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Wells Fargo or the Federal Reserve: Who’s the Bigger Fraud?
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The Wells Fargo bank account scandal took center stage in the news last week and in all likelihood will continue to make headlines for many weeks to come. What Wells Fargo employees did in opening bank accounts without customers’ authorization was obviously wrong, but in true Washington fashion the scandal is being used to deflect attention away from larger, more enduring, and more important scandals.

What Wells Fargo employees who opened these accounts engaged in was nothing more than fraud and theft, and they should be punished accordingly. But how much larger is the fraud perpetrated by the Federal Reserve System and why does the Fed continue to go unpunished? For over 100 years the Federal Reserve System has been devaluing the dollar, siphoning money from the wallets of savers into the pockets of debtors. Where is the outrage? Where are the hearings? Why isn’t Congress up in arms about the Fed’s malfeasance? It reminds me of the story of the pirate confronting Alexander the Great. When accused by Alexander of piracy, he replies “Because I do it with a small boat, I am called a pirate and a thief. You, with a great navy, molest the world and are called an emperor.”

Over two thousand years later, not much has changed. Wells Fargo will face more scrutiny and perhaps more punishment. There will undoubtedly be more calls for stricter regulation, notwithstanding the fact that regulators failed to detect this fraud, just as they have failed to detect every fraud and financial crisis in history. And who will suffer? Why, the average account-holder of course.

Any penalties assessed against Wells Fargo will be made up by increasing fees on account-holders. Clawbacks of bonuses, if they occur, will likely face resistance from the beneficiaries of those bonuses, leading to protracted and costly lawsuits. Even if the Wells Fargo CEO and top executives of Wells Fargo step down, the culture at Wells Fargo is unlikely to change anytime soon. As one of the largest banks in the world, Wells Fargo knows that it is not only too big to fail, but also too big to prosecute. At the end of the day, no matter how much public posturing there is, Wells Fargo and the regulators will remain best buddies. And those regulators who failed to catch this fraud will be rewarded with more power and larger budgets, courtesy of the US taxpayer.

Through all of this, the Federal Reserve will continue its policy of low interest rates and easy money. Retirees who hoped to be able to live off the interest on their investments will find themselves squeezed by continued low interest rates. Those living on fixed incomes will see their monthly checks buying less and less as the prices of food staples continue to rise. The fat cats on Wall Street will continue to have access to cheap and easy money while those on Main Street will face a constantly declining quality of life.

It is well past time for the Federal Reserve to face the same music as Wells Fargo and the bad actors on Wall Street. It is, after all, the Federal Reserve’s creation of money out of thin air that enables all of this fraudulent behavior in the first place, so why should the Fed remain untouchable? Let’s hope that someday Congress wakes up, hauls the Federal Reserve in for questioning, and puts as much pressure on the Fed as it does on private sector fraudsters.

(Reprinted from The Ron Paul Institute by permission of author or representative)
 
• Category: Economics • Tags: Federal Reserve 
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  1. Ron Paul has spent his life criticizing the Federal Reserve, with the following consequences:

    1. Nothing has happened to the Federal Reserve.

    2. And more importantly, nothing has happened to Ron Paul, in the sense that no one in power has retaliated by prosecuting Paul, causing him to lose jobs or pressuring him to humiliate himself publicly by apologizing for and renouncing his statements about the Fed. Our elites have just ignored Paul, and on the whole he has had an easy life, despite his self-promotion as an enemy of tyranny. These elites just don’t feel vulnerable through attacks on the Fed.

    By contrast, look at what happens to public figures who question our elites’ ideology and childish utopianism about feminism, gay degeneracy, race and immigration – and even climate change, interesting enough – for example Brenden Eich, Palmer Luckey and Steve Clevenger. Our elites and their proxies attack these people vigorously; and the difference shows what our elites really care about, what they view as their most powerful tools for controlling and reshaping society, and where they feel the most threatened by the men who stand up to them in these areas.

    In other words, the difference shows where we need to focus our energies in confronting and dislodging the corrupt people who have run our society into the ground.

    So keep criticizing the Fed, Dr. Paul. Your play-acting at defiance of our elites won’t accomplish anything, and it won’t inconvenience you one bit.

    Read More
    • Replies: @jtgw
    Don't you see how your first point contradicts your second? Who cares whether elites ignore or denounce Paul, provided that the same desired result is achieved, namely no change to current monetary policy?

    I think the real reason elites mostly ignore Paul on this is most people don't understand monetary policy and just vaguely accept that the government decides what is or isn't money and assigns value to that money. They can't get their heads around the competing arguments for fiat versus commodity currency, so they just don't think or talk about it. So there isn't much of a popular movement against the Fed, which suits the powers that be just fine. People can grapple with arguments over social policy and immigration much more easily, on the other hand, so they tend to have strong opinions and the elites are forced to crack down on their opponents.

    By the way, Paul's opponents have tried to smear him as a racist and bigot. It's just the smears didn't stick enough to destroy his reputation because there is no evidence that he is one. So they just went for neutralization, e.g. last-minute changes to nomination rules in order to disqualify his delegates.
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  2. @advancedatheist
    Ron Paul has spent his life criticizing the Federal Reserve, with the following consequences:

    1. Nothing has happened to the Federal Reserve.

    2. And more importantly, nothing has happened to Ron Paul, in the sense that no one in power has retaliated by prosecuting Paul, causing him to lose jobs or pressuring him to humiliate himself publicly by apologizing for and renouncing his statements about the Fed. Our elites have just ignored Paul, and on the whole he has had an easy life, despite his self-promotion as an enemy of tyranny. These elites just don't feel vulnerable through attacks on the Fed.

    By contrast, look at what happens to public figures who question our elites' ideology and childish utopianism about feminism, gay degeneracy, race and immigration - and even climate change, interesting enough - for example Brenden Eich, Palmer Luckey and Steve Clevenger. Our elites and their proxies attack these people vigorously; and the difference shows what our elites really care about, what they view as their most powerful tools for controlling and reshaping society, and where they feel the most threatened by the men who stand up to them in these areas.

    In other words, the difference shows where we need to focus our energies in confronting and dislodging the corrupt people who have run our society into the ground.

    So keep criticizing the Fed, Dr. Paul. Your play-acting at defiance of our elites won't accomplish anything, and it won't inconvenience you one bit.

    Don’t you see how your first point contradicts your second? Who cares whether elites ignore or denounce Paul, provided that the same desired result is achieved, namely no change to current monetary policy?

    I think the real reason elites mostly ignore Paul on this is most people don’t understand monetary policy and just vaguely accept that the government decides what is or isn’t money and assigns value to that money. They can’t get their heads around the competing arguments for fiat versus commodity currency, so they just don’t think or talk about it. So there isn’t much of a popular movement against the Fed, which suits the powers that be just fine. People can grapple with arguments over social policy and immigration much more easily, on the other hand, so they tend to have strong opinions and the elites are forced to crack down on their opponents.

    By the way, Paul’s opponents have tried to smear him as a racist and bigot. It’s just the smears didn’t stick enough to destroy his reputation because there is no evidence that he is one. So they just went for neutralization, e.g. last-minute changes to nomination rules in order to disqualify his delegates.

    Read More
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