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Congressman Ron Paul of Texas enjoys a national reputation as the premier advocate for liberty in politics today. Dr. Paul is the leading spokesman in Washington for limited constitutional government, low taxes, free markets, and a return to sound monetary policies based on commodity-backed... More
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End the Fed
  • Why the Fed Likes Independence 14 comments
    Jan 17, 2010 5:36 PM | about stocks: GLD, SLV
     Last week it was revealed that when Treasury Secretary Tim Geithner was Chairman of the New York Federal Reserve, he urged AIG officials not to disclose to the Securities Exchange Commission relevant details of agreements with banks to bail out Goldman Sachs.  Apparently he felt at the time that regulators and the public would be angry that taxpayer money was used to fully compensate bankers who made some horrifically bad investment decisions.  These banks should have suffered the consequences of the huge risks they were taking.  After all, they kept plenty of rewards when times were good.  Instead, the Fed found a way to socialize these major losses so these banks could survive and continue making more bad decisions, at the expense of the American people and the value of the dollar.

    Geithner claims that they had to take politically unpopular actions to save the economy from collapse.  Half of that is right – it was politically unpopular, but it is extremely premature at best, to claim the economy has been saved.  It was just reported that the economy shed 85,000 more jobs in December. Unemployment stands at 10 percent officially, and 22 percent according to more traditional calculations.  It is hard to argue that this sort of government waste has done anything but harm to our economy.  Raiding Main Street to bail out Wall Street is a foolish idea.  Main Street productivity and the strength of the dollar is the bedrock of the economy.  You cannot gut this foundation without eventually toppling everything else.  This is what too many policy makers either don’t understand or refuse to face.  Or even worse, perhaps they do understand, but don’t care!

    In any case, this revelation makes precisely my point about the need for Fed transparency.  This claim that the Fed should have “independence” is a canard. They very much enjoy their comfortable pattern of bailing out friends and devaluing the currency with no oversight and no accountability.  Geithner specifically asked officials at AIG not to disclose to the SEC or to the public particulars about this special deal for his friends.  We only know these details now because AIG was eventually forthcoming when Congress demanded some answers.

    We should be getting this information, and information on all such dealings, straight from the Fed.  The Fed should be accountable to Congress because it is a creature of Congress.  The Constitution gives Congress the authority to oversee the integrity of the monetary unit.  We have unwisely and unconstitutionally delegated this authority to the Federal Reserve, which has in turn devalued our dollar by 95 percent and counting.  When the Federal Reserve engages in harmful policies, Congress is still ultimately responsible.  If the Fed is not made accountable through a GAO audit at least, it will continue to be accountable to no one, and that is unacceptable. 

    Geithner expects to be praised and thanked for his actions instead of rebuked and fired.  He expects to be given more power to engage in “experimental” monetary policy in the future.  But he has just given us a very good idea of what the Fed and Treasury would do with more power, what they consider good monetary policy, and why they like their so-called independence.



    Disclosure: Long physical gold, silver, palladium, and platinum
    Stocks: GLD, SLV
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Comments (14)
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  • lower98th
    , contributor
    Comments (1420) | Send Message
     
    An insta from Ron Paul. Awesome.
    17 Jan 2010, 05:42 PM Reply Like
  • Mayascribe
    , contributor
    Comments (10562) | Send Message
     
    Ron Paul: Thank You for coming to Seeking Alpha and submitting your article. My sense of the Seeking Alpha contributors and commenters is that you will have highly interested and loyal following here. Many of us are not happy with the current leadership in Washington.

     

    For Washington to be stating that unemployment rests at approximately 10% is hard core disinformation.

     

    For the American populace to exist and endure the FED being above the law and beyond reproach, beyond any investigative authority, "accountable to no one," seems to me unconstitutional in this democracy.

     

    Where is the, "We the people," in all of this? This is transparency in one big dark room.
    17 Jan 2010, 06:08 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (5189) | Send Message
     
    Mr. Paul - Thank you for your inaugural post. I hope there will be many more here on SA.

     

    You will find, here on SA, that most thinking people will ascribe to your way of thinking where politics and, especially, fiscal policy are concerned. There is always room for another clear voice of reason in an otherwise cluttered world.

     

    BTW, if you have a chance to request other emails that could expose more of what we the people need to know, I think that the emails leading up to and especially during the debate and execution of the TARP funding between Blankfein, Geithner, and Paulson could be very telling.
    17 Jan 2010, 07:29 PM Reply Like
  • Northern Dancer
    , contributor
    Comments (737) | Send Message
     
    Dr. Paul, welcome to SA and thank you for posting your first message here. I'd like to offer you an award for being the most tenacious congressman in history. After all, I'm not sure how many people know how long you have battled for transparency and an audit of the Fed. For those readers who don't realize how long Dr. Paul has been pushing for this long overdue audit, he first proposed it in 1983. And he's never given up in spite of 27 years of ridicule and roadblocks. Congratulations on your success with H.R. 1207. I'm very proud of you sir, and I'm not even an American. I can only imagine how proud of you real Americans are.
    17 Jan 2010, 10:13 PM Reply Like
  • John Petersen
    , contributor
    Comments (30509) | Send Message
     
    Congressman Paul, I'm horrified that a Federal official would urge a citizen to ignore black letter disclosure requirements of the Securities Exchange Act of 1934 and the underlying regulations to avoid embarrassment. The last time I checked these matters were more than mere helpful suggestions. I'm delighted to see that you've chosen Seeking Alpha as a forum to spread the word and hope we see more from you in the future.
    18 Jan 2010, 01:11 AM Reply Like
  • doubleguns
    , contributor
    Comments (8683) | Send Message
     
    Dr. Paul thank-you for joining us here on Seeking Alpha, you are the ONLY congressman that I can honestly say that I admire. I am an advocate for GOOOH and If we are successful you will be removed from office. I believe that would be a shame so I implore you to run for President, Senate or Gov of Texas.

     

    One good man can not salvage Sodom and Gomorrah (Senate and House). Even God gave up on the efforts. We the people must restore our republic and remove the corruption in Washington. We intend to start with the House. I would love to see the 17th amendment repealed.

     

    The tea party's have incited the people and GOOOH has armed them and provided the strategy and tactics to win this battle for our republic, for our country. I sincerely hope that you are not one of the collateral losses in this battle to repair our republic. You have my support in any endeavor you seek for office except for office in the Peoples house. We want the house of representatives to no longer be the "House of ill repute" run by Madam Pelosi!! We want our house back for the people as our founding fathers intended.

     

    Again, I admire your efforts in Washington and would look forward to supporting you in ANY other political endeavor, (Geithners replacement?) but one good man can not go it alone. Unfortunately the peoples only viable option endangers you.

     

    I implore you to seek cover or lead the charge. Speak out on behalf of GOOOH.

     

    I look forward to future articles from you here on Seeking Alpha and I will be one of your most ardent and loyal followers.

     

    Thank-you

     

    Doubleguns
    18 Jan 2010, 07:58 AM Reply Like
  • doubleguns
    , contributor
    Comments (8683) | Send Message
     
    This link is for your review Dr. Paul.

     

    Support the people.

     

    seekingalpha.com/user/...
    18 Jan 2010, 08:13 AM Reply Like
  • tripleblack
    , contributor
    Comments (13589) | Send Message
     
    I agree with the concept that the Fed should suffer oversight from Congress - in fact, for its existance to meet the letter and spirit of the Constitution, it MUST.

     

    Greetings Mr. Paul from a fellow Libertarian. Welcome Home to Seeking Alpha!
    18 Jan 2010, 08:20 AM Reply Like
  • ScroogeMcduck
    , contributor
    Comments (515) | Send Message
     
    Dr. Paul It's a pleasure to have you here on SA.
    I truly hope you plan on running again for President in 2012. I wouldn't feel comfortable voting for anyone else. Help us bring the power back to the people and end this corruption in Washington.

     

    RON PAUL 2012! (Only 1023 days left)
    18 Jan 2010, 09:47 AM Reply Like
  • Advill
    , contributor
    Comments (2281) | Send Message
     
    ...."We have unwisely and unconstitutionally delegated this authority to the Federal Reserve, which has in turn devalued our dollar by 95 percent and counting. When the Federal Reserve engages in harmful policies, Congress is still ultimately responsible"......

     

    With all respect Sir, the process of erosion of Dollar is a fact that has been in effect since Mr. Nixon decided to quit US from Bretton Woods (as a unavoidable consequence of previous decisions).

     

    The erosion of dollar value is a bipartisan process where everybody during 40 years has been happily printing money and running deficits (with a notably exception of final years of Pres. Clinton).

     

    An interesting point could be HOW to reverse this situation and what to do in the future to avoid it.

     

    Best regards and welcome to SA.
    18 Jan 2010, 11:40 AM Reply Like
  • Gareth Hatch
    , contributor
    Comments (145) | Send Message
     
    Perhaps the good folks at Seeking Alpha might make contact with Congressman Paul's office, to verify that this Instablog post was actually created by him, or by someone from within his office with his authorization?
    18 Jan 2010, 01:36 PM Reply Like
  • James Quinn
    , contributor
    Comments (1016) | Send Message
     
    Let's hope the SA editors do not censor Mr. Paul.
    18 Jan 2010, 01:41 PM Reply Like
  • SlingWing9
    , contributor
    Comments (508) | Send Message
     
    "Main Street productivity and the strength of the dollar is the bedrock of the economy. You cannot gut this foundation without eventually toppling everything else. This is what too many policy makers either don’t understand or refuse to face. Or even worse, perhaps they do understand, but don’t care!"

     

    Dr. Paul, we do care. Like most of us here on SA, you are a citizen and a patriot, but within the proberbial "beltway" I believe you are a minority. Never in my nearly 60 years in this country have I ever seen a time when we are more in need of someone with your morals and your ethics. I have read references to you as being one who shares the values of our founding fathers.

     

    Welcome to SA and I look forward to your continued aggressive support of America as it was intended to be.
    18 Jan 2010, 05:27 PM Reply Like
  • Larry Doyle
    , contributor
    Comments (31) | Send Message
     
    Congressman Paul,

     

    I commend you for sharing your insights with the SA Community. America needs real transparency. If somebody from your staff monitors comments, I would very much like to speak to them about amazing failures within the Wall Street self-regulator FINRA. I have looked into FINRA for the last year and the failures to perform as well as the financial chicanery would make your blood boil.

     

    I can be found at my site Sense on Cents. Thanks. LD
    19 Jan 2010, 07:36 PM Reply Like
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