Private bankers who run the Federal Reserve System have the power to pump hundreds of billions of dollars into the nation’s money supply, making each dollar in circulation automatically worth less. Any institution with that kind of power over the economic lives and fortunes of Americans should be operated in the open. That is why the Fed’s lack of transparency is troubling, to say the least. More than half of the members of the House of Representatives agree. There are 276 co-sponsors of Texas Republican Rep. Ron Paul’s Federal Reserve Transparency Act of 2009, which requires a full-fledged audit by the Government Accountability Office (GAO) and a report to Congress by 2010. Co-sponsor Brad Sherman, D-CA, was quite right when he stated that “anyone exercising governmental power should be subjected to governmental oversight.”

Paul has been called a kook for his opposition to the central bank, which manipulates interest rates as well as monetary policy. But his stature was enhanced following last fall’s housing bubble collapse because he had predicted in 2003 that it would come. Created by Congress in 1913 to address a series of banking panics, the Fed not only failed to see the 2008 recession coming, it was at the epicenter of the crisis. Its artificially low interest rates stimulated a real estate price bubble that was exacerbated by flawed mortgage products offered by banks it failed to regulate, just as Paul warned five years ago. The Fed also made highly controversial “emergency” loans to bail out failing companies, including American International Group, Inc. (AIG) – which used it to pay bonuses to its top executives.