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Published: Monday, Sept. 17 2012 12:00 a.m. MDT

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Roland Kayser
Cottonwood Heights, UT

You are correct Richard, you're no economist.

Twin Lights
Louisville, KY

Should there be an audit of the Fed? Sure. As long as it can be done apolitically. Set up a fully independent board to conduct the audit. No problem.

As to exposing the Fed for what it is? What it is is a central bank. No secret there.

pragmatistferlife
salt lake city, utah

Right on Roland..two things Richard, one you apprently don't know that money is simply an agreement, it's not something that exsist on it's own..even if the agreement says I can't have anymore money than gold I posess. Secondly even Physics/logic isn't on your side..it may actually be possible to create something out of nothing. Logically if you think God created the world, who created God, who created that God etc. etc. at some point you have to just give up on logic or think something was created out of nothing. What was before the big bang?

As an after tought..if you think the economy is bad now try and have modernity without fiat money/credit.

The Real Maverick
Orem, UT

So what is the Fed? Expose it? Ummm ok.

I find it hilarious that the GOP is blasting Obama for "not doing enough" to help the economy... And then they get upset when steps are taken by the Fed/Gov/Obama to aid the economy. So which is it?

Do you want outside sources to help the free market or not? Because from what I see, the GOP is trying to have it both ways. They complain that the government isn't helping then they complain that the government is being too involved.

I have a better idea Richard, lets audit the GOP and expose it for what it really is. A political party without any solutions, ideas, or substance. They merely repeat, "tax cuts for the rich, freedom, free market" without any plans or real application.

GOP=party without any substance.

David King
Layton, UT

Great letter, Richard Nielsen. While some may try to ignore your proposal for an audit of the Federal Reserve with glib one-liners and obfuscations about our inability to know where God comes from, the wisdom of a fed audit is seen by many. That's why an audit of the Fed has already passed the House with bi-partisan support (how much legislation can you say that about these days?). That's why politicians ranging from progressive champion Dennis Kucinich, to Majority Leader Harry Reid, to Tea Party favorite Jim Demint, to libertarian Republicans like Ron Paul, have all spoken in favor of a thorough audit of the Fed's activities. A vote for an audit of the Fed is a vote for a more transparent, open government. Why oppose such a thing? Anyone have actual reasons to be against a Fed audit? Hopefully something more substantive than snarky remarks directed at Mr. Nielsen himself.

KDave
Moab, UT

Lets see the results of the Feds announcement. Wall St surged, making more millionars. The big banks get the 40 to 70 billion a month for who knows how long. The middle class gets a cut in pay (devalued dollar) while getting to pay more for gas and groceries. 4 more years?

Henderson
Orem, UT

So when will rich people start hiring normal Americans?

I keep hearing about record profits for Wall Street and big banks. They seem to be doing just fine. I mean, heck, Romney made 20+ million without even working!

So when will these folks start hiring us?

When will tickle down economics finally work? HAVE THEY EVER WORKED???

Fitness Freak
Salt Lake City, UT

If the Federal reserve system ever is audited I suspect the citizenry would DEMAND that it be abolished. They prefer you don't see behind the curtain.

Think of it this way: how would you like to be able to borrow money at one quarter of one percent, then re-lend it at 3.45% or more? Thats exactly what banks do with money from the fed. The nations' banks/bankers have ONE SWEET DEAL! Oh - and if the people decide not to pay you back that you lended to; you can always write that amount off against your "winnings".

The federal reserve was originally established to be a "bank of last resort" to the nations bankers and to momentarily stabilize currency if there is ever a "run on banks". Its' now way beyond its original purpose. It even lends directly to corporations (if they're big enough), how is that "fair" in the marketplace of money?

a bit of reality
Shawnee Mission, KS

For those who think that creating money causes inflation, shouldn't there have been a ton of inflation over the last four years from QE1, QE2, and the other Fed interventions and policies of the last four years?

I would suggest that if your economic theory fails to predict what happens, you change theories.

SEY
Sandy, UT

@a bit of reality: there are 2 kinds of inflation: 1) inflation of the money supply and 2) price inflation. There has been enormous inflation of the money supply, and there can be no disputation of that fact. That will eventually manifest itself in price inflation, but there is always a indeterminate lag time. However, if you'll take a peek at Shadow Government Statistics' website, you can see that price inflation is not nearly what government agencies report it to be. Based on pre-1990 methodology, our current price inflation is close to 4.5% instead of the less that 2% reported. Based on 1980 methods, price inflation is closer to 8%. Why the discrepancy? Because government hates to look bad, so they change their methods.

Your statement applies to what the government does, but with one correction: if your economic methodology fails to hide what actually happens, you change methodology.

SEY
Sandy, UT

Why audit the Fed? Because there's every reason to believe that several important things they say about themselves is not true. For instance, how much gold does the Fed actually own? One author put it this way:

"There is a possibility that the FED has transferred ownership of this gold, through swaps, to European central banks, which have in turn leased – sold – their gold to private buyers. It is not enough to determine that the physical gold is in the two vaults. It is also mandatory to determine whether the FED has indirectly sold the government's gold, which it has held in trust for the government since 1933."

Secondly, we (non-banksters) should be informed of any transfers made by the Fed to domestic or foreign banks during the bail-outs. It's clear that the alleged "transparency" described by Messrs. Bernanke and Paulson were anything but. Just how much went to whom? Do we really know? How much are we taxpayers on the hook for without being told? And why does the Fed have to right to make us liable for such expenses without our consent or knowledge?

wrz
Salt Lake City, UT

"Audit the Fed"

Why? You've already pointed out most of what an audit would disclose.

Eric Samuelsen
Provo, UT

Do you seriously think the Fed is never audited? it's extensively audited every year. Results of that audit are published in the Board of Governors annual report. The GAO has oversight. The Ron Paul audit bill passed both houses because it's meaningless. A sop to an nice old guy.

Wally West
SLC, UT

re: Fitness Freak

"If the Federal reserve system ever is audited I suspect the citizenry would DEMAND that it be abolished. They prefer you don't see behind the curtain."

You mean like the South Park episode titled Margaritaville???

Ultra Bob
Cottonwood Heights, UT

Seems like every day I create some new money and send it into our economic system. I use a plastic device called a credit card.

When that new money is deposited into a bank, depending on the discount rate, the bank is enabled to create new money and lend it out to their customers. I don’t have any idea about how the big money operation works but I too think that several opinions are better than one when dealing with money.

I would like to see audits of all the city, county and state organization receiving taxpayer money. Not that I would fully understand the audit, but I would like to know if we really need them. I think that UTOPIA might be just the tip of the iceberg.

Hank Pym
SLC, UT

@ pragmatistferlife

"Secondly even Physics/logic isn't on your side..it may actually be possible to create something out of nothing."

Wrong. Law of conservation of Matter & Law of Conservation of Energy.

wrz
Salt Lake City, UT

@Henderson:

"They seem to be doing just fine. I mean, heck, Romney made 20+ million without even working! So when will these folks start hiring us?"

Go to Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel. Look around. You'll see people working.

"When will tickle down economics finally work?"

Works far better than Obama's trickle-up economics.

@Fitness Freak:

"Think of it this way: how would you like to be able to borrow money at one quarter of one percent, then re-lend it at 3.45% or more? Thats exactly what banks do with money from the fed."

The Fed requires deposits from member (commercial) banks. Yes, the Fed pays interest on those deposits. It does not lend the money out unless there is a financial crisis... which there was... and which they did. Under normal circumstances the Fed does not loan money out... And it holds no gold. Why would it need gold?

wrz
Salt Lake City, UT

@Eric Samuelsen:

"Do you seriously think the Fed is never audited?"

Not by an independent audit organization, such as a CPA firm or GAO.

"...it's extensively audited every year. Results of that audit are published in the Board of Governors annual report."

That's likely an internal audit organization and report. Won't contain anything that management may not want known.

"The GAO has oversight."

Not so... unless the Congress says so. And so far it hasn't. GAO is an audit arm of the US Congress and audits the Executive Branch of government.

How would I know? Take a guess.

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