Friday, October 25, 2013

Rand Paul Grandstanding

So word is out, Rand Paul may attempt to hold up the nomination process for Janet Yellen, until a vote is allowed on his "Audit the Fed" bill (S.202 -- Federal Reserve Transparency Act of 2011).

I have often thought that Ron Paul's "Audit the Fed" proposal was one of his weakest. I much prefer his "End the Fed" campaign. Back in May 2009, I wrote:

I Smell A Trap

Ron Paul's House bill calling for an audit of the Fed is getting support from the strangest places.

Lew Rockwell today links to a column by Dean Baker who now supports an audit of the Fed.

The problem with Baker's column is that he doesn't quote Ron Paul. He doesn't even mention that Paul introduced the bill. He does, however, mention Elizabeth Warren, who heads a congressional oversight panel, dealing with bailout money.

I've discussed Warren before, her oversight committee went so out of bounds that two members of the five member panel dissented. She is a big time Obama operative. You don't want columnists using Warren as a signal flag to support Paul's bill.


This what Baker would like to see come from an audit:

The proposal for a GAO audit of the Fed is a first step towards reasserting democratic control over this institution...In a democracy, it is difficult to justify a situation in which the most important economic policy making body is, by design, more answerable to the banking industry than democratically elected officials.
I hope Congressman Paul knows what he is doing, to me it sounds like this may evolve into a power play over who controls Fed money rather than an investigation into whether the Fed should be printing money in the first place. If Democrats start signing on to the bill in heavier numbers, it may be a sign that an audit may come, but it will end with a restructured Fed controlled by left wing radicals, who believe money is for handing out and who have no fear of inflation.

It should be noted that Rand Paul's audit of the Fed is not a call for an audit by a major accounting  firm for an audit conducted under GAAP rules, or anything close to GAAP rules, but an "audit" by the  Comptroller General to the Congress. This is like having Bernie Madoff's brother audit his brother's accounts. Who knows what crazy and wild directions such an "audit" would go? I'll tell you where it won't go. It won't look into the detail of the gold holdings listed as part of Fed release H.4.1 The H.4.1 section 1, fraudulently lists "Gold stock" as $11,041 million (The gold stock is valued monthly at $42.2222 per fine troy ounce.), but the Fed owns no gold. As later stated in section 8 of H.4.1, the Fed holds "gold certificates," not gold.

The gold certificates, although not identified in the statements, appear to come from the Treasury, since the Treasury also reports holding $11,041 million in gold. But note well: A Treasury footnote to its gold holdings states that the gold holdings include, "gold deposits and, if appropriate, gold swapped." In other words, the gold held by the Treasury may have been swapped out, which means the Treasury doesn't have physical possession of some, or all, of its gold, which further means that the gold certificates held by the Fed may not represent actual gold held by the Treasury on behalf of the Fed.

If Rand was serious about an audit, or have a clue as to what should be audited, he would demand and audit of these gold certificates held by the Fed and issued by the Treasury, to determine if there really is any gold behind the certificates, or if they have been swapped out and to whom. This means the heart of the audit should be at Treasury and focused on Treasury's gold accounts and gold swap activity.

At this point, there is nothing here but typical Rand grandstanding, that just never quite gets to the core of an issue. A Comptroller General audit of the Fed may go in all kinds of crazy ways, including an audit to see if enough Fed printing is going to politically correct groups.And imagine the brouhaha if politically correect aren't getting "their fair share."

Audit the Treasury gold accounts!


  1. I wish this website would spend less time bashing Rand Paul for daring to be anything other than a doctrinaire libertarian and more time doing something constructive like criticizing the people who actually run the Republican party. Ron Paul isn't the second coming of Christ and Rand isn't the devil incarnate. Just get over it please.

    1. Ohh yeah because Rand 'poll-testing' Paul is so daring. Doesn't seem like EPJ is criticizing all of Rand Paul's views, just all his ambiguity and political posturing. It emphasizes how special his father was.

    2. So which is it for Rand: Is he just poorly informed and likes it that way or does he expect nothing more from such a statement than just a sound bite?

      Personally I think both points detail his motivation. He doesn't understand the important targets of the FED underbelly and he is just kicking up a little media dust so to be noticed.

      Trying to reclaim some Tea Party love lost to Ted Cruz during the defund the Obamascare brouhaha.

    3. "I wish this website would spend less time bashing Rand Paul for daring to be anything other than a doctrinaire libertarian and more time doing something constructive like criticizing the people who actually run the Republican party."

      Criticizing Rand Paul (not bashing) *is* constructive, if only because it clearly shows how many people still don't get it. If there was no criticism of Rand, even less people would get it.
      Funny how it is "bashing" Rand but "criticizing" the people that lead the GOP.

      "Ron Paul isn't the second coming of Christ and Rand isn't the devil incarnate."

      No, they aren't. And criticizing Rand Paul is still constructive.
      BTW: Wenzel has justly criticized Ron Paul for endorsing Cuccinelli. So he's not treated as the second coming of Christ.

  2. Even this mild bill is unlikely to pass but you expect Rand to bring a bill that shuts the fed and congress pass it ? Stupid article

    1. Even this mild bill is unlikely to pass, but when Rand becomes president, everything will change! I hope.

    2. Apparently you defend a guy who would only bring bills that he can get a majority for, therefor won't mean jack s**t other than "hey look at how tough i seem while not actually being tough" posturing for votes.
      Yeah, that certainly would warrant defending.

  3. Rand Paul is epic, he has my vote for 2016

  4. Got to love political wordsmiths. "Gold Swapped," I swapped my gold for your gold. No worries! "Democratic Control," where 51% (of our publicly schooled population) get to tell the other 49% what's for dinner. I look forward to an epic endorsement of the GOP nominee.