Rand Paul Reintroduces Audit The Fed Bill, DeMint And Vitter Co-Sponsors

Tyler Durden's picture

If there is one thing that the one-time GAO audit of the Fed disclosed, is how woefully insufficient the extremely superficial data discovery was. Another thing uncovered was just how needed this disclosure was: it provided extended material into how the Fed subsidizes banks (both domestic and international) on an ongoing basis, not to mention substantial number crunching for the blogosphere. Either way, if Bernanke was hoping that the Frank-Dodd bill would take care of the Fed opacity, pardon, transparency issue in perpetuity, he may be disappointed: Ron's son, Rand, has just announced he is introducing legislation to, well, Audit The Fed, precisely along the lines of what his father did previously and generated massive support from everyone in Congress. Once again Ben Bernanke is about to become a major thorn on the side of the political puppetry.

WASHINGTON, D.C. – Today, Senator Rand Paul introduced legislation allowing for a full audit of the Federal Reserve. This legislation is a Senate version of similar legislation long-championed by and introduced this session in the House of Representatives by his father, Congressman Ron Paul of Texas. Co-sponsoring the “Federal Reserve Transparency Act of 2011” (S. 202), are Senators Jim DeMint of South Carolina and David Vitter of Louisiana.

“We must take a critical look at the Fed’s monetary policy decisions, discount window operations, and a host of other things, with a real audit – and not just pay lip-service to the idea of an audit,” Sen. Paul said today. “At a time when we're seeing great volatility in small Euro-zone economies like Greece, Portugal, and Ireland, it is more crucial than ever that we have real transparency at our own central bank.“

The bill will eliminate the current audit restrictions placed on the Government Accountability Office (GAO) and mandate a complete audit of the Federal Reserve to be completed by a firm deadline, finally delivering answers to the American people about how their money is being spent by Washington.

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Xedus129's picture

Lets count the tungsten!

Turd Ferguson's picture

There you go! How about an "Audit Fort Knox" bill, instead?

At any rate, if anyone is wondering how things are working out in the bottom-calling business, feel free to click here:


Spalding_Smailes's picture

Bottom calling ... ? Minyanville ~


A call came in this morning from Shawn Hackett, founder and CEO of Hackett Financial Advisors, a Boynton Beach, Florida money management firm with a specific focus on agricultural commodities.

“Why is Cargill selling Mosaic (MOS)?" Hackett asked. “They know more about ag than anyone else in the world -- why would they be cashing out of the fertilizer business when everyone else is falling all over themselves to get in, with people talking about food shortages and riots going on?”

Cargill, which is the largest privately held company in the United States and competes directly alongside agribusiness behemoth Archer Daniels Midland (ADM), is unloading its $20 billion-plus stake in Mosaic -- the world's leading producer and marketer of concentrated phosphate and potash -- to reportedly free up money for the family-owned business’ charitable trusts without raising cash through an IPO and going public.

But why would Cargill, which according to its website, has “75 businesses organized around five major segments: Agriculture Services, Food Ingredients and Applications, Origination and Processing, Risk Management and Financial, and Industrial,” choose Mosaic as the one asset to shed?

“I don’t know exactly what’s going on inside other peoples’ heads, but this is certainly an interesting ‘tell,’” Hackett says. “There are so many other things they could be selling, so are they making a call that we’re at the top of the fertilizer cycle? The market is so bullish. Cargill’s not. Why would they give up all these ‘billions and billions of dollars in future value?’ It pays to pay attention to the kinds of companies who are really profitable again and again.”

Others agree.

“Cargill is smart money,” Malcolm Polley, president of Stewart Capital Advisors LLC, told Bloomberg news. “If they are getting out of Mosaic, maybe it’s a good time to hedge your bets probably in the whole sector.” 

Further, Mosaic CEO James Prokopanko and CFO Lawrence Stranghoener may sell what they described in a Tuesday regulatory filing as a “modest” number of MOS shares. What makes this noteworthy? Neither Prokopanko or Stranghoener have sold any of their Mosaic shares since the company was formed in 2004. 

Delving deeper, Hackett points out that Goldman Sachs (GS) has pared down their risk exposure to commodities to levels not seen since 2004.

“Q4 2010, Goldman had the lowest risk exposure to the overall commodity marketthey’ve had since Q1 2004,” he says. “What are they seeing that no one else seems to be? When you have two entities like Cargill and Goldman taking risk off the table, it may be a pretty telling macro call that there may be some trouble ahead.”

Matt McCormick, a banking analyst at Bahl & Gaynor, gave Reuters a similar perspective.

"I think Goldman is consciously making smaller bets on commodities," he said. "Any time you go back to a low of 2004, you are clearly making a substantial call." 

Equally substantial is the fact that Morgan Stanley (MS) and JPMorgan (JPM) have made similar moves that bear a closer look.

Morgan Stanley’s commodities “Value at Risk” in Q4 2010 was down roughly 20% for the quarter and JPMorgan’s VaR was flat -- but, as Reuters reports, “down more than two-thirds from its 2008 peak.”

“These numbers came despite a 28.7% jump in commodity prices over the two last quarters combined, as measured by the Reuters-Jefferies CRB index,” the news service reported. “The last time the CRB rose as much for two consecutive quarters was when it climbed 29% in 2008 and 34.5% 1973.”

While these questions are nothing more than questions at the moment, the prudent investor may well be served by filing them away for further thought.

“It doesn’t mean that it’s all over for commodities tomorrow,” Hackett says. “However, we may find out three or six months from now that we really should have been listening to this.”

bingaling's picture

Gov't is coming to control food is what it means and their prices - Speculators in commodities will be made the enemy of the people by the MSM and blamed for high prices  . Commodity exchange lockdown bitchez! or maybe there will be some major "population " declining event in the near future ?

gloomboomdoom's picture

The FED will sell securities back into the market... bearish for Coms

11100 is a good bottom

earnyermoney's picture

government controll will lead to rationing of a very limited selection of agricultural end products. Lots of empty shelves in your local grocery store. I would consider mass starvation a major population declining event.

The Navigator's picture


Most or all right on all points.

ColonelCooper's picture

Seriously dude....  Do you ever have an original thought?  Ever?  I mean sometimes a paste job is helpful, relevant (yours usually are at least), or interesting,,, but Shit!!  Start your own blog for Christssakes if you want to put up Dickensesque volumes on every single thread.  OR actually write some shit yourself.

Just sayin. 

zaknick's picture

Why do you read ZH? If you don't think that the insiders passing up on a juicy run-up in any market is a good indication of what they have in store for our bankster Matrix and an excellent piece of survival intel, then what the hell are you readiing ZH for? Comic relief??

Mark McGoldrick's picture

There is a 300 year supply of fertilizer at current consumption rates.  

Why would the chart of Potash look like this:


Why would the chart of Mosaic look like this:


Why would the chart of corn look like this:


Why does the chart of wheat look like this:


Why does the chart of oil look like this (mere months before the world economy collapses):


While food inflation is real, it is not because Bernanke is dumping digital money into reserve accounts. The absurdity of those charts begin in 2006/07/08, BEFORE anyone had ever heard of quantitative easing, and BEFORE an extra trillion lie dormant in reserve accounts. 

Here's your answer as to why food commodity prices are/were skyrocketing, why it might be coming to an end and why Cargill is trimming exposure: 


Don't look at Bernanke.  Look at the sharks at GSCI.  Welcome to Wallagio, the Wall Street casino that fucks up the whole world. 


hardcleareye's picture

It's interesting that you should post those charts.  I have been pondering over them for the last several months trying to understand the "dynamics" of them.  Food production is extremely energy dependent, hence a rise in oil triggers a rise in food. 

Perhaps if there was a "serious" global depression, this would trigger a significant reduction in global oil demand, the price per barrel oil would fall, the rest of the commodities would follow?

pslater's picture

So, I'm curious, doesn't the oil chart look like a massive, multi year head and shoulders pattern?  Given the nature of oil as a completely irreplaceable energy source and, if not peak oil at least peak cheap oil, the future population growth mentioned above would seem to make oil the ultimate BTFD asset.

I'm trying to envision a world situation that takes oil down to say $40/bbl again and the only thing that keeps popping up is armageddon.

earnyermoney's picture

Yes, your an evil speculator if you fail to follow the asset allocation directives of the fascist overlords.

OddFieldIsStrong's picture

"There is a 300 year supply of fertilizer at current consumption rates. "

Do you have the source for this bit of info? Thanks. 

hardcleareye's picture

++  Thanks enjoyed the read and following up on this.

DocLogo's picture

I thought we were at peak phosphate. That's weird.

Bay of Pigs's picture

Junk. Stay on topic...or better yet, quit posting this garbage.

Spalding_Smailes's picture

Bay of swine -


If you could put your perma- bull pom~poms down for a second could you point out the worthless info in said piece ???? A powerhouse getting out of the ag trade in 2011 .... Hmmmmmmm.

O.k. you can go back now and start pumping the bubble ...

cxl9's picture

Is he starting his car by remote control these days?


XitSam's picture

Don't count your conspiracy theories before they're hatched.

TruthInSunshine's picture

They can't do this.

The Federal Reserve is a "private bank," with private shareholders, whose business model is essentially loaning money to governments, so that the taxpayers can pay interest on more and more accumulated debt.

Who does this Rand Paul person think he is? What is this 'Congress' thing all about?

Rick64's picture

 Nothing a major flash crash can't solve.

hugolp's picture

The Board of Governors of the Federal Reserve (Bernanke and the rest of the gang) is a Federal Government agency. They can indeed audit it.

The local Feds are a mix of private and government entities, but they dont decide monetary policy, just implement the decisions the FOMC takes.

So yes, they can audit the Fed.

TruthInSunshine's picture

I was being sarcastic.


p.s. - The Federal Reserve has claimed contrary things as to whether they are a 'public' or 'private' entity in the past, depending on whether it suited their needs.

For example, when Bloomberg Financial News sued The Federal Reserve, under the Freedom of Information Act, to compel them to release data on how much money they expended, to whom, and for what assets (and on what dates), The Fed initially fought the suit claiming they were exempt from the statutory requirements of FOIA as they were a 'private, non-governmental' entity.

zhandax's picture

The biggest difference in the Federal Reserve and Federal Express is the president doesn't get to introduce the new chairman of Federal Express.  Up until this century, the president appointed the fed chairman but now the president simply introduces wall street's choice.  As mentioned immediately above, whether the fed admits as much depends on their immediate spin needs. 

More importantly, the fed has a charter from the Federal Government and that charter can be revoked at the will of Congress.  More than likely, a lot of congressmen need to have this fact pointed out to them.  I would wager that half of congress thinks the fed is a government agency.

plocequ1's picture

Arthur Jensen will soon be calling Rand Paul into his Val Halla office for a lecture about the primal forces of nature

Timmay's picture

Wall Street, DC and the FED are married.


Pretty messy divorce coming up.....

Rogerwilco's picture

Audit away, Bernanke is the only man standing between us and tanks in the streets, zombies roaming the night, Obama starving to death. Smell the glove and submit.

zhandax's picture

Starve an obummer supporter.  Hide his food stamps under his work boots.

faustian bargain's picture

Ron Paul intro'd the house version today also, HR459.

TruthInSunshine's picture

"Permit me to issue and control the money of the nation and I care not who makes its laws."

-- Mayer Amschel Rothschild


Just sayin'.



topcallingtroll's picture

I see that quote all the time but never evidence of attribution. It may be the doomers version of the protocols of zion. I would love to see the original source attribution. Anybody got it?

New_Meat's picture

Google the whole phrase and it comes up in many places.  But it was apparently stated in like 1812, and Al Gore hadn't gotten the Internet up and running back then.  Go figure.

- Ned

cranky-old-geezer's picture

Al Gore?  Same guy who started global warming?


New_Meat's picture

started? no.  Profit? Voila!

fleur de lis's picture

The "Permit me..." quotation is attributable to AM Rothschild, the 18th century patriarchal street rat who perfected the art of tying government taxes to wars and the like, leaving the ordinary citizens with the burden of repayment with huge and crushing interest, leaving them(R) with massive profits. AMR spawned five sons who set up shop in the capitals of Europe, continuing the proud family tradition of bloodshed.

Nathan was based in London, took control of the BoE, and was the contact for the young nation of America. In 1811 the 20year central bank charter expired and Congress actually followed laws and the Constitution and refused to renew.   

At this affrond, street rat Nathan said, "Teach those impudent Americans a lesson. Bring them back to colonial status." Thus began the War of 1812.  He had more control of the Brits than the King himself. After tens of thousands of British, American, and possibly Hessian deaths, Congress relented and granted the Rothschilds their filthy charter.

Twenty years later it was Andrew Jackson's turn, who fought them tooth and nail, and eventually Woodrow-the-pushover-Wilson.

We are currently stuck with these parasites in the form of the Federal Tapeworm Reserve.

Jerome Lester Horwitz's picture

I'm quite certain that the quote can be found in "The Rise Of The House Of Rothschild" By Count Egon Caesar Corti. It's been about 18 years since I read it but I am sure that it can be found in that book as I remember being familiar with that quote before I even owned a computer and that book is where I would have read it.

Cathartes Aura's picture
Quote by: Mayer Amschel Rothschild
[Mayer Amschel Bauer] (1744 -1812), Godfather of the Rothschild Banking Cartel of Europe
Source: in 'The Creature from Jekyll Island' (American Opinion Publishing), p. 218


you're welcome.

Almost Solvent's picture

The devil first had to convince the world he did not exist.

The quote's authenticity is not important, its message is!

rubearish10's picture

Don't worry, they'll settle at get wrist slapped.

Someone display some believable truth as to how the cover-up can be so easily disclosed. Not a chance...not this way. TPTB know clealry what's at stake (as so often mentioned by TD and friends), this is not the Black Swan style event needed to win back our good ole' US of A.

buzzsaw99's picture

There's nothing to audit. No records are kept. One man, named Sackfreeze runs the printing press and drives the truck on deliveries.

CPL's picture

Not holding my breath on this accomplishing anything.

//grabbing a beer, sitting on the deck chair and watching the city burn in the distance.

ColonelCooper's picture

Wake me up if it actually gets to the floor for a vote before it gets its nuts cut off.

Atlas Shrugging's picture

And this also - "Rand Paul proposes $500 billion in federal budget cuts" - http://www.fox41.com/story/13911626/rand-paul-proposes-500-billion-in-federal-budget-cuts


This man is on a Crusade and is going to be fun to watch until ....