Paul will press Fed, but recognizes limits

Rep. Ron Paul (R-Texas) plans to push for an audit of the Federal Reserve early in his tenure as chairman of the subcommittee overseeing the central bank, but he said he's also aware of the limits he faces in pushing some of his more extreme ideas.

Paul, a longtime foe of the Fed and author of the book End the Fed, was named chairman of the Domestic Monetary Policy subcommittee of the House Financial Services Committee.

In an interview with Bloomberg Television, he promised to push for an audit of the Fed.

"It was never intended that a secret body like this could create money out of thin air, spend to take care of some banks and big business and foreign banks" he said. "We have to look into it, and we have to start to consider reforms."

However, while his ultimate goal remains the abolishment of the Fed, he does not plan to pursue it "right up front."

In fact, he acknowledged that he was "realistic" about how much change he could really drive from a subcommittee chair if opposed by Republican leadership.

"It is not like I am a powerful person. My ideas are powerful, but I am not," he said. "There is a Committee Chairman, Speaker of the House. I am realistic and I know what that means."

But despite the limitations, he maintained that his ideas will ultimately prove persuasive.

"I also know the strength of ideas, and that is what will prevail," he said. "That is what they ought to worry about. We will be talking about ideas, improving the fallacy of the Fed and paper money."

Paul also suggested Rep. Barney Frank (D-Mass.), chairman of the committee, is a "subtle ally" in Paul's effort to make the Fed more transparent.

"Although he did not vote to audit the Fed, he was very sympathetic," he said. "He wants to know more about the Fed and look into the Fed, although his conclusions on what to do with monetary policy wouldn't be the same."

A spokesman for Frank did not immediately respond to Paul's comments.