by Elijah Johnson
During the presidential campaign, Donald Trump said the Federal Reserve should be audited. The “Audit the Fed” bill is being reintroduced. If the bill passes Congress, Trump could sign it into law.
Kentucky Senator Rand Paul introduced The Federal Reserve Transparency Act of 2017 on January 3, 2017. The bill was referred to the Committee on Banking, Housing, and Urban Affairs. The bill may go from there to Congress to be voted on.
Paul said, “No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve, yet Fed Chair Yellen refuses to be fully accountable to the people’s representatives.”
Since its founding more than 100 years ago, the Federal Reserve has never been fully audited on monetary policy. However, in 2011, a partial audit was conducted. It revealed the Fed lent $16 trillion to financial institutions between 2007 and 2010.
Possibility of Passing Audit the Fed
With a GOP majority in both the House and Senate and with the sitting president in favor of an audit, the prospects for passing this latest version of the bill are “better than ever,” Rand Paul’s father and former Texas Representative Ron Paul said.
Trump was critical of the Fed during the campaign. “They’re keeping the rates down so that everything else doesn’t go down,” he said, “We have a very false economy.” And he said the Fed was keeping interest rates low for “political reasons.”
“Maybe under President Trump we will get an audit here,” financial analyst Gregory Mannarino said, “I think [Trump] understands the way things work, and is willing to tell people the truth with regards to what’s going on here.”
Still A Tough Road Ahead
“It’s still going to be a tough road,” Ron Paul said, “because there are so many powerful special interests.”
Financial historian Jason Burack said Rand Paul is “up against corrupt career politicians protecting the status quo in both political parties. Many of those politicians are in bed with the big banks.”
Mannarino also sees the bill facing resistance. “I think the Federal Reserve will fight tooth and nail to not allow their books to be opened.”
Rand Paul and Ron Paul have been trying to get a full audit of the Fed for years. Ron Paul introduced the original version of the bill in 2009.
Former Fed chair Ben Bernanke was against the bill in 2009 because he said it would let Congress be in control of monetary policy. “I don’t think the American people want Congress running monetary policy,” he said.
The last version of the bill failed to pass the Senate in 2016, with seven votes short of the 60 needed.
Marketing Director for Miles Franklin Precious Metals Andrew Hoffman is skeptical Trump wants a Fed audit. Hoffman says Trump’s critiques of the Fed during the campaign were simply to attack Hillary Clinton and the Obama Administration. But since he became president, Trump has been silent on the issue, Hoffman says.
Hoffman also mentioned Trump’s Treasury secretary nominee Steven Mnuchin seems opposed to the bill. Senator Bill Nelson recently asked Mnuchin about “politicizing decisions made by the Federal Reserve Board of Governors and the benefits of an independent central bank.” Mnuchin said, “The Federal Reserve is organized with sufficient independence to conduct monetary policy and open market operations. I endorse the increased transparency we have seen from the Federal Reserve Board over recent years.”