A letter for Senators not supporting S. 604
I know that many of you have received a response from your Senators similar to the one I got from my NH Senator Jeanne Shaheen. They all seem to have gotten the same memo from the Fed's lobbyist encouraging them to respond with: "....the Federal Reserve was created by congress in 1913 to....."
As if we didn't know!
For those of you who are not satisfied with getting this "brush-off" from your Senator, I offer you my response to Senator Shaheen as a template you might use to encourage further dialogue:
Dear Senator Shaheen,
Thank you for taking the time to respond to my letter requesting your support for S. 604: The Federal Reserve Sunshine Act.
With all due respect, the second paragraph of your response, “....the Federal Reserve System is the central bank of the United States …”, reveals that you are getting your information about the Federal Reserve, from the Federal Reserve. This is the same pre-packaged retort that comes back from countless legislators who are under the impression that the Federal Reserve is a group of omniscient economists who have the best interest of the American people at heart. Chairman Bernanke seems to have successfully convinced Congress that the goings-on of the F.O.M.C. are beyond the grasp of the average American.
The Federal Reserve has been bequeathed the ultimate power: the power to create money from nothing and to destroy wealth through inflation. This fourth branch of government is thereby superior to the other three. To allow this power to go unchecked in the midst of the greatest economic disaster in history is irresponsible at best.
I hope you will take a moment to read the attached article: Economic Cause & Effect…, regarding the Federal Reserve and the fundamental irrationality and, indeed, immorality of the way the Fed robs the most vulnerable Americans of their savings and their purchasing power. As a champion of social justice, I’m sure you understand that the inflation induced by Fed policy is the nemesis of the poor and those on a fixed income.
Your constituents deserve to know the answer to the countless questions that recent Fed actions have created. For example:
1. Who got the T.A.R.P. funds? (Taxpayer money.)
2. Did J.P. Morgan get the sweetheart discount for Bear Stearns because Morgan C.E.O. Jamie Dimon is on the board of the New York Fed? (This incestuous, Wall Street / government relationship must be examined).
3. What countries are benefiting from currency swaps and who are their banks subsequently lending to?
4. What monetary diplomacy has transpired between the Federal Reserve and foreign central banks? (This “power of the purse” is the power to set foreign policy by unelected officials).
5. What went on at last year’s closed door meeting with Chairman Bernanke, Secretary Paulson and Goldman Sachs C.E.O. Blankfein? Was this where the decision was made to allow $13 billion in transfer payments to Goldman Sachs via the A.I.G. bailout? (Government officials consulting with private citizens in this manner is illegal!)
6. Why has the Federal Reserve found it necessary to hire former Enron lobbyist, Linda Robertson, in an effort to avoid being audited?
All of which begs the question: what are they hiding?
These are just a few of the questions that must be answered before the American people can begin to regain their faith in the U.S. economy. Our fiat dollar system is suspect enough without the whiff of impropriety that emanates from behind the Fed’s veil of secrecy.
Madame Senator, I respectfully request that you add your name to the bipartisan list of 20 cosponsors of S. 604, The Federal Reserve Sunshine Act, as well as the 281 cosponsors of its companion bill (H.R. 1207) in the house. It has been raining in New Hampshire for three months…… how about a little sunshine?
SPONSOR: SANDERS, BERNARD (I - VT) 202 224 - 5141
CO-SPONSORS
Sen DeMint, Jim [SC] - 6/11/2009
Sen Vitter, David [LA] - 6/16/2009
Sen Crapo, Mike [ID] - 6/25/2009
Sen Isakson, Johnny [GA] - 7/8/2009
Sen Chambliss, Saxby [GA] - 7/8/2009
Sen Brownback, Sam [KS] - 7/8/2009
Sen Inhofe, James M. [OK] - 7/9/2009
Sen Burr, Richard [NC] - 7/9/2009
Sen Feingold, Russell D. [WI] - 7/15/2009
Sen Lincoln, Blanche L. [AR] - 7/15/2009
Sen McCain, John [AZ] - 7/15/2009
Sen Bennett, Robert F. [UT] - 7/15/2009
Sen Barrasso, John [WY] - 7/15/2009
Sen Harkin, Tom [IA] - 7/20/2009
Sen Hutchison, Kay Bailey [TX] - 7/20/2009
Sen Cornyn, John [TX] - 7/20/2009
Sen Coburn, Tom [OK] - 7/20/2009
Sen Hatch, Orrin G. [UT] - 7/24/2009
Sen Graham, Lindsey [SC] - 7/24/2009
Sen Cardin, Benjamin L. [MD] - 7/28/2009
Sincerely,
James D. Summers
My attachment:
Economic Cause & Effect - Time to Audit the Fed!
By Jim Summers
The effects of our financial house-of-cards collapsing are obvious: home foreclosures, unemployment, retirement savings lost, etc. The cause, however, is more difficult to discern as we are distracted by sideshows like AIG bonuses and Bernie Madoff.
To solve this case, we must always ask the next question: What enables all of these sideshows? What economic force allowed for the housing bubble, too-big-to-fail financial firms, and trillions of dollars in bailouts? If the boom-bust cycle is to be stopped, we must walk past the sideshows, go inside the big-top and observe the main event. That event is a magic show called money creation, where, like pulling a rabbit out of a hat, the Federal Reserve creates money out of thin air.
Contrary to what some of our congressmen still believe, our money is not backed by gold or any other commodity. The U.S. dollar is a pure fiat currency. It is ink-on-paper redeemable for ink-on-paper. This is why, in Washington, fiscal discipline is just a quaint notion of the Founding Fathers that doesn’t apply to our sophisticated financial markets. The Fed doesn’t have any “reserves” to speak of, they have something far better: a printing press………….and they’re not afraid to use it! Ever since President Nixon severed the last link between the dollar and gold in 1971, the Fed has inflated the M3 (overall) money supply from $800 billion to over $14 trillion! This debasement of the currency always leads to price inflation: the hidden tax that allows unlimited deficit spending without the messy business of raising taxes. Our legislators are addicted to spending and they know where they can always get a fix. This is why Congress allows the Fed to carry on in secret with its unfettered inflation of the money supply. Congress is a money addict and the Fed is its dealer.
Ben Bernanke is unquestionably a learned individual, but he must have been absent the day his professor discussed the definition of capital. Capital is the result of hard work and savings. Capital is money readily available to purchase the goods and services that are created by the borrowing and investment of entrepreneurs. This was the real problem with our latest economic bubble. After the Fed was done inflating it with liquidity (1 – 2% interest rates), it finally burst because no real capital was available to buy all those artificially created goods and services. Injecting liquidity into the market would be one thing if this credit were backed by capital, but just the opposite is true. With no gold reserves, all of our money is created from debt. This is why every bill in your wallet says “Federal Reserve Note”, not “silver certificate” or “gold certificate”, because modern dollar bills are instruments of debt, not of capital. Now, the government is trying to re-inflate asset values with more liquidity. Where does this liquidity come from when our Treasury is bankrupt? It comes partially from going further into debt with China. When China is done buying our debt, the Treasury uses its own slight-of-hand to issue bonds and exchange them for newly printed dollars from the Fed. Presto!
Without this ability to make money from debt, there would be no $800 billion Wall Street bailout. Real capital would be required and fiscal discipline would prevail. Of course, without the Fed / Wall Street / Treasury Department revolving door, our house-of-cards might have been made of some stronger materials. Perhaps built on a foundation of sound money like gold and silver, as was the intention of our founders.
Beyond policy questions, there is the issue of who controls this private entity called the “Federal” Reserve. The Fed’s specific ownership is confidential but we know that member banks are always shareholders. This makes the Wall Street banks shareholders in the most powerful Fed branch. When the New York Fed decides to give, say, $30 billion to Citicorp, it is simply Citicorp and the rest of the boys club (Goldman Sachs, J.P. Morgan, etc.) bailing themselves out with our money.
One might expect that a private company with the power to print the reserve currency of the free world might be subjected to close congressional scrutiny. But in the bizarro world of finance, the Fed is above the law. Congress has had no authority to audit the Federal Reserve since the 1950’s. When Chairman Bernanke testifies before Congress, he answers questions only as he chooses. When asked recently which banks were loaned $2 trillion by the Fed, Bernanke simply refused to answer. The Federal Reserve has become our fourth and most powerful branch of government, yet it answers to no one.
The time has come for accountability. We the People have a right to know what our servants in Washington have done with our wealth. Congress has unconstitutionally delegated its power to coin money to a cartel of private bankers and created a government of the bankers, by the bankers and for the bankers. We must demand that congress pull back the curtain and show us who is really pulling the strings. It is time for Congress to pass the “Federal Reserve Transparency Act” (H.R. 1207) and finally audit the Fed.
