Janet Yellen Is Freaking Out About ‘Audit The Fed’ – Here Are 100 Reasons Why She Should Be
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By Michael Snyder, February 24, 2015
Janet Yellen is very alarmed that some members of Congress want to conduct a comprehensive audit of the Federal Reserve for the first time since it was created. If the Fed is doing everything correctly, why should Yellen be alarmed? What does she have to hide? During testimony before Congress on Tuesday, she made “central bank independence” sound like it was the holy grail. Even though every other government function is debated politically in this country, Yellen insists that what the Federal Reserve does is “too important” to be influenced by the American people. Does any other government agency ever dare to make that claim? But of course the Federal Reserve is not a government agency. It is a private banking cartel that has far more power over our money and our economy than anyone else does. And later on in this article I am going to share with you dozens of reasons why Congress should shut it down.
The immense power wielded by the Federal Reserve is clearly demonstrated whenever Janet Yellen speaks publicly. On Tuesday, her comments about interest rates sent stocks to brand new record highs…
Yellen, in her semi-annual testimony before the Senate banking committee, used a word familiar to investors when she reiterated that the central bank will be “patient” on raising interest rates for the first time since the 2008 financial crisis. Traders took that as a sign that interest rates would remain unchanged until autumn.
The Dow Jones Industrial Average rose 92.35 points (0.5%) to 18,209.19, while the Standard & Poors 500 gained 5.82 points (0.3%) to 2,115.48, both eclipsing Friday’s record closes.
But Yellen was also unusually defensive on Tuesday. The “Audit the Fed” bill that is being sponsored by Rand Paul (among others) has her really freaked out. The following comes from the Hill…
Appearing before the Senate Banking Committee, Yellen was on the defensive, as Republicans questioned how the Fed conducts monetary policy and Democrats put forward ideas for getting tougher on Wall Street.
In the midst of all of it, Yellen generally argued the Fed was designed as an independent entity for a reason — and it would be best not to change it.
“Central bank independence in conducting monetary policy is considered a best practice for central banks around the world,” she said. “Academic studies, I think, establish beyond the shadow of a doubt that independent central banks perform better.”
In fact, she went so far as to mention the “Audit the Fed” bill by name…
A GOP-controlled Congress has given the bill its best chances yet of passage, and that renewed interest led Yellen to deliver her most spirited opposition yet.
“I want to be completely clear,” she said. “I strongly oppose Audit the Fed.”
Yellen argued the audit measure would allow politicians to second-guess the Fed’s decisions, which, in turn, would weaken the central bank. And the ultimate victim of that process, she said, would be the U.S. economy.
So what is she so concerned about?
We are all accountable to someone.
What is so wrong about the Federal Reserve being accountable to Congress?
Why can’t we find out what is really going on inside the Fed?
And of course it isn’t just Yellen that is freaking out. Just consider these comments from Richard Fisher, the president of the Federal Reserve Bank of Dallas…
“It is always politically convenient to make something sound mysterious, if not malevolent, by claiming it is opaque,” Fisher said in a speech to the Economic Club of New York that is part of an effort by Fed officials to fight the legislation.
“My suspicion is that many of those in Congress calling for ‘auditing’ the Fed are really sheep in wolves’ clothing,” he said. “Having proven themselves unable to cobble together with colleagues a working fiscal policy or to construct a regulatory regime that incentivizes rather than discourages investment and job creation — in other words, failed at their own job — they simply find it convenient to create a bogeyman out of an entity that does its job efficiently.”
Obviously this is a very, very touchy subject over at the Fed.
It is quite clear that they do not want the rest of us to be able to see what they are really up to.
And the truth is that if the American people really did know how the Federal Reserve works and what it has been doing behind closed doors, most Americans would want it shut down tomorrow.
At the end of the day, the reality of the matter is that we don’t even need a Federal Reserve. I really like how David Stockman made this point the other day…
At the end of the day, American capitalism does not need recycled political hacks like Jerome H. Powell or clueless school marms like Janet Yellen to thrive. If we need a Fed at all, it is the one designed by Carter Glass 100 years ago. That is, a “bankers bank” that was intended to provide standby liquidity at a penalty spread above the free market interest rate in consideration for good collateral originating from inventory and receivables in the real economy.
Under that arrangement, there would be no monetary central planning or pointless attempts to manage the level of GDP, the number of new jobs, the rate of housing starts, the fluctuations of the CPI or the amplitudes of the business cycle. There would also be no pegging of the money market rate, no helping hand for Wall Street gamblers, no cheap debt to enable profligate politicians to kick-the-can down the road indefinitely.
In short, what the nation really needs is not an “independent” Fed, but one that is shackled to a narrow and market-driven liquidity function. The rest of its current remit is nothing more than the self-serving aggrandizement of the apparatchiks who run it; and who have now managed to turn the nation’s vital money and capital markets into dangerous, unstable casinos, and the nations savers into indentured servants of a bloated and wasteful banking system.
The Federal Reserve has been around for just over a hundred years, and it has done an absolutely abysmal job for the American people.
I want to share with you some facts and figures that I have shared before, but they bear repeating. Please share this list of 100 reasons why the Federal Reserve should be shut down with everyone that you know…