On February 26th of this year a bill was introduced by Hon. Ron Paul of Texas that would compel an audit of the Federal Reserve System by the Comptroller General of the United States. HR 1207 is rapidly gaining co-sponsors.

Created in 1913 under dubious circumstances, the Federal Reserve has never been audited.

It's name would imply that it is a branch of the "Federal" Government. That is not true. The Federal Reserve is a PRIVATE banking cartel, with private owners. The Federal Government does in no way whatsoever own the Federal Reserve banking system.

The Constitution of the United States in Article 1, Section 7, states, "The Congress shall have Power To coin Money, regulate the Value thereof." It also says in Article 1, Section 10, "No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts."

Our Founding Fathers knew the value of honest money, and did their very best to provide it for the citizens of this country. They knew that specie, which originates from the Latin meaning "in coin," was much preferred over fiat paper currencies.

As a matter of fact, the Coinage Act of 1792 mandated the death penalty for the felony crime of debasing the coinage/money of our country. Section 19 of that Act states in its entirety,

"And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the
default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death."

Our forefathers were serious about keeping this country's money honest.

Even though the Constitution clearly states that no state shall make any thing but gold and silver coin a tender in payment of debts, eventually paper certificates that represented the actual gold or silver coinage - and could be redeemed for them - begin to be issued by private banks in the early 1800's.

Eventually, the United States Treasury began to issue paper currency that could be redeemed in gold and silver coin. Here is an image of a 1928 $20 Gold Certificate issued by the Treasury:

Notice the wording at the top says, "This certifies that there has been deposited in the Treasury of the United States of America"

and continues the statement at the bottom with,

"twenty dollars in gold coin payable to the bearer on demand."

By contrast, in that very same year Federal Reserve Notes were being issued by the Federal Reserve. Here is an image of a $20 Federal Reserve Note:

Notice in the $20 Federal Reserve Note above that there is no statement that anything of value has been deposited at the Treasury, nor does it promise to pay in gold or silver coin.

In 1928 we had the very interesting situation whereby both the U.S. Treasury as well as the Federal Reserve were each issuing paper currency. The U.S. Treasury was issuing certificates, which are "documents certifying ownership," while the Federal Reserve was issuing notes, which is short for promissory notes, which are simply "promises to pay."

Also notice how similar they look to each other. That was NOT an accident, it was part of the plan by the Federal Reserve to condition the public to accept Federal Reserve Notes as money. In 1928, both the U.S. Treasury-issued $20 gold certificate and the Federal Reserve-issued $20 note could be taken into any bank and exchanged for a $20 gold coin.

But that would soon change.

President FDR came along and severed the convertibility between the paper coupons and the actual money in the form of gold coins on deposit with the U.S. Treasury by issuing Executive Order 6102, which required citizens to deliver on or before May 1, 1933 their gold coin, gold bullion, and gold certificates owned by the public to the Federal Reserve, in exchange for $20.67 in paper currency per troy ounce.

FDR was instrumental in The Gold Reserve Act of 1934, which made gold clauses unenforceable as well as limited gold ownership in the U.S.

Of course, from that point forward, the U.S. Treasury no longer issued gold certificates, and they were removed from circulation, leaving only Federal Reserve Notes to circulate as currency.

Later, in the 1960's came the demise of silver certificates. No longer could U.S. citizens walk into a bank and walk out with specie. The Federal Reserve now had total control of the nation's money, which from that point forward was exclusively Federal Reserve Notes.

The Fed could create and issue as many as it wanted. Federal Reserve Notes are not linked to, nor are they redeemable in anything of value, as the gold and silver certificates used to be.

And therein lies the problem. The Fed can create as much "money" as it wants, unrestrained, without audit. Nobody, not even the President of the United States, currently has the legal authority to examine the accounting books of the Federal Reserve.

Nobody.

If you could create as much legal currency as you wanted, without anyone ever having the legal authority to even count how much you were creating, how much would you create? Would you create some for your relatives? Your friends? Your neighbors?

Remember, you can create as much as you desire, and NOBODY has any legal recourse to hold you accountable for your actions, and NOBODY even has a right to perform an accurate accounting of the amount of money you are creating.

Do you see the potential for abuse in that situation?

There is no question that the first step in regaining honest money in this country is to have a full and accurate accounting performed on the Federal Reserve.

Of course, by its own admission, the Federal Reserve is worth multiple trillions.

Do you really think they are going to allow any scrutiny whatsoever on their unimaginable privilege to create trillions upon trillions of dollars and do with those dollars whatever they want?

I think not.