Audit the Fed, Audit Fort Knox, Audit Everything

Americans have to wonder, based on revelations coming out of Washington DC, whether government waste, fraud, and abuse is happening on an industrial scale.

The need to perform audits and implement controls is obvious, despite wailing from people who somehow aren’t happy with the questions being asked. If we are going to have a republic, taxpayers need some confidence their hard-earned money is well spent.

The word “audit” has some negative connotations – mostly associated with taxes and the Internal Revenue Service.

But well-run private sector companies do audits as a matter of routine and for a number of good reasons.

Metals stored in the Money Metals facility are perpetually audited. And we reconcile bank statements against client payment records, conduct physical counts of our entire inventory daily, audit staff adherence to internal controls and procedures, audit the auditors, and so on.

Money Metals has never had an internal loss in its 15 years of operation. Everyone working in our business understands and respects the need to run a tight ship and that details matter. Audit and accountability is part of the company’s culture.

There is generally a lot more “give a damn” found in the private sector, something which appears to be mostly missing in Washington DC.

Fort Knox has not been credibly audited for decades.

Here are some other points to ponder as the debate heats up over federal audits.

As for Fort Knox, it’s been decades since there was a credible audit of its contents.

As Money Metals researcher Jan Nieuwenhuijs detailed last week, one of several problems is that vault compartments have been opened without proper re-auditing.

Without robust auditing and accountability, the problems only get worse with time. Defense Secretary Donald Rumsfeld announced in a press conference on Sept. 10, 2001 that the Pentagon couldn’t account for $2 Trillion in spending. Unfortunately that story was buried by the events that ensued the following day – September 11th.

More than two decades have passed and the Pentagon still cannot pass an audit. How much more has been wasted or stolen? Corruption and apathy are problems that continually grow unless they are rooted out.

Government employees are suddenly facing accountability. Private citizens have a right to privacy. But government agencies, the Federal Reserve, and NGOs gorging themselves on taxpayer money do not.

No taxpayer funded organization is entitled to unquestioning trust. In the best of circumstances, Americans should “trust but verify.” Under current circumstances, the proper stance is closer to “trust absolutely nothing.”

Intensive auditing and housecleaning will be the only road back to some level of trust.

It's an important part of a much needed cultural shift.

For those of us who care about honest money, audits represent step one in getting rid of the Federal Reserve. Americans weren’t quite ready to “End the Fed” when Ron Paul made that a cornerstone of his presidential campaigns. There was far too much trust in the benevolence and wisdom of people like Alan Greenspan and Ben Bernanke.

Now the tide may be turning. Americans are less trusting and ready to demand some answers. A look inside the Fed can only help.

There has never been a public audit and full accounting for the Fed’s activities. That is remarkable, given the power of that institution and the amount of money running through it.

The lack of oversight is intentional. Politicians and bankers have been selling Americans on the notion of “independence.” Somehow it is better if the central bank answers to no one and never has to explain exactly what it does with trillions of dollars.

The Fed has been a black box since its inception. Given the disdain for transparency is hardwired there, it's a good bet citizens would be outraged to know how much waste, fraud, and abuse has developed over time.

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