I remember many years ago when I sent an email to James Corbett at the Corbett Report in Japan asking him for advice on how… well, how to become more like himself! I had respect and still do for Mr. Corbett’s apparently open-mindedness and willingness to report independently the news around the world despite what the popular opinion might be. His emailed response was in hind sight a perfectly reasonable and genuine one, short and to the point, which was to advise me to simply keep on doing what I was currently doing.
And I did…
Today, in appreciation of that advice, I wish to respectfully and publicly criticize Mr. Corbett’s grammar, logic, and rhetoric when it comes to the Federal Reserve System. Logic of course is simply another word for dialectic, and apparently the common but fallacious dialectic that the Fed is a completely private banking system separate from government is prominent in James’s grammar. This is of course understandable to an extent, considering that this appeal to popular opinion permeates the alternative consciousness while amazingly not a shred of evidence supports it. And without doing the proper due diligence, pain, and suffering of countless hours of research and contemplation, it would be much easier to just go with the flow and call the Fed the enemy, while submitting to the notion that the poor little legislature has no power whatsoever over the actions of the Fed…
I can certainly attest to this notion of the power of popular belief, for when I began showing on my blog and speaking out about the primary sources that state that the Fed was certainly in no way separated from the government or completely “private” in the way that was being portrayed, I was personally attacked for my efforts. Not with fact, but with fallacious rhetoric.
But, as James suggested, I should simply keep doing what I was doing. And so I tarried through the ad hominem attacks and kept on researching and writing.
I then came out against the false Libertarian hero of the alternative media and movement, Dr. Ron Paul, showing again through only primary sources that this false prophet was not to be trusted. I went through Paul’s “End The Fed Bill” as well as his so-called “Audit The Fed Bill” and showed them to be complete frauds and completely against the rhetoric of the End the Fed crowd in that, quite logically, (1) If government (congress) can vote to end the Fed, then logically the Fed necessarily must be a part of the government, which of course created it in the first place. And (2) the audit the fed bill does nothing to actually create a new audit of the Fed or to reveal anything that can’t already be found in the CAFR audit. For the bill only modifies one of the current audits – the audits that supposedly don’t exist in the first place. This was getting ridiculous!
And so I attempted to present these facts by asking why everyone is fallaciously yelling “Audit The Fed” when it is already audited, even while that this fact is clearly stated within Ron Paul’s Audit the Fed bill and showing that all these audits are accessible on the Fed’s own website. More attacks!
Next, I attempted to ask Ron Paul why he never talked about the actual auditing system of government, the Comprehensive Annual Financial Report (CAFR) system, for which the Federal Reserve was required to fulfill its obligation to. I blogged that Ron Paul “fans” need to tell Mr. Paul to not only talk openly about the CAFR (complete audit) of the Fed but to post it on his website so that his “fans” can see that the Fed is already audited and has been since its inception.
And my demands fell on deaf ears…
Instead, I received more fallacious ad hominem attacks, still insisting that the Fed is not audited, that it is completely independent with no strings attached, and that Ron Paul was somehow the savior Christ incarnate.
I quickly figured out that I wasn’t simply up against sheer ignorance, I was up against an institution of purposefully prescribed ignorance, complete with T-shirts, bumper stickers, talking points, sales and marketing tools, and of course Ron Paul’s book sales and propaganda team. For it was much easier to blame the Fed than to admit to ourselves that we have allowed our government to become a monopoly – government as banker extraordinaire – and that men like Ron Paul are a part of that syndicate. The truther/patriot mentality would not allow proper grammar into the fold, and therefore the illogical dialectic had evolved into a sheer propaganda nightmare of epic proportions.
Yet all this time the real audit of the Fed laid in wait for its chance in the sun… and still does.
And that seems to be where it lays today, as easily accessible as ever and just a click away from realization – 500 pages of shear fact that dispels every single patriot myth alive today. But those who deal in disinformation have built an empire upon keeping the facts hidden in lieu of fallacy, and so the T-shirt and book sales keep on truckin’ while the entire world economy suffers due to a government agency that pretends to be non-governmental with the blessings of government.
But, as they say, the proof is in the pudding. And so in taking with the advice of Mr. James Corbett, I am keeping on with my efforts and thus presenting the plain proof here today, with all due respect to James, for I still think he is one of the best reporters out there. But even the best can believe in unprovable lies sometimes, especially when they are spouted around like religion and protected by grammar-less protectorates and paid shills, garnering applause and false praise at their very mention. If there is one thing about James, it is that he often goes against the norm.
I choose to believe that James is simply ignorant of the facts, that he is still able to change his mind when those primary source facts are presented to him, and that he is not so vested in the audit the Fed lie that he is still willing to publicly retract the lie and stand in truth with me, for the benefit of all. After all, it was his advice and encouragement that lead me to this point of exposing the lie.
First, we must examine the words spoken by Mr. Corbett in his recent podcast.
The rhetorical false dialectic ad populum made here by Mr. Corbett, promoting the institution of ignorance, goes like this:
“And for of those who continue to puppet the Fed’s own line that, “well, we already audit ourselves, it’s ok,” ah, they should be aware of 31 U.S. Code Section 714 sub-paragraph B, which lays out all of the exemptions by which, ah, the Federal Reserve does not have to be audited for transactions with central banks or foreign governments, transactions, ah, involving anything to do with monetary policy decisions including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations, the don’t aud- they are not audited for transactions made under the direction of the FOMC (Federal Open MarketCommittee), and they are not audited for communication among members of the board or employees of the Federal Reserve System. So, again, there’s all sorts of exemptions that this au- Audit The Fed ah- bill would- would eliminate, and it would also make sure that the results of the audit were made available to congress. So, those are significant steps.This is not an insignificant bill. It’s not an insignificant thing. It’s only a tiny baby step towards the way of dismantling and tearing apart the Federal Reserve beast, but it is progress of a sort, and it does let us get our foot in the door to get people aware of that bigger picture. So for people who are interested in that, and have people in their lives who still don’t understand the Federal Reserve, or why it should be opposed, may I humbly suggest my own documentary, “Century of Enslavement: History of the Federal Reserve,” to get people aware of the nature of this beast and why and how it must be dismantled.”
Now, in correction of these many fallacious comments, I wish to do the service of dispelling them with the primary sources and logical rhetoric based on those sources (proper grammar that is) while showing how James Corbett is so easily misled by the dialectical that has been set up to purposefully push him and other well-intended folks into that irrational thought process. And so let’s break down each logical fallacy as we break down each erroneous statement above.
I wish to disclaim here once again that I have the full respect and admiration for Mr. Corbett and that this is in no way intended to disparage his name or reputation for otherwise wonderful insight and reporting. But I will say that the facts provided here demand a retraction and restatement of the facts surrounding the Federal Reserve System to his “fans” so that, in the future, the correct course of action may be taken and so that ridiculous bills like that of Ron Paul’s Audit the Fed bill don’t continue to fool the masses into pointless distraction. As I have learned along the way, one must be responsible with their opinions, and I only respect those who may change their opinion even when they are invested in the lie with documentaries and past statements. The ego has no place in a movement designated with the word truth. And to forgive is divine…
I have come to the conclusion after so many years of attempting disclosure of the facts that comprehension is not possible because of the religious-like faith and belief that even the most staunch activists have in their government. This seemingly unavoidable conditioning is ensured via the “waking up” process, which unerringly leads to shock jocks and disinfo agents selling the story. That is to say that there is a firm belief that the government and its creation, the Federal Reserve Board and System, are actually competing against each other; that government is somehow just another victim of the Federal Reserve. This holy misunderstanding creates the foundation for the dialectic (logic) which leads to false rhetoric and mythos about the Fed. And so we must be clear as we delve into reality that there is no real competition here and that government is all one entity, including it’s many “independent agencies”.
One of the most important Maxim’s of law is simply that the creator controls.
When applied to the Federal Reserve System, we can simply read the Federal Reserve Act (primary source) and come to no other conclusion than that the Federal Reserve Board and system was indeed created by Congress. Thus, it is patently incorrect to state that the Federal reserve is independent or separate from government, without first stating that such forms (titles) of independence and separation are only what Congress (the creator) allows in its statutes. Under no circumstances does the Fed act “outside of the law”, for in law the creator always controls.
Inversely, there stems confusion by the fact that the Federal Reserve Board is allowed by its creator to make its own rules.
Our Maxim’s of law also state that a fiction of law can make no law. In other words, the law-maker (congress) creates fictions of law, which in turn being creations (fictions) of law, have no power to make laws themselves. This is the role of the Federal Reserve.
“There is no fiction without law”
“Fictions arise from the law, and not law from fictions.”
Bouvier’s 1856 Dictionary of Law defines what a Fiction Of Law is:
FICTION OF LAW – The assumption that a certain thing is true, and which gives to a person or thing, a quality which is not natural to it, and establishes, consequently, a certain disposition, which, without the fiction, would be repugnant to reason and to truth. It is an order of things which does not exist, but which the law prescribe; or authorizes. It differs from presumption, because it establishes as true, something which is false; whereas presumption supplies the proof of something true…The law never feigns what is impossible – fictum est id quod factum non est sed fieri potuit. Fiction is like art; it imitates nature, but never disfigures it it aids truth, but it ought never to destroy it. It may well suppose that what was possible, but which is not, exists; but it will never feign that what was impossible, actually is. Fictions were invented by the Roman praetors, who, not possessing the power to abrogate the law, were nevertheless willing to derogate from it, under the pretense of doing equity. Fiction is the resource of weakness, which, in order to obtain its object, assumes as a fact, what is known to be contrary to truth: when the legislator desires to accomplish his object, he need not feign, he commands. Fictions of law owe their origin to the legislative usurpations of the bench. 4. It is said that every fiction must be framed according to the rules of law, and that every legal fiction must have equity for its object. To prevent, their evil effects, they are not allowed to be carried further than the reasons which introduced them necessarily require. The law abounds in fictions…
The Federal Reserve is nothing more or less than a fiction of law – an association of persons incorporated within the law to act under the law. It deals in mostly imaginary currency (non-paper or coin) called credit, in a purely imaginary fictional realm. It is the banker in a pretend monopoly game. It is the creator of currency, which it thus controls via the powers and laws granted by Congress and the very limited independence that congress allows one of its own created corporations.
This independence is no different than the independence bestowed by the creator congress to the board of the Postal Service, the board of Social Security Administration (investment insurance scheme), or any other board of any other corporation or institution created by congress. They are all creatures of law, allowed to make their own rules to govern themselves in the absence of daily oversight by congress itself. It’s really quite simple and logical. Yet we are not bothered by the independence of say the the Post Office, while at the same time we would not expect to see a member of congress behind each Post Office desk in-taking letters and packages.
Why not? Stamps are also considered money, are they not?
According to its own data, The USPS employed 626,764 workers (as of January 2014) and operated 211,654 vehicles in 2013. So how do we think that the Post Office would exist without a certain bit of political independence from Congress?
There can’t be a congressman posted at every post office in America now can there?
This word independence has been tweaked and twisted by authors and radio shock jocks so as to mean something other than what it actually does in politics (fiction). But everything Congress creates is created with independence. And honestly unless this is the case, Congress would have no time to do anything but run its own creation.
From WhiteHouse.Gov we read:
“There are hundreds of federal agencies and commissions charged with handling such responsibilities as managing America’s space program, protecting its forests, and gathering intelligence. For a full listing of Federal Agencies, Departments, and Commissions, visit USA.gov.”
And from that link on USA.gov we read:
“The Federal Reserve is the central bank of the United States. It formulates and administers credit and monetary policy.”
The word of, in law, means “belonging to”. The popular or common concept of independence does not refer to ownership, only to operation.
The word policy is not law. Webster’s 1828 defines policy as “In common usage, the art, prudence or wisdom of individuals in the management of their private or social concerns… Stratagem; cunning; dexterity of management… Art, prudence, wisdom or dexterity in the management of public affairs; applied to persons governing. The word policy is used also for the writing which insures against other events, as well as against loss of property.”
Policies are simply the internal rules of the agency, not the laws of the United States. Only the legislature can create laws, and those laws govern the fictions created within, like the Federal Reserve System and Board. But the board is allowed to make some rules governing its institution, since congress cannot babysit every one of its created agencies. I’m sorry to say that there is nothing more to the word independence than that, and that there is really no conspiracy here at all, just normal governance through the creation of independent agencies of government to manage the affairs of government. So stop blaming the agencies of government for government’s actions. The creator controls!!!
Listed under that heading “independent agencies of government” is all of these agencies of government allowed to act independently under their boards and commissions, including the “Federal Reserve System”. And it gives the website (http://www.federalreserve.gov/) for more information, which is where the Federal Reserve CAFR and other audits are housed for public utilization.
To give you an idea of just how many independent agencies of government there are, here is just a partial selection of the listings starting with only the letter F. Notice that no special place is given to the Federal Reserve System, for it is simply just another of hundreds of associations that Congress creates to manage the affairs of the United States Corporation. Clicking on any of these independent agencies of government brings you to its prospective website, including the Federal Reserve.
- Federal Law Enforcement Training Center
- Federal Library and Information Center Committee
- Federal Maritime Commission
- Federal Mediation and Conciliation Service
- Federal Mine Safety and Health Review Commission
- Federal Motor Carrier Safety Administration (FMCSA)
- Federal Protective Service
- Federal Railroad Administration (FRA)
- Federal Register
- Federal Reserve System
- Federal Retirement Thrift Investment Board
- Federal Student Aid Information Center
- Federal Trade Commission (FTC)
- Federal Transit Administration (FTA)
- Federal Voting Assistance Program
- Financial Management Service
- Fiscal Responsibility and Reform Commission
- Fiscal Service, Bureau of
- Fish and Wildlife Service (FWS)
- Food and Drug Administration (FDA)
- Food Safety and Inspection Service
- Foreign Agricultural Service
- Foreign Claims Settlement Commission
- Forest Service
- Fossil Energy
- Fulbright Foreign Scholarship Board
Now, do you honestly take issue with this perfectly logical and reasonable list of independent agencies? Do you honestly think that the Congress with its 538 or so members could possibly run all of these agencies from the halls of congress? Is there a reason that you don’t hold up a sign, for instance, that says END THE FTA?
Understandably, the concept of ending what is the 5th plank of the Communist Manifesto – “Centralization of credit in the hands of the state, by means of a national bank with state capital and exclusive monopoly” – is a perfectly reasonable endeavor for a people that can only be described today as debt slaves to that system. However, while callously parading around such a notion in felt tip pen and cardboard, the thought of a replacement never seems to cause concern to most armchair activists. For the Fed is just part of the government, remember. So while the Fed system and banks might disappear, the central government remains perfectly intact, and still holds patent on the monopoly money. And the government has instituted all 10 planks of the communist manifesto by law, not just this one. And the other 9 planks don’t need the Federal Reserve to exist!
In fact, it is my own speculation that the collapse of the Federal Reserve would lead to one and only one thing – takeover by the world bank via loans and collateralization – which in my opinion is the goal of the government-bankers who run the Fed in the first place. Let the people believe they have defeated a small subsection of evil within the greater unseen evil by ending the Fed, and then watch helplessly as the United States is handed over to the United Nations and World Bank like every other nation, creating the ultimate manifestation of a world central bank; a bail-out like no other. But that’s merely my own opinion.
Back to the facts…
I present this information here for only one purpose, which is to show the reader that the conspiracy is not the independent agency, but the controller of that agency. For the agency has no power without its mother corporation. By promoting the patriot myth that these entities are separate in any other way than operationally creates a false dialectic that they are also in conflict or competition with each other. And in the stage-play of congressional hearings and meetings, we watch as this notion is played out for the benefit of the masses. But indeed, all they are doing is playing the parts assigned to them as agents (actors).
And here is the most important thing to contemplate…
The only reason that the chairman of the Federal Reserve can tell Congress “no” to the requests for information by Congress while in session is because the Congress voted on a bill to allow that power to the chairman.
These are nothing more than actors; agents of the government. By creating the appearance of competition and the tying of hands the illusion is set to make the audience believe the fictional tale being presented. Good guy vs. bad guy. Left vs. right. Democrat vs.Republican. House vs. Senate. Congress vs. Fed.
Its the classic rhetoric of organized crime. Many fingers of the same hand pretending to be different and opposing one another, all the while controlled by the same hand.
Ironically, if anything, the bill introduced by Ron Paul entitled “End The Fed” stands as a very clear acknowledgement that Congress can end the fed (its own creation) at any time it wishes, through a simple vote. This is because of the fact that it is a federal agency of congress, and is its master no matter how much independence is bestowed upon it by its creator. And yet this simple logic is not acknowledged for some reason when speaking of the independence concept. But it shows that Congress the creator has ultimate power over what it created, including the invoking of the Fed’s immediate demise at the stroke of a pen. After all, the Fed is just a fiction of law, and therefore has no standing against law. This elegant truth stands as a perfect example of how a false dialectic (logic) has been built not from proper grammar, but from sheer word-of-mouth nonsense; usually from those selling products, storable food, gold and silver, and other commodities while using this fictional tale of independence and competition as its backbone of fear.
Well I have nothing to sell… And as history shows, it is usually the retail outfitters that supply goods and services that make out like bandits, not those searchers of the thing coveted or the cowards of the thing feared, and not the gold-diggers and hoarders of those goods. Strange, unreasonable, fear-based commerce indeed…
Breaking Down The Fallacies
Let us break down the fallacious statement by Mr. Corbett, piece by piece, by offering the opposing factual and primary information as its counter.
To start, let me provide you here with the primary resources that I referred to above, including the very long, full audit of the Federal Reserve called the Annual Report of the Board of Governors, otherwise known as the CAFR, as well as that of the individual banks – the audit of the Federal Reserve System and Banks:
From the Fed Board’s Website:
CAFR Annual Reports for the Board and the Individual Federal Reserve banks:
Federal Reserve Board CAFR (back to 1995) –> http://www.federalreserve.gov/publications/annual-report/default.htm
CAFR’s for individual banks –> http://www.federalreserve.gov/monetarypolicy/bst_fedfinancials.htm
New York Fed Bank CAFR –> http://www.newyorkfed.org/aboutthefed/annualreports.html
Quarterly Reports on Balance Sheets –> http://www.federalreserve.gov/monetarypolicy/quarterly-balance-sheet-developments-report.htm
For our purposes, we will use the most recent CAFR for fiscal year (fy) 2013.
You may also view my previous research articles here, thoroughly exposing this fraud, and presenting any facts not re-presented herein:
The Incontrovertible Conundrum Of Dr. Ron Paul –> https://realitybloger.wordpress.com/2012/06/23/the-incontrovertible-conundrum-of-dr-ron-paul/
Today’s Creatures From Jekyll Island –> https://realitybloger.wordpress.com/2012/09/01/todays-creatures-from-jekyll-island/
And so that there is no confusion here, the above links are for the Comprehensive Annual Financial Report, which is the full audit of the Fed. This is not to be confused with the completely separate, purposefully incomplete and misleading GAO audit of the Comptroller General of the United States, which is the only subject of the Audit the Fed bills from Ron Paul and the current version spoken about above by Mr. Corbett. These two audits are completely different and separate from each other. They should not ever be confused as being the same audit report, except by the fact that both are requirements of the creator (Congress) and its prescribed laws. It is this false notion that is at the heart of the confusion. The Fed has no choice but to comply with those laws because it is a creation of that Congress and subservient to it.
Unfortunately, part of Mr. Corbett’s dialectic as presented is that the audit produced by Title 31, Section 714 is the only audit available, or at least the only one to take into consideration. Both of these notions are false. For the CAFR is just as available to the public as it is to Congress, and it has nothing to do wit Title 31, Section 714. The reality is that Congress, including former congressman Ron Paul and his son, purposefully ignore and remain silent about the full audit of the Fed – the CAFR. If I can link it to you here, do you honestly think it’s that hard to find by the Congress itself, who requires the Fed to create the CAFR under its own laws BUT NEVER SPEAKS OF IT IN CONGRESSIONAL SESSION?
As far as the actual act in question presented within the Audit The Fed bill(s), it only refers to the other incomplete audit of the GAO and not the CAFR. In regards to this seemingly strange notion, please understand that Congress passed this restrictive act – Title 31, Section 714 – the subject of the entirety of the “Audit The Fed” bill(s) – in the first place, in order to restrict itself!!! In other words, Congress itself limited the audit ability of the Comptroller General as it is reported to Congress. The average person reading this most likely thinks that the Federal Reserve is a rogue agency that refuses by its own will to allow its transactions listed within Title 31, Section 714 to be audited. But this is a congressional act! The Fed is simply obeying the law set out by congress when in high Hollywood fashion it refuses the information that Congress asks for. Congress already knows that the Fed will refuse it before it asks, because congress wrote the law that requires the Fed to with-hold that same information in the first place. This is a Hollywood production you fools!
To make this ever more clear, the audit is only done in the first place because it is required by congress. The Ron Paul campaign and Audit The Fed bill(s) only served to change a rule that Congress – not the Federal Reserve or the Comptroller General – already voted into law in 1978 – called the Federal Banking Agency Audit Act (TITLE 31, Section 714). The Fed has nothing to do with this fact and has no authority whatsoever to change or deny this law. In other words, it is Congress itself [the government corporation] that is currently keeping this information off of the Comptroller General’s audit to itself, and thus out of the realm of public or legislative disclosure within public sessions of congress. Understand this, and you understand controlled opposition politics and how the Untied States legislature runs as nothing but a Hollywood production and consensus gaining company.
Now I’m willing to bet that James Corbett has not read the very subject of his rhetoric, the comptroller’s audit itself. He certainly has not read or at least comprehended the Federal Reserve Act and the laws that very clearly require the audits. And finally, it is painfully obvious that Mr. Corbett has not even looked at the index of the CAFR report, since it shows each thing not allowed in the Comptroller’s audit to be audited in the CAFR.
Firstly, he states that the Fed “audits ourselves”, referring to myself apparently as a “puppet”. Big mistake, dude!
Here we go…
#1 The auditing process of the Fed works the same way as any other auditing process works in any other government or business. The Fed creates its financial statements, called the CAFR or annual report, and then and only then does an independent auditing firm get hired to audit the financial statements themselves. Thus, to call the unaudited financial statements an audit is not technically correct, and is just another misunderstanding by the patriot folks who do not actually read the audited reports. We call the finished product post-audit an audit report simply because the financial reports are thus audited. So this first fallacy is absolutely wrong, for the Fed statements are audited by an outside company.
In it’s letter of transmittal, the CAFR states:
Board of Governors of the Federal Reserve System
The Speaker of the House of Representatives:
Pursuant to the requirements of section 10 of the Federal Reserve Act, I am pleased to submit the ninety-ninth
annual report of the Board of Governors of the Federal Reserve System.
This report covers operations of the Board during calendar year 2012.
Notice that this report is presented to the Speaker of the House! Are you really going to tell me now that the Congress doesn’t have access to the CAFR (annual report)? This is not the same audited report as the GOA audit, obviously, as we are reading here from page 4 (of the pdf) of the CAFR itself – not the GAO audit.
Also notice that this report is required by congress, the creator of the Federal Reserve Act as amended. This is not a choice!
We read in the CAFR:
Federal Reserve System Audits
The Board of Governors, the Federal Reserve Banks, and the Federal Reserve System as a whole are all subject to several levels of audit and review. The Board’s financial statements are audited annually by an outside auditor retained by the Board’s Office of Inspector General. The outside auditor also tests the Board’s compliance with certain laws and regulations affecting those statements.
The Reserve Banks’ financial statements are audited annually by an independent outside auditor retained by the Board of Governors. In addition, the Reserve Banks are subject to annual examination by the Board. As discussed in the chapter “Federal Reserve Banks,” the Board’s examination includes a wide range of ongoing oversight activities conducted on site and off site by staff of the Board’s Division of Reserve Bank Operations and Payment Systems.
The OIG also conducts audits, reviews, and investigations relating to the Board’s programs and operations as well as to Board functions delegated to the Reserve Banks, and Federal Reserve operations are also subject to review by the Government Accountability Office.
And on page 99 we read:
“The Federal Reserve Board engaged Deloitte & Touche LLP (D&T) to audit the 2012 combined and individual financial statements of the Reserve Banks and those of the consolidated VIEs.15 In 2012, D&T also conducted audits of internal controls over financial reporting for each of the Reserve Banks,Maiden Lane LLC,Maiden Lane III LLC, and TALF LLC. Fees for D&T’s services totaled $7 million, of which $1 million was for the audits of the consolidated VIEs. To ensure auditor independence, the Board requires that D&T be independent in all matters relating to the audits. Specifically, D&T may not perform services for the Reserve Banks or others that would place it in a position of auditing its own work, making management decisions on behalf of the Reserve Banks, or in any other way impairing its audit independence. In 2012, the Banks did not engage D&T for any non-audit services. One Bank leases office space to D&T.”
And we can finally read about the very different and separate GAO audit on page 409, to see the origin and novelty of that separate and unrelated audit report:
Government Accountability Office Reviews
The Federal Banking Agency Audit Act (Pub. L. No. 95–320) authorizes the Government Accountability Office (GAO) to audit certain aspects of Federal Reserve System operations. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) directs GAO to conduct additional audits with respect to these operations. Many of these Dodd-Frank-mandated audits have now been completed, but not all. In addition, the GAO has initiated its own review of financial regulators’ progress on implementing Dodd-Frank Act regulations.
In 2012, the GAO completed 21 projects that involved the Federal Reserve (table 1). Ten projects remained open as of December 31, 2012 (table 2). Some of the major projects that GAO has undertaken include a study of the Independent Foreclosure Review process; a review of Board and Reserve Bank offices of Minority and Women Inclusion and the diversity of the Federal Reserve System workforce; a review of enforcement of the Service members Civil Relief Act; and several studies on the costs and benefits associated with the implementation of the Dodd-Frank Act.
In point of fact, the GAO audit that is referred to in the Audit The Fed bills was never intended to be a full audit of the Fed system in the first place. It is a specific targeted audit of the items and transactions that the GAO is specifically looking for. It does not need a full audit for its purposes. If it did, then it would simply use the CAFR and save its auditors the trouble and expense of re-auditing the same exact thing over again. The GAO even refers readers to the CAFR (annual report) for the full financial audits!
In reference to these bills that would lift the constraints placed on the GAO’s audit authority over the Federal Reserve, Angell stated:
“The benefits, if any, of broadening the GAO’s authority into the areas of monetary policy and transactions with foreign official entities would be small. With regard to purely financial audits, the Federal Reserve Act already requires that the Board conduct an annual financial examination of each Reserve Bank (CAFR)… The process of conducting financial audits is reviewed by a public accounting firm to confirm that the methods and techniques being employed are effective and that the program follows generally accepted auditing standards… Further, a private accounting firm audits the Board’s balance sheet… Finally, and more broadly, the Congress has, in effect, mandated its own review of monetary policy by requiring semiannual reports to Congress on monetary policy under the Full Employment and Balanced Growth Act of 1978… In addition, there is a vast and continuously updated body of literature and expert evaluation of U.S. monetary policy. In this environment, the contribution that a GAO audit would make to the active public discussion of the conduct of monetary policy is not likely to outweigh the disadvantages of expanding GAO audit authority in this area.”
Mr. Corbett and so many others are simply victims of a slight of hand game. The various audits that take place within the Fed are stated clearly here, and yet the “Audit The Fed” bills always only refer to the single audit of the GAO, which is the least important audit of all with respect to the budgetary purposes of congress. For the GAO audit is meant to be specialized and incomplete by design!!!
No wonder the bill is not being passed. It’s just a redundancy of the CAFR! And again, the conspiracy is not within the Fed, it’s the government itself, and it will continue to play out these stage shows as long as you fall for their tricks. In fact, it would not surprise me at all if congress passes the bill simply to fool the End and Audit the Fed movement into believing they had a small victory. And the shock jocks and bumper-sticker suppliers will tout it as a big win, though nothing at all will become of it. Why? Because the audit is already there, and the congress ignores it already. LOL!
And so we now know that an audit is in fact done very much independently from the fed, making the true puppets in reality James Corbett and all others who puppet the notion that the Fed “audits itself”. This simply is not true, as shown above. The Fed does not audit itself any more than any other corporation out there. Instead it follows the legal process of auditing under the laws of the United States. I’m not here to suggest that this is a good or bad system, just to show how it works. Fallacy negated.
We also now know that the bill in question would not create any new audit, and would only serve to modify the already existing GAO audit, which in reality is just a redundancy, since the House receives a copy of the fully audited CAFR from the Board of Directors of the Fed – not by choice but by law of congress. And in that CAFR we can un-miraculously find everything missing from the GAO audit report…
One down, many fallacies to go…
#2 Mr. Corbett expresses the fact that as per U.S. Code Title 31, Section 714, and I quote “the Federal Reserve does not have to be audited for transactions with central banks or foreign governments, transactions, ah, involving anything to do with monetary policy decisions including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations, they don’t aud- they are not audited for transactions made under the direction of the FOMC (Federal Open Market Committee), and they are not audited for communication among members of the board or employees of the Federal Reserve System.”
But is this an accurate statement?
No. Not at all. Unless you do as he has and limit yourself to just this one restricted report from the GAO, thus creating your own fallacious dialectic. And why not, that’s the point isn’t it? To obfuscate and restrict the information presented in the real audit (CAFR) so that the people don’t know about it? The CAFR is certainly inclusive of this information, and the above items and transactions are indeed audited within.
I suppose we could say he is correct that this information is kept out of just one of the redundant audits, the one referred to as the GOA audit. But the whole point I am trying to make here is that this is mere subterfuge, because the congress receives the CAFR too, making the GAO audit report absolutely pointless… unless it’s designed and used to confuse and obfuscate, which it has done to Mr. Corbett!
So let’s go to the index and Table of Contents and see what we can find in the 2013 CAFR that is apparently not allowed to be audited…
How about the open market committees? Apparently in the mythos these meetings are secret, according to the ridiculous Audit the Fed bill, and thus must be voted upon to be included in the GAO audit report.
But is this correct? Does this mean that the information is not audited elsewhere?
Did anyone bother to check the full audit, the CAFR, for any of this information? Surely it can’t be in there, can it?
Oh, wait a minute. In the table of contents its states the following:
Minutes of Federal Open Market Committee Meetings….. 123
Meeting Held on January 24–25, 2012 ………………………. 124
Meeting Held on March 13, 2012 ………………………………. 156
Meeting Held on April 24–25, 2012 …………………………… 166
Meeting Held on June 19–20, 2012 ……………………………. 191
Meeting Held on July 31–August 1, 2012 ……………………. 216
Meeting Held on September 12–13, 2012 ……………………. 227
Meeting Held on October 23–24, 2012 ……………………….. 251
Meeting Held on December 11–12, 2012 …………………….. 261
Well then… the actual minutes of the actual meetings of the Open Market Committee, presented right in the audited financial statements of government? It can’t be, according to the myth. But there it is. Why? Because the CAFR is the full audit of the Federal Reserve, and it is not restricted by Title 31, Section 714.
Just because Congress chooses to ignore the CAFR doesn’t mean it does not exist. And that goes for you too, Mr. Corbett.
So what else can we find in the CAFR that is “not allowed to be audited” in the GAO audit?
Let’s go to the index and see, shall we?
Here’s a list of things apparently “not allowed to be audited” right here, somehow audited in the CAFR:
Federal Open Market Committee (FOMC). See also: Open market operations
Annual organizational matters, 125–127
Appropriate monetary policy, 144, 150, 152, 181, 186,
188, 209, 213, 244, 248, 278, 281
Consensus forecast, 225–226, 237
Domestic policy directives, 5–6
Forecast uncertainty, 155, 190, 215, 250, 285
Foreign currency operations and directives, 128–138
Meeting minutes, 123–285
Monetary policy strategies and communications, 44–48, 164–165, 167, 217
Notation votes, 140, 165, 176, 202, 226, 237, 260, 271
Policy actions, 44–48, 138–140, 162–164, 173–176, 199–202, 223–225, 235–237, 258–260, 269–271
Policy compliance, 100
Statement on longer-run goals and strategy, 7
Summary of Economic Projections, 6, 47–48, 123, 140–154, 177–189, 203–214, 237–249, 272–284
System Open Market Account, 127–128, 150, 157, 167, 217–218, 253
Open market operations. See also Federal Open Market Committee
Open Market – Open Market Desk, 16–17, 41 ,46
Volume of transactions, 289–290
Securities credit, 74
Alternative scenarios, 167
Developments and outlook, 44–48
Expectations, 22–26, 38–39
Overview, 5–6, 180
Statement on longer-run goals and strategy, 7, 131–132
Monetary policy reports to Congress
February 2013, 5–26
July 2012, 27–48
Foreign currency operations:
Authorization, 128 –130
Denominated assets, 355–356, 372–374
Liquidity swaps, 357, 374
Procedural instructions, 130–138
Foreign economies, 133–134, 158, 169, 195–196
Depository institutions, 19–20, 359
Federal Reserve Banks, 295, 300–301, 359
Deposits, 19–20, 359
Discount rates, 121–122
Reserve requirements, 292
Reserves of, 294–295, 298–301
Federal Reserve Banks
Accounting policies, 350–363
Assets and liabilities, 19–20, 294–295, 298–299
Automated clearinghouse (ACH) services, 93
Balance sheets, 19–20, 41–42, 132, 150, 157, 167, 193,
217–218, 228, 253, 262
Branches, 293, 420–433
Capital, 348, 359
Cash-management services, 97
Collection services, 96–97
Commercial check collection service, 92–93
Commitments and contingencies, 395–396
Condition statements, 304–308, 346
Credit outstanding, 294–295, 298–301
Currency and coin operations and developments, 94–95
Deposits, 295, 359
Economic growth projections, 141
Equipment and software, 393–395
Examinations, 53, 99–100
Fair value, 361–362
FedLine access to services, 98
Fedwire Funds Service, 93
Fedwire Securities Service, 93–94
Financial statements, 105–110, 342–407
Fiscal agency services, 95–97
Government depository services, 95–97
Income and expenses, 95, 100–101, 309–314, 347, 360, 405, 407
Information technology, 98–99
Interest rates on depository institutions loans, 292
Intraday credit, 97–98
Investments of consolidated VIEs, 102
Loans and other credit extensions, 294, 296–297, 298–299, 363–368
National Settlement Service, 93
Notes outstanding, 20, 358–359
Officers, 316, 432–433
Open market transactions, 289–290
Operations, volume of, 315
Operations and services, 349–350
Payments services, 96
Postemployment benefits, 404
Postretirement benefits, 402–404
Premises, 102–104, 317, 358, 393–395
Priced services, 91–94
Recovery of direct and indirect costs, 91–92
Restructuring charges, 362, 405–406
Retail securities programs, 96
Retirement plans, 396–401
Risk management, 94
Salaries of officers and employees, 316 442 99th Annual Report | 2012
Securities holdings, 100–101, 291, 298–
Supervisory information technology, 69
System OpenMarket Account holdings and loans, 100–102, 368–377
Thrift plans, 401
Treasury securities services, 95–96
Wholesale securities programs, 96
Foreign Assets Control, Office of (OFAC), 66
Foreign banks. See also specific banks by name
Deposits, 295, 300–301
Prudential standards, 50, 51, 111–112
Supervision of, 57–58
U.S. activities, 51, 58, 73
Foreign currency operations
Denominated assets, 355–356, 372–374
Liquidity swaps, 357, 374
Procedural instructions, 130–138
Credit (i.e. Discount Window Operations)
Availability, 11–12, 14, 18, 159, 170, 172–173, 195, 231
Consumer credit, 31, 255, 265
Now, I could go on listing more and more detail from the index of the Fed audit, but I have provided here a place in the CAFR for each item that is supposedly “not allowed to be audited”. And so please do your due diligence, Mr. Corbett and all others, and stop fallaciously naming those of us who actually do the research and read the primary data as the “puppets”, when in fact the puppet is you, parroting patriot mythology based on no solid evidence at all.
As for your other demeaning rhetoric to “those who do not understand the nature of the beast that is the Federal Reserve System” like you supposedly do, I can only say that your ego is apparent here when in plain fact it should not be. Perhaps you need to be reminded about the difference between reporting “news” and having proper grammar to feed your rhetorical reporting?
In the end, Mr. Corbett, I have written this piece not to offend you (as you did generally to me with your referential parrot comment), or to harm your reputation. On the contrary, I am writing to you today in order that you would save your reputation with me, an admirer, who has caught you here with no clothes. I’m not only asking for but demanding a retraction of what I believe to be your own fallacious incomprehension of the Federal Reserve and its place among government and UNDER government control. I recognize you here as the victim, not the criminal, or so I hope. Just as I too fell for the lies and mythology without checking the cold hard facts not so long ago, I redeemed myself and suffered the blow-back by truly speaking to the reality of the Fed. But I took your advice after so many attacks and kept on doing what I was doing, and ironically our roads have diverged on this subject due to your advice and my diligent research. My goal is to inform our fellow man that this Fed story is a fraud, and at best a distraction into the notion of a false competitive dialectic by a completely corrupt government legislature. I simply ask that you be a beacon of what the so-called truth movement is supposed to be about by doing the right thing and exposing not only the truth about the Fed and these bogus bills, but to also confirm to your “fans” the very difficult admission that even the best and most respected of us can be fooled into a false dialectic – false logic and rhetoric caused by very well laid misinformation and false grammar. In short, I only ask that you tell the people, unlike Ron Paul has, that the CAFR is the audit of the Fed and of every other independent agency of government in existence (fiction), and to quit promoting the notion that an audit does not exist. For clearly the CAFR as revealed above and in my own research is the audit you seek. And this new bill will not change anything about this reality. And the audit of the Fed will continue as it always has…
With great respect and position comes great responsibility.
So do the right thing.
Retract immediately (or immediately after proper action in studying the grammar provided here) the fallacious rhetoric you have helped to spread about the Fed as I have, and encourage others to do the same. Be what you are meant to be, James.
Or… Somehow prove me to be in error! For the burden of proof has been fulfilled on my end in triplicate here today.
Signed, with all due respect,
–Clint Richardson (realitybloger.wordpress.com)
–Monday, October 27th, 2014