Former Fed governor: Audit the Fed bill is 'dangerous'

[The Northerner]

Dec. 1 (Bloomberg) -- U.S. Representative Ron Paul’s proposal to allow audits of the Federal Reserve’s monetary policy is “incredibly dangerous” and could stoke inflation, said Frederic Mishkin, a former Fed governor.

“The Ron Paul bill is incredibly dangerous,” said Mishkin, who is now a Columbia University professor, in a Bloomberg Radio interview. “It is remarkable the kind of attacks that are occurring on Fed independence.”

Fed Chairman Ben S. Bernanke has opposed the proposal by Paul, a Texas Republican, saying it might open the door to interference in monetary policy. A separate proposal in the Senate backed by Banking Committee Chairman Christopher Dodd would strip the Fed of authority to supervise banks.

Paul’s bill “would be very dangerous in terms of promoting inflation,” Mishkin said. “If you make the central bank beholden to politicians on a short-run basis, you get very bad outcomes: high inflation and less of the ability to deal with shocks like the ones we had recently.”

Bernanke goes before Dodd’s Senate panel Dec. 3 in a confirmation hearing for his second term as central bank chief. He is likely to face questions about the central bank’s record of supervision during the financial crisis and its role in taxpayer-funded rescues of firms including insurer American International Group Inc.

The Fed chairman, in a Nov. 29 commentary in the Washington Post, said curbing the central bank’s authority to supervise the banking system and tampering with its independence would “seriously impair” economic stability in the U.S.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aqUfLCJcZ7Ow&pos=6

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It's dangerous to know what the Fed has been doing for so long?

So be it.

This administration promised 'transparency' and it ought to be delivered in some form.

[FiveGoodMen]

1. How transparent can they be?!

[DJ13]

2. Sounds like a threat

Bring it on, banker boy!

[notesdev]

3. It IS a threat

The passports for all of the people involved in the finance industry, whether on the industry or the government side, ought to be pulled. They are strip-mining what little wealth is left in this country, they already have their bags packed and their private planes fueled. They are causing a collapse and they know it, but none of that matters as long as they get theirs.

We need to stop them from getting away with it.

[IrateCitizen]

4. Note how they keep repeating this meme of "independence" regarding the Fed

The Fed is not independent, nor has it ever been. It is, essentially, a banking cartel that has control over the nation's money supply. As such, it ensures that the actions it takes benefit bankers first and foremost.

But, apparently they think if they repeat "independence" enough, people will believe it and get scared. Mind you, I'm not crazy about Congress having a great deal of authority over the money supply. But I'm also not so blind to believe that putting it in the hands of the banks is the best way to go about things either -- unless you're a banker, that is.

[phasma ex machina]

8. Pugsley argues that established banks created the Fed to limit competition

Using the argument that the public was often defrauded by charlatans who opened new banks and then fled with depositors' funds or who failed due to lack of sound banking practices, the established banks lobbied for government regulation of the banking industry. Of course, the established banks did not want to be controlled, they just wanted the legal power to make it difficult for new banks to enter the field, and wanted to prevent the banks that did get in from engaging in competitive practices that would affect the established banks' profits. - The Alpha Strategy

[Atman]

5. They don't explain WHY it is so dangerous, they just keep saying it will be.

WHY would an audit cause inflation to rise? Doesn't the Fed set interest rates? Are they going to just raise rates because they're being audited? This sounds like blackmail.

.

[Warpy]

6. Yeah, but I think anybody who knows there is such a bill

is aware enough to know only a few men and their fiefdoms are in danger and that an audit followed by nationalization is the best policy.

It's insane to have a central bank in private hands. We need more oversight than that.

[LiberalFighter]

7. I think it should be more than just an audit of the Federal Reserve

There should be an audit of all current and past Federal Reserve board members.

[pscot]

9. Rats think that rat traps are dangerous

Come to think of it, I'd rather have my basement infested with rats than bankers.