In 2009, Ron Paul, a Texas Congressman, released a book entitled End the Fed. In the book, Congressman Paul uses American history and economics to claim that the Fed is a corrupt, manipulative, and dictatorial institution that threatens to put the U.S. in an inflationary recessionary environment.
Since many believe the Federal Reserve has been printing money "out of thin air" to jumpstart the economy, Paul's exaggerated claims can't be shrugged off easily. Just to give you an idea on how large the Fed's balance sheet has become, let's take a look at a recent report released just this Thursday. The report showed that the Fed's balance sheet expanded to 2.364 trillion USD, up from 125 billion USD from the previous week. Ay caramba!
As controversial as Paul's claim sounds, it looks like the movement is starting to gain momentum. A recent poll conducted by Bloomberg reveals that Ron Paul isn't the only one who thinks that the Fed is too wild. Forrealz yo!
The survey showed that most Americans don't feel that the Federal Reserve deserves its independence from political scrutiny anymore. Thirty-nine percent of them say that the Congress should have more power over it so it would become more accountable to the taxpaying-average Joes. Heck, sixteen percent even said that that the Fed must be abolished entirely!
Uh oh... It looks like Ben Bernanke has a lot more to worry about other than the economy because... Are you ready for this?
Ron Paul has just been appointed as the leader of the committee responsible for overseeing the Fed!
Talk about a wild turn of events! House Financial Services Chairman Spencer Bachus said that he entrusted Paul with the position because if there's anyone who can get the Fed's act together, it's Ron Paul.
But will the policymakers muster enough political muscle to actually end the Fed? I highly doubt it. For one, the American economy still needs a firm central bank in the middle of a financial crisis. The Fed needs to retain its politics-free (ideally, at least) authority so it can continue to make big decisions and promote price stability and economic growth.
Also, I have a feeling that all these hoopla over the Fed's independence is just another racket by the media and a few unpopular politicians. While the "End of Fed" is a catchy trending topic, it would be challenging for the average Joe to understand the issue beyond the details that the media is providing.
For instance, media presents rising prices only in a bad light, but in reality, inflation can actually be a sign that the economy is expanding!
For all we know, the "End the Fed" movement might just be another way to divert the public's attention from other issues like the concerns over the "Don't ask, don't tell" policy, or even Lebron James' next games. Hah!
The last reason why I don't think the Fed will end is that it's simply too hard on the American economy to add this issue to its truckload of problems. It's already dealing with gloomy employment and housing numbers, as well as Obama's possible tax cut extensions, and the Fed's quantitative easing program!
In any case, I'm sure that the "End the Fed" movement will be examined from every angle. It's just a far too radical to be implemented. But in the event that the lawmakers approve the plan... then the Greenback could plunge in the charts like there's no tomorrow!