The failure of the Federal Reserve

The Federal Reserve System is a failure. In the last round of bailouts, all they could do was inflate the money supply to unprecedented levels, in order to stave off a financial tsunami. The problem is that the financial tsunami was created by inflating the money supply in the first place. That's like putting out a fire by throwing gasoline on it.

The Fed averted a collapse this time, but all they really accomplished was to postpone the day of financial reckoning. Perhaps when the next bubble bursts, no amount of created funny money will save us. This time it took around 3 trillion dollars. What will it take next time?

You can't disregard economic law in perpetuity without someday paying a penalty. What economic law is the Fed ignoring? The law that says that when you spend more money than you take in, you go bankrupt. The Fed has been postponing that day of reckoning through the Bretton Woods agreement, which placed the dollar as the de facto international currency since WWII. But that can't go on forever when you keep debauching the currency.

That's why we need to audit the Fed, so as to keep them in line. HR 1207 and S 604, the bills that will audit the Fed, will do that. And for the first time, the Fed is sweating bullets. They are really afraid at what an honest audit might reveal. Good. Let's put on the heat more and more until they crack.

Our country faces a financial disaster and I personally think it can't be avoided, but know this-the blame cannot be put on President Obama, nor on former President Bush, nor any other politician. It is totally the Fed's fault. Since the Fed has kept their decisions out of the hands of the politicians all these years, they cannot now blame anyone else for the financial mess we're in, nor for what is coming.

Come on, Representative Jim Matheson, get with it and sign on as a cosponsor of HR 1207. Show the people of Utah that you really are a Blue Dog (i.e., financially conservative) Democrat.

There's a Latin saying that is applicable here: Quis custodiet ipsos custodies? Or: Who keeps the keepers? Good question. Who keeps the Fed? They say that they want to keep monetary decisions out of the hands of the politicians, but at least the politicians are answerable to the people. Who will make sure that the Fed won't give in to old fashioned greed and use their power to line their own pockets? Remember, we're talking about trillions of dollars here. That's a BIG temptation.