,

Lost in the shuffle of all the news about
Congress, big spending packages, debt limit increases, and
inflation, is the big culprit behind all of it: the Federal
Reserve.

While I am happy to see some real pushback in
Congress now from both sides of the aisle against passing yet
another multi-trillion dollar spending package, the Fed makes it
all possible and for the most part, gets a free pass.

It's interesting to see Fed Chairman Jerome
Powell launching an investigation into officials in his own
agency for making what amounts to insider trades, but he fails to
take any responsibility for the real crime his organization
engages in.

You see, as they distract Americans with some
personal investments that amount to a drop in the ocean, they
continue to impoverish millions at an accelerating rate.

We ought to change the conversation to a full
audit of the Federal Reserve, which I explain more about in my
column from this week.

I hope you'll take a read below. And please
know I'm always grateful for all your support.

-Ron



______________________________________



The Biggest Federal Reserve Scandal

Following revelations that Federal Reserve
officials made trades in financial assets while the Fed was
taking extraordinary efforts to "stimulate" the economy, Federal
Reserve Chairman Jerome Powell ordered a review of the Fed's
ethics rules. While these trades appear problematic, they pale in
comparison to the biggest Fed scandal - the Fed's impoverishment
of ordinary Americans, enrichment of the elites, and facilitation
of government debt and deficits.

The depression induced by coronavirus, though
really caused by so-called public health actions government took
in response, was the official reason for the Fed's increased
asset purchases last year. However, the Fed actually started
ramping up its money creating activities in September of 2019,
when it began pouring billions a day into the repo markets, which
banks use to make short-term loans to each other, in order to
keep repo market interest rates low.

Coronavirus was just a convenient excuse for
the Fed to do more of what it was already doing. Now, the Fed is
using the limited reopening as a scapegoat for rising prices. Of
course, anyone who understands Austrian economics understands
that rising prices are a symptom, not a cause, of inflation.
Inflation is the very act of money creation by the Fed.

Rising prices that diminish the average
American's standard of living are not the only result of the
Fed's manipulation of the money supply. The manipulation distorts
economic signals, producing results including booms, bubbles, and
busts.

Inflation has always benefited the
well-connected elites who receive the Fed's newly created money
before the new money causes widespread price increases. The true
motivation behind Fed policies was revealed by former Fed
official Andrew Huszar in 2013. Huszar, writing for The Wall
Street Journal, confirmed that quantitative easing kept stock
prices high, instead of helping Americans struggling with the
aftereffects of the 2008 meltdown.

Other beneficiaries of the Fed are
big-spending politicians. The Federal Reserve's purchase of
federal debt instruments keeps the federal government's debt
servicing costs manageable. This is why, despite Chairman
Powell's recent suggestion that the Fed will soon begin
"tapering" its purchases of Treasuries, the Fed is unlikely to
significantly reduce its purchase of Treasuries or allow interest
rates to significantly increase.

Powell is also unlikely to upset President
Biden and Biden's congressional allies as long as progressives
are urging Biden not to reappoint Powell. Progressives want to
replace Powell with someone more committed to fighting climate
change and systemic racism, two boogeymen routinely bought out as
excuses for vast expansions in government spending and power.

Another major scandal involving the Fed is
Congress' refusal to pass the Audit the Fed bill and let the
American people know the truth about the Fed's operations. Audit
the Fed authorizes a Government Accountability Office (GAO) audit
of the Fed's dealing with foreign governments and central banks,
the Fed's discount window operations, reserves of member banks,
securities credit, interest on deposits, and open market
transactions. Audit the Fed would finally reveal the truth about
the Fed's operations.

A limited audit authorized by the Dodd-Frank
Act found that between 2007 and 2010, the Federal Reserve
committed over 16 trillion dollars to foreign central banks and
politically influential private companies. Imagine what a full
audit would find. It is time to end the scandal of allowing a
secretive central bank to have so much power over the economy and
our liberty. It is time to audit, and end, the Fed.

For Liberty,

Ron Paul
Chairman



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