‘Audit the Fed’ gains ground as the left (re) discovers its inner Love of central banking

Guest post by Nick Sorrentino

The American Federal Reserve, as we have noted before, is the world’s Prime Mover of crony capitalism. It is a politburo. It is a central planning committee. It is a tool by which the big banks are backstopped with the wealth of the American people. It should be audited. It should be opened.

This is what the U.S. dollar has done under the Fed:

In fairness it’s not JUST the Fed. Other central banks¹, like NZ’s Reserve Bank, have done their part for other currencies as well.

Fed advocates like Paul Krugman (featured in the attached article, below) fear fundamentally that the citizenry will one day lose confidence in a dollar which is conjured out of nothing. So long as the major media, the big banks, Keynesian economists like himself, and the politicians are all singing from the same song sheet then the game can continue. If however someone was to really get through to the American people, and was to effectively highlight the insanity of the Fed system, well then all bets are off for the crony capitalists. Krugman would have to spend the rest of his life cuddling his cat in disgrace. Which would be just fine.

The anti-audit-the-Fed stuff we’ve seen in recent weeks is coming because the Federal Reserve is scared. All the flak being shot isn’t because the Fed’s friends are actually afraid that an audit would somehow throw the economy off the rails. No, they are afraid of an audit because they’ve bought completely into a dishonest fiat money system and they are afraid that they will have to stand naked before history. That’s what they fear.

Audit the Fed and then end it. Make ‘em stand naked.

(From Forbes)

An empirical review published in 2011 by the Bank of England — not exactly a “fever swamp” — of the performance of the fiduciary currency standard relative to the performance of the Bretton Woods gold-exchange standard and the classical gold standard, found, as then summarized by Forbes.com contributor Charles Kadlec:

• Economic growth is a full percentage point slower, with an average annual increase in real per-capita GDP of only 1.8%

• World inflation of 4.8% a year is 1.5 percentage point higher;

• Downturns for the median countries have more than tripled to 13% of the total period;

• The number of banking crises per year has soared to 2.6 per year, compared to only one every ten years under Bretton Woods;

• The number of currency crises has increased to 3.7 per year from 1.7 per year;

• Current account deficits have nearly tripled to 2.2% of world GDP from only 0.8% of GDP under Bretton Woods.

Click here for the article.

1. Other central banks, like the Bank of England, for example,

From 1989 to now CPI has averaged just 2.8 per cent per year.
    But the amount of money circulating in the UK has been ‘inflated’ at an average annual rate of 11.5 per cent over the same period.
    In 1971 there was £31bn in circulation. Now there is just under £2,100bn (that’s £2.1 trillion). That is a 67-fold inflation (see, I’m using the word correctly and suddenly it makes sense) of the supply of money.
    There are very few families, however, that are 67-times richer. I know mine isn’t.
    That’s largely because wages have not kept up with the 67-fold increase in money supply. They’ve gone from about £2,000 in 1971 to around £25,000 today. So many families now find themselves having to work longer hours, with both spouses in the workplace, taking on larger debts and having fewer children just to maintain an ordinary middle class lifestyle. Their children face unprecedented levels of debt and, in many parts of the country, will never be able to buy a house.

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This post originally appeared at Against Crony Capitalism