On March 15, Congressman Ron Paul (R-Texas) introduced and sponsored bill H.R. 1094 — the Federal Reserve Board Abolition Act, which calls for the complete abolition of the Federal Reserve System and the Federal Reserve banks, and for the repeal of the Federal Reserve Act of 1913. Later that same day House Resolution 1094 was referred to the House Committee on Financial Services. On April 4 it was referred to the Subcommittee on Domestic Monetary Policy and Technology, chaired by Ron Paul, where it is currently pending and awaiting further action.
Upon introducing H.R. 1094, Rep. Paul offered the following remarks in support of his bill to abolish the Federal Reserve. Paul stated:
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. [emphasis added]
As the Federal Reserve disseminates more information about its secret dealings abroad, giving loans to foreign banks, bailing out industries, printing endless supplies of paper money – causing inflation and thus high prices for consumer goods, and the artificial depreciation of interest rates (i.e. zero percent federal funds rate), it is clear that the Federal Reserve does more harm than good and that its policies of lowering the federal funds rate in the fall of 2001 was the catalyst for the unsustainable housing bubble that collapsed in late 2007/2008.
History has proven that fiat currency does not work and that such Keynesian schemes, as those practiced by the Fed, only precipitate the very recessions/depressions it claims to oppose, which the Fed then responds to by enacting further measures that only serve to prolong the assured economic calamity.
Article I, Section 8 of the U.S. Constitution gives Congress, and Congress alone, the sole power to determine monetary weights and measurements for the coinage of money and the power to coin gold and silver as the nation’s legal tender. Nowhere is Congress authorized to establish a national or central bank and cede away its Constitutional powers that protect the integrity of sound money and free markets. This wisdom was understood and practiced by Thomas Jefferson, Andrew Jackson and Grover Cleveland. Now, H.R. 1094 lives up to that very same wisdom by calling for the abolition of the Federal Reserve System in its entirety and thus repealing the Federal Reserve Act of 1913.
As pointed out in G. Edward Griffin's classic exposé, The Creature from Jekyll Island, the Federal Reserve System was created, in order to protect the power of the banking cartel and expand its wealth. Since the Fed extends credit to the U.S. government, it profits handsomely from the ever-increasing national debt. As a result, there is every incentive for the Fed to support profligate federal spending.
A series of tsunami-like waves of fiscal and monetary stimulus are being generated by politicians and bureaucrats in Washington who would have naïve Americans believe that such a policy is intended to shorten (with no ulterior motive) the recession by stimulating consumer spending, which makes up around 70% of U.S. economic activity. It does not really matter whether the stimulus comes through tax rebates, increased government spending, or lower interest rates, because the end result is inflation of the money supply by the Federal Reserve System.
The inflationary policies of the federal government and the central bank (Fed) are largely responsible for bringing the world to the brink of financial collapse. A key reason is that the unlimited availability of money created out of thin air distorts the perceptions of economic strength of a nation and the solvency of its government, which leads to the misdirection of investment in ways that would not be justified or tolerated in the absence of monetary inflation. Creating more money (the Keynesian means for economic stimulus and controlling the masses) exacerbates the problem and perpetuates misdirected investment. And yet, that is precisely what is being supported by many, if not most, members of Congress and appointed bureaucrats, and the view most promulgated by the politically correct, elitist controlled media.
A policy of tax cuts, increased government spending, and lower interest rates was implemented during 2001 in response to the economic downturn that began with the bursting of a stock market bubble the year before. However, those stimulus measures only postponed a recession and in turn created the real estate market bubble that has now burst. Allowing the Fed to create more money out of thin air delays the day of reckoning, but ensures that the traumatic consequences will be compounded when such fiscal stimulus fails to work.
Ironically, former Fed Chairman Alan Greenspan once called the idea that the Fed could prevent recessions a "puzzling" notion. As for inflation, Greenspan is on the record as follows:
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value [without gold].... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. ("Gold and Economic Freedom," Alan Greenspan, 1966)
Please support the restoration of financial stability to America's economy through the abolishment of the Federal Reserve System.
Contact your U.S. Representative and ask him or her to cosponsor and support the passage of H.R. 1094 to "End the Fed" in the 112th Congress.