He may be right but they still canned the bill......................
Ron Paul is right we should audit the Feds
Posted Jul 08, 2009 12:30pm EDT by Peter Gorenstein in Newsmakers, Banking
Related: XLF, GLD, SPY, DIA, TBT, TLT, ^DJI
An amendment based on Congressman Ron Paul’s House bill to audit the Federal Reserves was blocked by the Senate this week on procedural grounds.
Speaking on the Senate floor, Republican Senator Jim DeMint and supporter of an audit said, "allowing the Fed to operate our nation's monetary system in almost complete secrecy leads to abuse, inflation and a lower quality of life."
Charles Ortel, managing director with Newport Value Partners, an independent research firm, agrees. "Transparency is the key to any market," he says, noting the Fed doesn't mark-to-market its assets, much of it now consisting of the worst toxic debt Wall Street had to offer.
In truth, the Fed doesn't work in complete secrecy - they do release a weekly update which details the size and type of assets on its balance sheet. According to the latest report, the Fed’s balance sheet shrunk to $1.989 trillion, falling below $2 trillion for the first time since March.
And Bernanke backers are inclined to say, give the Fed a break. Those supporters including, Warren Buffett, claim the Fed’s action saved the U.S. from an even greater economic catastrophe.
But Ortel isn’t buying it: "We are well into a major crisis of confidence... those with major league exposure to the dollar and U.S. companies are quietly reducing that exposure," he claims.
If one looks at recent U.S. Treasury auctions, appetite for U.S. debt remains relatively strong. But Ortel says the smart money has little confidence in the future of the U.S. and is instead buying gold and other hard assets