“Show me the money!” Cuba Gooding made this phrase famous in the 1996 movie, Jerry McGuire. The phrase soon got into the language.
“Follow the money!” That came from the movie, All the President’s Men. No one knows who said it. “Deep Throat” didn’t. The screenwriter says that he does not know where he got it. It has entered the language.
“Trust me.” That was Jimmy Carter’s phrase in 1976. It also got into the language. It has been used ever since as satire. It has been the mantra of every Chairman of the Federal Reserve System.
“Don’t ask. Don’t tell.” That was Bill Clinton’s phrase. I think he got it after watching Congress deal with Alan Greenspan.
“Never give a sucker an even break.” That was W. C. Fields’s famous line. This has been the FED’s operational policy since 1914.
AUDIT THE GOLD
In 2011, Congressman Ron Paul will introduce a bill in the House of Representatives calling for an audit of the gold held by the Federal Reserve System on behalf of the United States government. If he can successfully promote this bill by the phrase, “Show us the gold!” he will inflict enormous damage on the American Establishment. This damage could conceivably spread to the entire international Establishment, which rests on the sovereignty of the central banks over their domestic governments.
Most of those few Americans who have ever heard of the Federal Reserve System operate under the illusion that the government is sovereign over the FED. On paper, this is true. Operationally, it isn’t. We know this, because no government agency audits the FED.
You are surely not sovereign over the United States government. The United States government is sovereign over you. The supreme mark of this control is the fact that the Internal Revenue Service can tax you. It requires you to sign your tax forms, on penalty of perjury. You can be sent to jail if you lie about these forms. It can require you to provide evidence that you have filled out your income tax forms accurately. If you refuse to provide this evidence, the IRS will simply assess whatever it wants, and you will be required to prove that its assessment is inaccurate.
If you want to find out who is really in control in any situation, find out who has the legal right to audit the other one.
This is easy to understand with respect to individuals, corporations, and other organizations that are under the thumb of the tax man. This is understood by taxpayers all over the world. They fully understand who is in charge. In a modern society, the agency in charge is the agency that can and does compel other individuals and agencies to supply records relating to their income, capital, and bank accounts.
The Federal Reserve System has never been audited by an agency of the United States government. The FED hires private auditing firms, rotating them year by year, which undermines continuity, making it more difficult for them to follow the money. The FED limits those firms with respect to what they are allowed to audit. The FED then submits these internally audited facts to the United States Treasury.
Each year, the FED pays the Treasury any excess money beyond the FED’s operations expenses, if the money came from interest earned from its holdings of U.S. government debt. This has been the law since the early 1940s. In the good old days, the FED kept all of the money that it earned as interest payments from the Treasury. It paid nothing to the Treasury. That was a sweet deal.
When Congressman Paul persuaded the House of Representatives in 2009 to vote in favor of a general audit of the FED by the Federal government, the bill was blocked in committee. His original version of the audit bill never came to a final vote in the House as part of the banking reform legislation. The Senate never considered the amendment.
So, it is obvious who is in charge. Congress pretends that it is in charge, but in fact the Federal Reserve System is in charge. Congress accepts the word of the Federal Reserve System with respect to how much it cost the FED to keep its doors open, and it accepts whatever payment the FED makes to the Treasury.
It is obvious that if the Internal Revenue Service did not have the power to audit taxpayers, and if taxpayers have the authority to decide how much it cost them to “keep their doors open,” and pay the Treasury only that amount of money that is in excess of their costs of operation, the government would go bankrupt. It is equally obvious that the government does not intend to go bankrupt. The government does not intend to let individuals decide on their own authority how much to pay the government. This is because the government is in charge, and taxpayers are not in charge.
The Federal Reserve System is in charge of Congress; Congress is not in charge of the Federal Reserve. You can say that, on paper, the Congress is in charge. In response, I argue that this paper is rarely used, and with respect to an audit, it has never been used.