Currently under the United States Code, the Fed is exempt from audit regarding “(1) transactions for or with a foreign central bank, government of a foreign country or nonprivate international financing organization; (2) deliberations, decisions, or actions on monetary policy matters (3) transactions made under the direction of the Federal Open Market Committee; or (4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection,” or, as I like to put it: everything they do. H.R. 1207 removed exceptions one through four and opened the Fed to audits of all their dealings.

When the bill was referred to the House Domestic Monetary Policy and Technology Subcommittee, the language was weakened by Chairman Mel Watt, D-N.C. Watt, who has received more than $200,000 from the commercial banking industry since he entered Congress, stripped the bill of all sections allowing for an audit, leaving only a hollow call for Fed transparency. It is unlikely that Watt, whose district has been gerrymandered such that he could be caught with a goat and still be re-elected, has been receiving very many calls from his constituents demanding a completely secret central banking system. Therefore, it is probable that Watt has other interests in mind when he prevents Federal Reserve transparency from becoming a reality.

The Federal Reserve is regarded by the Austrian School of Economics to be the engine of the business cycle. In a theory promoted by Austrian economists such as Freidrich von Hayek and Ludwig von Mises, the Fed causes the business cycle by setting the interest rate lower than the natural rate dictated by the market. This deludes producers into believing there are more savings in the economy than truly exist and causes them to take excessive risks to produce more than could possibly be consumed.Consequently, producers have to take major losses and retract their projects. Furthermore, the Fed’s inflationary monetary policy, agreements with foreign nations and collusion with large banks affect everyone. The Federal Reserve is a creature of Congress, and therefore, it is the right of the people to know what the Fed is up to.

There are concerns, of course, about preventing sensitive financial information from being released immediately. For this reason, the author of the bill, Congressman Ron Paul, has agreed to a time lapse between Fed action and an audit. This compromise is fair, and there is no reason why the American people cannot have full transparency in their central bank after such precautions have been added. The United States has now come the closest to Federal Reserve transparency since its mysterious inception on Jekyll Island 96 years ago. The more the Fed resists these efforts, the more reason we have to believe they have something to hide.

Philip is a sophomore in Arts & Sciences. He can be reached via e-mail at pchristofanelli@hotmail.com.

Treasury Secretary Timothy Geithner, former head of the New York branch of the Federal Reserve, recently asserted in a speech that the Chinese government manipulates its currency.

This statement adds to the uneasiness the Chinese government already feels toward the new president and his administration.

According to experts on China, the government is concerned that the Obama administration will also take a hard stance on pollution generated by Chinese factories and on human rights violations.

The uneasiness was expressed in an editorial last week published in the China Daily, which praised former President Bush’s actions toward China and pondered what the Obama administration’s intents toward China might be.

China is in a less comfortable position than it was just two weeks ago during the Bush administration. Bush and Henry Paulson, secretary of the Treasury in the Bush administration, sought to improve relations with China by working with Chinese leaders and not taking stances on controversial Chinese issues.

Since Obama has little experience working with China, and because none of his advisers are experts on Chinese diplomacy, some fear that relations between the United States and China will fall apart.

“Just from my opinion, its hard to say whether Obama will hurt China because Obama just became the president,” Ph.D. student Baili Min said. “We haven’t seen his actions yet, but I don’t think that Chinese people will fear Obama, because the Chinese-American relationship is not decided by the personality of just one president; there are so many things to consider.”

Others, however, do not follow the Chinese-United States diplomatic dynamic while at the University.

“I’m really not positive about the Chinese-American political situation,” freshman Jennifer Ma said.

Despite the Chinese government’s fears about Obama, since November, Obama has become a popular figure among young Chinese people, with a Chinese translation of his book “The Audacity of Hope” soaring to bestseller lists there.

“Everyone now knows Obama is the president of the United States,” Ma said. “The Chinese people want the [Chinese] government to be friendly toward Obama.”

Many people in China, Min said, are hoping that Obama will reform some aspects of American society to China’s benefit.

“We think he will bring some reforms to some fields in United States society like education,” Min said. “College students pay attention to that because it may become easier for Chinese students to apply to American graduate schools. We also want to see whether there will be some sort of visa reform to make traveling between the United States and China easier.”

Despite the Chinese government’s concerns, some Chinese people have high hopes for Obama.

“Everyone wishes the new president will make Chinese relationships with America better,” Min said. “We haven’t seen Obama’s reaction. We don’t know if he will be good to China or bring hard times to China.”

Other students noted that the relationship between Obama and Beijing will depend on whether those in power in China acclimate themselves to his policies.

“Only time will tell how the Chinese government will respond to Obama,” freshman Chris Lo said.