On the same day, October 4, 2011, I testified on Capitol Hill about the terrible record for transparency and corrupt records at the Federal Reserve, its chairman, Ben Bernanke, gave a strong opposing view before the Joint Economic Committee. When Senator Michael Lee (R, Utah) said he was concerned about the "general veil of secrecy under which the Federal Reserve typically operates," Bernanke replied: "That's an urban legend." (Defined as "a bizarre untrue story that circulates in society...")
Bernanke's reply incorporated the Fed's urban legend: "We are thoroughly audited at this point." and "Nobody has found an impropriety." While Bernanke may confine this reply to the partial audit in the 2010 Dodd-Frank law, which the Fed vigorously opposed, the Fed's long history of deception and corruption should not be bypassed.
My testimony on the same day before the Subcommittee on Monetary Policy and Technology of the House Financial Services Committee, chaired by Congressman Ron Paul, reveals a different record from Congressional investigations in which I participated:
Blocking large parts of the Federal Reserve from GAO audits
House Committee on Banking, Finance and Urban Affairs Chairman Henry Reuss (D, Wisconsin) proposed a GAO audit of the Fed in 1976. The Fed orchestrated a massive campaign using the officials of the private banks it regulates to lobby to kill the audit bill. The Fed won. The bill could not garner enough support to pass out of the Committee. It passed the Government Operations Committee two years later, only after glaring no-audit barriers for Fed monetary policy and international operations were added.
Billions of dollars can be made from inside information leaks from the Fed's monetary policy operations. One necessary step to stop leaks is to severely limit inside information on future Fed policy to a few Fed employees.
This has not happened. Congress received information in 1997 that non-Federal Reserve employees attended Federal Reserve meetings where inside information was discussed. Banking Committee Chairman/Ranking Member Henry B. Gonzalez (D, Texas) and Congressmen Maurice Hinchey (D, New York) asked Fed Chairman Alan Greenspan about the apparent leak of discount rate information. Greenspan admitted that non-Fed people including "central bankers from Bulgaria, China, the Czech Republic, Hungary, Poland, Romania and Russia" had attended Federal Reserve meetings where the Fed's future interest rate policy was discussed. Greenspan's letter (4/25/1997) contained a 23-page enclosure listing hundreds of employees at the Board of Governors in Washington, D.C. and in the Federal Reserve Banks around the country who have access to at least some inside Fed policy information.
Destroying Fed records
In 1995 Greenspan held a non-recorded vote - no finger prints - to destroy the source transcripts of the Fed's policy-making committee, the Federal Open market Committee (FOMC). I was informed November 1, 2001 by Donald Kohn, the future Fed Vice Chairman, that this destruction would continue and that the Fed considered the destruction to be legal.
The Fed's shredding machines destroyed the 1995 source FOMC transcripts of Fed officials who bypassed the Congress and voted for a $5 billion loan to Mexico collateralized by revenue from Mexico's oil industry. When the potential loan become public the peso stopped falling, and the loan was not made.
No audits can be made of source FOMC transcripts that were formerly sent to the National Archives and Records Administration because the transcripts are destroyed. That is not an urban legend.
Corrupted bookkeeping at Fed vaults
A 1997 Gonzalez investigation, assisted by the GAO, found extensive corrupt accounting at the cash section of the Los Angeles branch of the San Francisco Fed Bank with dire possibilities at other Fed vault facilities. Greenspan informed Gonzalez that nearly $500 thousand had been stolen from Fed vaults by Fed employees from 1987 to 1996. The Gonzalez/GAO investigation indicated this was an understatement.
The Fed Banks' vaults contain uncirculated currency and coin transferred from the Bureau of Engraving and Printing and cash from banks throughout the country. The Fed district banks and branches need to be audited with GAO personnel who are trained and experienced in central bank operations and auditing. When will these audits be done and reported to the Congress or will Bernanke dismiss this national security problem as an urban legend?
Bernanke replied in a similar manner at a previous Congressional hearing (2/23/2010) to Congressman Paul's questions based on material in my book, Deception and Abuse at the Fed (2008). It may not be a coincidence that the Fed's Inspector General office contacted me about my book (5/19/2011) shortly after Congressman Paul announced his candidacy for president. Since the Fed's IG is appointed by the Fed's chairman, the IG's investigation of my book does not rule out a continuing cover-up to save the Fed's "urban legend".
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We do have two classes of citizens. Those who work for government and everyone else. And those in government are the ones not only living off the voluntary sector, but stealing from them as well.
If you want the Fed audited, I suggest you switch to the Republican party and vote for Ron Paul, as he's the only one who's been pressing for an audit of the Fed, and he's been doing it for over 20 years.
When Bubbles are created or the economy crashes, its voting members are not held accountable. When their mandate to support FULL EMPLOYMENT is a total failure, they ignore it. This is an incredible stain on our DEMOCRACY. As Andrew Jackson demonstrated (by dissolving the National Bank of his era), the Federal Reserve should be disbanded. Responsibility for Monetary Policy should be turned over to the Treasury Secretary, who is responsible to the public through the elections of presidents.
In the short term, it would be best for the Fed. to increase the money supply in favor of growth over inflation to bring unemployment down. Working with the Congress, they should try to eliminate all U. S. debts and deficits within 10 years. At that point, it would be very beneficial for the United States to return to the GOLD STANDARD to help avoid future BUBBLES and CRASHES. This would also stem the Inflation that drives increasing costs in the Social Security and Medicare/Medicaid Programs.
And there's a reason the founders said "coin" as a verb, not "print". They had seen the banker tricks before, notably the Bank of England.
In 1913, persuaded by the bankers that only their expertise could prevent deep and long depressions, Congress gave the power to the bankers, along with secrecy and a level of independence that led Alan Greenspan to claim the "Federal Reserve" is above the law. Congress is still nominally in charge, with limited authority under the Federal Reserve Act of 1913, to question "the Fed" chairman, but not with power to audit or know the operational dealings. BUT, instead, we have now had TWO depressions deeper and longer than anything that came before, when we had sound money backed by gold, and no central bank.
As for increasing the money supply, that is exactly what "the Fed" has done, in astonishing amounts. Bernanke & company printed up $16 TRILLION in 2008, a partial audit (pushed for by Ron Paul) revealed. How can they DO that? NOTHING has backed up the dollar since 1971. It's just thin air money. They can run the printing press at will. The Keynesian economic theory that guides them says this should bring unemployment down, but it hasn't.
Last year, Ben Bernanke spoke to a senate panel. He kept emphasising the need for regulations in our markets because investors are leaving our markets at record rates & have been doing so since it became clear in 2008 that nothing would be done to prevent the same crooks from tanking the economy of the world again. Bernanke pushed credibility, all the senators wanted to know was whether it was legal for states to file bankruptcy, and what would the Fed do if they did. Bernanke said that was their work, not his, that the Fed was not set up to deal with state bankruptcies.
They finally concluded it was illegal for states to file BK, but that they could default on their bonds.
It was obvious to me what the next moves would be.....have cities and counties file BK instead, and dump all the pensioners and retirees.
Since then, many cities have filed BK, and PA's capital city is considering it. If that is allowed, it will set legal precedent for dozens of state capitals to follow suit. Many state and county workers will be without their pensions.
I sure wish people would pay attention to stories like this, until they do, it will only get worse.
That philosophy could cover a lot of ground, religion-wise.
Even an agnostic could believe that.