Saturday, May 7, 2011

Rick Sanchez, “It’s Time To Audit the Fed”

“It’s Time To Audit the Fed”
by Rick Sanchez

“The royal wedding was last week, in case you missed it. Newsrooms here in the US nearly went dark with virtually every reporter embedded in key locations around Hyde Park and Buckingham Palace. It was the century's first "wedding of the century," but we're only a decade in so there could be others.

As newsmen and anchors discussed the minutiae of Kate Middleton's dress, we missed something pretty historic: the Federal Reserve held its first open press conference after a policy meeting. I wonder what the Founding Fathers would have said about our fixation with British royalty at a time when our economy is rotting from the inside out.

When the news media does report on our economy, a lot is usually said about China owning so much of our country's debt. Yes, China's central bank is the largest holder with over $1.1 trillion. And yes, foreigners own more of our national debt than ever before - 32%, or $4.45 trillion, of our over $14 trillion national debt. But the real threat to our economy isn't China.

We have seen the enemy and he is us.

Congress is spending tomorrow's money today, throwing us into economic oblivion. But Congress isn't the only culprit in the crime of grand larceny of our future. The Federal Reserve - a quasi-public institution that includes privately-owned US banks - is a more than willing accomplice. As Thomas Jefferson warned, "...banking establishments are more dangerous than standing armies; and... the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

For an entity that wields so much power, we know relatively little about the Fed. Would you trust an unknown banker to decide what happens with your paycheck every week? Why do we accept this for our country? We grow up revering our government's transparency. "Checks and balances" is as much a part of our lexicon as is "American Idol." Yet perhaps the most powerful part of our government, the one constituting the biggest potential conflict of interest in our government's history, goes unchecked and unbalanced.
The mystery that is the Federal Reserve begins with its name, since it is neither Federal nor does it have any reserves. Those two facts are the crux of the problem.

So here we are today with an economy in a continual stall that is not just broken but broken down, higher gas prices loom over our heads, and a sense of dread that what Wall Street and Washington did to cause our recent meltdown may repeat itself once again. Despite this history, we remain in the dark rather than demand transparency.

It is remarkable, and remarkably unacceptable, that the Federal Reserve held a press conference after a policy meeting for the first time in its 97-year history just last week. That's simply 97 years too late. During this press conference, Fed Chairman Ben Bernanke addressed the public's concern over inflation, the slow economic recovery, and critics' claims that the Fed has driven down the value of the dollar. But Bernanke just danced around questions on the dollar, saying currency policy is an issue for the Treasury Department.

Bernanke is wrong. The issue isn't the advice that the Treasury gives Congress, and this isn't about how our money gets printed. The simple, blunt question he avoided - the proverbial elephant in the room - is why we're printing money that is literally not worth the paper it's printed on. The issue is the dollar's historical evolution (and devolution) from a "United States Note" to a "Federal Reserve Note" and the resulting steady decline in its value as a result of interest rate policy set by the Fed. The Canadian dollar is now stronger than the US dollar. But at least we're still ahead of the Jamaican dollar - for now.

I may disagree with Glenn Beck on certain issues, but when it comes to the Fed, he's dead-on. To his credit, he's been taking the Fed to task. And we should give credit where credit is due: Representative Ron Paul has been beating this drum for years. It's good that some are finally starting to listen. Recently on Beck's show, Paul said, "People now are looking at the Fed as the culprit rather than the savior, and rightfully so." He's right.

Skepticism is healthy. Americans are tired of being kept in the dark. We refuse to be left out of the conversation any longer. What we need are real answers. What we need is transparency and honesty. What we need is an audit of the Fed - an independent audit by Congress with public hearings - so we, the American people who are footing the bill and paying the price, can decide how to reform the Fed and save our country.”

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