Off-topic: WHY Audit the FED

First, a Distraction: The Smaller Dragon

Bernanke says that Congress can have access to an audit at any time. Sure it can — an audit vetted and sanitized by the FED, where no one knows which banks got what bailout money. This is an audit in the way a CIA audit is an audit. The main differences are these: (1) the CIA legally operates only outside the borders of the United States; (2) the CIA can assassinate any uncooperative Congressman who insists on a full audit. The FED does not have the second power, but it is not limited by the first restriction.

Why Bernanke Panicked on National TV: The Threat of an Audit by Gary North

It ain’t wise, for a lone congressman to demand an audit of the CIA. “Accidents happen.”

Even a group of five-ten congressmen, strongly unified on this one point, are still at a very high risk of losing their seats, their freedom, their lives… or all at once.

There is no scandal that can reign in the CIA Black Budget. At the end of the day, the Public Just Doesn’t Care. Remember: not even the Snowden scandal was enough to put the breaks on the CIA/NSA/etc!

The power Congress has over the government is the control over the purse strings… and that’s exactly what Congress does NOT have over the CIA. And — for obvious reasons — not a single congressman is willing to lead the charge on this issue.

Now, The Bigger Dragon

What has Bernanke panicked is this: the Federal Reserve has bailed out the biggest banks and has let almost 100 little ones die. This is crony capitalism at its most notorious.

The threat is that Congress will discover what should be obvious: the biggest banks last October almost went bankrupt. Bernanke and Paulson admitted this to Congressional leaders. This is how they got the leaders to authorize the Treasury bailout. This is why the FED swapped marketable Treasury debt for unmarketable toxic debt at face value with the biggest banks.

Which banks? The FED refuses to say.

This is the heart of the matter. This is what has Bernanke in a panic. If Congress compels a full audit — a real audit, not a FED-controlled audit — individual members of Congress will discover that the American financial system is a house of cards. A few of them will release the results of the audit to the public. This will include Website publishers, who will go over the audit, line by line. The mainstream media will face being scooped by newsletter writers, so they will try to publish first.

The public will find out which banks are not safe. This is what has Bernanke in panic mode.

Why Bernanke Panicked on National TV: The Threat of an Audit by Gary North

This is the core of the bigger dragon: Control over the money, and subsidies to the Big Banks.

The CIA and the rest of the Deep State aren’t interested in creating a proper tyranny, where everyone lives in fear of the government. Such things are expensive, unstable, and brittle: Our Leaders are a good deal smarter (and yes, even wiser) than the old Collectivists, either Black or Red.

Also, the general population doesn’t really care if a few dozen very inquisitive, very brave, and very stubborn people suffer fatal accidents/suicides every year. After all, the Soviet Union did not go down because of the gulags, or the KGB executions.

What brought the Soviet Union down was the inability of the State to pay for its promises. And a full, external audit of the FED would put that ability at risk for the United States government.

This thought of depositors finding out which banks are at risk is what the Federal Reserve was created in 1913 to prevent. The banking cartel must prevent bank runs from spreading. If the public had explicit information on what the FED did and why, the public would be in a position to pull their money out of illiquid, economically insolvent large banks.

Bernanke feigns a fear of Congress setting policy. What he is afraid of is depositors setting policy. He does not want depositors to see which banks are at risk.

The bankers live in fear of their depositors. Depositors can bust a bank in a matter of days. All they need to do is write a check or send a bank wire transfer from their present bank to a different bank. If too many depositors pull money out of Bank A to send to Banks B, C, or D, Bank A goes under. The FDIC has to have a Friday afternoon emergency session where it absorbs the bad assets of Bank A and opens bidding for the good assets.

The big banks love this when they are not the targets of the bank run. They can buy up millions of dollars of good assets, while palming off the bad assets to the FDIC. If the FDIC can’t cover the losses, then Congress picks up the tab. A sweet deal for the surviving banks!

But what if the surviving banks are being held together with accounting gimmicks. […]

Why Bernanke Panicked on National TV: The Threat of an Audit by Gary North

If you reveal the rotten timber now, there will be pain, suffering, and a major loss of legitimacy for the Right Sort, now.

If you reveal the rotten timber later, there will be more pain, more suffering, and a greater loss of legitimacy for the Right Sort, later.

The Right Sort will, always and everywhere, choose to kick the can down the road.

“Someone else, later, can deal with the mess.”

Justice and Mercy

It gets down to faith, in the end. Must ALL debts – however delayed – be eventually be paid in full? Or not?

Darwinians explicitly believe that there is no such thing as a moral law: all debts need not be paid.

“We really CAN borrow, and NEVER repay!”

Everyone who is not a materialist atheist — from the Hindi to the Buddhists, from Stoic Pagans to Calvinist Christians — say that the moral law exists… and that it carries a well-used iron pipe.

“If you borrow, YOU WILL REPAY:
willingly or not, in this generation or later down the line.”

The profession of economics – not physics, not astronomy, not biology – was the first Western profession to go full atheist. “The profits gained by ditching the Law was Just. So. Good!!

With the rapid aging of the West, the rapid intellectual rot of the sciences, and the massive – and still swiftly increasing – debt load of the welfare states, it is becoming quite obvious that the debt collector has arrived.

No knock on the door, yet. But we are already under His shadow, and the bill is going to be ugly.

And unpayable.

Which means that penalties will be extracted.


If you get off with just being stripped of your financial wealth, count yourself greatly blessed.

At least you still have your people, your health, your hope, your liberty, and a way to rebuild!

And if you actually come out with a good chunk of your financial wealth intact too, you should be praising Jesus every day, for the rest of your life!

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