PoliticalAction.com Blog

Dear Friend of Liberty,

Trillions of dollars are being stolen from the U.S. taxpayer.

Right now, you and I are seeing the worst plundering of a country’s wealth in the history of civilization, led by an out of control Federal Reserve.

But together you and I CAN put a stop to it all.

With your help (including submitting the petition linked below to your Congressman and Senators) today, Representative Ron Paul, Senator Jim DeMint and Campaign for Liberty are ready to fight back, by taking the battle straight to the heart of the problem – the Federal Reserve itself.

Just think about the scope of the problem for a minute: The massive, outrageous amount of dollars committed to the economic bailouts in recent months totals:

More than the socialist New Deal … More than the entire Iraq debacle … More than the 1980’s savings and loan mess … More than the Korean War …

COMBINED.

When will it all end?

It’s time you and I put a stop to a renegade Federal Reserve by exposing the Fed’s out of control actions to the American people. And Congressman Ron Paul and Senator Jim DeMint have a bill before Congress to do just that, known as the “Audit the Fed” Bill (HR 1207 and S 604).

That’s why it’s vital you click here to submit your “Audit the Fed” petition in support of Congressman Paul’s bill.

You see, Audit the Fed already has almost 300 cosponsors!

Now is the time to make sure your Congressman and Senators feel the heat to support the Audit the Fed bill!

If you and I don’t act today, I’m afraid this crisis will end with the economic ruin of every man, woman and child in America.

Today, nearly 13 TRILLION in taxpayer dollars in bailouts and loans have been agreed to by Congress, the Bush and Obama Treasury Departments, and the out of control Fed.

So is it really any wonder more and more folks are starting to realize the Washington, D.C. establishment is hurtling us toward complete economic disaster?

Whether it’s watching a phony “stimulus” package get rammed into law or watching Congress pass a $700 BILLION bank “bailout” under threat of martial law, the American people are agitated and increasingly angry.

That means it’s a perfect time to unleash the pressure of MILLIONS of outraged Americans on the out of control Fed!

So please click here to sign the petition linked below urging your Congressman and Senators to cosponsor and seek roll call votes to pass the Audit the Fed Bill!

As I know you’re aware, the Federal Reserve is shrouded in secrecy. Their meetings are off-limits to the public. Their inner workings are off-limits to the public.

And just recently, the Federal Reserve told Congress “NO WAY” when asked to account for $2 TRILLION in taxpayer-backed loans!

Well, why do you think they refused?

They know coming clean with Congress and the American people on how they doled out that two TRILLION dollars would result in an anti-Fed firestorm.

So can you imagine the impact of a full-scale audit? You and I will finally be able to show the American people that the Federal Reserve System leads to:
*** Constant economic crises — the housing crisis and the resulting chaos is just one example of an economic bubble created by centrally-planned interest rates and money manipulation;

*** The destruction of the middle class — as fuel, food, housing, medical care and education costs soar, everyone who is NOT on the government dole is forced to make do with less as the value of their money slowly decreases;

*** Currency destruction — history shows us that riots, violence and full-scale police states can result when people finally realize our money isn’t worth the paper it’s printed on and REFUSE to accept it.
And unless you and I do end the madness in Washington, D.C., we may be closer than we’d like to think to learning that history lesson firsthand — right here in our own streets.

That’s why your commitment to helping pass the Audit the Fed Bill –- and helping Campaign for Liberty fight this battle — is so vital.

Just a few months ago, there was no chance of passing any legislation like the Audit the Fed Bill. So I guess there has been one “CHANGE.”

You see, with the piling up of trillions of dollars in out of control “bailouts” of Wall Street and international bankers, even many politicians in Washington want to show you they’re “being responsible.”

What better way for Congress to do this than by auditing the Federal Reserve to account for the trillions stolen from the U.S. taxpayers?

More and more Congressmen are already feeling the pressure and are signing up to support this bill. I’ve even received word this bill could move in the next few weeks in the U.S. House.

When that happens, you and I must be ready to fight.

And, it’s both a bill we CAN pass, and one that is vital to exposing the massive corruption and dollar manipulation at the Federal Reserve.

You see, after regulating, taxing, spending, borrowing and printing us into what looks like the worst recession in decades, establishment politicians and power brokers are assuring us they’re working hard to “fix” our economic woes. What is their solution? You guessed it. More of the same!

And even if the Audit the Fed Bill is defeated this time, just forcing a vote is a win/win situation.

Can you imagine how many politicians will pay the price at the ballot box in 2010 when you and I tell the American people their Congressman somehow lost trillions of taxpayer dollars and refused to even LOOK for it?

Now we just need to show Congress the American people demand action on the Audit the Fed Bill. Here’s how we plan to do that.

First, we’re already busy contacting up to five million activists nationwide through mail, phones and email to generate petitions to the U.S. Congress demanding action on Ron Paul’s Audit the Fed Bill.

But that’s just the beginning. We’ll work the talk radio stations and grant local media interviews to ratchet up the pressure even further on Congress.

And a few days before the vote, if we have the resources, we’d also like to run hard-hitting targeted radio, TV and newspaper ads.

This entire program is designed to send this one, CLEAR message to Congress: Any politician who votes against the Federal Reserve Audit should look for another job.

But such a massive effort won’t be easy — or cheap.

So in addition to submitting your petition, I also hope you’ll agree to make a contribution of $1000, $500, $250, or $100 to Campaign for Liberty.

If $100 is too much to ask right now, please make a contribution of $50 or even $25 today. Every dollar will help, and every dollar will go to this vital fight.

I know times are hard, but if we don’t take action, the America we see in just a few years could look far worse than even the one we see today.

Can I count on you to join the fight to AUDIT THE FED by clicking here to sign the petition, and by making a generous contribution of $1000, $500, $250, $100, $50 — or whatever you can afford — to Ron Paul’s Campaign for Liberty?

Sincerely,

John F. Tate
President

P.S. Please submit the petition urging your Congressman and Senators to cosponsor and seek roll call votes on Rep. Ron Paul’s Audit the Fed Bill TODAY!

O. Max Gardner III
Shelby, N.C. March 31, 2008
Times are tough. Suffice it to say, we are embroiled in considerable market, economic and outright personal turmoil. Gas and food prices are going up and up and home values are going down and down. Real wages are flat and as they say “a dollar ain’t what it used to be.” Since we stand to see trillions of dollars’ worth of assets vaporize in the ensuing mess, we ought to take a long look back at history to see how we got into it, and how we might get out of, this god-awful mess. We also need to understand that Henry Paulson and Ben Bernanke, without an explicit vote by the Congress, have put virtually billions of dollars of taxpayer money at risk to save us from the risky and unregulated business practices of the investment bankers and hedge funds.
What has placed the entire American financial capitalism system in jeopardy of a complete collapse? How did we get to the point where the Government of last resort (the U.S. Treasury) is working with the lender of last resort (the Federal Reserve) to shore up housing and credit markets to avoid the Great Depression II? And, what caused a Republican administration to throw overboard the idea that the market can sort out this mess by itself? How did the fifth biggest investment bank in the world implode in approximately 24 hours? In order to understand the present, we must first understand the past.
Just ten years ago the markets and the economy were shocked when John Meriwether’s Long Term Capital Management fund imploded and lost some $4 billion dollars. The failure of LTCM helped foster a global financial crisis and triggered both a Wall Street-led bailout and congressional hearings on the dangers of hedge funds, the free-wheeling pools for wealthy investors and institutions that often trade heavily and rely on borrowed money to bolster returns.
Did we learn anything from this disaster and did Mr. Meriwether? Regrettably, the answer to both of these questions is no. Even today Mr. Meriwether’s biggest fund, JWM Partners LLC, has plunged 28% since the first of the year and some of his investors are trying to get their money out. The struggles of Mr. Meriwether and his new investment funds represent clear warning signals that we have learned nothing from the past and that the perils of the current crisis are far from over. In fact, one observer has noted that we are just in the first inning of an extra-inning game.
The Meriwether problem was not the only warning sign. Half a decade ago, the entire nation was shocked when award-winning “innovator” Enron and George Bush’s favorite son, Kenny-Boy Lay, turned out to be little more than high-end con artists in charge of what was then the largest cash-shredding pyramid scheme in the history of the world. The crucial failing for investors was Enron’s use of opaque, “mark-it-to-model” accounting techniques.
The problem with this type of accounting is that it uses “computer or notional values” where there is no real market for the real-world valuation of assets. So, instead of using an objective market to benchmark the value, you mark your assets to the so-called model, which in many cases is completely divorced from the real world. This accounting magic is especially helpful when you are wrong about the real value of the assets, either because you made an error or because you based it on exceedingly generous assumptions. I don’t know about the rest of you but the theory of “notional asset values” has never really registered with me. Or, to put it another way, this is the type of deal that even Howie Mandel would call out “no deal.”
In the end, of course, we all learned that Enron’s accounting was more or less a mark-to-fairy-tale model, with the company booking enormous gains from assumed future profits on schemes (like bandwidth trading) that sounded great, but had little chance of producing anything besides headlines. Enron actually securitized every receivable and contract it created and in some cases resecuritized the original deals two or three times over. Enron even securitized contracts where there was no real chance of any future income to fund the deal. Enron operated on the theory that if we show you the securitized bond and if you show us the money then we will eventually show you a big future profit.
Does any of this sound familiar? It should because all of this was engineered by Enron’s original golden boy, Andy Fastow. If you want a little hint about why things at Enron went so far south, then you need to know that before he signed on with Enron Andy was one of those tall-building mortgage bankers. Andy really only applied to the questionable Enron receivables and other opaque “assets” the bizarre securitization models and structures that he had worked with on a daily basis in the mortgage banking business. In light of the current market meltdown, I suppose that Andy must be having severe second thoughts about his guilty plea. Kenny-Boy Lay, on the other hand, is well past the second thought process.
Andy Fastow, meet Freddie and Fannie
You might think we’d learned our lessons about fantasy accounting after John Meriwether and Enron, but you would be wrong. Things actually got worse. And I mean much worse. Meriwether and Enron were like the “head start” problems for high school seniors. The Enronization infection moved to the comfy-sounding “homeownership” market. Against a star-spangled, feel-good backdrop of George Bush touting the “American Dream” and increasing homeownership, our recent mark-to-model mania tripped up a lot more than one big company.
The problem is that this infection quickly swept through the entire banking world. Bear Stearns is not the first to choke on the lousy, poorly modeled mortgage-backed securities, and it will not be the last. I would even suggest that the late author Hunter Thompson would find the “collateral debt obligations” and “credit default swaps” to be just plain weird stuff! What did Hunter say, when things turn weird the weird turn pro? Well, we have had our share of pros in this game, that’s for sure. Tony Mozillo, the butcher’s son, is one name that hits the top of this list.
But more dangerous yet was the way this mania also infected our own almost scared Government Sponsored Entities. The fact of the matter is that the most widespread mark-to-model fantasies were actually committed not by some easy-to-blame Wall Street guru like Mozillo, but by Freddie Mac and Fannie Mae, our two most favored GSEs.
One of my dear friends refers to the two GSEs as Fanron and Freddie Kruger. And, her fears as expressed by her naming rights may not be so far-fetched. Mr. Paulson and the Federal Reserve Board just allowed Fannie and Freddie to increase their leverage so that they can buy about $200 billion more in bad mortgage-backed securities. So, Fannie and Freddie will get even bigger but at what price? They accounted for 76% of the new mortgage market share for the fourth quarter of last year, up from 46% in the second quarter. And even though they are not part of the Government, everyone knows that if either Fannie or Freddie stumbles, the taxpayers will get stuck with the tab. Whether or not you agree with Ron Paul on most things you should agree with him with respect to his concerns about our liability for the operations of Fannie and Freddie. We should cut off the implicit government guarantees for their operations and let them take their losses like the rest of the losers.
It was flawed models (and the habit of booking earnings on these models) that enabled financial companies to concoct the elaborate securities that funded the bubble. And now, to save us from disaster the Federal Reserve has agreed for the first time in history to make direct loans to these same investment banks. As a non-lawyer asked me last week, “Is this legal?” The answer is I don’t know but it does not pass the “smell” test. In the first three days of this new era, securities firms borrowed an average of $31.3 billion per day from the Federal Reserve System. These are big numbers any way you do the math. And yes, these are the same investment banks whose CEOs paid themselves handsome bonuses ahead of the current financial tsunami. These guys don’t deserve a bailout with our money. What they deserve is a public flogging and then about 20 years of hard-labor at GitMo.
But the fat-cat CEOs weren’t the only ones making out like bandits. While Wall Street was booking fantasy profits on bad assumptions about real estate mortgages, Freddie and Fannie were securitizing anything that looked like a mortgage, whether the broker-completed application form was based on real numbers or just plain fabricated numbers and made-to-order appraisals. So the thought of using Freddie and Fannie, no matter how you dress them up, to save us from financial ruin seems like another Alice-in-Wonderland story from the dark side. This is akin to selecting Tony Soprano to serve as Director of the Federal Bureau of Investigation. Does this really make you feel safer about the security of our money? I don’t think so.

But, What Were They Really Thinking?
In their pyramid schemes (excuse me I mean in their computer models), house prices always go up. In their models, you can pay any price for a home, so long as you can make the monthlies with a teaser-rate ARM, never mind the upcoming adjustments that will take the APR up to 14% and then double the monthly payments. In their models, it’s OK to take out a Payment Option ARM where you elect to make no monthly payments at all, thereby increasing the total debt owed each month (this is what the accountants call negative amortization). In their models, you avoid all of these problems via a refinance down the line with an equity cash-out to boot. In their models, it’s OK to buy on a less-than-forthcoming, Alt-A so-called “liar loans,” because there’s no real punishment for lying on a mortgage application — particularly if everyone’s doing it. With these models, it makes sense to buy three other homes, in order to flip them later. And it makes sense to extract HELOC cash from the home, based on fantasies about continually increasing “equity.” What goes up never goes down, right? The law of gravity has no application to residential real estate!
The sad truth of the matter is that all of this is not so different from what brother Meriwether and Enron were doing. Freddie and Fannie were marking up the value of their assets (the bonds) to a model (their belief that real estate prices always go up). They were allowing the consumers who were taking out the underlying mortgages to spend their new-found “income” immediately, on iPods, Hummers, $250 designer jeans, and fancy vacations to Maui and Mexico. What was the saying—here today and gone to Maui? This happened all over the country, and millions of people behaved the same way. In fact, the American Fantasy of owning a home (for no money down) that would provide a fully leveraged, 10% annual returns for a decade, is precisely what enabled those Wall Street suits to do what they did. It takes two to tango, folks. And this was the biggest dance party in economic history.
Last year’s model got ugly
Alas, the music stopped and the dance is over. And when the music stopped we all found out that there were not enough chairs for all of us to sit down. It is bye-bye Miss American Pie, we all went to the bank but all the banks were dry. And, finally, we all realize that this dream’s “income” wasn’t actually matched by real cash flows, just fuzzy math and bizarre computer models — precisely the problem at Enron. The “income” was all hot air. And now that the “income” from home appreciation has turned negative, it must be supported by cash mortgage payments. But many people can’t pay those bills, the mortgages are defaulting in huge numbers, and now, we are all paying a huge price, even those of us who didn’t throw our money into a flimsy, overpriced McMansion.
Almost 18 months ago the “industry” lambasted the Center for Responsible Lending when it predicted that foreclosure rates on subprime mortgage loans could hit a outstanding and unbelievable rate of 19%. Well, the most recent figures from December of 2007 reveal that the current rates are 25.2%! As they say on the Verizon commercials, can you hear me now? And just last week Fitch predicted that almost 50% of these mortgages would eventually end up in foreclosure. I think that is 1 out of every 2, regardless of how you do the math or the model.
We all know that the Bear Stearns stockholders were wiped out for either $2.00 or $10.00 per share, take your pick. Hell, their office building in New York is worth more than Morgan has offered for all of the stock. Many other stocks have been creamed. The losses at those companies most directly victimized by their own housing-bubble ineptitude – Citigroup, HSBC, USB and Wachovia — are easy to understand. But, of course, the losses have extended much further than that. Even mighty Apple has dropped like a rock, as investors wonder how many iPods can be sold in Foreclosureville, U.S.A. And if they can’t afford their beloved iPods, what will they buy? That’s the thinking that has crushed everything from trendy togs-sellers like Zumiez to mom and pop carmakers like good old GM and Ford.
Consumers are spending less, and the Federal Reserve is printing money like the banks used to print credit cards. We are in a serious recession and appear to be headed directly into stagflation-a combination of recession and inflation. And the real concern at the kitchen table is that no one appears to be in charge or on top of the problem. The average American does not care what Reverend Wright said, but whether or not they can buy food and fuel next week.
It’s Ugly Out There
By now, it ought to be clear that I have been, and remain, very negative on the state of the American economy. But, I am certain that this systemic failure has steered us into a terrifying and possible direct crash right into the proverbial ditch. And, make no mistake about it, this ditch is deep and nasty and the extraction process will be long and difficult. As the lost safari leader once said, “Folks, there just ain’t no easy way out.”
The real tragedy is that all of these problems were spawned by greed gone amok on Wall Street and by the lack of any meaningful oversight from Washington and the Federal Reserved Board. I am not sure if we will have another Great Depression but it is possible and more of us realize it every day. If it happens, and if the worst case scenario turns into a real American tragedy, then the road to recovery will be long and winding with many bumps and detours along the way. It all makes me think that Andy Fastow must be sitting back in his cell at Club-Fed with a little smile on his face. If so, the Andy is the only one laughing now! The only one.

O. Max Gardner III

Texas Straight Talk – A weekly column
Rep. Ron Paul (R) – TX 14

Since the bailouts last fall, lawmakers have been behaving as quasi-owners of the bailed-out banks and businesses, leading to calls for increased regulation of executive compensation and other wasteful expenditures. We have heard much about bonuses and executive pay packages that sound more like lottery winnings than an honest salary.

Many lawmakers voted in favor of these unconstitutional bailouts, believing that these corporations were too big to fail, and allowing them to go under would precipitate widespread economic disaster. This second wave of citizen outrage at the bailouts has left these lawmakers with a bit of egg on their face, and once again, they feel the need to “do something” to “fix” it. Shouldn’t there be a regulatory structure in place governing executive compensation? Politically, it seems quite feasible. People are outraged that the system has once again gutted the many to make a few at the top fantastically wealthy. But they are incorrectly demonizing the free market.

What we need to realize is that there WAS a regulatory structure in place that was attempting to stop bad management, including overpaying executives. That regulatory structure is the free market, and when poor management brought these companies to the point of bankruptcy, Congress circumvented the wisdom of the free market, and inserted its own judgment at our expense. And now because of that intervention, we will burdened with massive new regulations. We can be certain this effort will fail.

The free market is a naturally occurring phenomenon that can’t be eliminated by governments, not even totalitarian ones like the former Soviet Union. It can be regulated, over-taxed and manipulated until it is driven underground. Lately it has been wrongly accused of doing so many things it just doesn’t do, that are really the fault of crony corporatism and convoluted government policies that brought on the crisis. Too many people equate the free market with big business doing whatever it wants, but that is not the free market. Unconstitutional taxpayer funded bailouts are what allow giant corporations to run roughshod over the economy. The free market is what puts them out of business when they misbehave.

The free market is you and your neighbors working hard to produce what you produce, and exchanging goods and services voluntarily, in mutually agreeable arrangements. The free market is about respecting property rights and contracts. It is not about building up oligarchs and monopolies and confiscatory tax theft – these are creatures of government.

We must watch out when government comes up with interventionist solutions to interventionist problems. The root of our problems lie in interventionism. Trusting the free market is the solution.

by Peter Schiff, CEO Euro Pacific Capital
August 14, 2009

The nationwide revelry surrounding our apparent economic recovery was disrupted this week by the release of lower-than-expected retail sales data. However, rather than sending a chill up the spines of those hoping for a quick end to the downturn, the numbers should be welcomed. Though this may come as a surprise to most observers, lower retail sales are precisely what our economy needs.

To return our economy to health, we must first allow market forces to ring out the excesses of the bubble years. Even government economists acknowledge that this decade’s spending boom resulted from a combination of asset bubbles and the dangerous overextension of consumer credit. Yet the same economists balk at the logical need for spending to drop now that the stimuli are no longer in effect. They argue for the resumption of spending by any means, regardless of its ultimate cost. This is a recipe for momentary gain and lasting pain.

America’s economic vitality will never be restored until we rebuild our savings and pay down our debts. To build back up, we must change the pattern of capital flows from the phony economy. It is a painful process, but one that will leave our economy on a stronger foundation. Unfortunately, Americans cannot accomplish these goals unless they stop shopping, live within their means, and replenish their savings. Though this may be problematic for retailers, it is beneficial to the overall economy.

But rather than accepting the market’s medicine, our government is overriding its own citizens’ responsible behavior. To do so, it has put borrowed money into consumers’ pockets, and then conjured various incentives for them to go out and spend it. This process requires more government bureaucracy, more debt, and more regulation at a time when we can’t afford any of it.

In contrast, I believe that we must restore the conditions that led to our economic preeminence. We must once again become the leader in economic freedom. This entails dismantling a significant portion of our federal and state governments, repealing countless unnecessary regulations, significantly lowering and simplifying taxes, and reinstituting sound money. If we accomplish these tasks, conditions will be ripe for a lasting recovery that solidifies our place at the top of the global economic totem pole.

However, if we neglect these reforms, and instead continue on our present course of more government and less freedom, more borrowing and less savings, more spending and less production, then our standard of living is doomed to fall. As the world cuts us off from its savings and production, we will finally be forced to live within our means. On a practical level, imagine living without easy access to the cheap and abundant goods with the “made in China” label. Imagine Walmart rolling up prices every week, while wages continue to fall. This pain would hit every American, not just retailers.

There are two ways to rebalance the American economy. The right way is to restore competitiveness through diminished government spending, deregulation, lower taxes, and higher savings. Higher savings will facilitate capital formation, and lower taxes and fewer regulations will allow that capital to improve the competitiveness of American labor. Improved productivity and capital investment will translate into higher real wages and pave the way to higher future living standards.

Alternatively, if we don’t rebalance our economy on these terms, our foreign creditors will do it for us – and they may have no compunction about imposing harsh measures. This tough medicine will be delivered in the form of declining value for the dollar. This will effectively raise consumer prices and interest rates for all Americans and dramatically lower the real value of our wages. In other words, balance will be restored from abroad by forcing our living standards to match our diminished industrial capacity. If we cannot compete based on lower taxes and increased capital investment, our only alternative will be to do so based on cheap labor.

Though president Obama claims that his policies will not raise taxes on average Americans, the unfortunate truth is that the effect of his policies will be to lower wages. The choice is simple: either we shrink government and enjoy higher wages, or grow government and accept lower wages. As for me, I prefer the former. However, if we do not change course soon, we will all be stuck with the latter.

Dear Friend of Liberty,

As you and I both know, Campaign for Liberty is leading the fight to pass Ron Paul’s bill to Audit the Fed. With 282 cosponsors in the House and 23 in the Senate, your efforts have so far proven very successful in establishing large, bipartisan support for Federal Reserve transparency. We’ve come a long way in demonstrating to the nation that monetary policy is a critical issue, and every day more and more people are waking up to the harm that the Fed has caused our economy.

But our mission is not yet complete. There are more Americans to educate, more signatures to collect, and more work to be done to combat the “big guns” that have come out against Ron Paul’s Audit the Fed bill. That’s why today I’m proud to announce that we’ve taken the next step in our efforts by launching AuditTheFed.com, a focused, coalition website with one purpose: to push this historic piece of legislation through Congress, past the President’s desk, and into law.

AuditTheFed.com includes: contact information for your congressman and senators, petitions, widgets, and banners to promote the website, dynamic graphs of the bill’s cosponsors, a detailed summary of the Audit the Fed bill, a list of our growing coalition, a blog to keep you up to date on all the latest Audit the Fed news, a sign up for email updates, and social networks to help get the word out online. This website was designed to put you, the liberty-loving activist, in a position to efficiently and effectively promote Audit the Fed to family, friends, neighbors, and strangers alike.

This new website is the latest addition to our efforts to Audit the Fed, but it is by no means the culmination. Stay tuned to CampaignforLiberty.com in the coming days for information on how we plan to mobilize to gain not only more cosponsors for HR 1207 and S 604, but support for a vote in the House and Senate.

For Liberty,
John Tate

President

P.S. If you are able, please consider donating to Campaign for Liberty today to help ensure Audit the Fed becomes law and we can finally bring transparency and accountability to one of our country’s most secretive institutions.

Texas Straight Talk – A weekly column

Rep. Ron Paul (R) – TX 14

Last week I was very pleased that hearings were held on the independence of the Federal Reserve system. My bill HR 1207, known as the Federal Reserve Transparency Act, was discussed at length, as well as the general question of whether or not the Federal Reserve should continue to operate independently.

The public is demanding transparency in government like never before. A majority of the House has cosponsored HR 1207. Yet, Senator Jim DeMint’s heroic efforts to attach it to another piece of legislation elicited intense opposition by the Senate leadership.

The hearings on Capitol Hill provided us with a great deal of information about the types of arguments that will be levied against meaningful transparency and how the secretive central bankers will defend the status quo that is so beneficial to them.

Claims are made that auditing the Fed would compromise its independence. However, by independence, they really mean secrecy. The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves. I am happy to challenge this type of “independence”.

They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs. We should just trust them. This is patently ridiculous. The market is a complex and intricate thing. No one knows what the market needs other than the market itself. It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled. Bankers are not all-knowing and cannot ignore the rules of supply and demand. They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.

They claim the Fed must remain apolitical. No organization is apolitical that relies on the President to appoint the Chairman. In fact, it is subject to the worst sort of politics – power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight! The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long term considerations. They do this partly because of the political appointee process for the Chairmanship.

The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress’s constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long. This was the issue that got me involved in politics 35 years ago. It is very encouraging to finally see the issue getting some needed exposure and traction. It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue.

Anthony from Detroit writes:

How can the media (all) ignore the fact of the U.S. coming
off the “gold” standard ($35/oz)to a free rise or fall during Nixon era and President Reagan allowing the CEO’s, CFO’s, and Presidents of corporations to escape going to jail when they commit a crime and hide in the name of a corporation when the I.R.S. treats the corporation as an individual? If I committed the same crime as an individual, I’d go to jail.

Secondly, President Obama was handed a “Ponzi Scheme” with the $700.billion+ bail-out money, knowing full well the next President would have to continue his “rip-off of the American citizens OR print more money to cover the bad decisions of the major companies and corporations. This is a Ponzi scheme to pay out good money after bad when they knew the decisions were bad.

Nixon started this mess when we came off the gold standard and the
Republicans took advantage of the print more money to pay off bad or greedy debts.

Representative Ron Paul continues to receive cosponsors on his Audit the Fed bill (H.R. 1207). With 245 cosponsors in total, one has to wonder why this bill has been unable to move ahead in the House for floor debate and an eventual floor vote.

The Senate companion bill (S. 604) offered by Senator Bernard Sanders (R-VT) carries only 3 cosponsors (Senators Mike Crapo, R-ID; Jim DeMint, R-SC; and David Vitter, R-LA). However, the Senate version of the bill had a chance for passage when Senator Jim DeMint (R-SC) opted to attach S. 604 to the Legislative Branch Appropriations Act (H.R. 2918) as an amendment. DeMint’s attempt to force the Senate to consider the bill through the amendment process failed when Senate leaders rejected having a vote on the amendment claiming it violated Senate rules. The appropriations bill passed without a vote on the DeMint amendment, even though the bill had several other provisions for the Government Accountability Office (GAO) to audit various other agencies. (Click here for a video of Senator DeMint’s statement on his amendment.)

This issue cannot be ignored forever. With more and more support to audit the Federal Reserve, congressional leaders will soon have to deal with this issue in one way or another.

Continue to contact Congress and urge them to support H.R. 1207 and S. 604. If your representative and senators are co-sponsors already – GREAT! If not, you should continue to call, e-mail, or visit their office. Let them know that you support a complete audit of the Federal Reserve and that you wish for them to become a sponsor of either H.R. 1207 or S. 604.

Thank you,
Your friends at The John Birch Society

Last week Congress passed the war supplemental appropriations bill. In an affront to all those who thought they voted for a peace candidate, the current president will be sending another $106 billion we don’t have to continue the bloodshed in Afghanistan and Iraq, without a hint of a plan to bring our troops home.

Many of my colleagues who voted with me as I opposed every war supplemental request under the previous administration seem to have changed their tune. I maintain that a vote to fund the war is a vote in favor of the war. Congress exercises its constitutional prerogatives through the power of the purse, and as long as Congress continues to enable these dangerous interventions abroad, there is no end in sight, that is until we face total economic collapse.

From their spending habits, an economic collapse seems to be the goal of Congress and this administration. Washington spends with impunity domestically, bailing out and nationalizing everything they can get their hands on, and the foreign aid and IMF funding in this bill can rightly be called an international bailout!

As Americans struggle through the worst economic downturn since the Great Depression, this emergency supplemental appropriations bill sends $660 million to Gaza, $555 million to Israel, $310 million to Egypt, $300 million to Jordan, and $420 million to Mexico. Some $889 million will be sent to the United Nations for so-called “peacekeeping” missions. Almost one billion dollars will be sent overseas to address the global financial crisis outside our borders. Nearly $8 billion will be spent to address a “potential pandemic flu” which could result in mandatory vaccinations for no discernable reason other than to enrich the Pharmaceutical companies that make the vaccine.

Perhaps most outrageous is the $108 billion loan guarantee to the International Monetary Fund. These new loan guarantees will allow that destructive organization to continue spending taxpayer money to prop up corrupt leaders and promote harmful economic policies overseas.

Not only does sending American taxpayer money to the IMF hurt citizens here, evidence shows that it even hurts those it pretends to help. Along with IMF loans comes IMF required policy changes, called Structural Adjustment Programs, which amount to forced Keynesianism. This is the very fantasy-infused economic model that has brought our own country to its knees, and IMF loans act as the Trojan Horse to inflict it on others. Perhaps most troubling is the fact that leaders in recipient nations tend to become more concerned with the wishes of international elites than the wishes and needs of their own people. Argentina and Kenya are just two examples of countries that followed IMF mandates right off a cliff. The IMF frequently recommends currency devaluation to poorer nations, which has wiped out the already impoverished over and over. There is also a long list of brutal dictators the IMF happily supported and propped up with loans that left their oppressed populace in staggering amounts of debt with no economic progress to show for it.

We are buying nothing but evil and global oppression by sending your taxdollars to the IMF. Not to mention there is no Constitutional authority to do so. Our continued presence in Iraq and Afghanistan does not make us safer at home, but in fact undermines our national security. I vehemently opposed this Supplemental Appropriations Bill and was dismayed to see it pass so easily

Below is a list of famous quotes about the Federal Reserve.

“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” — Henry Ford

“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it.” — Congressman Louis T. McFadden in 1932 (Rep. Pa)

“Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States” — Sen. Barry Goldwater (Rep. AR)

“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson.” – Franklin Delano Roosevelt

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than beaurocracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.” Abe Lincoln

“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” — Thomas Jefferson, U.S. President.

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it’s issuance.” — James Madison.

“This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized….the worst legislative crime of the ages is perpetrated by this banking and currency bill.” — Charles A. Lindbergh, Sr. , 1913

“A great industrial nation is controlled by it’s system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world–no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men.” — President Woodrow Wilson

“By this means government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.” — John Maynard Keynes (the father of ‘Keynesian Economics’ which our nation now endures) in his book “THE ECONOMIC CONSEQUENCES
OF THE PEACE” (1920).

“While boasting of our noble deeds were careful to conceal the ugly fact that by an iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery. — Horace Greeley

“The few who understand the system, will either be so interested from it’s profits or so dependant on it’s favors, that there will be no opposition from that class.” — Rothschild Brothers of London, 1863

“Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild