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Rep. Frank: House will pass Ron Paul’s ‘audit the Fed’ bill this year

Dav said:
Just a little side note here, but isn't Ron Paul's expertise in vaginas?
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Yes. He has expertise in many areas of study; obstetrics & gynaecology being one of them.

Any more compelling inquires?
 
Ethereal said:
Yes. He has expertise in many areas of study; obstetrics & gynaecology being one of them.

Any more compelling inquires?
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Not really, but I was trying to find out how he has more monetary expertise than the average Congressperson.
 
Dav said:
Not really, but I was trying to find out how he has more monetary expertise than the average Congressperson.
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For starters, he's the ranking Republican on the House Subcommittee on Domestic Monetary Policy and Technology.

[ame=http://en.wikipedia.org/wiki/United_States_House_Financial_Services_Subcommittee_on_Domestic_Monetary_Policy_and_Technology]United States House Financial Services Subcommittee on Domestic Monetary Policy and Technology - Wikipedia, the free encyclopedia[/ame]
 
Dav said:
Alright, I'd LOVE to see proof of that.

An explanation would also be nice.
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Sure. Far from being a stable source of value, gold (like any commodity) is extremely volatile. The gold standard can fix the PRICE of gold, but it can't fix the VALUE of gold. All it does is make the value of a dollar as volatile as the value of gold. This hurts consumer confidence and leads to wild economic swings, including depressions. Furthermore, we would no longer have our best recession-fighting weapon at our disposal: Monetary policy.

For most of American history, we have used the Gold Standard. The fiat system is actually a relatively recent creation...but it's proven effective at preventing depressions. If we define a depression as four consecutive quarters of negative economic growth, with an overall decline of at least 10%, here are all of the depressions in American history:

1784-1785
1797-1800
1807-1814
1837-1843 (deepest depression in US history)
1873-1879 (The Long Depression)
1893-1897
1907-1908 (JP Morgan had to personally bail out the US government because we didn't have the Fed)
1910-1911
1929-1933 (The Great Depression, Part I)
1937-1938 (The Great Depression, Part II)



Important dates:
1913 - Federal Reserve established
1944 - Bretton Woods System established
1971 - Fiat currency system established

We've only had 1 or 2 (depending on how you count) depressions since the Federal Reserve was established...and we haven't had any since we nixed the gold standard.
 
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Ethereal said:
For starters, he's the ranking Republican on the House Subcommittee on Domestic Monetary Policy and Technology.

United States House Financial Services Subcommittee on Domestic Monetary Policy and Technology - Wikipedia, the free encyclopedia
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That sounds like the Deputy Assistant to the Secretary of the Vice-Chairman on the Committee to Establish Grandiose Job Titles.

I've never even heard of this subcommittee before. What makes you think his chairing the committee gives him a lot of experience with monetary policy? I'd be more impressed if he had had some experience with banking.
 
Kandahar said:
That sounds like the Deputy Assistant to the Secretary of the Vice-Chairman on the Committee to Establish Grandiose Job Titles.

I've never even heard of this subcommittee before.
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Nothing of substance. Moving along.

What makes you think his chairing the committee gives him a lot of experience with monetary policy?
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Because it's the House subcommittee on domestic monetary policy.

I'd be more impressed if he had had some experience with banking.
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No one's perfect, I guess.
 
Dav said:
You know, the more I think about it, the more I don't think the gold standard was such a bad idea after all.

I mean, with all this argument over monetary policy, maybe things would just be better if there were no monetary policy....
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No one is talking about returning to the gold standard.
 
Ethereal said:
Nothing of substance. Moving along.



Because it's the House subcommittee on domestic monetary policy.



No one's perfect, I guess.
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My point is that chairing a committee with the word "monetary policy" in the title does not make one an expert on monetary policy. Especially if the committee doesn't actually do much, as I suspect is the case with this one since it's never in the news.
 
Kandahar said:
Sure. Far from being a stable source of value, gold (like any commodity) is extremely volatile. The gold standard can fix the PRICE of gold, but it can't fix the VALUE of gold. All it does is make the value of a dollar as volatile as the value of gold. This hurts consumer confidence and leads to wild economic swings, including depressions. Furthermore, we would no longer have our best recession-fighting weapon at our disposal: Monetary policy.

For most of American history, we have used the Gold Standard. The fiat system is actually a relatively recent creation...but it's proven effective at preventing depressions. If we define a depression as four consecutive quarters of negative economic growth, with an overall decline of at least 10%, here are all of the depressions in American history:

1784-1785
1797-1800
1807-1814
1837-1843 (deepest depression in US history)
1873-1879 (The Long Depression)
1893-1897
1907-1908 (JP Morgan had to personally bail out the US government because we didn't have the Fed)
1910-1911
1929-1933 (The Great Depression, Part I)
1937-1938 (The Great Depression, Part II)



Important dates:
1913 - Federal Reserve established
1944 - Bretton Woods System established
1971 - Fiat currency system established

We've only had 1 or 2 (depending on how you count) depressions since the Federal Reserve was established...and we haven't had any since we nixed the gold standard.
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A fine post showing historical evidence that Ron Paul (who I admire and agree with at least partially on many other issues) is dead wrong in his desire to abolish the Fed and return to the gold standard.
 
Psychoclown said:
A fine post showing historical evidence that Ron Paul (who I admire and agree with at least partially on many other issues) is dead wrong in his desire to abolish the Fed and return to the gold standard.
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Ron Paul does not advocate a complete return to the gold standard. He simply wishes to legitimize gold and silver as legal tender.

I would also add that Kandahar’s post is nothing more than correlation posing as causation.
 
Kandahar said:
My point is that chairing a committee with the word "monetary policy" in the title does not make one an expert on monetary policy.
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It does when the highest legislative body in the land created it for the specific task of analyzing monetary policy.

Especially if the committee doesn't actually do much...
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The jurisdiction of the Subcommittee on Domestic Monetary Policy and Technology includes-

(i) financial aid to all sectors and elements within the economy; (ii) economic growth and stabilization; (iii) defense production matters as contained in the Defense Production Act of 1950, as amended; (iv) domestic monetary policy, and agencies which directly or indirectly affect domestic monetary policy, including the effect of such policy and other financial actions on interest rates, the allocation of credit, and the structure and functioning of domestic financial institutions; (v) coins, coinage, currency, and medals, including commemorative coins and medals, proof and mint sets and other special coins, the Coinage Act of 1965, gold and silver, including the coinage thereof (but not the par value of gold), gold medals, counterfeiting, currency denominations and design, the distribution of coins, and the operations of the Bureau of the Mint and the Bureau of Engraving and Printing; and (vi) development of new or alternative forms of currency.

Financial Services Committee - Subcommittees
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---

...as I suspect is the case with this one since it's never in the news.
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Domestic monetary policy isn't exactly good for ratings. Even on a political debate forum the issue doesn't get much attention. I think you’re really reaching here.
 
Ethereal said:
Ron Paul does not advocate a complete return to the gold standard. He simply wishes to legitimize gold and silver as legal tender.

I would also add that Kandahar’s post is nothing more than correlation posing as causation.
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The correlation seems strong enough that it's worth noting. I'm not saying there can never be another depression...but the frequency of them dropped off dramatically, almost immediately following the establishment of the Fed. We were averaging about one every 15 years prior to that...and since then, we've only had 1 or 2 (depending on how you count the Great Depression) in the last century.

This seems especially plausible since several of those depressions (e.g. 1907-1908) are directly related to the lack of a central bank.
 
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Ethereal said:
Ron Paul does not advocate a complete return to the gold standard. He simply wishes to legitimize gold and silver as legal tender.

I would also add that Kandahar’s post is nothing more than correlation posing as causation.
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I decided to fact check that. I gave up before I could find out for sure, though his writings suggest strongly he prefers a return to a gold standard. However, from my readings, I do have to say that Paul has got to be the most dangerously insane person in Washington.
 
Kandahar said:
The correlation seems strong enough that it's worth noting.
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That's fine. I think some leeway should be inherent to any macroeconomic dialogue, since the amount of variables are virtually infinite, BUT I would be more swayed by a specific analysis of each down turn and how the gold standard or a lack of a central bank contributed.

Not that I support either:

a. Abolishing the Fed or
b. Returning to the gold standard.

But we need to understand why these down turns happened before we can attribute it to either of those things.
 
Redress said:
I decided to fact check that. I gave up before I could find out for sure, though his writings suggest strongly he prefers a return to a gold standard.
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[ame="http://www.youtube.com/watch?v=RKQmYfY3R7c"]YouTube - Ron Paul in New Hampshire[/ame]

However, from my readings, I do have to say that Paul has got to be the most dangerously insane person in Washington.
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Then I guess I'm insane, too.
 
Ethereal said:
That's fine. I think some leeway should be inherent to any macroeconomic dialogue, since the amount of variables are virtually infinite, BUT I would be more swayed by a specific analysis of each down turn and how the gold standard or a lack of a central bank contributed.

Not that I support either:

a. Abolishing the Fed or
b. Returning to the gold standard.

But we need to understand why these down turns happened before we can attribute it to either of those things.
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True that it is correlation and not causation, but the correlation is very strong. Especially when you consider that many economists believe the Fed made mistakes that helped worsen the Great Depression rather than dampen it. Since the Fed has learned from those mistakes, we've not had a single economic depression.

Yes there are a lot of factors at play in the history of the US economy, but that correlation is strong enough to warrant at least second thoughts on abolishing the Fed.
 
Psychoclown said:
True that it is correlation and not causation, but the correlation is very strong. Especially when you consider that many economists believe the Fed made mistakes that helped worsen the Great Depression rather than dampen it. Since the Fed has learned from those mistakes, we've not had a single economic depression.

Yes there are a lot of factors at play in the history of the US economy, but that correlation is strong enough to warrant at least second thoughts on abolishing the Fed.
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The process of abolishing the fed would be a much more involved process then simply changing the locks at their head office.

The only problem with the fed was creating the fed in the first place.
 
Psychoclown said:
True that it is correlation and not causation, but the correlation is very strong. Especially when you consider that many economists believe the Fed made mistakes that helped worsen the Great Depression rather than dampen it. Since the Fed has learned from those mistakes, we've not had a single economic depression.

Yes there are a lot of factors at play in the history of the US economy, but that correlation is strong enough to warrant at least second thoughts on abolishing the Fed.
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Each recession or depression has a character of its own. In 1929, the stock market crashed because, during the 10 previous years, stocks were being sold on margin, that is, you pay 10% of its value to own it. Thus stocks were grossly overvalued, and the adjustment to that bubble had to happen sooner or later.

In the crash of 2007, the dismantling of the Glass-Steagal act was one of the major factors, along with the real estate bubble. Note that, in 1929, being on a gold standard had very little to do with the crash. The Great Depression had everything to do with mismanagement and greed. The crash of 2007 also had everything to do with mismanagement and greed.
 
I understand the importance of maintaining the independence of the fed, but I don't understand why auditing the fed compromises it's independence.

I know there was talk of audits including reviews of monetary policy decision-making, but I didn't see any of that in the linked article. Unless I skimmed too fast ... ?
 
jackalope said:
I understand the importance of maintaining the independence of the fed, but I don't understand why auditing the fed compromises it's independence.
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Because any "audit" will invariably be accompanied by shrieks from congressmen who have no idea what they're talking about, calling for Bernanke to do this or that, or to resign immediately. Even if those congressmen don't get their way, it would discourage necessary but politically unpopular decisions in the future.
 
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danarhea said:
Each recession or depression has a character of its own. In 1929, the stock market crashed because, during the 10 previous years, stocks were being sold on margin, that is, you pay 10% of its value to own it. Thus stocks were grossly overvalued, and the adjustment to that bubble had to happen sooner or later.

In the crash of 2007, the dismantling of the Glass-Steagal act was one of the major factors, along with the real estate bubble. Note that, in 1929, being on a gold standard had very little to do with the crash. The Great Depression had everything to do with mismanagement and greed. The crash of 2007 also had everything to do with mismanagement and greed.
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Add to that, look at what happens during depressions.

In the good times you see all sorts of new companies being created, then they grow... then during the contraction of the economy, those with the most money can buy these companies and new developments (as well as competing banks, and other ressources) and so there is a conglomeration in the economy. So the contraction migh affect the majority of people, there are always those with the most money get a sale... profiting on those that are hurt most by the depression.

It's DOCUMENTED... not only is it documented, the who and the how is also documented as causing the great depression through their actions. The purpose was to create a 'wholesale' on stocks... so, if a small handfull of banks were able to generate the great depression for greater controls over the economy... and that the heads of these banks also are able to hold office in the federal reserve, how could you NOT see this new attack on the economy, which is being kept 'secret' within the filings of the federal reserve which likes to promote this idea that audit = takeover and detrimental to the economy... this is tantamount to terrorism.
 
Kandahar said:
Because any "audit" will invariably be accompanied by shrieks from congressmen who have no idea what they're talking about, calling for Bernanke to do this or that, or to resign immediately. Even if those congressmen don't get their way, it would discourage necessary but politically unpopular decisions in the future.
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Well, there is that. LOL

But in all seriousness, transparency and someone checking the books seems like a good idea. Compromising the independence would damage our credit rating tho.
 
Ethereal said:
That's fine. I think some leeway should be inherent to any macroeconomic dialogue, since the amount of variables are virtually infinite, BUT I would be more swayed by a specific analysis of each down turn and how the gold standard or a lack of a central bank contributed.

Not that I support either:

a. Abolishing the Fed or
b. Returning to the gold standard.

But we need to understand why these down turns happened before we can attribute it to either of those things.
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"Alan Greenspan has testified before Congress that “a central bank properly functioning will endeavor to, in many cases, replicate what a gold standard would itself generate."

http://www.cato.org/pubs/bp/bp100.pdf

Just funny to me. :lol:
 
jackalope said:
Well, there is that. LOL

But in all seriousness, transparency and someone checking the books seems like a good idea. Compromising the independence would damage our credit rating tho.
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You know WHY it would damage our credit??

Because it would expose just how messed up the system is that the world would see the level of corruption spelled out and would lose credit since the F.R.A.U.D (Federal Reserve Accounting Unit Dollar) would be exposed for what it is... pieces of paper backed by nothing.
 
BmanMcfly said:
You know WHY it would damage our credit??

Because it would expose just how messed up the system is that the world would see the level of corruption spelled out and would lose credit since the F.R.A.U.D (Federal Reserve Accounting Unit Dollar) would be exposed for what it is... pieces of paper backed by nothing.
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Uhh you think the fact that we have a fiat monetary system (i.e. pieces of paper backed by nothing) needs to be "exposed"? Do you think there is any serious investor in the world that doesn't already know that?
 
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