The solvency of the American banking system rests on smoke and mirrors. Bernanke knows this. Congress is ignorant. Congress thinks things are probably OK. But a majority of House members want to be safe. They don't want the folks back home to believe that they are asleep at the wheel, which Congress has been since 1914 with respect to the Federal Reserve. So, a majority of House members co-sponsored Ron Paul's bill to audit the FED.
Barney Frank understands the threat. He has bottled the bill up in committee. This way, members who support the bill can tell the folks back home that it's not their fault. If they are asked about this, they can say, one by one, "I am really sorry. I did my best, but the bill is bottled up in committee. There is nothing I can do."
Of course there is something they can do. They can vote to bring the bill to the floor for a vote. There, they will be exposed to the folks back home. Did they vote "yes" to audit the FED? By co-sponsoring the bill, they can tell the folks back home, "I'm with you on this." By letting Frank bottle it up in committee, they can plead powerlessness. Nice.
It's all smoke and mirrors. It's all about not letting depositors find out how their banks are doing.
Continue reading Gary North's essay.
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