Joe Doakes from Como Park emails:
The Federal Reserve doesn’t like Sen. Rand Paul’s proposal to have the federal government audit the Federal Reserve.
“Who in their right mind would ask the Congress of the United States — who can’t cobble together a fiscal policy — to assume control of monetary policy?” Richard Fisher, president of the Federal Reserve Bank of Dallas, said during an interview with The Hill.Well, Thomas Jefferson, for one. Article I, Section 8 of the United States Constitution:
“To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures . . . .”
The Founders knew Congress wasn’t going to be made up of experts so they adopted the KISS principle (Keep It Simple, Stupid) which, in those days, meant Gold or Silver coins of a known weight and purity. Easy to recognize, hard to counterfeit, holds its value internationally and over time.
Modern experts can argue whether the gold standard is good or bad, but one thing’s for sure – it’s much harder for a privately held corporation to flood the market with trillions of dollars’ worth of gold coins in response to political pressure than it is to dump $40 Billion dollars of electrons into the economy, month after month, without any oversight at all.
Joe Doakes
Remember how the Catholic Church used to kill people who translated the Bible from Latin to “Vulgate”, regular languages?
Sometimes it feels like the government wants to put its entire body of laws, constitution included, in a separate language that nobody understands.
And looking at the way our schools are performing these days, that language just might end up being English…
“Sometimes it feels like the government wants to put its entire body of laws, constitution included, in a separate language that nobody understands.”
They already have done so, Mitch. They are called the Federal Tax Codes.
It’s worth noting that prior to 1913, the value of the dollar was actually pretty stable under Congress’ oversight. It would halve during wartime and recover in peace, and almost all of the panics of the pre-Fed era occurred because lenders forgot that the war would be ending and therefore cannon-makers were going to have trouble paying back their loans.
Mr. Paul will flog “audit the Fed” to increase his fundraising numbers.
Democrats will stonewall “audit the Fed” to hide the numbers.
Maybe I’ve just not been thinking about this enough, but what would an audit of the Fed find? That they’ve been pumping money into the economy like there’s no tomorrow? Don’t we already know that?
Don’t get me wrong; I’d love to see money returned to a constitutional gold standard. Even with fractional reserve banking, it would be a huge improvement. I just don’t know what we’d find about the Fed that we don’t already know, or at least can’t easily infer, by auditing their books.