In 1913 the US Federal Reserve was created. In just a few years the Federal Reserve will reach the 100th anniversary of it's creation. It is alarming that not once in that time has the Federal Reserve been audited.
In the last year Federal Reserve officers have flatly refused to tell congress what they have done with huge amounts of money. These refusals have included the refusal to explain who they gave trillions of dollars of loans to in other countries. The refusals have included the refusal to disclose which banks they decide to help in the current crisis. Why they decided to help those banks and not others (Goldman Sacks v. Lehman Brothers).
It is high time that audit took place.
The Federal Reserve reports that it's duties are:
- Conducting the nation's monetary policy by influencing monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates.
- Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system, and protect the credit rights of consumers
- Maintaining stability of the financial system and containing systemic risk that may arise in financial markets
- Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
Have they done a good job at maximizing employment? ~ Unemployment is currently over 17% if you count the people who have given up or taken part time work. That is one failure.
Have they done a good job at keeping prices steady? ~ The dollar is only worth about 4% of what it was in 1913 so you could say they have steadily decreased the value of the dollar. That is a second failure.
Have they done a good job at moderating long term interest rates? ~ The easy, cheap, credit of the last decade was the central cause of the current economic mess. This is a third failure.
Have they ensured the safety & soundness of the nations banking and financial system? ~ Have you watched the news lately? Fourth failure!
Have they prevented systemic risks? ~ Did they do anything about the creation of these new derivatives which are now the toxic assets killing the banks. Fifth failure!
Have they provided financial services? ~ They certainly have but they refuse to disclose who they have loaned money to. We need the audit because many people strongly suspect they are helping their friends to the detriment of others. We can't be sure who they have helped because they refuse to disclose this!
After almost 100 years it is high time someone took a look at their books and practices.
It is time to return to sound money.
