Fed Trying to Hide Smoking Gun

The evil bastards have shown their hand. They are going to make the Fed even less transparent. Writes Ryan Grim at HuPo:

A bipartisan effort to force transparency on the Federal Reserve is suddenly in jeopardy after a House Financial Services Committee member introduced an amendment that would let the multi-trillion dollar organization continue throwing tax dollars around in secret.

Rep. Mel Watt, a Democrat from North Carolina, has introduced an amendment intended as an alternative to the measure to audit the Federal Reserve introduced by Reps. Ron Paul (R-Texas) and Alan Grayson's (D-Fla.) . But instead of increasing transparency, as the amendment claims to do, Watt's measure would instead make the institution more opaque.

Watt pitched his amendment in a letter to colleagues circulated Tuesday. "While my amendment will certainly fall short of demands by those intent on destroying the independence (if not the existence) of the Fed, the critics of my amendment will have to concede...that my amendment will provide transparency of the Fed's financial operations that will be completely unprecedented," he wrote.

In fact, the critics are conceding no such thing. "The Watt Amendment, as written today, actually places new restrictions on the little authority that exists, such as it is, for independent auditing of the Fed," Grayson said. "It keeps in place all existing restrictions and adds four more. So I don't see why anybody would reasonably think that it creates unprecedented authority to audit the Fed."

The devil, as always, is in the details. While Watt's amendment talks a big game about opening up the Fed to a complete audit, all of the new powers granted must be carried out "each case in accordance with subsections (b) and (e)."

Those subsections of the current law delineate the many restrictions that an auditor confronts when seeking to audit the Fed. Watt's measure not only leaves those in place but requires all audits to abide by them.

And in addition to the current restrictions in place, it creates new ones. An auditor could not look at loans or liquidity arrangements the Fed enters into, the terms of those arrangements, or the effect of those loans and other liquidity deals on "reserves, the balance sheet or financial condition of a Federal reserve bank or the Federal Reserve System."

The measure could come for a vote anytime this week....

"The new exemptions are described as limited but they are extremely broad," Grayson said. They're so broad, in fact, that there would be very little left for an auditor to look into. What could an auditor check up on?

"Count the pencils on the desks," Grayson speculated. "Perhaps check on proper Metro card usage."

But, I think the evil bastards have shown a little more of their cards than they realize. Yes, the devil is in the details, but just look at the details they want to hide:

An auditor could not look at loans or liquidity arrangements the Fed enters into, the terms of those arrangements, or the effect of those loans and other liquidity deals on "reserves, the balance sheet or financial condition of a Federal reserve bank or the Federal Reserve System."

Loans or liquidity arrangements" say wouldn't that cover gold swaps, and the more than a trillion dollars of junk the Fed has loaned against over the last year for the benefit of big banks?

"The dirt is just where Ron Paul suspected it was, and like a murderer trying to hide a evidence when a detective is in the room, the Fed is trying to hide its crimes while Ron Paul is in the room. Paul has smoked the Fed out. Now is not the time to give one inch to the Fed's attempt to cover up its dirty deeds. They want to hide the loans and liquidity arrangements, I say audit the loans and liquidity arrangements first. That's where the smoking gun is. Bury the Watt Amendment and start the investigation, now.

by Robert Wenzel