[Congressional Record (Bound Edition), Volume 156 (2010), Part 6]
[House]
[Pages 7812-7813]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             AUDIT THE FED

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Texas (Mr. Paul) is recognized for 5 minutes.
  Mr. PAUL. Madam Speaker, I rise to call attention to my colleagues of 
a vote that occurred in the other body today. Senator Vitter from 
Louisiana offered an amendment to the financial reform package in the 
Senate that was essentially--it was exactly the same as H.R. 1207, 
which is Audit the Fed bill. There was a vote on this, and 
unfortunately there were only 37 Senators that voted in favor of this 
Audit the Fed bill. This is rather sad because it is already in the 
House version of the financial reform bill, and in the House we have 
319 cosponsors of this bill. So it is a very well-accepted bill by a 
broad spectrum of both Republicans and Democrats.
  But the reason why this is so disturbing is because of the current 
events going on in the financial markets. Right now we are involved 
with bailing out Europe and especially bailing out Greece, and we are 
doing this through the Federal Reserve. The Federal Reserve does this 
with currency swaps. They do this by literally giving loans and 
guarantees to other central banks, and they can even give loans to 
governments. So this is placing the burden on the American taxpayers, 
not direct taxation, but by expanding the money supply, this is a tax 
on the American people because this will bring economic hardship to 
this country. And because we have been doing this for so many years, 
the economic hardship is already here. We have been suffering from it.
  But the problem comes that once you have a system of money where you 
can create it out of thin air, there is no restraint on the spending in 
the Congress. And then the debt piles up, and then they get into debt 
problems as they are in Greece and other countries in Europe. And how 
do they want to bail them out? With more debt.
  But what is so outrageous is that the Federal Reserve can literally 
deal in trillions of dollars. They don't get the money authorized. They 
don't get the money appropriated. They just create it, and they get 
involved in bailing out their friends, like they have been doing for 
the last 2 years, and now they are doing it in Europe.
  So my contention is that they deserve oversight. Actually, they 
deserve

[[Page 7813]]

to be reined in where they cannot do what they are doing. But 
initially, we need oversight, and that is why this vote of only 37 
Senators willing to audit the Federal Reserve in a thorough manner and 
hold them in check, which means that there were 62 Senators that 
support the idea of maintaining a status quo with the Fed and that they 
will still be able to make these loans to these foreign central banks.
  Now, what has this led to? It has led to tremendous pressure on the 
dollar. The dollar is the reserve currency of the world. We bail out 
all of the banks and all of the corporations. We have been doing this 
for the last couple of years to the tune of trillions of dollars, and 
even today it looks like the dollar is strong on the international 
exchange market. People are frightened about what is happening 
throughout the world, and they are buying Treasury bills and they are 
buying dollars and holding dollars. But the real truth is the dollar is 
very, very weak, because the only true measurement of the value of 
currency is its relationship to gold. For 6,000 years, gold has been 
the best measurement of the value of a country's currency.
  In the 1970s, we were very much aware of what was happening. Our 
dollar was depreciated to gold at 18 percent, and it ushered in a whole 
decade of inflation: prices going up 15 percent; interest rates up to 
21 percent. In the last 10 years, our dollar has been devalued 80 
percent in terms of gold. That means, literally, we have printed way 
too much money. Right now, we are just hanging on. The world is hanging 
on the fact that the dollar still is usable. But the whole problem is 
our financial situation is no better in this country than around the 
world. There is just a greater trust in our dollar because we have a 
military machine and we have economic growth in this country which is 
greater than others; but, quite frankly, it is quite weak.
  So we face a very serious crisis. To me, it is very unfortunate that 
we are not going to have this Audit the Fed bill passed in the Senate. 
It has been passed in the House. Possibly we can salvage this in 
conference and make sure that this occurs. But since the Federal 
Reserve is responsible for the business cycle, for the inflation, and 
for all of the problems that we have, it is so vital that we stand up 
and say it is time for us to assume the responsibility, because it is 
the Congress, under the Constitution, which has been authorized to be 
responsible for the value of the currency.
  As a matter of fact, the Constitution still says, it has not been 
amended or changed, but only gold and silver are supposed to be used as 
legal tender, not pieces of paper, not computer entries. This can't 
work. It is not working very well. The world is starting to recognize 
this, and I am really concerned about what is going to happen, because 
a currency crisis is much worse than a financial crisis. We have just 
been through the financial crisis. We are in the midst of it. But a 
currency crisis, which is on our doorstep, means that our dollar will 
be devalued.

                          ____________________