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US House backs Fed plan from libertarian Rep. Ron Paul

"As Paul trains his sights on his favorite villain, the Fed, many in Congress are listening"

A veto-proof 300 US House members have endorsed US Rep. Ron Paul (R-Texas)'s proposal to make public audits of the secretive Federal Reserve.

"After fighting for decades to increase scrutiny of the Federal Reserve or abolish it, the Texas Republican's proposal requiring audits of the central bank's interest-rate decisions is getting traction," reports Bloomberg here.

"As Paul trains his sights on his favorite villain, the Fed, many in Congress are listening. 'We live in the age of the people demanding more transparency, and that came out of the failure of Congress to monitor the bailouts,'" Paul told the news service.

"The House is to start debate today on broader legislation overhauling U.S. financial rules. Included in it is Paul's proposal to remove the shield (that keeps secret) congressional audits of monetary policy.

"Fed Chairman Ben S. Bernanke, at a Senate hearing Dec. 3, said Paul's proposal could subject the central bank to political pressure and undermine its credibility," making it tough, say, to raise interest rates when bankers think the economy is growing too fast." Sen. Judd Gregg (R-NH) has promised to block Paul's proposal in the upper House.

"During his 11 House terms, Paul has introduced legislation to abolish the Fed six times and to conduct the audits three times. Until now, none was even debated in committee. "The economic crisis has changed everything," Paul writes in his recent book, "End the Fed."

As I understand Paul, his real goal isn't just auditing all the Fed has done for Wall Street bankers lately. Paul also wants to go back to the gold standard, and the kind of wide-open boom-and-bust monetary system the nation employed from the 1830s to the 1910s. Which was both a great time to be in business, and an awfully rough time if you lacked capital.