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Need Help in Flame Wars: Isn't the Fed Already Audited?

Internet flame wars left and right as it heats up. Need best short answer to: "But the Fed is already audited" from the savvy DP community. I'm getting chewed up out here need reinforcements.



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Republicae's picture

Hope this helps...

People hear that the FED is audited already and assume that when they hear the word “audit” that such an audit is what could be considered a complete, fully revealing audit that might be conducted on some actual business, but that is simply not the case.

Information has been leaked and subsequently documented, that the FED not only bailed out the “Too big to fail” banks and companies here in the U.S., but that it also used its power to bailout foreign banks. Those banks which, by the way, included the Libyan Bank (while Gaddafi was still in power), the Arab Banking Corp of Bahrain, Banks of Bavaria, Mexico and Korea among others. Not only that, but the FED bailed out huge hedge funds, tossed more than a few dollars toward Harley-Davison, McDonalds even private individuals such as Wayne Huizenga, John Paulson, Christopher Flowers, Michael Dell and possibly others as well.

Even the GAO, the Government Accountability Office state that the FED is not only corrupt in its actions, but also has created a systematic conflict of interest that is completely contrary to any form of sound policy. When you dig deep into the FED publications and reports you will find that there are examples of conflicts of interests, most of these conflicts of interests involve the Directors of the FED Regional Banks.

If you read the GAO account, there are far more than just a few instances where top executives of several big corporations, banks and other types of financial institutions peddle influence toward the FED directors in order to benefit from that influence. So, the FED regulates banks and financial institutions and yet they are in close contact with the executives and are obviously influenced by those executives to bring about a more favorable regulatory atmosphere, one that will be beneficial to the corporations, the banks and those financial institutions.

The GAO report found that there are 18 current and former FED board members who were tied to the very banks and companies that received either bailouts or some type of emergency loans. There are absolutely no legal barriers between the FED and those that the FED is suppose to police. It also came to light that the FED, with its monetary policies, allowed its patron banks and buddies to profit, in fact make untold billions, off of inside information stemming from the FED itself and upcoming policy decisions that might affect the banks and financial institutions, as well as corporations.

The system is one of Mercantilism and the proof of that is in the words of the former FED Head Paul Volcker:

In some sense the Federal Reserve is always an instrument of the government. It is a government body but it is independent within government. But you are right in the sense that part of the concern is that they have involved themselves quantitatively in entering markets and in that process, you are supporting some markets and not others.

Such government patronages, creates a system where wealth is distributed a type of pre-determination; one which, supports some market participates while not supporting others. It plays favors and always has played favors in order to gain influence and peddle that influence in ways that are not only illegal, but also damaging to everyday Americans and the future of this country.

Without an actual audit, not just a formal audit that superficially examines the books, but one that delves into the intricate policy decisions, the influences behind those decisions and the results of those decisions then we will continue to face the consequences, both intended and unintended.

Current audits do not show the movements of money that is not on the books of the FED, and based again on GAO reports, there are possibly Trillions of dollars that have been created and used in ways that are not only harmful to the United States, but also dangerous to the future economic and political health of this country and its people.

While the FED’s financial accounts are indeed audited,

For those who say why audit the FED since they are already audited fail to understand just what a complete audit of the FED would mean, this is why there are so many who are fighting tooth and nail to see to it that the FED is not audited. If the FED has nothing to hide then why fight against such transparency?

William Bergman, who, by the way, is a former FED economist writes:

The appearance of extensive auditing authority doesn’t mean audits are effective. Good auditing requires the willingness and ability of auditors to do their jobs. Some people view the Inspectors General, generally, and the Federal Reserve Board’s Office of Inspector General, specifically, as less than effective or independent in pursuing their mandates. In turn, some people question whether the Board’s oversight of the Reserve Banks, including the Federal Reserve Bank of New York, might be less than arms-length. More fundamentally, from the point of view of the supporters of the recently introduced legislation, there are a variety of restrictions on the ability of the GAO to audit the Fed. There are significant exceptions for monetary policy and transactions with foreign central banks and international organizations like the Bank for International Settlements and the IMF.

The FED is a system of Patronages, one that provides the privileges of power and a type of wealth distribution that is not only immoral, but also dangerous in the most definitive meaning of that word. The very practices of the FED have, through the decades, caused economic crisis and monetary redistribution from such crisis on a scale that should alarm every single American. There are so many off-balance sheet manipulations that it would be difficult for a superficial audit to either recognize or fully understand outside the context of the overall monetary policies that the FED engages in every day. The fact is that Congress, when passing the Federal Reserve Act in 1913 never authorized many of the actions and policies that the FED engages in today. Thus, there is a real need for a very investigative audit of the FED, its policies, the way it moves money, particularly digital money, around, as well as the manner in which it manipulates money and economic forces through such manipulation.

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Yes, it is already audited but no solutions are in sight.

yes, a partial audit that was good enough was already done in 09 or so. it already revealed the croniness of the fed. time is short and you need to act and offer and drive solutions, instead of just talk and talk of the fed.

jj

Auditing a thief only tells you how much they stole

skip the audit - End the Fed by passing Competition in Currency Act and let the market work.

ok that helps please keep em coming

//

A man who views the world the same at fifty as he did at twenty has wasted thirty years of his life.
-- Muhammad Ali

It's like the IRS coming to

It's like the IRS coming to you and saying "did you make less than $xxxx last year? Did you pay taxes on it? Okay, I guess we're done here.

"Federal Banking Agency Audit Act enacted in 1978 as Public Law 95-320 and Section 31 USC 714 of U.S. Code establish that the Federal Reserve may be audited by the Government Accountability Office (GAO).[The GAO has authority to audit check-processing, currency storage and shipments, and some regulatory and bank examination functions, however there are restrictions to what the GAO may in fact audit.

Audits of the Reserve Board and Federal Reserve banks may NOT include:

transactions for or with a foreign central bank or government, or nonprivate international financing organization;

deliberations, decisions, or actions on monetary policy matters;

transactions made under the direction of the Federal Open Market Committee;

or

a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items"

"Timid men prefer the calm of despotism to the tempestuous sea of liberty." - Thomas Jefferson
"Annoyance is step one of thinking"
"We're all in the same boat, it doesn't matter if you like me"

Partial audit only ...

this was a deal struck between Bernie Sanders and Ron Paul in order to get the audit past the Senate.

No swaps. That is $16 trillion in un-audited accounts during the peak of the crisis in 2008-09.

It's only a partial audit.

It's only a partial audit. The offshore finances and the monetary policy discussions are restricted topics and were taken out of the audit process. If those were included, a thing like LIBOR would have been known long before.