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Audit the Fed Bill To Reach the House Floor

With reports of a House majority sponsoring HR 1207, it looks like the Audit the Fed bill will reach the House Floor.

Fed Would Be Shut Down If It Were Audited, Expert Says
Yahoo Finance/CNBC, 6.10.09
The Federal Reserve’s balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant’s Interest Rate Observer, told CNBC.

With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.

“If the Fed examiners were set upon the Fed’s own documents-unlabeled documents-to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”

Jake Towne reporting at Goldseek.com provided a status report along with Q and A about HR 1207:

“…A win in the House now appears likely, so I would say the gravest threat is that the bill will die in the Senate.”

Town recommends using “DownsizeDC’s “Audit the FED” Campaign to thank or urge your representative and Senators to co-sign this bill. However, writing directly to your Senator’s office and placing a phone call are also recommended.”

Update from Ron Paul on 1207, June 12th, 2009:

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One Response

  1. Well, seeing the Federal Government uses cash-basis accounting (with all the major liabilities off the balance sheet), we should not be too surprised the the Fed is effectively insolvent.

    Audit the Fed, then shut it down. Rinse and repeat for the Federal Government.

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