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Paul Slams Federal Reserve Bank
Ron Paul slams Federal Reserve as US money
printing de-stabilize world
April 13, 2008 (LBO) – Texas Congressman Ron Paul has slammed the
Federal Reserve for printing money to manipulate interest rates and
undermining the salaries of workers and savings of older people.
Paper money from pure fiat central banking, backed by nothing other
than government debt - a process that was born after the gold
standard was lifted by the United States which has led to rampant
inflation since then - is a mystery to most ordinary people.
Secretive System
"Few Americans give much thought to the Federal Reserve System or
monetary policy in general," Ron Paul wrote in his column this week.
"But even as they strive to earn a living, and hopefully save or
invest for the future, Congress and the Federal Reserve Bank are
working insidiously against them. Day by day, every dollar you have
is being devalued.
"The greatest threat facing America today is not terrorism, or
foreign economic competition, or illegal immigration.
"The greatest threat facing America today is the disastrous fiscal
policies of our own government, marked by shameless deficit spending
and Federal Reserve currency devaluation."
Ron Paul is one of the few politicians of the world who understands
the intricacies of fiat money. He is on the House Committee on
Financial Services.
Deficits
Since the gold standard which was set at 35 dollars an ounce was
broken amidst heavy money printing in 1973 leading to the collapse
of the Bretton Woods system, the Federal Reserve has debauched the
dollar to around 1,000 dollars an ounce in 2008.
US rate cuts (money printing) to save the domestic financial system
from collapse has fired another round of inflation around the world,
as the dollar plunged and excess liquidity found a home in commodity
speculation, leading to food riots in some poor countries.
The International Monetary Fund said in its World Economic Outlook
report this week that the current commodity bubble may also burst as
it had in earlier cycles, now that the housing and financial bubbles
have collapsed.
"Just today the dollar went down 1.2 percent in one day," Paul told
the Congress on April 12.
"It comes from the fact of deficits. Why does it hurt the dollar?
Because we don't have enough money. People are overtaxed. We can't
borrow anymore because interest rates will go up.
"So we print the money. The more money you print the further the
dollar goes down and everything will go up in price."
Since the August slashing of rate cuts, US inflation measured by an
index that has earned Paul's criticism for understating inflation
has almost doubled to over 4 percent by end 2007 from just over 2
percent earlier in the year.
The housing bubble, the collapse of which caused the sub-prime
meltdown itself was fired by earlier US loose monetary policy.
Scamming the elderly
"The Fed’s inflationary policies hurt older people the most. Older
people generally rely on fixed incomes from pensions and Social
Security, along with their savings," Paul wrote.
"Inflation destroys the buying power of their fixed incomes, while
low interest rates reduce any income from savings.
"So while Fed policies encourage younger people to over borrow
because interest rates are so low, they also punish thrifty older
people who saved for retirement.
"The financial press sometimes criticizes Federal Reserve policy,
but the validity of the fiat system itself is never challenged."
Paul is echoing the words of an earlier generation of elected
representatives who tried to stop the Federal Reserve bill being
passed into law in 1913.
"The worst legislative crime of the ages is perpetrated by this
banking bill," Charles Lindberg said of the proposed Fed bill almost
a century ago.
"This is the strangest, most dangerous advantage ever placed in the
hands of a special privileged class by any Government that ever
existed."
