Guest Post: House Passes Bill to Audit the Fed

I have just received confirmation from a very credible Congressional source that the bill to audit the Federal Reserve is included in the House financial reform legislation which passed today. My source says:

The Fed audit provision which passed the Financial Services Committee a few weeks ago is part of the bill. This is a real milestone, as it means that the full House of Representatives has passed a bill that mandates a complete audit of the Fed.

The effort to audit the Fed – supported by 79% of the American people – is gaining traction.

Call your Senator and demand that the Senate approve the bill to audit the Fed.

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  1. avrymann

    Ron Paul says the bill was gutted in the finance committee. From what he stated just a couple of days ago, the audit is another Washington deception. The audit will not apparently aqddress substantive issues. Any comments?

    1. i on the ball patriot

      Audit or no audit.
      How do you want your fucking?

      Collapse With No Audit

      A collapse in deception,
      Will slow down the pain,
      The rich will flee,
      And escape any pain …

      Collapse With Audit

      A collapse with perception,
      Will hasten the pain,
      The rich will flee,
      And escape any pain …

      Deception is the strongest political force on the planet.

  2. john

    Great! Too bad it comes wrap in a stinking piles of feces that is “reform”. “‘Hope'” indeed. Democrats suck.

  3. Vinny G.

    Wow! Now that would be something. But I must admit, it does sound like something too good to be true.


  4. MethodMan

    I cannot figure what these critters are up to. It looks like this clause means to restrict whatever passes to auditing stuff under the “current crisis” …. pre-emptive gutting?


    (a) In General- Notwithstanding any other provision of law, the Comptroller General of the United States shall perform an audit of all actions taken by the Board of Governors of the Federal Reserve System and the Federal reserve banks during the current economic crisis pursuant to the authority granted under section 13(c) of the Federal Reserve Act. Such audit shall be completed as expeditiously as possible after the date of the enactment of the Financial Stability Improvement Act of 2009.

    (b) Report-

    (1) REQUIRED- Not later than the end of the 90-day period beginning on the date the audit referred to in subsection (a) is completed, the Comptroller General of the United States shall submit a report to the Congress, and make such report available to the public.

    (2) CONTENTS- The report under paragraph (1) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.

  5. ^WizeUp

    Oh I’m sure its a good Bill. Just like so many would like with full accounting and transparency for the Fed. Ha.

    Does anyone seriously think these cretins grew a conscience and decided to do something that is right, rather than what their paymasters (its not the taxpayers) would have them do?

    There is no telling what kind of goodies, outrages, and thefts the banksters got placed in this thing.

    I guess no one has a copy. Whatever happened to posting the bills 72 hours???

  6. doc holiday

    Obviously our age of corruption lacks anyone with the integrity of

    The retard bozos from the House are already in the pockets of the wall street mob and this is just more dog and pony circus feces … we can encounter that kinda stuff for free in any park USA, why bother watching these puppets drop their loads?

    Full Disclosure: No disrespect to animals intended.

  7. Jason Rines

    I expect the Federal Reserve to be audited after the 2012 elections. By the time the American people have poured through all the information not completely entangled in pretzels or missing the crooks will have made their exit.

  8. s.hammer

    What a total joke! Audit…right..first you have to have some basis of understanding which obviously doesn’t exist anywhere in Washington about anything.

  9. David

    What does it mean to “audit the actions of the Fed”? An audit looks at cash and assets, stocks and flows, and perhaps also some actions if they are auditing processes. I’m not sure that what is being proposed is actually “an audit” in the usual sense.

    To “audit the actions of the Fed” might just mean checking whether they actually did what they said they did during the period.

    Hope I’m wrong.

    1. Dave Raithel

      You may not be, your points have been my own concerns. The Fed does now currently suffer an audit in the traditional sense that you describe, as I understand it. Ron Paul and the Pile On Populists meant to inject policy decisions. Mind you, I am not here to defend Ron Paul (I got no use for him, really). But I am not one to consider the enemies of my enemies my friends – which is why I follow this as best I can and really trust no one about it. On the one hand, a specific accounting of what collateral the bank has and who has borrowed from it, etc., informs the Congress. On the other, the information becomes a grounds for speculation in the real economy. (That whole information problem in markets …)

      Could be what we got here is a contradiction for which the economic order provides no resolution.

  10. Gordon

    By taking up all the phony assets on its balance sheet and refusing to let the phony money supply to shrink the Fed has already done most of the damage to the dollar’s purchasing power.

    The timing of this audit the fed bill is very bad – Congress may interfere when it is time to raise interest rate.

  11. Clark

    What the Audit the Fed bill is (was?) supposed to do is to open up the balance sheet so we can find out just what it’s now composed of. Sure, the Fed’s website breaks it down into general categories (USTs, Agencies, repos, etc.) but what we really want to know — that they don’t want us to find out — is WHO are the counterparties? What are the terms? How much are the “assets” really worth? How much was bought (including repos), from whom, what terms. In detail. This will never happen, I am afraid. Ron Paul has put up a good fight, but the oligarchs do NOT want transparency.

    1. Dave Raithel

      But in the context of a private entity, the kind of information you site would be proprietary – between the audited, the owners, and the auditor? I’m still trying to get clear on that. I can think of reasons WHY a business would want such information kept private. In the case of the Fed: Would the information that XYZ had borrowed $$ from the Feds be a reason to short its stocks or bonds?

      And as others above have observed: Paul’s original purpose is not to improve the Fed, but to kill it. Personally, I want to be secure that the checks given me will clear (provided the issuer hasn’t written a bad one, which would not be the Fed’s fault.) So when Ronny and the Golden Libertarians start explaining how practical matters like that get done in a national economy without a central bank, I might take them seriously….

  12. Trainwreck

    I am curious as to how BAC and Citi will be able to pay back the tarp loans so quickly and easily. Was the money never lent to them by the treasury in the first place and the fed ordered up some accounting chicanery to hide that fact? We all know that the FASB rules were changed so that mark to market became mark to fantasy. Yeah that’s conspiracy theory for the hardcore theorist, but hey, I’m in the mood to fish.

    We are gambling against the house without even knowing what exactly are the house rules.

  13. David

    A bank can make a lot of money, borrowing from the Fed at 0 percent and lending by buying Treasuries at 3 percent. Risk-free!

  14. Doc Holiday

    With all the FASB/GAAP/IRS accounting/tax regulations tossed out the window, and then the illusionary process of taxpayers supercharging bank balance sheets (with a tsunami of cheap and easy taxpayer revenue) is it any wonder that these financial crooks need to re-engineer the derivative markets and then use congress in broad daylight (for their dirty work)? Face the facts, many trillions of dollars evaporated into thin air recently, and there is no way to really understand what happened — so now, the pea and shell game becomes a matter of more politics and more corrupt bullshit. The subprime/derivative game was never close to being real 5 years ago and it sure as shit wont be real three years from now — this is just a fucked up mess that is getting worse by the day!!!!! In reality, since we are talking about trillions, things are getting worse by the second, and there is no way out of this expanding black hole! Count on it and take that shit to the bank….

    Full Disclosure: The author felt the need to swear a little — in hopes that some off-color remarks would hit some invisible target. I’m sorry to not be F’ing Florence Nightingale ….. ok, what about a song …. LOL:

    For unto us a Child is born, unto us a Son is given, and the government
    shall be upon His shoulder; and his name shall be called Wonderful,
    Counsellor, the Mighty God, the Everlasting Father, the Prince of Peace.
    (Isaiah 9:6)

    > Somehow that works for me?

    1. Keenan

      Certainly a timely musical selection, doc. And especially at this season we shouldn’t forget, as Lloyd said, they really are doing His work.

  15. Muaddib

    I doubt it’s a coincidence that the Federal Reserve was enacted only a few months after the 17th amendment was ratified by the states. David Graham Phillips’ series “The Treason of the Senate” ran in 1906, documenting the corruption of 20 senators, especially that of Senator Aldrich, the Freemason and Rockefeller toady who was the driving force in the Senate for both the Fed (proposed 1908, enacted 1913) and the 16th amendment (the federal income tax, proposed 1909, ratified 1913). By 1910, 31 states had voted for a constitutional convention, just one short of the required 2/3. Pressured from below, Congress began working on the 17th amendment in 1911, which was ratified in April of 1913.

    This was a major populist movement that posed a serious threat to ‘business as usual’. The situation, on its surface, didn’t look promising for the elites who had gamed the system. However, in 1907 there was a financial panic with J. P. Morgan conveniently stepping in to ‘save the day’. Thus began the campaign for a central bank. But the elites didn’t want just any old central bank. No, they needed one with sufficient power and autonomy to make it a de facto fourth branch of [unelected] government, operating as a tool of the wealthy and the initiated. They needed a quasi-private chimera that would let them hide their shady backroom deals.

    1914 saw a third of the Senate up for popular election for the first time in American history. This provided the illusion of just enough democracy to prevent a populist revolt — like a pressure relief valve. Meanwhile the critically important monetary powers of Congress shifted into the private sector.

    Clearly the constitution wasn’t written with fiat currency in mind. We need a constitutional amendment to create a central bank as a genuine 4th branch of government that operates in complete sunshine. Bring all 12 of the regional banks into the public sector. Normalize power among them (no more NY domination) and have the President appoint Jesus and his 12 disciples to run our state religion, with congressional approval, of course.

    1. i on the ball patriot

      Good comment, and one of the reasons I frequently use the term ‘aggregate generational corruption’, lest we all forget the litany of past transgressions. This is especially worth a repeat.

      “This provided the illusion of just enough democracy to prevent a populist revolt — like a pressure relief valve. Meanwhile the critically important monetary powers of Congress shifted into the private sector.”

      You will not get a constitutional amendment though through the present electoral structure. We need a constitutional jubilee along with a debt jubilee that will only come about peacefully through massive election boycotts as a ‘vote of no confidence in government’.

      Probably a moot point now as belief in the efficacy of the sham two party system, unbelievably to me, is far to strong, and collapse of the currency looks to be right around the corner.

      Deception is the strongest political force on the planet.

  16. RN

    Congress auditing the Fed. My God, we’ve entered the Twilight Zone.

    It’s amazed me to see how fast these people are dismantling the USA.

    Ron Paul would have us go back to living in caves and bartering rocks.

    Get me on a bus to Canada, SOON.

  17. crazyv

    This bill should not be measured against some kind of ideal but rather against within the the context of a Congress and President who are employees of the banksters.

    Yes there are plenty of loop holes but at least their holes not wide open doors. While we should recognize that this is a step forward- we should not allow the Congress critters to use this as an excuse for their job with regard to financial regulation is done.

    I would be interested if somebody could provide a concrete example of how this bill would be worse than current conditions- something more than analysis by one liners please.

  18. crazyv

    For what it is worth- Bank of America repaid its TARP by issuing new equity. Now we don’t know who bought that equity it is quite possible that through some underhanded way the Fed and Treasury bought it- but I am not a great believer in conspiracies. In other words the “market” bought it. Isn’t that what those who oppose government regulation believe in.

    BTW I think if I was an existing B of A shareholder I might wonder whether the management issued this equity (with its dilution) not in the interest of shareholders but rather to ensure that they could collect their bonuses.

  19. avrymann

    Oct. 30 (Bloomberg) — Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.

    The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.

    “There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.”

    You can read the entire article here:

    Video version:

  20. Jerry

    Would someone please tell me how the United States is different from Iran….I’m no longer sure there is any difference…

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