nya, we told you the Fed was a sham."

Woopity woo. Everyone with half a brain knows that.
Inflation is contained by a slow velocity of money.
Absent a total loss of confidence (what you are ASKING FOR HERE with this audit) that velocity will remain low.
I happen to believe that the velocity of money is relatively static in normal times, and i think this is what our financial leaders happen to know privately. This is why the debt (& the money supply) has essentially doubled with little consequence. Normal people have normal spending patterns. Most of this money is contained "towards the top" (or has been "sterilized" ... lol) ...

even so, do i think the course we are on is sustainable?
No.
Do i think an audit is ANY sort of SOLUTION?
Categorically: NO.

But truly, i have hope (unwarranted or not) that there is some greater plan, and that if we can only get there without triggering an unnecessary collapse, we should all be the better for it.

Playing devil's advocate, on the other hand, perhaps it is possible our leaders see NO "normal" way of achieving this alleged "plan"\goal (A Global Fiscal Union?) and perhaps it is that this audit IS the plan ... a planned implosion if you will ... panic and unrest PART of the plan ... the crisis then used to INSTIGATE the plan ... Problem - Reaction - Solution.
I guess we will know if & when the senate does or does not vote "Yay" to this bill.

riotgrl

Drifting and inlet you are speaking a bit above my economic skills - can ya dumb it down?

Are you saying let it collapse and start all over via a Fed audit which will expose the corruption (I guess that is what you mean) and then reinstate a true free market system? What would be the fall out if that were allowed to happen? The end of banks, businesses, collapse of our currency? What about trade with other nations? Would we be trading at local levels? Would we have to recreate our entire global economic system? Obviously, I know you don't have THE answer but I assume you have a BELIEF about what might happen.

Or allow the powers to be, the Fed, the govt. etc. to work on creating a solution to be implemented a bit at a time to ease the chain reaction that might occur if the rug was yanked all at once. Would this slow trickle solution really resolve the fundamental problem of lack of transparency at the Fed and the market manipulation that often occurs and the govt./corporation economic and political ties that allow market manipulation?

mikepegg44

DriftingByTheStorm wrote:

I guess we will know if & when the senate does or does not vote "Yay" to this bill.

If this isn't tabled and killed in senate committee I will be SHOCKED. Even though Reid thought it was a great idea back in the 90's

I don't think transparency of action is going to cause all the problems you think it will. I don't know the markets as well as you however so I will concede that you have some greater understanding. I just don't understand the idea that we borrow ourselves money and we think this is ok. Our debt is becoming less and less attractive to international buyers. If I believe anything conspiratorial about it I believe that the EURO is being kept artificially low amid "concerns" and delayed solutions in order to keep the strength of the dollar relative. Which really will be better for both markets rather than one over the other. If the Euro were in a different position we would be in a lot more trouble wouldn't we?.

Most Americans will not care one iota about the results of the fed audits. The fact that the house of cards isn't serving the entire population in what could be considered remotely equally is good enough reason to me to take away the wizard's power.

Aren't long term rates being as low as they are bad for the value of a dollar? or am i missing something there? Long term rates on bonds being low is good for the fed and the US gov't, but is it the best thing for me who has a few thousand in savings? This is coming from someone who is teaching themselves about markets so forgive me my rather simple questions.

inlet13

DriftingByTheStorm wrote:

:roll:
please.
i don't want the sky to come crashing down unnecessarily and I am the one that is fear mongering?

Economies became Political-Economies a LONG time ago, before the Fed and before the foundation of the United States of America, to ignore that and preach about some theoretical island where government doesn't exist is ridiculous. Governments do exist.

Ha ha...

Back-up. You said "markets"... now you're changing your verbiage to "economies". My point is simply put - in a free-market, supply and demand dictates prices and consumption. That's it. Government involvement can manipulate that. There's nothing theoretical about that. It's factual.

I think you were originally referring to markets as financial markets. My point was to try to draw out the notion that everything is completely and totally dependent on ups and downs in financial markets (like the stock market). While, I agree there are connections, the sphere of influence that financial markets play within vs. the sphere in main street is very, very different.

DriftingByTheStorm wrote:

There ARE ramifications for actions taken, and the ramifications of a publicly disclosed audit on the Fed would be ... in as plain a language as possible ... disastrous ... not just for some large banks ... but to the entire United States system of government, and ultimately, TO THE PEOPLE THEMSELVES.

"You" believe it would be "disastrous".

Re-read what you just wrote.... how could one not say you're not fear-mongering?

Also, just to note, your basically saying that if the truth gets out we're f'd. In that context, it's not the Fed that's f'ing us. It's not the government. It's the audit that would be f'ing us. From my mindset, if that's what you meant, it's delusional. Anyway, yes, there are ramifications for actions. Perhaps if the Fed was so scared of doing things that will be "disastrous" if a tax-payer could see them, they shouldn't have done them? That's my take. They are public officials.

DriftingByTheStorm wrote:

To address some of your specific points.
Yes, we live in a house of cards.
No, everything is not alright.
I do not wish to live with my head in the sand.
I believe that giving our leaders time to "figure out" a "solution" is better than pulling the rug out from underneath everyone and their grandmother.
I don't wish to sweep anything under the rug. I just don't want to pull it out from underneath us.
I believe that finding a CONSTRUCTIVE solution is far better than setting in motion a DESTRUCTIVE-NON-SOLUTION to make some stupid political point. "Nya nya, we told you the Fed was a sham."

Woopity woo. Everyone with half a brain knows that.
Inflation is contained by a slow velocity of money.
Absent a total loss of confidence (what you are ASKING FOR HERE with this audit) that velocity will remain low.
I happen to believe that the velocity of money is relatively static in normal times, and i think this is what our financial leaders happen to know privately. This is why the debt (& the money supply) has essentially doubled with little consequence. Normal people have normal spending patterns. Most of this money is contained "towards the top" (or has been "sterilized" ... lol) ...

Everyone with "half a brian" knows that inflation is contained or maximized by BOTH velocity of money AND the money supply. Changing either, impacts inflation.

Anyway, I don't think confidence is high - GDP is going to come in low. In fact, I think we're in recession or will be in one within the next six month. I think everyone "with half a brain" knows confidence sucks now as is.

Government manipulation is the "current problem". Look at the government dependent countries who were over-levered for proof.

Also, what I think you and I disagree is that you believe money supply growth means "real asset growth". I don't. I believe it means nominal asset growth. Right now, if not for QE the stock market would be half what it is. Some may claim that's proof for why QE and the like have worked. I claim that's pure ignorance. The "real" value is the same - actually I argue it would be worse. Inflating it, doesn't making it better. Nor does it make us better off. In fact, it's what every single desperate country does before they collapse.

DriftingByTheStorm wrote:

even so, do i think the course we are on is sustainable?
No.
Do i think an audit is ANY sort of SOLUTION?
Categorically: NO.

I guess we just disagree. I think it is the solution because it may stop (at least temporarily) the prolongment of this sort of Keynesian stimulus (be it monetary or fiscal). The problem with Keynesianism was best summed up by Keynes... "in the long run we're all dead". They keep on fixing. But, the f things up along the way. Who gives a shit about the long run, right? Until we're in it. Then we just do it all over again. F that.

DriftingByTheStorm wrote:

But truly, i have hope (unwarranted or not) that there is some greater plan, and that if we can only get there without triggering an unnecessary collapse, we should all be the better for it.

I don't want a collapse. In fact, I think the longer we draw this out, the more likely a collapse is.

To me - the more government leaders think they can control the uncontrollable - markets - the worse the "downturn" will be. Will it be a collapse? I believe the answer is Yes... only because I think our government is too stupid to realize they make matters worse with the more they try to help with government policy (stimulus, QE, etc.).

DriftingByTheStorm wrote:

Playing devil's advocate, on the other hand, perhaps it is possible our leaders see NO "normal" way of achieving this alleged "plan"\goal (A Global Fiscal Union?) and perhaps it is that this audit IS the plan ... a planned implosion if you will ... panic and unrest PART of the plan ... the crisis then used to INSTIGATE the plan ... Problem - Reaction - Solution.
I guess we will know if & when the senate does or does not vote "Yay" to this bill.

Ha ha... I can only laugh at this part and think you don't want what you wrote here to be labeled fear-mongering.

Anyway, long story short.... we disagree. I don't think it will get through the Senate. So, you're hopes of us remaining blind to what the Fed does will probably win out.