“Shock and awe” is how the Pentagon described the opening stages of the 2003 U.S. invasion of Iraq: overwhelming force designed to demoralize the enemy into surrendering. Having witnessed how spectacularly that war turned out, the Obama administration decided to employ the same tactic, in a metaphorical sense, to the European debt crisis.
Just before noon on Tuesday, May 11, the U.S. Senate agreed to a one-time audit of the Federal Reserve's emergency actions taken in response to the 2008 financial crisis. The approved audit, which Senator Bernie Sanders (I-Vt.) offered in an amendment to the larger financial regulatory reform legislation, is a much watered-down version of the earlier audit proposed by Sanders that mirrored the "Audit the Fed" legislation in the House sponsored by Rep. Ron Paul (R-Texas).
With a congressional battle brewing over what is being touted as the biggest attempt at financial regulatory reform since the Great Depression, most pundits are predicting that, despite token Republican opposition, some version of the bill that originated with Senator Chris Dodd’s Finance Committee will soon pass. Senate Republicans blocked the first attempt to bring the matter to a vote on April 19, but Democrats and the Obama administration vowed to continue to press wavering Republicans to support the bill.
The timing of the sellout by Senator Bernie Sanders (I-Vt.) last Thursday, May 6, on legislation to audit the Federal Reserve could not have been more auspicious — or more suspicious. After pledging for months that he was going to offer an amendment in the Senate identical to "Audit the Fed" legislation in the House (H.R. 1207) authored by Congressman Ron Paul (R-Texas), Sanders caved in to pressures from the Obama administration and the Federal Reserve.
Senate Democrats beat back a Republican alternative amendment to Connecticut Democrat Christopher Dodd's Restoring American Financial Stability Act of 2010 (S. 3217) and will soon consider an amendment to audit the Federal Reserve Bank authored by Louisiana Republican David Vitter. The GOP substitute amendment failed in a 38-61 vote May 6.
Congressman Ron Paul (R-Texas) and Senator Bernie Sanders (I-Vt.) had long worked together on their campaign for a full audit of the Federal Reserve, which emerged last year as H.R. 1207 and S. 604. Dr. Paul's House version of the Audit the Fed bill had 319 cosponsors; Sanders’ Senate version, 32 cosponsors. Despite these bills’ massive popularity with a public grown increasingly suspicious of central banking, efforts to audit our central bank, the Federal Reserve, have been effectively thwarted for the time being.
The banking cartel’s manipulation of supposedly “free” markets is coming under increasing fire as a broad coalition of activists, legislators, and non-profit groups target the Federal Reserve System with lawsuits, investigations, criminal complaints, and federal transparency legislation. Now whistleblowers, and even some government officials, are also taking aim at “irregularities” in the precious-metals market being orchestrated by the banking cartel and its government allies.
The Competitive Enterprise Institute filed a complaint with the Federal Trade Commission on May 4, saying that General Motors is misleadingly claiming in a TV advertisement that it has already paid back its government loan in full.
Quick: What’s a “derivative”? The difference between a “custodial account” and a “trust”? “Listed” versus “unlisted” markets? “Debentures”? How about “price earning ratios”? “Assets” per se, versus “net asset value”? “Capitalism” versus “capitalization”? Stumped? Well, don’t feel badly. Most of your friends and neighbors are stumped, too, unless they majored in economics and are pursuing finance as a career.