The House Financial Services Committee has approved Ron Paul’s amendment that could give Congress sweeping oversight into the operations and policies of the Federal Reserve. Officials from the Fed have opposed the measure, under the guise that “it would undermine the central bank’s political independence and gravely threaten its credibility as a bulwark against inflation,” the New York Times reports.

Hmm, a bulwark against inflation?

Dictionary.com defines a bulwark as follows

Take a look at this chart and decide for yourself what a “bulwark against inflation” the Fed has been.

Wouldn’t you like a little transparency and accountability for the Fed? What I personally would have really liked is to have bought gold in 1900!

We are a little dubious about the Fed’s promises for the future. Their inability to predict the current financial crisis, or, actually, their contributions to it are the main reason for this. The folks at the Big Picture also feel the same way, and decided to do some investigating into the Fed’s track record at accomplishing things. Namely, how well has the Fed maintained the strength of the US dollar?

Fed Pres Fisher is also speaking on the economy today and the Federal Reserve and one comment specifically stands out. He said that a goal of the Fed is to maintain the purchasing power of the US dollar. To quantify the success of this or lack thereof, one should look at the rate of increase in the CPI to measure how much a like basket of goods cost over different periods of time. Using Bloomberg data going back to 1920 (as far back as it goes and the Federal Reserve was established in 1913), the purchasing power of the US$ has fallen 91% since 1920. Since 1971 when the US went off the gold standard, the US$ has lost 81% of its value. Greenspan took office in 1987 and the US$ has since lost 47% of its purchasing power. Bernanke followed Greenspan in Feb ‘06 and since then the US$ has lost 8.3% of its value. This report card of the Fed’s ability to achieve a key goal speaks for itself.

The dollar’s purchasing power is falling everyday while the price of gold is rising. Have you protected your wealth yet?

The Federal Reserve is on the short list to buy your local foreclosure! In a statement released last week, the Fed stated that they would increase their purchasing of agency mortgage-backed securities from the initially projected $300 billion to $1.25 trillion.

This is great news for the buyers who plan on seeking foreclosure once their option ARMs readjust soon.

Its not great news for taxpayers.

Among the auto industry, banking, and a multitude of stimulus programs, the federal government’s commitment causes the editor of CBS Money Watch to ask, “How does the government turn off the economy’s life support systems without killing the patient? And yet how does it prevent the inflation that will surely result from keeping the spending going too long?”

While we may not know the answers to those questions, one way the average tax payer can sharpen their defenses against the coming inflation is to invest in gold. The nature of gold as a hedge against uncertainty can offer a safe place for money to grow or retain its value when the economic future looks bleak.

Found a great article over at GoldPrice titled: “Trash the U.S. Economy or Trash the US Dollar.” The article quickly and clearly highlights our (the United States) current economic debacle. We are in the midst of crisis, but our policy makers and the Fed (Federal Reserve) are trying to solve this problem by pumping more money into the system (generating more money in order to stave off an even greater downward spiral). Unfortunately, this addition of new capital into the system is only delaying the inevitable and is ultimately just killing the dollar (the more we print, the less its value).

If the US Treasury and the Fed create too many US dollars (that do not represent any new wealth what so ever, just increased US Treasury and Fed debt) to try to fend off (delay) the decent into the Greater Depression, they will trash the US dollar. If they do not do that (stop increasing the debt build up in the system) they will crash the economy. Actually, it is crashing already. They would just allow it to crash faster and not as badly as it would if they try to artificially prop it up (increase the debt in the system). The economy would also recover a lot faster than if they did not interfere. Plus, the US dollar would not be devalued as much.

The article is enlightening and features truly staggering and mind-blowing facts about how much credit/debt has been pumped into the system in less than a year:

The US Treasury/Fed combo [has] spent… over $13 trillion in less than a year. [This has doubled] the US dollar supply in less than a year. Most people need serious protection from this, in the form of gold and silver, but still do not realize it.

A great article, that quickly gets to the core of the dangers of a Fiat Based money system and a good advocate for saving yourself from the declining dollar within a wealth preservation tool like gold and other precious metals.