The government can never run out of money.

There is no "economics." There are only individual human beings or groups of human beings making exchanges between each other. I assert that all adult individuals have the right to engage in peaceful, honest, voluntary actions without interference. Economics is just another attempt to introduce unnecessary complexity into the equation to deprive people of rights.

 

Economics is about understanding the problem. What do you believe the problem is?

 

First of all, perfection is not an option. You'll still have problems in a pure free market. The real question is "what leads us to the least amount of problems and the most progress for the individual human beings that comprise the group known as society?"

As I've just stated, the main problem is a group of human beings calling themselves government preventing adult individuals from making peaceful, honest, voluntary exchanges. Government's only legitimate role is punishing those who initiate force, fraud or coercion. When they control the peaceful, honest, voluntary actions of adult individuals, they are acting illogically. Cause and effect. You act illogically, you get blowback of some type.

 

I believe I take a simpler approach. I believe we need merely solve simple poverty and the capital effects of capitalism's, natural rate of unemployment.

 

That article was a string of misleading stories on the bailout. It was $16 trillion in cumumlative loans, not in total money lent out. For example, if a billion was lent out on a 30 day payback, and then rolled over each month for 10 months, that is counted as $10 billion in terms of that figure.

The most that was ever outstanding was about $1.3 trillion. And there was nothing secret about it.

But as I demonstrated earlier, it's audited by multiple entities, including independent auditors, the GAO and the OIG, multiple times yearly.

It's probably the most heavily audited entity in the world.

 

Borrow it from Japan. Their bonds have negative interest.

 

It will excite all of us when you show evidence the Fed is audited all the time. "heaviest audited entity in the world."

 

The "Creature Feature" didn't tell you about the regular Fed audits, eh?

Don't get too excited.

Most of this is from a thread I started a few years back.

+++

If you've followed financial posts here at all, you've no doubt seen the many posts claiming the Fed has never been audited, or (once they've been educated a bit) that the Fed isn't "really" audited or comprehensively audited.

These claims inevitably come from sources of demagogue politicians (like Ron Paul) who regularly bash the Fed for political purposes, or internet whacko videos like "Creature from Jeckyll Island" and other internet hucksters that feed the gullible.

This month, the Government Accountability Office (GAO), a government entity responsible for auditing government (and quasi-government) operations, released an exhaustive, comprehensive, 266 page report that details the Fed's operations generally, and its operations to avert a disaster in the 2008 credit collapse more specifically.

You can find the report here:

http://sanders.senate.gov/imo/media/doc/GAO Fed Investigation.pdf

As to the Fed's operations and its "never been audited" aspects, the GAO report comprehensively reviewed the numerous, mulitple, internal and external layers of audits and controls to which the Fed is subjected on a regular basis.

Summary of some of the findings are presented below.

---

Page 38:

The Federal Reserve System and Its Emergency Activities Were Subject to Multiple Audits and Reviews


The Emergency Programs Have All Been Subject to Audits and Reviews

The Federal Reserve Act requires the Federal Reserve Board to order an annual independent audit of the financial statements of each of the 12 Reserve Banks.57 Each Reserve Bank prepares annual financial statements that reflect its financial position as of the end of the calendar year and its related income and expenses for the year. The Federal Reserve Board also prepares combined financial statements of the Reserve Banks, which include the accounts and results of operations of the 12 Reserve Banks. As shown in figure 2, the loans and other financial assistance provided through the Federal Reserve’s emergency programs are recorded in the Reserve Banks’ publicly reported financial statements.

The Reserve Banks have voluntarily adopted the internal control reporting requirements of the Sarbanes-Oxley Act of 200260 and provide an assessment of the effectiveness of their internal control over financial reporting annually to their boards of directors.61 Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.

...

Since 2007, Deloitte has been the independent external auditor for the Federal Reserve System. Accordingly, Deloitte performs the audits of the individual and combined financial statements of the Reserve Banks and those of the consolidated LLCs. Deloitte also provides opinions on the effectiveness of each Reserve Bank’s internal control over financial reporting. In 2009, Deloitte began providing opinions on the effectiveness of each LLC’s internal control over financial reporting. 63 To help ensure auditor independence, the Federal Reserve Board requires that its external auditor be independent in all matters relating to the audits. Specifically, Deloitte 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.

FRBNY management also engaged external firms to review certain aspects of the emergency programs. For example, FRBNY engaged the auditing firm KPMG LLP (KPMG) to assist FRBNY in developing a conflict of interest inspection and fraud-review program for certain programs created in response to the financial crisis. In 2009 and 2010, KPMG executed reviews of vendors and agents supporting the Agency MBS program, Maiden Lane LLC, Maiden Lane II LLC, Maiden Lane III LLC,
TALF, and CPFF. The scope of this work covered an evaluation of the vendors’ and agents’ adherence to their own conflict of interest policies and more program-specific provisions contained within their engagement agreement with FRBNY. These reviews are discussed in greater detail later in this report. In 2009, FRBNY contracted with a management consulting firm, Oliver Wyman, to conduct an independent review of the governance and management infrastructure surrounding its new market
facilities and emergency programs created throughout 2008. This review was specifically focused on the three Maiden Lane LLCs, CPFF, and MMIFF and included an examination of internal reporting and management updates, business and strategic plans for relevant Reserve Bank functions, internal risk assessments, Reserve Bank policies and procedures, committee charters, and organizational summaries.

In addition to external audits and reviews, the Federal Reserve System has a number of internal entities that conduct audits and reviews of the Reserve Banks, including the emergency programs. For example, each Reserve Bank has an internal audit function that conducts audits and other reviews to evaluate the adequacy of the Reserve Bank’s internal controls, the extent of compliance with established procedures and regulations, and the effectiveness of the Reserve Bank’s operations. The internal audit function conducts audits in accordance with the International Standards for the Professional Practice of Internal Auditing and maintains organizational independence from management by reporting directly to the audit committee of the Reserve Bank’s board of directors.64 During the period from 2008 through 2010, FRBNY’s internal audit function conducted audits pertaining to the Agency MBS program, TSLF, Swap Lines, TAF, CPFF, TALF, and PDCF, as well as the three
Maiden Lane LLCs.

...

The OIG also conducts audits, reviews, and investigations related to the Federal Reserve Board’s programs and operations, including those programs and operations that have been delegated to the Reserve Banks by the Federal Reserve Board. The OIG is required to submit a semiannual report to the Chairman of the Federal Reserve Board and to Congress. In November 2010, the OIG reported on its review of six of the emergency programs: TSLF, PDCF, MMIFF, TALF, CPFF, and AMLF.
The OIG stated that the purpose of its review was to determine the function and status of these programs and to identify risks in each of the programs to assist the Federal Reserve Board in its general supervision and oversight of the Reserve Banks.

The Fed is the most heavily audited entity in the world, probably.

---

Results of the numerous external, internal, and government audits:

Page 46:

Audits and Reviews Have Not Identified Significant Accounting or Financial Reporting Internal Control Issues Concerning the Emergency Programs

The Reserve Banks and LLCs Received “Clean” Opinions on their Financial Statements

Deloitte rendered unqualified (clean) opinions on the individual and combined Reserve Banks’ financial statements for the years 2007, 2008, 2009, and 2010. As described earlier in this report, the Reserve Banks’ financial statements include the activity pertaining to the emergency programs, including the accounts and operations of the LLCs, which are consolidated into FRBNY’s financial statements. Deloitte also has rendered clean opinions on the financial statements of each LLC beginning with the creation of Maiden Lane LLC in 2008. A clean opinion indicates that the financial statements prepared by management are free of material misstatements and are presented fairly in accordance with U.S. generally accepted accounting principles (GAAP) or, in the case of the Reserve Banks, accounting principles established by the Federal Reserve Board, which is a comprehensive basis of accounting other than GAAP.

The independent external auditor conducted its financial statement audits of the Reserve Banks and LLCs in accordance with U.S. generally accepted auditing standards as established by the Auditing Standards Board and in accordance with the auditing standards of the Public Company Accounting Oversight Board.67 These standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement
and whether effective internal control over financial reporting was maintained in all material respects. The audits of the Reserve Banks’ and LLCs’ financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.

Since the development and implementation of the emergency programs, the independent external auditor’s internal control opinions related to the Reserve Banks and LLCs have all been clean, indicating that these entities have maintained, in all material respects, effective internal control over financial reporting.

As mentioned in the previous section, in addition to the independent external auditor, the Reserve Banks’ internal audit function, RBOPS, and the OIG performed audits and reviews of the emergency programs. Similar to the external audits, the audits and reviews conducted by these other groups did not report any significant accounting or financial reporting internal control issues.

---

As the comprehensive GAO review and audit proves, the Fed has been audited up the ying yang but multiple, numerous entities, both external and internal, non-government and government, and every audit found that there were no significant mis-statements or control issues the Fed's reports or financial statements both in terms of its normal operations and its emergency actions in conjunction with mitigating the financial collapse that was threatened in the great recession.

---

Here are the independent auditor reports and opinions:

2009: http://www.federalreserve.gov/monetarypolicy/files/BSTcombinedfinstmt2009.pdf
2010: http://www.federalreserve.gov/monetarypolicy/files/BSTcombinedfinstmt2010.pdf
2011: http://www.federalreserve.gov/monetarypolicy/files/BSTcombinedfinstmt2011.pdf
2012: http://www.federalreserve.gov/monetarypolicy/files/BSTcombinedfinstmt2012.pdf
2013: http://www.federalreserve.gov/monetarypolicy/files/BSTcombinedfinstmt2013.pdf
2014: http://www.federalreserve.gov/monetarypolicy/files/BSTcombinedfinstmt2014.pdf

Other GAO audit reports:

http://www.gao.gov/assets/670/669468.pdf
http://www.gao.gov/new.items/d09722r.pdf

Let me know if you need more.

 

Money is not wealth. The US government can certainly seize, transfer, and destroy wealth by crediting accounts. It is never a net creator of wealth.

 

So now that I've answered your question, maybe you can answer mine?

From what source(s) did you get the belief that the Fed is not audited on a regular basis?

 

Typical libertarian prevarication. You didn't just drop down out of the sky into a virgin world with no infrastructure. 99.9% of what you use was created by others for you to take advantage of. Including police, military, courts, roads, rails, and education. If you are a one-in-a-million genius or entrepreneur maybe, just maybe you might add some small amount to that total.

And I don't even mind you taking advantage of what other people's taxes have created. What torques my jaws is the fact you are standing on the shoulders of the human race and telling us you don't owe anybody anything. Bloody freeloaders should be whipped.

 

No, it is not that they are delusional or believe the lies, it is that for the most part they are the ones profiting from the system in which 99 people work and 1 person reaps the wealth. If they admitted the truth, their scam would be outed and they would be in prison.

 

Let's gnaw on your bone a bit longer.

This is what your report claims.

Notice the topic is the emergency programs.

Copied from the report

 

You mean the same "lie" that the Fed has never been audited, independently or otherwise? The question you keep dodging?

http://www.politicalforum.com/showthread.php?t=451929&page=36&p=1066102826#post1066102826

 

Yes, that report focused on the Fed's actions in the financial crises, but the sections I quoted discuss how it is regularly audited.

And you can see for yourself some of the audit reports, including the independent audit report for the past 6 years.

By the way, it's not *my* report, its the report of the General Accountability Office.

 

P.S., if you need more Fed audits, you can find links to the numerous and regulator audits of the GAO, the OIG, Deloitte audits here: http://www.federalreserve.gov/faqs/about_12784.htm

 

From what source(s) did you get the belief that the Fed is not audited on a regular basis?

 

Again, I'm talking about standard currency, but who wants to invest in bonds and continuously lose money on your investment. With negative interest rates, that's what will happen. If the banks do it here, you'll be paying the bank to keep your money there. Negative interest rates will eventually destroy the banking system and the economy. The only reason they're taking that route is because of the massive debts that governments have incurred to keep buying votes without raising taxes more.

 

It's definitely not a simply approach because you're looking for a centralized answer. Poverty won't be solved by giving people money and making them dependent. Unemployment isn't relevant with enough technology. If everyone has zero pollution free energy, robots to maintain their own mini-farms, 3-D printers to produce repair materials to be maintained by robots also, etc. Then they don't really need jobs in the traditional sense.

The question is, which economic system provides the fastest rate of innovation to get us there. The historical evidence shows that free markets do this best.

 

why do you believe that?

Does Hoover Dam or the Fed, not create wealth?

 

Please sent me your worthless money. I like if for sentimental reasons. Thanks.

 

I am not sure what you mean. There is no ignoring economics in favor of political ideology. Simple poverty can be solved, simply and easily and on an at-will basis in our at-will employment States. There is no dependency, unless a Person likes staying poor on an at-will basis in our at-will employment States.

We have fifty States.

Solving for the capital effects of capitalism's, natural rate of unemployment is what social safety nets should be all about.

 

Yes, it's always somebody elses fault. If they hadn't let those fast guys run in the race, I'd have come if first. And my money? If those other guys hadn't grabbed my money before I got there, I'd be rich too. You just can't win, because so many won't play fair.

 

The US used to be a British colony.

 

Typical statist/collectivist irrational nonsense. No, we didn't just drop out of the sky. We dropped into a world of thugs, liars and thieves who've been stealing from people through color of law, fraud and threat of force (and actual force if the threat doesn't work) for generations. They don't give anyone a choice. They immediately falsely claim that you are liable and subject to all of this simply by being born to certain parents or on a certain strip of land. There is no social contract. No one was ever given the choice to agree or disagree after reaching the age of consent. The government just assumes that it owns everyone, and most of you suffer from Stockholm Syndrome, so you don't argue with that assumption. Your delusions lead you to believe that anyone who questions this must be out of their minds, because you are just so, so sane.

The freeloaders have been the parasitical class, who produce nothing but simply steal from the efforts of others by deluding them into believing their nonsense can improve their lives, thus reducing survival anxiety. It started out as the priesthood, but later the collectivists/statists took over this role. A thorough breakdown of that is here:

[video=youtube;Kler8K4tIPM]https://www.youtube.com/watch?v=Kler8K4tIPM[/video]