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To end the Fed, Paul will have to start questioning it
9:08p ET Wednesday, February 29, 2012
Dear Friend of GATA and Gold:
At a hearing today of the U.S. House Committee on Financial Services, Rep. Ron Paul did an entertaining job of berating Federal Reserve Chairman Ben Bernanke about the Fed's long debasement of the dollar. Video of Paul's comments has been posted at GoldSeek's companion Internet site, SilverSeek, here --
http://www.silverseek.com/article/ron-paul-assaults-ben-bernanke-paralle...
-- and Forbes' Agustino Fontevecchia produced a fair and complete written account, which is appended.
But as much as advocates of free markets in the monetary metals may have enjoyed the proceedings, to GATA they were another waste of the most precious opportunity -- the opportunity to pry gold information out of the Fed or to show the Fed concealing its most sensitive secrets.
Paul knows these issues intimately. GATA's officers have discussed them with him and his staff several times. He is fully informed about GATA's work. Indeed, in his comments to Bernanke today Paul referred, without naming him, to the case of Liberty Dollar proprietor Bernard von Not Haus, who is facing a federal prison sentence for his conviction on a ridiculous charge of (sort of) counterfeiting, and to the campaign in Mexico led by the president of the Mexican Civic Association for Silver, Hugo Salinas Price, for the introduction of a silver coin as part of a system of parallel money.
But talking about these things today, Paul once again let the Fed's great vulnerabilities escape notice.
... Dispatch continues below ...
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For example, Paul could have pressed Bernanke about the Fed's admission, in the course of GATA's freedom-of-information lititation three years ago, of its involvement in gold swap arrangements with foreign banks, an admission contradicting the Fed's many denials of involvement with the gold market:
http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf
Paul could have asked: Exactly what are those gold swap arrangements? What are they for if not surreptitious intervention in markets? How do they work? Have they ever been implemented? Why must they be kept secret?
And Paul could have asked Bernanke about the Fed's many other gold secrets, acknowledged during but carefully preserved against GATA's lawsuit against the Fed, secrets whose locations were specified by U.S. District Judge Ellen Segal Huevelle in her decision in the case a year ago:
http://www.gata.org/files/GATAFOILawsuitRuling-02-03-2011.pdf
Paul could have cited the judge's decision and asked Bernanke: Why all these secrets about gold? And will the Fed provide the committee with the documents at issue? If not, why not? What are you hiding from the American people and the markets, and why?
But it didn't happen, as it hasn't happened at any of the dozens of other hearings where Paul has been allowed a few minutes to question Fed officials. Instead Paul has been content to lecture, even though nearly everyone has heard it all before and simply turns it off.
That is, despite his long and heroic work, it seems that Paul just has not wanted to be the one to go down in history as having pulled the plug on the institution he has denounced as parasitic and totalitarian, the institution whose abolition he advocated in his recent best-selling book, "End the Fed."
Just a few carefully targeted questions posed in a congressional forum -- questions about its constant and surreptitious intervention in the gold market and other markets -- well might end the Fed. All advocates of free markets and transparent government may wish for his election as president, but that is at best a long shot. As he isn't seeking re-election to the House, Paul now has only nine months left in which he is sure to have the chance to hold the Fed to account.
So, Representative Paul, if you really want to end the Fed, stop making speeches and start questioning the Fed.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Ron Paul Tells Bernanke He Killed The Dollar, Silver Coin In Hand
By Agustino Fontevecchia
Forbes
Wednesday, February 29, 2012
http://www.forbes.com/sites/afontevecchia/2012/02/29/ron-paul-tells-bern...
Fed Chairman Ben Bernanke had an interesting morning over on Capitol Hill, facing the ire of Ron Paul and receiving Democratic praise from Barney Frank. Bernanke was testifying before the Committee on Financial Services, where he said the economic recovery continues but remains frail, but was put on the spot by Ron Paul, who pulled out a silver eagle and accused him of debasing the currency and destroying America's wealth.
Ron Paul was in full campaign mode. So was Barney Frank. Bernanke was caught in the middle.
In what was supposed to be a Q&A session, the Fed chief essentially sat down and listened to one side bash him and the other love him. Frank took the floor after some softballs by Committee Chairman Spencer Bachus, praising Bernanke's tenure as Fed Chairman and pointing to continuing job growth.
It was Ron Paul, though, who took the day. In what is usually the most heated and interesting exchange of Bernanke's excursions to Congress, the Fed chairman was forced to sit down and listen as Ron Paul scolded him for "debasing" the currency and "destroying" the wealth of millions of Americans.
Ron Paul first asked Bernanke if he did his own grocery shopping, to which the Fed Chairman responded with a yes. Paul immediately cut him off and said "no one believes the 2% inflation rate," claiming it was actually closer to 9%. "Someone is stealing wealth," said Ron Paul, in full campaign mode.
He then pulled out a silver eagle, a silver coin that has nominal face value of one dollar that is legal tender. Ron Paul told Bernanke that in 2006, as he took the top spot at the Federal Reserve, an ounce of silver bought about 4 gallons of gas. Today, said Paul, it buys about 11.
"That's preservation of value," yelled an excited Ron Paul, before accusing Bernanke of loving paper money and begging him to "legalize competing currencies." Bernanke responded by explaining that anyone can hold whatever currency they want and told Paul he'd gladly help him figure out how to hold euros, yen, or whatever he pleases.
Paul once again lashed out, telling Bernanke "the record of what you've done is destroy the currency," before saying he still can't pay his bills or taxes with silver eagles, just as his time was running out and he was forced to forfeit the floor to California's Maxine Waters.
As usual, Ron Paul put the focus on what he considers to be the illusory essence of fiat or paper money. This time around, though, Paul didn't let Bernanke respond, making it a one-way conversation.
Gold continued to decline through the session, down 3.5% to $1,726.50 an ounce while 10-year Treasuries saw rates firm a little to 1.98%. All three major equity indices were in the red, despite major stocks like Apple and Microsoft hitting new intraday all-time highs.
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