U.S. Rep. Ron Paul | monetary |
monetary
State Of The Republic
28 January 1998 1998 Ron Paul 2:62
The international currency crisis: Congress lacks concern and understanding of the significance of the Asian currency crisis. Monetary policy has never excited many Members of the Committee on Banking, let alone other members of Congress. A handful of Members do consistently complain to the Chairman of the Federal Reserve, but inevitably it is to object to the high interest rates and not enough credit being available to either the poor or the rich beneficiaries of Central Bank credit largesse.
monetary
State Of The Republic
28 January 1998 1998 Ron Paul 2:76
Eventually, everyone though is threatened by the political disruption that can ensue with a currency mishap. Our greatest concern should be for our loss of liberties that so often accompany a currency crisis. Congressional attitude toward monetary policy is not likely to change soon, so we can expect a lot more turmoil in the currency markets in the months ahead.
monetary
State Of The Republic
28 January 1998 1998 Ron Paul 2:100
Both types of welfare expenditures benefit from a monetary system that creates credit out of thin air in order to monetize congressional deficits when needed and manipulate interest rates downward to nonmarket levels to serve the interests of big borrowers and lenders. Federal Reserve policy is an essential element in serving the powerful special interests. Monetary mischief of this type will not likely be ended by congressional action, but will be eventually stopped by market forces, just as has recently occurred in the Far East.
monetary
State Of The Republic
28 January 1998 1998 Ron Paul 2:139
The budgetary process and the transfer of wealth that occurs through monetary inflation is influenced more by the business and banking elite than by the poor. The $1.7 trillion budget is not an investment in liberty. The kings are gone and I doubt that we will see another Stalin, Hitler, Pol Pot or Mao, but the “majority” in our legislative bodies now reign supreme with one goal in mind: maintaining power.
monetary
Three Important Issues For America
11 February 1998 1998 Ron Paul 7:3
In the attempt to help people in a welfare-warfare state, unfortunately the poor never seem to be helped. A lot of money is spent, but due to the monetary system that we have, inevitably, the middle class tends to get wiped out and the poor get poorer, and very often in the early stages the wealthy get wealthier. In the meantime, the corporations seem to do quite well. So we live in an age where we have a fair amount of corporatism associated with the welfare-warfare state in which we live.
monetary
Conference Report on H.R. 1757, Foreign Affairs Reform And Restructuring Act Of 1998
26 March 1998 1998 Ron Paul 28:1
Mr. PAUL. Mr. Speaker, last year’s attempts by some in Congress to tie the Mexico City Policy to the issues of funding for the United Nations (UN) and the International Monetary Fund (IMF) this week come back to haunt those of us who believe in the sanctity of human life, the inviolability of US Sovereignty, and the rights of the U.S. taxpayers to keep the fruits of their own labor. This week, we see, the “grand deal” struck which will see liberals back down from their opposition to Mexico City Language in exchange for conservative members voting to support funding of the United Nations, affirmative action, peacekeeping activities, and the National Endowment for Democracy.
monetary
The Bubble
28 April 1998 1998 Ron Paul 39:5
We are endlessly told no inflation exists. But inflation is strictly and always a monetary phenomenon and not something that can be measured by a government consumer or producer price index.
monetary
The Bubble
28 April 1998 1998 Ron Paul 39:14
A lot of foreign money has been used to buy our stocks, one of the consequences of computer-age financial technology and innovations. Our negative trade balance allows foreign governments to accumulate large amounts of our treasury debt. This serves to dampen the bad effect of our monetary inflation on domestic prices, while providing reserves for foreign central banks to further expand their own credit.
monetary
The Bubble
28 April 1998 1998 Ron Paul 39:23
4. Prices indeed do go up, although which prices will go up is unpredictable, and the CPI and PPI can never be a dependable measurement of a monetary policy driven by loose credit.
monetary
The Bubble
28 April 1998 1998 Ron Paul 39:45
THE SOLUTION The solution to all of this is not complex. But no effort is going to be made to correct the problems that have allowed our financial bubble to develop, because Alan Greenspan has been practically declared a god by more than one Wall Street guru. Because Alan Greenspan himself understands Austrian free-market economics and the gold standard, it is stunning to see him participate in the bubble when he, deep down inside, knows big problems lurk around the corner. Without the motivation to do something, not much is likely to happen to our monetary system in the near future.
monetary
The Bubble
28 April 1998 1998 Ron Paul 39:48
NATIONALISM However, I continue to have serious reservations regarding the ECU’s long-term success, believing that the renewed nationalism within Europe will not permit the monetary unification of countries that have generally not trusted each other over the centuries. In Germany, 70 percent of the people oppose entering into this new monetary agreement. If economic problems worsen in Europe — currently the unemployment rate in Germany and France is 12 percent — the European union may well get blamed.
monetary
The Bubble
28 April 1998 1998 Ron Paul 39:54
Liberals are heedless of the significance of monetary policy and its ill effects on the poor. They have no idea that the transfer of wealth from the poor to the rich occurs as a result of monetary policy and serves to hurt the very people they claim to represent. Liberals stick to the old cliche´ that all that’s needed are more welfare benefits. They are, I’m sure, influenced by the fact that if more welfare benefits are handed out, they can count on the Federal Reserve to accommodate them. Unfortunately this will continue to motivate them to argue for a loose monetary policy.
monetary
The Bubble
28 April 1998 1998 Ron Paul 39:56
Whether it’s Japan that tries to inflate their currency to get out of an economic problem, or the East Asian countries facing their crisis, or our willingness to bail out the IMF, resorting to monetary inflation is the only option being considered. We can rest assured that inflation is here to stay.
monetary
Higher Education Amendments of 1998
6 May 1998 1998 Ron Paul 49:14
Mr. Chairman, the Higher Education Amendments of 1998 expand the unconstitutional role of the federal government in education by increasing federal control over higher education, as well as creating a new teacher training program. This bill represents more of the same, old “Washington knows best” philosophy that has so damaged American education over the past century. Congress should therefore reject this bill and instead join me in working to defund all unconstitutional programs and free Americans from the destructive tax and monetary policies of the past few decades, thus making higher education more readily available and more affordable for millions of Americans.
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The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:2
ECONOMIC FALLACY Belief that an artificial boom, brought about by Central Bank credit creation, can last forever is equivalent to finding the philosopher’s stone. Wealth cannot be created out of thin air, and new money and credit, although it can on the short-term give an illusion of wealth creation, is destructive of wealth on the long run. This is what we are witnessing in Indonesia — the long run — and it’s a much more destructive scenario than the currently collapsing financial system in Japan. All monetary inflation, something all countries of the world are now participating in, must by their very nature lead to an economic slump.
monetary
The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:3
The crisis in Indonesia is the predictable consequence of decades of monetary inflation. Timing, severity, and duration of the correction, is unpredictable. These depend on political perceptions, realities, subsequent economic policies, and the citizen’s subjective reaction to the ongoing events. The issue of trust in the future and concerns for personal liberties greatly influences the outcome. Even a false trust, or an ill-founded sense of security from an authoritarian leader, can alter the immediate consequences of the economic corrections, but it cannot prevent the inevitable contraction of wealth as is occurring slowly in the more peaceful Japan and rapidly and violently in Indonesia.
monetary
The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:5
But what we cannot lose sight of is that the Indonesia economic bubble was caused by a flawed monetary policy which led to all the other problems. Monetary inflation is the mother of all crony “capitalism.”
monetary
The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:9
A much more justifiable “scapegoat” is the IMF and the American influence on the stringent reforms demanded in order to receive the $43 billion IMF bailout. IMF policy on aggravates and prolongs the agony while helping the special interest rich at the expense of the poor. The IMF involvement should not be a distraction from the fundamental cause of the financial problem, monetary inflation, even if it did allow three decades of sustained growth.
monetary
The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:15
Effort to prop up an ailing economy after the financial bubble has been popped, prolongs the agony and increases the severity of the correction. Japan’s bubble burst in 1989 and there is not yet any sign of the cleansing of the system of bad debt and mal-investment which is necessary before sound growth will resume. And Indonesia is embarking on the same predictable course. Restoration of free markets, and establishing sound monetary policy has not yet been considered. The people of Indonesia and the rest of the world should prepare for the worst as this crisis spreads. For Congress, the most important thing is to forget the notion that further taxing American workers to finance a bail-out, that won’t work, is the worst policy of all for us to pursue.
monetary
The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:16
The Indonesian government had one idea worth considering under these very difficult circumstances. They wanted to replace their central bank with a currency board. It’s not the gold standard, but it would have been a wise choice under current conditions. But the United States and the IMF insisted that in order to qualify for IMF funding this idea had to be rejected outright and the new central bank for Indonesia had to be patterned after the Federal Reserve with, I’m sure, ties to it for directions from Greenspan and company. A currency board would allow a close linkage of the rupiah to the dollar, its value controlled by market forces, and would have prevented domestic Indonesia monetary inflation — the principle cause of the economic bubble now collapsed. The shortcoming of a currency board is that the Indonesian currency and economy would be dependent on dollar stability which is far from guaranteed.
monetary
The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:17
REFUSAL In the approximately 8 months since the crisis hit Indonesia there has been no serious look at the underlying cause — monetary inflation brought about by a central bank. Nor has any serious thought gone into the internationalization of credit as United States exports of billions of dollars, and thus our own inflation, to most nations of the world who hold these dollars in reserve and use them to further inflate their own currencies. Our huge negative trade balance and foreign debt is not considered by conventional wisdom to be relevant to the Asian currency problems, yet undoubtedly it is. True reform to deal with the growing worldwide crisis can only be accomplished by us first recognizing the underlying economic errors that caused the current crisis.
monetary
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:2
ECONOMIC FALLACY Belief that an artificial boom, brought about by Central Bank credit creation, can last forever is equivalent to finding the philosopher’s stone. Wealth cannot be created out of thin air. New money and credit, although it can on the short-term give an illusion of wealth creation, is destructive of wealth on the long run. This is what we are witnessing in Indonesia — the long run — and it’s a much more destructive scenario than the currently collapsing financial system in Japan. All monetary inflation, something nearly all countries of the world are now participating in, must by their very nature lead to an economic slump.
monetary
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:3
The crisis in Indonesia is the predictable consequence of decades of monetary inflation. Timing, severity, and duration of a correction, is unpredictable. These depend on political perceptions, realities, subsequent economic policies, and the citizen’s subjective reaction to the ongoing events. The issue of trust in the future and concerns for personal liberties greatly influence the outcome. Even a false trust, or an ill-founded sense of security from an authoritarian leader, can alter the immediate consequences of the economic corrections, but it cannot prevent the inevitable contraction of wealth as is occurring slowly in the more peaceful Japan and rapidly and violently in Indonesia.
monetary
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:5
But what we cannot lose sight of is that the Indonesia economic bubble was caused by a flawed monetary policy which led to all the other problems. Monetary inflation is the mother of all “crony capitalism.”
monetary
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:9
A much more justifiable “scapegoat” is the International Monetary Fund (IMF) and the American influence on the stringent reforms demanded in order to receive the $43 billion IMF-led bailout. IMF policy only aggravates and prolongs the agony while helping the special interest rich at the expense of the poor. The IMF involvement should not be a distraction from the fundamental cause of the financial problem, monetary inflation, even if it did allow three decades of sustained growth.
monetary
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:15
Effort to prop up an ailing economy after the financial bubble has been popped, prolongs the agony and increases the severity of the correction. Japan’s bubble burst in 1989, and there is not yet any sign of the cleansing of the system of bad debt and mal-investment which is necessary before sound growth will resume. And Indonesia is embarking on the same predictable course. Restoration of free markets, including the establishment of a sound monetary policy, has not yet been considered. The people of Indonesia and the rest of the world should prepare for the worst as this crisis spreads. For Congress, the most important thing is to forget the notion that further taxing American workers to finance a bail-out will work. It won’t work — it is the worst policy of all for us to pursue.
monetary
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:16
The Indonesian Government had one idea worth considering under these very difficult circumstances. They wanted to replace their central bank with a currency board. It’s not as good as gold standard, but it would have been a wise choice under current conditions. But the United States and the IMF insisted that in order to qualify for IMF funding this idea had to be rejected outright and the new central bank for Indonesia had to be patterned after the Federal Reserve with, I’m sure, ties to it for directions from Federal Reserve Board Governor Alan Greenspan and company. A currency board would allow a close linkage of the rupiah to the dollar, with its value controlled by market forces, and would have prevented domestic Indonesia monetary inflation — the principle cause of the economic bubble now collapsed. The shortcoming of a currency board tied to the U.S. dollar is that the Indonesian currency and economy would be dependent on dollar stability which is far from guaranteed.
monetary
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:17
REFUSAL In the approximately eight months since the crisis hit Indonesia, there has been no serious look at the underlying cause: monetary inflation brought about by a central bank. Nor has any serious thought gone into the internationalization of credit as United States exports of billions of dollars, and thus our own inflation, to most nations of the world which hold these dollars in reserve and use them to further inflate their own currencies. Our huge negative trade balance and foreign debt is not considered by conventional wisdom to be relevant to the Asian currency problems, yet undoubtedly it is. True reform to deal with the growing worldwide crisis can only be accomplished by us first recognizing the underlying economic errors that caused the current crisis.
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:1
Mr. PAUL. Mr. Speaker, it has recently come to my attention that James Grant has made a public warning regarding monetary crises. In an Op-Ed entitled “Every Currency Crumbles” in The New York Times on Friday, June 19, 1998, he explains that monetary crises are as old as money. Some monetary systems outlive others: the Byzantine empire minted the bezant, the standard gold coin, for 800 years with the same weight and fineness. By contrast, the Japanese yen, he points out, is considered significantly weak at 140 against the U.S. dollar now to warrant intervention in the foreign exchange markets but was 360 as recently as 1971. The fiat U.S. dollar is not immune to the same fate as other paper currencies. As Mr. Grant points out, “The history of currencies is unambiguous. The law is, Ashes to ashes and dust to dust.”
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:4
Monetary crises are almost as old as money. What is different today is the size of these episodes. It isn’t every monetary era that features recurrent seismic shifts in the exchange values of so-called major currencies. On Wednesday morning, after coordinated American and Japanese intervention, the weakling yen became 5 percent less weak in a matter of hours.
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:5
People with even a little bit of money ought to be asking what it’s made of. J.S.G. Boggs, an American artist, has made an important contribution to monetary theory with his lifelike paintings of dollar bills. So authentic do these works appear — at least at first glance, before Mr. Boggs’ own signature ornamentation becomes apparent — that the Secret Service has investigated him for counterfeiting. “All money is art,” Mr. Boggs has responded.
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:7
It cannot undergird confidence that the monetary fires are becoming six- and seven-alarmers. Writing in 1993 about the crisis of the European Rate Mechanism (in which George Soros bested the Bank of England by correcting anticipating a devaluation of the pound), a central bankers’ organization commented: “Despite its geographical confinement to Europe, it is probably no exaggeration to say that the period from late 1991 to early 1993 witnessed the most severe and widespread foreign exchange market crisis since the breakdown of the Bretton Woods System 20 years ago.” But the European crisis has been handily eclipsed by the Asian one.
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:8
Monetary systems have broken down every generation or so for the past century. The true-blue international gold standard didn’t survive World War I. Its successor, a half-strength gold standard, didn’t survive the Great Depression. The Bretton Woods regime — in which the dollar was convertible into gold and the other, lesser currencies were convertible into the dollar — didn’t survive the inflationary period of the late 1960’s and early 1970’s.
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:10
For the moment, the market is highly confident. So is the world at large. In 1996, the Federal Reserve Board estimated that some 60 percent of all American currency in existence circulates overseas. The dollar has become the Coca-Cola of monetary brands.
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:13
Or were. France and Germany have led the movement to create a pan-European currency, one that would compete with the dollar as both a store of value and a medium of exchange. The euro, as the new monetary brand is called, constitutes the first serious competitive threat to the dollar since the glory days of the pound sterling.
monetary
Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:15
And no degree of excellence can forestall a new monetary crisis indefinitely. Some monetary systems are better than others, and some last longer than others, but each and every one comes a cropper. The bezant, the standard gold coin of the Byzantine empire, was minted for 800 years at the same weight and fineness. The gold may still be in existence (in fact — no small recommendation for gold bullion — it probably is), but the empire has fallen.
monetary
Worldwide Financial Crisis
10 September 1998 1998 Ron Paul 97:7
A crisis brought on by monetary inflation cannot be aborted by more monetary inflation or the IMF bailouts favored by the American taxpayer. It may at times delay the inevitable, but eventually, the market will demand liquidation of the malinvestment, excessive debt, and correction of speculative high prices as we have seen in the financial markets.
monetary
Worldwide Financial Crisis
10 September 1998 1998 Ron Paul 97:8
All this could have been prevented by a sound monetary system, one without a central bank that has monopoly power over money and credit and pursues central economic planning. My concern is profound. The retirement and savings of millions of Americans are jeopardized. Economic growth could be reversed sharply and quickly as it already has in the Asian countries. Budget numbers will need to be sharply revised.
monetary
Worldwide Financial Crisis
10 September 1998 1998 Ron Paul 97:9
The Federal Reserve hints at lower interest rates which means more easy credit. This may be construed as a positive for the market, but it only perpetuates a flawed monetary system.
monetary
Revamping The Monetary System
24 September 1998 1998 Ron Paul 102:8
The argument might go, yes, indeed, the financial condition of the world is rather severe and we should do something. But the financial condition of the world is in trouble because we have allowed our Federal Reserve System, in deep secrecy, to create credit out of thin air and contribute to the bubble that exists. Where else could the credit come from for a company like Long-Term Capital Management? Where could they get this credit, other than having it created and encouraged by a monetary system engineered by our own Federal Reserve System?
monetary
Revamping The Monetary System
24 September 1998 1998 Ron Paul 102:9
We will have to do something about what is happening in the world today, but the danger that I see is that the movement is toward this worldwide Federal Reserve System or worldwide central bank. It is more of the same problem. If we have a fiat monetary system, not only in the United States but throughout the world, which has created the financial bubble, what makes anybody think that creating more credit out of thin air will solve these problems? It will make the problems much worse.
monetary
Revamping The Monetary System
24 September 1998 1998 Ron Paul 102:10
We need to have a revamping of the monetary system, but certainly it cannot be saved, it cannot be improved, by more paper money out of thin air, and that is what the Federal Reserve System is doing.
monetary
Revamping The Monetary System
24 September 1998 1998 Ron Paul 102:16
Well, I do not think the American people can afford it. We do have a financial bubble, but financial bubbles are caused by the creation of new credit from central banks. Under a sound monetary system you have a commodity standard of money where politicians lose total control. Politicians do not have control and they do not instill trust into the paper money system.
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Don’t Fast-Track Free Trade Deal
25 September 1998 1998 Ron Paul 103:4
Congress does have, amongst its enumerated powers, regulation of commerce with foreign nations. Imposing import tariffs, quotas, and embargoes, however economically detrimental to the macro economy of the United States, are, at least, amongst powers delegated to Congress by Article I of the Constitution. Regulating commerce, of course, refers to enacting domestic laws which effect voluntary exchanges between trading partners who happen to be citizens of different governments. International agreements between the governments of those trading partners cannot be construed to escape the stringent treaty ratification process established by the document’s framers just by suggesting Congress has the power to enact domestic regulation regarding foreign commerce. If this were an allowable justification for bypassing the constitutionally-mandated treaty process, Article I Congressional powers would almost completely undermine the necessity for the Constitutionally-mandated treaty process. Treaties regarding everything from international monetary policy to military policy would suddenly become “ripe” for the “treaty-making” power of the President and Congress. Instead, a bright line process exists whereby entering into agreements with foreign nations under which the U.S. government will do “X” if the government of Ruritania does “Y” must be understood to constitute an international agreement and, as such, require the more restrictive treaty process.
monetary
World Financial Markets
1 October 1998 1998 Ron Paul 104:4
There have been no restraints on the world monetary managers to expand their money supplies, fix short-term interest rates or deliberately debase their currencies. Although.
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World Financial Markets
1 October 1998 1998 Ron Paul 104:6
This cannot be prevented. All that we can hope for is to not prolong the agony, as our monetary and fiscal policies did in the U.S. in the 1930s and as they are currently doing in Japan and elsewhere in the world.
monetary
New Global Economic Plan
9 October 1998 1998 Ron Paul 117:2
The world economies have been built on generous credit expansion with each country inflating their currencies at different rates. Additionally, each country has had different political, tax, and regulatory policies leading to various degrees of trust and stability. Economies that have “enjoyed” inflationary booms, by their very nature, must undergo a market correction. The market demands deflation of all excesses, while the politicians and special interests agitate for continued credit inflation. Under these circumstances, financial assets may deflate in price but monetary inflation continues and the currency is further depreciated thus putting serious pressure on the dollar; as in the case of the United States.
monetary
New Global Economic Plan
9 October 1998 1998 Ron Paul 117:3
Fluctuating fiat currencies, no matter how inefficient as compared to a world commodity monetary standard, function solely because exchange rates are allowed to fluctuate and currency movements across borders are freely permitted as capital seeks the most efficient market. This process provides an indication when host countries need to improve monetary and fiscal policy.
monetary
New Global Economic Plan
9 October 1998 1998 Ron Paul 117:8
First, the plan demands additional appropriations to transfer wealth from the richer to the poorer nations through increased funding of the International Monetary Fund, World Bank, Development Bank, and direct foreign aid programs.
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New Global Economic Plan
9 October 1998 1998 Ron Paul 117:10
Third this plan calls for an international government agreement to strictly control capital flows and mandate debt forgiveness in contrast to allowing countries to default. Controlling swift movements of capital is impossible and any attempt only encourages world government through planning by a world fiat monetary system. Any temporary “benefit” can only be achieved through an authoritarian approach to managing the world economy, all done with the pretense of preserving financial stability at the expense of national sovereignty and personal liberty.
monetary
New Global Economic Plan
9 October 1998 1998 Ron Paul 117:11
Let there be no doubt, the current chaos is being used to promote a new world fiat monetary system while giving political powers to its managers.
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Medicare Home Health And Veterans Health Care Improvement Act Of 1998
9 October 1998 1998 Ron Paul 118:8
Similarly, Congress should seek funds for an increased expenditure on home care by ending federal support for institutions such as the International Monetary Fund (IMF), which benefit wealthy bankers and powerful interests but not the American people. At a time when the federal government continues to grow to historic heights and meddles in every facet of American life I cannot believe that Congress cannot find expenditure cuts to finance the programs in this bill!
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Monetary Policy
16 October 1998 1998 Ron Paul 120:16
Third, we must abandon the tradition of bailing out bad debtors, foreign and domestic. No International Monetary Fund and related institution funding to prop up bankrupt countries, and no Federal Reserve-orchestrated bailouts such as Long Term Capital Management LP. Liquidation of bad debt and investments must be permitted.
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Monetary Policy
16 October 1998 1998 Ron Paul 120:18
Following a policy of this sort could quickly restore growth and stability to any filing economy and soften the blow for all those about to experience the connections that have been put in place by previous years of mischief, mismanagement and monetary inflation.
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Supports Impeachment Of President Clinton
19 December 1998 1998 Ron Paul 125:18
Let’s declare a victory in despite of the mess we’re in. The President is not likely to be removed from office. We’ll call it a form of “jury nullification” and hope someday this process will be used in our courts to nullify the unconstitutional tax, monetary, gun, anti-privacy, and seizure laws that are heaped upon us by Congress, the President, and perpetuated by a judicial system devoid of respect for individual liberty and the Constitution.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:68
Credit expansion is the root cause of all financial bubbles. Fiat monetary systems inevitably cause unsustainable economic expansion that results in a recession and/or depression. A correction always results, with the degree and duration being determined by government fiscal policy and central bank monetary policy. If wages and prices are not allowed to adjust and the correction is thwarted by invigorated monetary expansion, new and sustained economic growth will be delayed or prevented. Financial dislocation caused by central banks in the various countries will differ from one to another due to political perceptions, military considerations, and reserve currency status.
monetary
Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:72
From December 1996, at the time that Greenspan made this statement, to December 1998, the money supply soared. Over $1 trillion of new money, as measured by M–3, was created by the Federal Reserve. MZM, another monetary measurement, is currently expanding at a rate greater than 20 percent. This generous dose of credit has sparked even more irrational exuberance, which has taken the Dow to over 9,000 for a 30 percent increase in just two years.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:80
Government propaganda promotes the false notion that inflation is no longer a problem. Nothing could be further from the truth. The dangerous financial bubble, a result of the Federal Reserve’s deliberate policy of inflation and the Fed’s argument that there is no inflation according to government-concocted CPI figures, is made to justify a continuous policy of monetary inflation because they are terrified of the consequence of deflation. The Federal Reserve may sincerely believe maintaining the status quo, preventing price inflation and delaying deflation is possible, but it really is not.
monetary
Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:89
It is easy to see why Congress, with its own insatiable desire to spend money and perpetuate a welfare and military state, cooperates with such a system. A national debt of $5.6 trillion could not have developed without a willing Federal Reserve to monetize this debt and provide for artificially low interest rates. But when the dollar crisis hits and it is clearly evident that the short-term benefits were not worth it, we will be forced to consider monetary reform.
monetary
Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:90
Reconsidering the directives given us in the Constitution with regard to money would go a long way towards developing a sound monetary system that best protects our economy and guides us away from casually going to war. Monetary reform is something that we ought to be thinking about now.
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Free Trade
27 July 1999 1999 Ron Paul 82:11
I look forward to the day that our trade debate may advance from the rhetoric of managed trade versus protectionism to that of true free trade, without subsidies or WTO-like management; or better yet, free trade with an internationally accepted monetary unit recognizing the fallacy of mismanaged fiat currencies.
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Conference Report On S. 900, Gramm-Leach-Bliley Act
4 November 1999 1999 Ron Paul 113:4
Such a scenario would put added pressure on the financial bubble. The growth in money and credit has outpaced both savings and economic growth. These inflationary pressures have been concentrated in asset prices, not consumer price inflation — keeping monetary policy too easy. This increase in asset prices has fueled domestic borrowing and spending.
monetary
Conference Report On S. 900, Gramm-Leach-Bliley Act
4 November 1999 1999 Ron Paul 113:5
Government policy and the increase in securitization are largely responsible for this bubble. In addition to loose monetary policies by the Federal Reserve, government-sponsored enterprises Fannie Mae and Freddie Mac have contributed to the problem. The fourfold increases in their balance sheets from 1997 to 1998 boosted new home borrowings to more than $1.5 trillion in 1998, two-thirds of which were refinances which put an extra $15,000 in the pockets of consumers on average — and reduce risk for individual institutions while increasing risk for the system as a whole.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:57
Today there is no serious effort to challenge welfare as a way of life, and its uncontrolled growth in the next economic downturn is to be expected. Too many citizens now believe they are entitled to the monetary assistance from the Government anytime they need it and they expect it. Even in times of plenty, the direction has been to continue expanding education, welfare, and retirement benefits.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:89
The U.S. monetary system. The U.S. monetary system during the 20th Century has dramatically changed from the one authorized by the Constitution. Only silver and gold were to be used in payment of debt, and no paper money was to be issued. In one of the few restrictions on the states, the Constitution prohibited them from issuing their own money, and they were to use only gold and silver in payment of debt. No Central Bank was authorized.
monetary
A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:91
Unfortunately, their concerns as they were reflected in the Constitution have been ignored and as this century closes we do not have a sound dollar as good as gold. The changes to our monetary system are by far the most significant economic events of the 20th Century. The gold dollar of 1900 is now nothing more than a Federal Reserve note with a promise by untrustworthy politicians and the central bankers to pay nothing for it.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:99
It is also advantageous for the politicians to ignore the negative effects from such a monetary arrangement, since they tend to be hidden and disseminated. A paper money system attracts support from various economic groups. Bankers benefit from the float that they get with the fractional reserve banking that accompanies a fiat monetary system. Giant corporations who get to borrow large funds at below market interest rates enjoy the system and consistently call for more inflation and artificially low interest rates. Even the general public seems to benefit from the artificial booms brought about by credit creation, with lower interest rates allowing major purchases like homes and cars.
monetary
A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:103
There are other real costs as well that few are willing to believe are a direct consequence of Federal Reserve Board policy. Rampant inflation after World War I as well as the 1921 depression were a consequence of monetary policy during and following the war. The stock market speculation of the 1920s, the stock market collapse of 1929 and the depression of the 1930s causing millions to be unemployed, all resulted from Federal Reserve Board monetary mischief.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:104
Price inflation of the early 1950s was a consequence of monetary inflation required to fight the Korean War. Wage and price controls used then totally failed, yet the same canard was used during the Vietnam war in the early 1970s to again impose wage and price controls, with even worse results.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:108
The stage has been set. Rampant monetary growth has led to historic high asset inflation, massive speculation, overcapacity, malinvestment, excessive debt, a negative savings rate and a current account deficit of huge proportions. These conditions dictate a painful adjustment, something that would have never occurred under a gold standard.
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A Republic, If You Can Keep It – Part 2
2 February 2000 2000 Ron Paul 5:71
We find ourselves at the close of this century realizing all our standards have been undermined. A monetary standard for our money is gone. The dollar is whatever the government tells us it is. There is no definition and no promise to pay anything for the notes issued ad infinitum by the government. Standards for education are continually lowered, deemphasizing excellence. Relative ethics are promoted and moral absolutes are ridiculed. The influence of religion on our standards is frowned upon and replaced by secular humanistic standards. The work ethic has been replaced by a welfare ethic based on need, not effort. Strict standards required for an elite military force are gone and our lack of readiness reflects this.
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Manipulating Interest Rates
May 15, 2000 2000 Ron Paul 36:3
* Business cycles are well understood. They are not a natural consequence of capitalism but instead result from central bank manipulation of credit. This is especially true when the monetary unit is undefinable as it is in a fiat monetary system, such as ours. Therefore, it is correct to place blame on the Federal Reserve for all depressions/recessions, inflation, and much of the unemployment since 1913. The next downturn, likewise, will be the fault of the Fed.
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Manipulating Interest Rates
May 15, 2000 2000 Ron Paul 36:9
* This silly notion of money and credit gives rise to the conventional wisdom that once the economy gets really rolling, it’s time for the Fed to stop economic growth. The false supposition is that economic growth causes higher prices and higher labor costs, and these evils must be prevented by tightening credit and raising interest rates. But these are only the consequences of the previous monetary expansion and blaming rising prices or higher labor costs is done only to distract from the real culprit-monetary inflation by the Federal Reserve.
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Manipulating Interest Rates
May 15, 2000 2000 Ron Paul 36:10
* In a free market, economic growth would never be considered a negative and purposely discouraged. It is strange that so many established economists and politicians accept the notion of dampening economic growth for this purpose. Economic growth with sound money always lowers prices-it never raises them. Deliberately increasing rates actually increase the cost of all borrowing, and yet it’s claimed that this is necessary to stop rising costs. Obviously, there’s not much to the soundness of central economic planning through monetary policy of this sort.
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Manipulating Interest Rates
May 15, 2000 2000 Ron Paul 36:11
* There are some who see this fallacy and object to deliberately slowing the economy but instead clamor for even more monetary growth to keep interest rates low and the economy booming. But this is just as silly because that leads to even more debasement of the currency, rising prices, and instead of lowering interest rates will in time, due to inflationary expectation, actually raise rates.
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Manipulating Interest Rates
May 15, 2000 2000 Ron Paul 36:12
* Fine-tuning the economy, through monetary manipulation is a dangerous game to play. We are now completing nearly a decade of rapid monetary growth and evidence is now appearing indicating that we will soon start to pay for our profligate ways. The financial bubble that the Fed manufactured over the past decade or two will burst and the illusion of our great wealth will end. In time, also the illusion of “surpluses for as far as the eye can see” will end. Then the Congress will be forced to take much more seriously the budgetary problems that it pretends do not exist.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:3
* When trade imbalances are not corrected, sudden devaluations, higher interest rates, and domestic inflation are forced on the country that has most abused its monetary power. This was seen in 1997 in the Asian crisis, and precarious economic conditions continue in that region.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:4
* Japan has yet to recover from its monetary inflation of the 70s and 80s and has now suffered with a lethargic economy for over a decade. Even after this length of time there is no serious thought for currency reform in Japan or any other Asian nation.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:13
* Fiscal policy, and current monetary policy will not solve the crisis we will soon face. Only sound money, money that cannot be created out of thin air, can solve the many problems appearing on the horizon. The sooner we pay attention to monetary policy as the source of our international financial problems, the sooner we will come up with a sound solution.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:1
Mr. Speaker, at a frantic pace we anxiously rush to close down this Congress with excessive legislation while totally ignoring the all-important issue of monetary policy.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:2
Congress has certainly reneged on its responsibility in this area. We continue to grant authority to a central bank that designs monetary policy in complete secrecy, inflating the currency at will, thus stealing value from the already existing currency through a dilution effect.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:3
The Federal Reserve clings to the silly notion that economic growth causes inflation, thus trying to avoid the blame it deserves. The Federal Reserve then concludes that an economic slowdown is the solution to the problem it created. Those who argue to continue the inflationary process are equally in error. As if the economy were an airplane, the monetary authorities talk about a soft landing with the false hope of painlessly paying for the excesses enjoyed for a decade.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:5
And what do we do here in the Congress? We continue to ignore our constitutional responsibility to maintain a sound dollar. Our monetary policy of the last 10 years has produced the largest financial bubble in all of history, with the good times paid for by borrowing and an illusion of wealth created in a speculative stock market. Our current account deficit, now running over $400 billion per year, and our $1.5 trillion foreign debt, has been instrumental in financing our extravagance. Be assured, the piper will be paid. The markets are clearly reflecting the excesses of the 1990s.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:9
In preparation for the time when we are forced to reform the monetary system, we must immediately begin to consider the problems that befall a nation that permits systematic currency depreciation as a tool to gain short-term economic benefits while ignoring the very dangerous long-term consequences to our liberty and prosperity.
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WARNING ABOUT FOREIGN POLICY AND MONETARY POLICY
October 12, 2000 2000 Ron Paul 86:2
Mr. Speaker, over the last 3 years to 4 years, I have come to the floor on numerous occasions trying to sound a warning about both our foreign policy and our monetary policy. Today our monetary policy and our foreign policy have clashed. We see now that we face serious problems, not only in the Middle East, but on our financial markets.
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WARNING ABOUT FOREIGN POLICY AND MONETARY POLICY
October 12, 2000 2000 Ron Paul 86:4
Most good economists recognize that inflation is a consequence of monetary policy; as one increases the supply of money, it inflates the currency. This distorts interest rates, and it distorts the markets. Sometimes this goes into goods and services, and other times these excessive funds will go into marketplaces and distort the value of stocks and bonds.
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ECONOMIC PROBLEMS AHEAD
November 13, 2000 2000 Ron Paul 93:4
* Even though it is argued that there are huge budget surpluses in Washington, instead of budget compromise, a stalemate results. Each side wants even a greater share of the loot being distributed by the politicians. Even with the windfall revenues, no serious suggestion is made in Washington for cuts in spending. Instead of moving toward a market economy and less dependency on the federal government in the midst of this so-called ‘prosperity,’ we continue to go World Trade Organization, the International Monetary Fund, and the World Bank. Although in the early stages of interventionism and government planning, especially when a great deal of wealth is available for redistribution, it seems to enhance prosperity while prolonging the financial bubble on which the economy is dependent. The monetary system, both our domestic system as well as the international fiat system, plays a key role in the artificial prosperity based on inflated currencies as well as debt and speculation.
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ECONOMIC PROBLEMS AHEAD
November 13, 2000 2000 Ron Paul 93:5
* The pretended goal of the economic planners has been economic fairness through redistribution of wealth, politically correct social consciousness, and an all-intrusive government which becomes a responsibility for personal safety, health and education while personal responsibility is diminished. The goal of liberty has long been forgotten. The concentrated effort has been to gain power through the control of wealth with a scheme that pretends to treat everybody fairly. An impasse was destined to come, and already signs are present in our system of welfarism. This election in many ways politically demonstrates this economic reality. The political stalemate reflects the stalemate that is developing in the economy. Both will eventually cause deep division and hardship. The real problem-preserving of the free market and private property rights- if ignored, will only make things worse, because the only solution that will be offered in Washington will be more government intervention, increased spending, increase in monetary inflation, more debt, greater military activity throughout the world, and priming the economic pump with more expenditures for weapons we do not need.
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ECONOMIC PROBLEMS AHEAD
November 13, 2000 2000 Ron Paul 93:6
* We have already seen signs of economic troubles ahead . Although the Fed plans for only a slight slow down and a so-called ‘soft landing,’ the correction from the monetary mischief of the last 10 years has already been determined. Although the dollar currently remains strong, because other currencies are so weak, there is a limitation on how long we can create new dollars without them being devalued. A weaker dollar will surely come in our not too distant future. Our huge current account deficit and trade imbalances warn us of that day.
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ECONOMIC PROBLEMS AHEAD
November 13, 2000 2000 Ron Paul 93:8
* Even in the midst of our great imaginary budgetary surpluses, there has been no effort to cut. Once the economy tends to slow and more problems are apparent, expenditures are going to soar not only because of future problems but because of the new programs recently initiated. A huge financial bubble has been created by the GSEs, such as Fannie Mae and Freddie Mac. The $33 billion of shareholder equities in these two organizations has been leveraged into $1.07 trillion worth of assets- a bubble waiting to be pricked. The Congress has reacted to all these events irresponsibly by increasing spending, increasing tax revenues, doing nothing to reduce regulations, and being totally apathetic toward the dollar and monetary policy. We in the Congress have a moral and constitutional obligation to protect the value of the dollar and to understand why it is so important to the economy that a central bank not be given the unbelievable power of inflating a currency at will and pretending that it knows how to find tune an economy through this counterfeit system of money.
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ECONOMIC UPDATE
December 4, 2000 2000 Ron Paul 97:7
* The problem I see is that Congress for too long has conceded too much of their authority over control of the monetary system to the Federal Reserve system, which acts in secrecy.
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ECONOMIC UPDATE
December 4, 2000 2000 Ron Paul 97:22
* Ironically it’s argued that the deliberate raising the cost of borrowing money for everyone is that this will hold prices in check. Yet consumers and businesses suffer from this additional cost - pushing all prices upward. But even more ironic is the claim that they now care about “inflation” after a decade of massive monetary inflation-the real culprit.-The Federal Reserve meanwhile ignores the fact that the money supply is key to monetary policy, not admitting the damage has already been done.
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ECONOMIC UPDATE
December 4, 2000 2000 Ron Paul 97:25
* A short time after Chairman Greenspan took over the reigns of the Federal Reserve the stock market crash of 1987 prompted him to alleviate concerns with a heavy dose of monetary inflation. Once again, in the slump of 1991 and 1992, he again re-ignited the financial bubble by more monetary inflation. There was no hesitation on Mr. Greenspan’s part to inflate as necessary to alleviate the conditions brought about by the Mexican financial crisis, the Asian crisis, the Russian ruble crisis, and with the Long-Term Capital Management crisis. Just one year ago the non-existent Y2K crisis prompted huge, unprecedented monetary inflation by the Federal Reserve. All these efforts kept interest rates below the market rate and contributed to the financial bubble that is now starting to deflate. But, there is no doubt that this monetary inflation did maintain an economy that seemed like it would never quit growing. Housing markets thrived, the stock market and bond market thrived, and in turn, the great profits made in these areas, especially gains made by stock market transactions, produced profits that inflated greatly the revenues that flowed into the Treasury. The serious problem that we now face, a collapsing stock market and a rapidly weakening economy, was caused by inflating the money supply along with artificially low interest rates. More inflation and continuing the policy of artificially low interest rates can’t possibly be the solution to the dilemma we face.
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ECONOMIC UPDATE
December 4, 2000 2000 Ron Paul 97:26
* We should never blame economic growth as the culprit. Instead artificial growth, mal-investment, overcapacity, speculation, and excessive debt that comes from systematic monetary inflation should be blamed, since these are all a result of Federal Reserve Board policy. Let there be no doubt political and financial leaders will demand lower interest rates in order to alleviate the conditions that are developing. But just because a boom can come from generous Fed credit, it doesn’t mean the bubble economy can be maintained or re-inflated by easy credit once a correction sets in.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:5
The feared gridlock anticipated for the 107th Congress will differ little from the other legislative battles in recent previous congresses. Yes, there will be heated arguments regarding the size of budgets, local vs. federal control, and private vs. government solutions. But a serious debate over the precise role for government is unlikely to occur. I do not expect any serious challenge to the 20th Century consensus of both major parties-that the federal government has a significant responsibility to deal with education, health care, retirement programs, or managing the distribution of the welfare state benefits. Both parties are in general agreement on monetary management, environmental protection, safety and risks both natural and man-made. Both participate in telling others around the world how they must adopt a democratic process similar to ours, as we police our worldwide financial interests.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:44
The majority of Americans have not yet accepted the harsh reality that this less-threatening, friendlier type of economic planning is minimally more efficient than that of the socialist planners with their five-year economic plans. We must face the fact that the business cycle, with its recurring recessions, wage controls, wealth transfers, and social discord are still with us and will get worse unless there is a fundamental change in economic and monetary policy. Regardless of the type, central economic planning is a dangerous notion.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:45
In an economic downturn, a large majority of our political leaders believe that the ill effects of recession can be greatly minimized by monetary and fiscal policy. Although cutting taxes is always beneficial, spending one’s way out of a recession is no panacea. Even if some help is gained by cutting taxes or temporary relief given by an increase in government spending, they distract from the real cause of the downturn: previously pursued faulty monetary policy. The consequences of interest-rate manipulation in a recession-along with tax and spending changes-are unpredictable and do not always produce the same results each time they’re used. This is why interest rates of less than 1% and massive spending programs have not revitalized Japan’s economy or her stock market. We may well be witnessing the beginning of a major worldwide economic downturn, making even more unpredictable the consequence of conventional western-style central bank tinkering.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:69
The extra credit in the 1990s has found its way especially into the housing market like never before. GSEs, in particular Freddie Mac and Fannie Mae, have gobbled up huge sums to finance a booming housing market. GSE securities enjoy implicit government guarantees, which have allowed for a generous discount on most housing loans. They have also been the vehicles used by consumers to refinance and borrow against their home equity to use these funds for other purposes, such as investing in the stock market. This has further undermined savings by using the equity that builds with price inflation that homeowners enjoy when money is debased. In addition, the Federal Reserve now buys and holds GSE securities as collateral in their monetary operations. These securities are then literally used as collateral for printing Federal Reserve notes; this is a dangerous precedent.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:70
If monetary inflation merely raised prices, and all prices and labor costs moved up at the same rate, and it did not cause dis-equilibrium in the market, it would be of little consequence. But inflation is far more than rising prices. Creating money out of thin air is morally equivalent to counterfeiting. It’s fraud and theft, because it steals purchasing power from the savers and those on fixed incomes. That in itself should compel all nations to prohibit it, as did the authors of our Constitution.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:71
Inflation is socially disruptive in that the management of fiat money-as all today’s currencies are- causes great hardships. Unemployment is a direct consequence of the constantly recurring recessions. Persistent rising costs impoverish many as the standard of living of unfortunate groups erodes. Because the pain and suffering that comes from monetary debasement is never evenly distributed, certain segments of society can actually benefit.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:73
There is a greater threat from the monetary mischief than just the economic harm it does. The threat to liberty resulting when economic strife hits and finger-pointing increases should concern us most. We should never be complacent about monetary policy.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:74
We must reassess the responsibility Congress has in maintaining a sound monetary system. In the 19th Century, the constitutionality of a central bank was questioned and challenged. Not until 1913 were the advocates of a strong federalist system able to foist a powerful central bank on us, while destroying the gold standard. This banking system, which now serves as the financial arm of Congress, has chosen to pursue massive welfare spending and a foreign policy that has caused us to be at war for much of the 20th Century.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:75
Without the central bank creating money out of thin air, our welfare state and worldwide imperialism would have been impossible to finance. Attempts at economic fine-tuning by monetary authorities would have been impossible without a powerful central bank. Propping up the stock market as it falters would be impossible as well.
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The Economy
February 13, 2001 2001 Ron Paul 13:1
Mr. Speaker: Many government and Federal Reserve officials have repeatedly argued that we have no inflation to fear. Yet those who claim this, define inflation as rising consumer and producer prices. Although inflation frequently leads to price increases we must remember that the free market definition of inflation is the increase in the supply of money and credit. Monetary inflation is seductive in that it can cause great harm without significantly affecting government price indices. The excess credit may well go into stock market and real estate speculation with consumer price increases limited to such things as energy, repairs, medical care and other services. One should not conclude, as so many have in the past decade, that we have no inflation to worry about. Imbalances did develop with the 1990’s monetary inflation but were ignored. They are now becoming readily apparent as sharp adjustments take place—such as we have seen in the past year in the NASDAQ.
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The Economy
February 13, 2001 2001 Ron Paul 13:8
When control is lost in a sharp downturn, dealing with it by massive monetary inflation, may well cause something worse than the stagflation that we experienced in the 1970s; an inflationary recession or depression could result.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:7
The biggest error in interpreting today’s events is totally ignoring how monetary policy in a fiat system affects the entire economy.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:8
Politicians and economists are very familiar with business cycles with most assuming that slumps erupt as: 1.) A natural consequence of capitalism, 2.) An act of God, 3.) Or as a result of Fed driven high interest rates. That is to say, the Fed did not engage in enough monetary debasement, becomes the most common complaint by Wall Street pundits and politicians.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:10
But the artificial nature of today’s world trade and finance being systematically managed by the IMF, the World Bank and WTO, and driven by a worldwide fiat monetary system, has produced imbalances that have already prompted many sudden adjustments. There have been eight major crisis in the past six years requiring a worldwide effort, led by the Fed, to keep the system afloat, all being done with more monetary inflation and bailouts.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:12
One day it will become known that technological advances and improvements in productivity also have a downside. This technology hid the ill effects of the monetary mischief the Fed had enthusiastically engaged in over the past decade. Technological improvements, while keeping the CPI and the PPI prices in check, led many, including Greenspan, to victoriously declare that no inflation existed and that a new era had indeed arrived. Finally, it’s declared that the day has arrived that printing money is equivalent to producing wealth and without a downside. Counterfeiting works!
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:18
For thirty years the world has operated on a pure fiat monetary system and all the ill effects of such a system are now becoming apparent. Current adjustments will be different than all other previous currency adjustments, which were local or regional. This one is worldwide and may well be the biggest economic event in modern history.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:19
It’s reasonable to assume a worldwide slump will ensue as a result of the worldwide monetary mischief our authorities have engaged in the past 30 years. Never before has the world gone so long without money having some tangible value attached to it. Trust in politicians and Central Bankers may have been a benefit in the inflationary part of the cycle but this trust will quickly dissipate in the corrected phase. Monetary heroes can quickly become villains as the price is paid for previous excesses and extravagance.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:20
However, hope springs eternal, so no effort will soon be made to restore sound money. A giant worldwide slump will merely prompt massive monetary inflation and deficit financing. The Congress and the American people should anticipate this will happen even though it should not.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:23
When that day comes we will have a true New Era, unlike the fictitious New Era of Greenspan’s dreams and certainly opposite of the dangerous New Era that stares us in the face as the world fiat monetary system falters.
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Manipulation Of Interest Rates Cause Economic Problems
20 March 2001 2001 Ron Paul 22:3
Interest rates have been manipulated by the Federal Reserve as long as I can remember, especially in the last 30 years since we have had a total fiat monetary system. So it is the manipulation of interest rates that causes a problem.
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Manipulation Of Interest Rates Cause Economic Problems
20 March 2001 2001 Ron Paul 22:9
We talk about interest rates. We talk about stimulating the economy. But we really do not talk about the problem, and that is the monetary system and the nature of the dollar.
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Manipulation Of Interest Rates Cause Economic Problems
20 March 2001 2001 Ron Paul 22:13
Now, there is another aspect of inflation, that is the monetary debasement that I have great concern about. That is, when it goes to extremes, it inevitably wipes out the middle class. It destroys the middle class. We are just starting to see that happening in this country.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:3
It is very clear that we have these cycles and these booms coming from a monetary system that is pure fiat. Fiat money means that the money is created out of thin air, and the characteristic of a fiat monetary system is that you have overspeculation, you have stock market booms, you have stock market crashes, and you have a business cycle. This comes from the mismanagement of money, mainly because man, in his efforts to plan, to have economic central planning through monetary policy, is incapable of providing the information necessary that a free market is supposed to have.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:7
This is not the case. Ultimately what we have to have is monetary reform, currency reform. We have to have a time when once again we have money that cannot be created out of thin air. We have to have money of value, something that governments and politicians cannot create out of thin air. Unless we address that, we are going to continue with these problems.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:8
This can be very serious. Just in the last year there has been $4 trillion of value lost in the stock market. Of course, it was artificially high, and now it is going to be artificially low, and these sudden changes reflect the disequilibrium built into the system once we have a monetary system of this sort.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:11
This type of a monetary system also encourages us to do things unwisely. When interest rates are lower than they are supposed to be, we borrow more money and we do not save as much money, so savings has a negative rate. Yet people are way in debt, business people are in debt, and then business people are actually encouraged to do things that are not wise. They overbuild; they build into the system overcapacity and mal-investment which eventually has to be cleansed out of the system.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:12
So this mantra of saying all we need is more inflation will not work. Inflation caused the problem. The inflation of the monetary system is the problem. To believe that all we need is more inflation to solve the problem is a serious error. We need currency reform.
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Inflation Is Still With Us
3 May 2001 2001 Ron Paul 30:2
To understand the perversities of inflation one must look to the money supply. The money supply, as measured by M3, rose an astounding $42 billion last week and is up a whopping $210 billion in the past ten weeks. MZM, another important measure of inflation, is rising at the rate of 27%. Now that’s monetary debasement!
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Inflation Is Still With Us
3 May 2001 2001 Ron Paul 30:3
But rising prices, a reflection of monetary inflation, should not be dismissed as so many government economists have done. The current first quarter GDP report shows a 3.3% rise in the personal consumption price index, well above the 1.9% recorded in last year’s fourth quarter.
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Inflation Is Still With Us
3 May 2001 2001 Ron Paul 30:5
The most serious economic myth that Federal Reserve economists perpetuate is that a booming economy causes prices to rise and a slowing economy will hold “inflation” in check. Ever since 1971, when the fiat dollar was established, records show that during each of our economic slumps, prices rose even faster than they did during periods of economic growth, supporting the argument that rising prices are a consequence of monetary policy.
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Inflation Is Still With Us
3 May 2001 2001 Ron Paul 30:6
Although the economy is now slowing, and fuel prices are skyrocketing for the airlines, Delta pilots are receiving salary increases of between 24 and 34%. Other evidence of labor cost increases is now available even with the large and growing number of announced layoffs. Wage prices pressure is more often than not a consequence of monetary policy, not a tight labor market.
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Inflation Is Still With Us
3 May 2001 2001 Ron Paul 30:7
Rising prices and the economic slowdown must be laid at the feet of the Federal Reserve. Likewise, the existing financial bubble is a consequence of the same policy of monetary expansion and artifically low interest rates. Although the NASDAQ bubble has already partially deflated, the entire world financial system suffers from the same distortion; and a lot more adjustment is required. Merely re-inflating with monetary expansion and manipulating interest rates will not solve the problems of debt, mal-investment and overcapacity that plague the system.
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Inflation Is Still With Us
3 May 2001 2001 Ron Paul 30:9
A sad consequence of today’s conditions is that monetary policy encourages transfer of wealth and power to the undeserving. The victims of bad monetary policy then blame capitalism for the inequities. The leftist demonstrators at recent WTO, IMF, and World Bank meetings make a legitimate point that the current system has resulted in accumulation of wealth and power in the hands of some at the expense of others.
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Inflation Is Still With Us
3 May 2001 2001 Ron Paul 30:10
But this is an expected consequence of monetary debasement, which generally leads to social unrest. But, blaming capitalism and freedom for the harm done by inflationism, special interest corporatism, and interventionism presents a danger to us all, since the case for commodity money and individual liberty is lost in the shouting. Unless this message is heard and distinguished from the current system, freedom and prosperity will be lost. Leaders of the current worldwide system that has evolved since the collapse of the Soviet empire pay lip service to free trade and free markets, but tragically they are moving us toward a fascist system of partnerships with government, big businesss, and international banking at the expense of the middle class and the poor.
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Export-Import Bank Amendment
24 July 2001 2001 Ron Paul 62:7
There is a lot of mal-investment in the economy, misappropriation of money and investments that generates overcapacity, which is a consequence of monetary policy. It is a serious problem; and we are today facing the consequence, because we are now moving into a rather severe recession. But at the same time, export financing compounds that problem. It adds on to it because it is an allocation of credit.
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A NEWSPAPER ARTICLE ON THE LIFE OF FREDERIC BASTIAT -- HON. RON PAUL
July 26, 2001 2001 Ron Paul 67:19
Obvious? Sure, but we fall for a version of the broken-window fallacy every time we evaluate the impact of a government program without considering what taxpayers would have done with the money instead. Some people even judge monetary policy by what happens, without considering what might have happened.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:4
We are now witnessing the effects of the accumulated problems of thirty years of fiat money-not only the dollar but also all the world currencies-something the world has never before experienced. Exactly how it plays out is yet unknown. Its severity will be determined by future monetary management- especially by the Federal Reserve. The likelihood of quickly resolving the deeply ingrained and worldwide imbalances built up over thirty years is remote. Yielding to the addiction of credit creation (as has been the case with every market correction over the past thirty years) remains irresistible to the central bankers of the world. Central planners, who occupy the seats of power in every central bank around the world, refuse to accept the fact that markets are more powerful and smarter than they are.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:7
Paper money helps the strong and hurts the weak before it self-destructs and undermines international trade. The US dollar, with its reserve-currency status, provides a much greater benefit to American citizens than that which occurs in other countries that follow a similar monetary policy. It allows us to export our inflation by buying cheap goods from overseas, while our dollars are then lent back to us to finance our current account deficit. We further benefit from the confidence bestowed on the dollar by our being the economic and military powerhouse of the world, thus postponing the day of reckoning. This permits our extravagant living to last longer than would have otherwise occurred under a gold standard.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:9
The monetary inflation of the 1900s produced welcomed profits of $145 billion for the NASDAQ companies over the five years between 1996 and 2000. Astoundingly this entire amount was lost in the past year. This doesn’t even address the trillions of dollars of paper losses in stock values from its peak in early 2000. Congress has expressed concern about the staggering stock-market losses but fails to see the connection between the bubble economy and the monetary inflation generated by the Federal Reserve.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:13
But if the Fed and its chairman, Alan Greenspan, have been able to guide us out of every potential crisis all the way back to the stock market crash of 1987, why shouldn’t we expect the same to happen once again? Mainly because there’s a limit to how long the monetary charade can be perpetuated. Now it looks like the international financial system built on paper money is coming to an end.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:19
Current concerns are expressed by worries about meeting the criteria for a government-declared recession and whether a weaker dollar would help. The first is merely academic, because if you are one of the many thousands who have been laid off, you’re already in a recession. The second doesn’t make a lot of sense unless one asks “compared to what?” The dollar has been on a steady course of devaluation for thirty years, against most major currencies and against gold. Its purchasing power in general has been steadily eroded. The fact that the dollar has been strong against third-world currencies and against most major currencies for the past decade doesn’t cancel out the fact that the Federal Reserve has systematically eroded the dollar’s value by steadily expanding the money supply. Recent reports of a weakening dollar on international exchange markets have investment implications but do not reflect a new policy designed to weaken the dollar. This is merely the market adjusting to thirty years of systematic monetary inflation.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:21
Economic growth can hide the ill effects of monetary inflation by holding some prices in check. But it can’t prevent the over-capacity and mal-investment which causes the economic downturn. Of course, the central bankers cling to the belief that they can somehow prevent the ugly corrections known as recessions. Economic growth, when artificially stimulated by monetary growth and low interest rates, generates the speculation we’ve seen in the stock, bond and real estate markets, along with excessive debt. Once the need for rectifying the over-capacity is recognized by the market, these imbalances are destined to be wiped out. Prolonging the correction phase with the Fed’s efforts to re-inflate by diligently working for a soft landing, or even to prevent a recession, only postpones the day the economy can return to sustained growth. This is a problem the United States had in the 1930s and one that Japan has experienced for more than a decade, with no end in sight.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:31
Concerned Federal Reserve economists are struggling to understand how the wealth effect of the stock market and real estate bubble affect economic activity and consumer spending. It should be no mystery, but it would be too much to expect the Fed to look to itself and its monetary policy for an explanation and assume responsibility for engineering the entire financial mess we’re in.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:33
The weakening dollar will usher in an age of challenge to the whole worldwide financial system. The dollar has been the linchpin of economic activity, and a severe downturn in its value will not go unnoticed and will compound the already weakening economies of the world. More monetary inflation, even if it’s a concerted worldwide effort, cannot solve the approaching crisis. The coming crisis will result from fiat money and monetary inflation; therefore, more of the same cannot be the solution.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:36
Our dollar problem, which affects our financial and budgetary decisions, originated at the Fed with our country’s acceptance of paper money thirty years ago. Federal Reserve officials and other government leaders purposely continue to mislead the people by spouting the nonsense that there is no evidence of inflation, as measured by government-rigged price indices. Even though significant price increases need not exist for monetary inflation to place a hardship on the economy, stock prices, housing prices, costs of medical care and education, and the cost of government have all been rising at very rapid rates. But the true inflation, measured by the money supply, is rising at a rate of greater than 20%, as measured by MZM. This fact is ignored.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:38
Serious problems lie ahead. If the Fed continues with the same monetary policy of perpetual inflation, and the Congress responds with more spending and regulations, real solutions will be indefinitely delayed.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:42
Even the serious economic problems generated by a flawed monetary system could be tolerated, except for the inevitable loss of personal liberty that accompanies government’s efforts to centrally plan the economy through a paper monetary policy and ever-growing welfare state.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:44
If, heaven forbid, the economy sinks as low and for as long as many free market economists believe, what policy changes must we consider? Certainly the number one change ought to be to reject the ideas that created the crisis. But rejecting old ways that Congress and the people are addicted to is not easy. Many people believe that government programs are free. The clamor for low interest rates, (more monetary inflation) by virtually all public officials and prominent business and banking leaders is endless. And, the expectation for government to do something for every economic malady-even if ill-advised government policy has created the problem-drives this seductive system of centralized planning that ultimately undermines prosperity. A realization that we cannot continue our old ways may well be upon us, and, the inflating, taxing, regulating, and centralized planning programs of the last thirty years must come to an end.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:45
Only reining in the welfare-warfare state will suffice. This eliminates the need for the Fed to monetize the debt that politicians depend on to please their constituents and secure their reelection. We must reject our obsession with policing the world by our endless foreign commitments and entanglements. This would reduce the need for greater expenditures while enhancing our national security. It would also remove pressure on the Federal Reserve to continue a flawed monetary policy of monetizing endless government debt.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:48
There are no other options if we hope to remain a free and prosperous nation. Economic and monetary meddling undermines the principles of a free society. A free society and sound money maximize production and minimize poverty. The responsibility of Congress is clear: avoid the meddling so engrained in our system and assume the responsibility, all but forgotten, to maintain a free society while making the dollar once again as good as gold.
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Foreign Interventionism
September 25, 2001 2001 Ron Paul 80:4
Mr. Speaker, I returned to Congress 5 years ago out of deep concern about our foreign policy of international interventionism, and a monetary and fiscal policy I believed would lead to a financial and dollar crisis. Over the past 5 years I have frequently expressed my views on these issues and why I believed our policies should be changed.
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A SAD STATE OF AFFAIRS --
October 25, 2001 2001 Ron Paul 90:27
It is both annoying and sad that there is so little interest by anyone in Washington in free market solutions to the world’s economic problems. True private ownership of property without regulation and abusive taxation is a thing of the past. Few understand how the Federal Reserve monetary policy causes the booms and the busts that, when severe, as now, only serve to enhance the prestige of the money managers- while most politicians and Wall Streeters demand that the Fed inflate the currency at an even more rapid rate. Today’s conditions give license to the politicians to spend our way out of recession, they hope.
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Statement before the House Capital Markets Subcommittee
Monday, February 4, 2002 2002 Ron Paul 3:6
Therefore, if Congress wishes to avoid future bankruptcies like Enron, the best thing it can do is repeal existing regulations which give investors a false sense of security and reform the country’s monetary policy to end the Fed-generated boom-and-bust cycle. Congress should also repeal those programs which provide taxpayer subsidies to large, politically-powerful corporations such as Enron.
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Statement before the House Capital Markets Subcommittee
Monday, February 4, 2002 2002 Ron Paul 3:10
This does not mean Enron is to be excused. There seems to be little question that executives at Enron deceived employees and investors, and any fraudulent conduct should of course be fully prosecuted. However, Mr. Chairman, I hope we will not allow criminal fraud in one company, which constitutionally is a matter for state law, to justify the imposition of burdensome new accounting and stock regulations. Instead, we should focus on repealing those monetary and fiscal policies that distort the market and allow the politically powerful to enrich themselves at the expense of the American taxpayer.
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Statement on the Argentine crisis
February 6 2002 2002 Ron Paul 4:3
In fact, Mr. Chairman, Argentina does not represent an exception to the laws of economics. Rather, Argentina’s economic collapse is but one more example of the folly of government intervention in the economy done to benefit powerful special interests at the expense of the Argentine people and the American taxpayer. The primary means by which the federal government forces American taxpayers to underwrite the destruction of the Argentine economy is the International Monetary Fund (IMF), which enjoys a $37 billion line of credit provided with U.S. Treasury funds.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:13
Monetary inflation is the chief cause of recessions. Therefore, we must never expect that this same policy will reverse the economic dislocations it has caused.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:18
Sadly lacking in the Congress is a conviction that free markets- that is truly free markets- and sound money can provide the highest standard of living for the greatest number of people. Instead, we operate with a system that compromises free markets and causes economic injury to a growing number of people, while rewarding special interests and steadily undermining the principles of liberty. Unfortunately, the policy of monetary inflation is most harmful to the poor and the middle class, especially in the early stages.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:30
Bigger government with more monetary debasement and deficit spending means a steady erosion of the free market and personal freedoms. This is not tolerated, because the people enjoy or even endorse higher taxes, more regulations and fewer freedoms. It’s tolerated because most people believe that their financial and economic security is the responsibility of the government. They believe they are better off with government assistance in facilitating the free market, having been taught for decades that it is necessary for government to put a human face on capitalism. Extreme capitalism, i.e. freedom, we have been told is just as dangerous as extreme socialism. As long as this belief prevails, our system will continue in its inexorable march toward fascist-type socialism.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:33
An economy that depends on ever-increasing rates of monetary inflation will appear much healthier and the people much richer than is the actual case. Owners of the dot-com companies or Enron stocks know what it’s like to feel rich one day and very poor the next. This is not a unique experience but one that should be expected and is predictable.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:34
Countries that inflate their currencies must adjust their values periodically with sudden devaluations, which destroy the pseudo-wealth of the middle class and poor. The wealthy, more often than not, can protect themselves from the sudden shocks to the monetary system. However, they can’t protect from the insidious loss of liberty that accompanies these adjustments, and eventually everyone suffers.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:37
Ideas regarding the national debt have been transformed. Presidents Jefferson and Jackson despised government debt and warned against it. Likewise, both detested central banking, which they knew inevitably, would be used to liquidate the real debt through the mischievous process of monetary debasement.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:47
Wealth- the product of labor, investment and savings- can never be substituted by government spending or by a central bank that creates new money out of thin air. Governments can only give things they first take away from someone else. Printing money only diminishes the value of each monetary unit. Neither can create wealth; both can destroy it.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:65
11. The economic ramifications of our war on terrorism are difficult to ascertain but could be quite significant. Although the recession was obviously not caused by the attacks, the additional money spent and the effect of all the new regulations cannot help the recovery. When one adds up the domestic costs, the military costs and the costs of new regulations, we can be certain that deficits are going to grow significantly, and the Federal Reserve will be further pressured to pursue a dangerous monetary inflation. This policy will result in higher rather than lower interest rates, a weak dollar and certainly rising prices. The danger of our economy spinning out of control should not be lightly dismissed.
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Introduction of the Monetary Freedom and Accountability Act
February 13, 2002 2002 Ron Paul 8:1
Mr. Speaker, I rise to introduce the Monetary Freedom and Accountability Act. This simple bill takes a step toward restoring Congress’ constitutional authority over U.S. monetary policy by requiring congressional approval before the President or the Treasury secretary buys or sells gold.
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Introduction of the Monetary Freedom and Accountability Act
February 13, 2002 2002 Ron Paul 8:2
Federal dealings in the gold market have the potential to seriously disrupt the free market by either artificially inflating or deflating the price of gold. Given gold’s importance to America’s (and the world’s) monetary system, any federal interference in the gold market will have ripple effects through the entire economy. For example, if the government were to intervene to artificially lower the price of gold, the result would be to hide the true effects of an inflationary policy until the damage was too severe to remain out of the public eye.
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Introduction of the Monetary Freedom and Accountability Act
February 13, 2002 2002 Ron Paul 8:4
While the Treasury denies it is dealing in gold, the Gold Anti-Trust Action Committee (GATA) has uncovered evidence suggesting that the Federal Reserve and the Treasury, operating through the Exchange-Stabilization Fund and in cooperation with major banks and the International Monetary Fund, have been interfering in the gold market with the goal of lowering the price of gold. The purpose of this policy has been to disguise the true effects of the monetary bubble responsible for the artificial prosperity of the 1990s, and to protect the politically-powerful banks that are heavy invested in gold derivatives. GATA believes federal actions to drive down the price of gold help protect the profits of these banks at the expense of investors, consumers, and taxpayers around the world.
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Introduction of the Monetary Freedom and Accountability Act
February 13, 2002 2002 Ron Paul 8:8
Given the tremendous effects on the American economy from federal dealings in the gold market, it certainly is reasonable that the people’s representatives have a role in approving these transactions, especially since Congress has a neglected but vital constitutional role in overseeing monetary policy. Therefore, I urge all my colleagues to stand up for sound economics, open government, and Congress’ constitutional role in monetary policy by cosponsoring the Monetary Freedom and Accountability Act.
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Statement on Ending US Membership in the IMF
February 27, 2002 2002 Ron Paul 10:1
Mr. Speaker, I rise to introduce legislation to withdraw the United States from the Bretton Woods Agreement and thus end taxpayer support for the International Monetary Fund (IMF). Rooted in a discredited economic philosophy and a complete disregard for fundamental constitutional principles, the IMF forces American taxpayers to subsidize large, multinational corporations and underwrite economic destruction around the globe. This is because the IMF often uses the $37 billion line of credit provided to it by the American taxpayers to bribe countries to follow destructive, statist policies.
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Statement on the Financial Services committee’s “Views and Estimates for Fiscal Year 2003”
February 28, 2002 2002 Ron Paul 12:5
Rather than embracing an agenda of expanded statism, I hope my colleagues will work to reduce government interference in the market that only benefits the politically powerful. For example, the committee could take a major step toward ending corporate welfare by holding hearings and a mark-up on my legislation to withdrawal the United States from the Bretton Woods Agreement and end taxpayer support for the International Monetary Fund (IMF). The Financial Services committee can also take a step toward restoring Congress’ constitutional role in monetary policy by acting on my Monetary Freedom and Accountability Act (HR 3732), which requires Congressional approval before the federal government buys or sells gold.
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Corporate and Auditing Accountability, Responsibility, And Transparency Act of 2002 (CARTA)
24 April 2002 2002 Ron Paul 24:17
In conclusion, the legislation before us today expands Federal power over the accounting profession and the financial markets. By creating new opportunities for unscrupulous actors to maneuver through the regulatory labyrinth, increasing the costs of investing, and preempting the market’s ability to come up with creative ways to hold corporate officials accountable, this legislation harms the interests of individual workers and investors. Furthermore, this legislation exceeds the constitutional limits on Federal power, interfering in matters the 10th amendment reserves to state and local law enforcement. I therefore urge my colleagues to reject this bill. Instead, Congress should focus on ending corporate welfare programs which provide taxpayer dollars to large politically-connected companies, and ending the misguided regulatory and monetary policies that helped create the Enron debacle.
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Stop Perpetuating the Welfare State
May 16, 2002 2002 Ron Paul 42:10
Today, government welfare programs have supplemented the old-style private programs. One major reason for this is that the policy of high taxes and the inflationary monetary policy imposed on the American people in order to finance the welfare state have reduced the income available for charitable giving. Many over-taxed Americans take the attitude toward private charity that "I give at the (tax) office."
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Don’t Force Taxpayers to Fund Nation-Building in Afghanistan
May 21, 2002 2002 Ron Paul 43:18
Madam Chairman, over the last several days and almost continuously, as a matter of fact, many Members get up and talk about any expenditure or any tax cut as an attack on Social Security, but we do not hear this today because there is a coalition, well built, to support this intervention and presumed occupation of Afghanistan. But the truth is, there are monetary and budget consequences for this.
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Opposing The Amendment
21 May 2002 2002 Ron Paul 45:3
Madam Chairman, over the last several days and almost continuously, as a matter of fact, many Members get up and talk about any expenditure or any tax cut as an attack on Social Security, but we do not hear this today because there is a coalition, well built, to support this intervention and presumed occupation of Afghanistan. But the truth is, there are monetary and budget consequences for this.
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Don’t Expand Federal Deposit Insurance
May 22, 2002 2002 Ron Paul 47:7
Finally, I would remind my colleagues that the federal deposit insurance program lacks constitutional authority. Congress’ only mandate in the area of money and banking is to maintain the value of the money. Unfortunately, Congress abdicated its responsibility over monetary policy with the passage of the Federal Reserve Act of 1913, which allows the federal government to erode the value of the currency at the will of the central bank. Congress’ embrace of fiat money is directly responsible for the instability in the banking system that created the justification for deposit insurance.
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Don’t Expand Federal Deposit Insurance
May 22, 2002 2002 Ron Paul 47:8
In conclusion, Mr. Speaker, HR 3717 imposes new taxes on financial institutions, forces sound institutions to pay for the mistakes of their reckless competitors, increases the chances of taxpayers being forced to bail out unsound financial institutions, reduces individual depositors’ incentives to take action to protect their deposits, and exceeds Congress’s constitutional authority. I therefore urge my colleagues to reject this bill. Instead of extending this federal program, Congress should work to prevent the crises which justify government programs like deposit insurance, by fulfilling our constitutional responsibility to pursue sound monetary policies.
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AN OPEN LETTER TO TREASURY SECRETARY O’NEILL AND FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN
May 31, 2002 2002 Ron Paul 51:3
Dear Sirs: I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)’s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency. This policy could delay a country’s recovery from an economic crisis and retard economic growth, thus furthering economic and political instability.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:1
Mr. Speaker, I have for several years come to the House floor to express my concern for the value of the dollar. It has been, and is, my concern that we in the Congress have not met our responsibility in this regard. The constitutional mandate for Congress should only permit silver and gold to be used as legal tender and has been ignored for decades and has caused much economic pain for many innocent Americans. Instead of maintaining a sound dollar, Congress has by both default and deliberate action promoted a policy that systematically depreciates the dollar. The financial markets are keenly aware of the minute-by-minute fluctuations of all the fiat currencies and look to these swings in value for an investment advantage. This type of anticipation and speculation does not exist in a sound monetary system.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:5
History and economic law are on the side of the gold. Paper money always fails. Unfortunately, though, this occurs only after many innocent people have suffered the consequences of the fraud that paper money represents. Monetary inflation is a hidden tax levied more on the poor and those on fixed incomes than the wealthy, the bankers, or the corporations.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:8
There are a lot of reasons the market is pushing down the value of the dollar at this time. But only one is foremost. Current world economic and political conditions lead to less trust in the dollar’s value. Economic strength here at home is questionable and causes concerns. Our huge foreign debt is more than $2 trillion, and our current account deficit is now 4 percent of GDP and growing. Financing this debt requires borrowing $1.3 billion per day from overseas. But these problems are ancillary to the real reason that the dollar must go down in value. For nearly 7 years the U.S. has had the privilege of creating unlimited amounts of dollars with foreigners only too eager to accept them to satisfy our ravenous appetite for consumer items. The markets have yet to discount most of this monetary inflation. But they are doing so now; and for us to ignore what is happening, we do so at the Nation’s peril. Price inflation and much higher interest rates are around the corner.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:11
Now it is back to reality. This is serious business, and the correction that must come to adjust for the Federal Reserve’s mischief of the past 30 years has only begun. Congress must soon consider significant changes in our monetary system.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:12
Congress must soon consider significant changes in our monetary system if we hope to preserve a system of sound growth and wealth preservation. Paper money managed by the Federal Reserve System cannot accomplish this. In fact, it does the opposite.
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Is America a Police State?
June 27, 2002 2002 Ron Paul 64:41
What government gives with one hand- as it attempts to provide safety and security- it must, at the same time, take away with two others. When the majority recognizes that the monetary cost and the results of our war against terrorism and personal freedoms are a lot less than promised, it may be too late.
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Has Capitalism Failed?
July 9, 2002 2002 Ron Paul 66:7
In the 1930s, it was quite popular to condemn the greed of capitalism, the gold standard, lack of regulation, and a lack government insurance on bank deposits for the disaster. Businessmen became the scapegoat. Changes were made as a result, and the welfare/warfare state was institutionalized. Easy credit became the holy grail of monetary policy, especially under Alan Greenspan, "the ultimate Maestro." Today, despite the presumed protection from these government programs built into the system, we find ourselves in a bigger mess than ever before. The bubble is bigger, the boom lasted longer, and the gold price has been deliberately undermined as an economic signal. Monetary inflation continues at a rate never seen before in a frantic effort to prop up stock prices and continue the housing bubble, while avoiding the consequences that inevitably come from easy credit. This is all done because we are unwilling to acknowledge that current policy is only setting the stage for a huge drop in the value of the dollar. Everyone fears it, but no one wants to deal with it.
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Has Capitalism Failed?
July 9, 2002 2002 Ron Paul 66:13
First, Congress should be investigating the federal government’s fraud and deception in accounting, especially in reporting future obligations such as Social Security, and how the monetary system destroys wealth. Those problems are bigger than anything in the corporate world and are the responsibility of Congress. Besides, it’s the standard set by the government and the monetary system it operates that are major contributing causes to all that’s wrong on Wall Street today. Where fraud does exist, it’s a state rather than federal matter, and state authorities can enforce these laws without any help from Congress.
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Has Capitalism Failed?
July 9, 2002 2002 Ron Paul 66:17
This is a bad scenario that need not happen. But preserving our system is impossible if the critics are allowed to blame capitalism and sound monetary policy is rejected. More spending, more debt, more easy credit, more distortion of interest rates, more regulations on everything, and more foreign meddling will soon force us into the very uncomfortable position of deciding the fate of our entire political system.
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Has Capitalism Failed?
July 9, 2002 2002 Ron Paul 66:19
We cannot depend on government to restore trust to the markets; only trustworthy people can do that. Actually, the lack of trust in Wall Street executives is healthy because it’s deserved and prompts caution. The same lack of trust in politicians, the budgetary process, and the monetary system would serve as a healthy incentive for the reform in government we need.
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Hard Questions for Federal Reserve Chairman Greenspan
July 17, 2002 2002 Ron Paul 71:6
"But gold has always had to be undermined if fiat money is to work and there has to be an illusion of trust for paper to work. And I think this has been happening for thousands of years. At one time the kings clipped coins. Then they debased the metals. Then we learned how to print money. Even as recently as the 1960’s for us to perpetuate a myth about our monetary system, we dumped 2/3 of our gold, or 500 million ounces of gold at $35 per ounce in order to try to convince people to trust the money. And even today, there is a fair amount of trading by central banks, the dumping of hundreds of tonnes of gold, loaning of gold for the sole purpose that this indicator of gold does not discredit the paper money and I think there is a definite concerted effort to do that.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:1
Mr. PAUL. Mr. Speaker, as the attached article (“A Classic Hayekian Hangover”) by economists Roger Garrison and Gene Callahan makes clear, much of the cause for our current economic uneasiness is to be found in the monetary expansion over most of the past decade. In short, expansion of the money supply as made possible by the policy of fiat currency, leads directly and inexorably to the kind of problems we have seen in the financial markets of late. Moreover, if we do not make the necessary policy changes, we will eventually see similar problems throughout the entire economy.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:2
As the authors point out, our ability to understand the linkage between inflated money supplies and subsequent economic downturns is owing to the ground breaking work of the legendary economists of the Austrian school. This Austrian Business Cycle (or “ABC”) theory has long explained the inevitable downside that attends to a busting of the artificial bubble created by inflationary fiat monetary practices.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:4
Mr. Speaker, I wish to commend the authors of this fine article as well as to call it to the attention of my colleagues in hopes that we will not merely understand its implications but also that we find the courage to change monetary policy so that we will not see a repeat performance of this year’s market volatility.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:13
In recent years money-supply figures have become clouded by institutional and technological change. But in our view, a tale-telling pattern is traced out by the MZM data reported by the Federal Reserve Bank of St. Louis. ZM standing for “zero maturity,” this monetary aggregate is a better indicator of credit conditions than are the more narrowly defined M’s.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:17
Meanwhile consumer spending stayed strong — with very low (sometimes negative) savings rates. Growth was not being fueled by real investment, which would require forgoing current consumption to save for the future, but by the monetary printing press.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:22
“We are not in the midst of a financial panic, and recovery isn’t simply a matter of restoring confidence. Indeed, excessive confidence [fostered by unduly low interest rates maintained by rapid monetary growth? — RG & GC] may be part of the problem. Instead of being the victims of self-fulfilling pessimism, we may be suffering from self-defeating optimism. The driving force behind the current slowdown is a plunge in business investment. It now seems clear that over the last few years businesses spent too much on equipment and software and that they will be cautious about further spending until their excess capacity has been worked off. And the Fed cannot do much to change their minds, since equipment spending [at least when such spending has already proved to be excessive — RG & GC] is not particularly sensitive to interest rates.”
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:2
Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:4
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:5
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of the special interests and their own appetite for big government.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:6
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the Federal Government to erode Americans’ living standard via an inflationary monetary policy.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:7
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our Nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:12
Or perhaps it is not so obvious why this is true. It’s been three decades since the dollar’s tie to gold was completely severed, to the hosannas of mainstream economists. There is no stash of gold held by the Fed or the Treasury that backs our currency system. The government owns gold but not as a monetary asset. It owns it the same way it owns national parks and fighter planes. It’s just another asset the government keeps to itself.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:17
There is nothing intrinsic about gold that makes it money. It has certain properties that lend itself to monetary use, like portability, divisibility, scarcity, durability, and uniformity. But these are just descriptors of certain qualities of the metal, not explanations as to why it became money. Gold became money for only one reason: because that’s what the markets chose.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:18
Why isn’t gold money now? Because governments destroyed the gold standard. Why? Because they regarded it as too inflexible. To be sure, monetary inflexibility is the friend of free markets. Without the ability to create money out of nothing, governments tend to run tight financial ships. Banks are more careful about the lending when they can’t rely on a lender of last resort with access to a money-creation machine like the Fed.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:26
How much easier matters were when we didn’t have to rely on the wisdom of exalted monetary central planners like Greenspan. Under the gold standard, the supply of money regulated itself. The government kept within limits. Banks were more cautious. Savings were high because credit was tight and saving was rewarded. This approach to economics is the foundation of a sustainable prosperity.
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The Shrimp Importation Financing Fairness Act
October 8, 2002 2002 Ron Paul 97:7
Adding insult to injury the federal government is forcing American shrimpers to subsidize their competitors! In the last three years, the United States Government has provided more than $1,800,000,000 in financing and insurance for these foreign countries through the Overseas Private Investment Corporation (OPIC). Furthermore, the U.S. current exposure relative to these countries through the Export-Import Bank totals some $14,800,000,000. Thus, the United States taxpayer is providing a total subsidy of $16,500,000,000 to the home countries of the leading foreign competitors of American shrimpers! Of course, the American taxpayer could be forced to shovel more money to these countries through the International Monetary Fund (IMF).
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Shrimp Importation Financing Fairness Act
7 January 2003 2003 Ron Paul 3:7
Adding insult to injury, the federal government is forcing American shrimpers to subsidize their competitors! Since 1999, the United States Government has provided more than $1,800,000,000 in financing and insurance for these foreign countries through the Overseas Private Investment Corporation (OPIC). Furthermore, according to the latest available figures, the U.S. current exposure relative to these countries through the Export- Import Bank totals some $14,800,000,000. Thus, the United States taxpayer is providing a subsidy of at least $16,500,000,000 to the home countries of the leading foreign competitors of American shrimpers! Of course, the American taxpayer could be forced to shovel more money to these countries through the International Monetary Fund (IMF).
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Republic Versus Democracy
29 January 2003 2003 Ron Paul 6:39
We were adequately warned about this problem. Democracies lead to chaos, violence and bankruptcy. The demands of the majority are always greater than taxation alone can provide. Therefore, control of the monetary and banking system is required for democracies to operate.
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Republic Versus Democracy
29 January 2003 2003 Ron Paul 6:107
It is not a coincidence that in the times of rapid monetary debasement, the middle class suffers the most from the inflation and the job losses that monetary inflation brings. When inflation is severe, which it will become, the middle class can be completely wiped out. The stock market crash gives us a hint as to what is likely to come as this country is forced to pay for the excesses sustained over the past 30 years while operating under a fiat monetary system.
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The Financial Services Committee’s Terrible Blueprint for 2004
February 28, 2003 2003 Ron Paul 27:6
Rather than embracing an agenda of expanded statism, I hope my colleagues will work to reduce government interference in the market that only benefits the politically powerful. For example, the committee could take a major step toward ending corporate welfare by holding hearings and a mark-up on my legislation to withdraw the United States from the Bretton Woods Agreement and end taxpayer support for the International Monetary Fund (IMF). The Financial Services Committee can also take a step toward restoring Congress’ constitutional role in monetary policy by passing legislation requiring congressional approval before the federal government buys or sells gold.
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The Financial Services Committee’s Terrible Blueprint for 2004
February 28, 2003 2003 Ron Paul 27:7
Perhaps the most disappointing omission from the committee’s views is the failure to address monetary policy. This is especially troubling given that many Americans have lost their jobs, while millions of others have seen severe declines in their net worth, because of the Federal Reserve’s continuing boom and bust monetary policy. It is long past time for Congress to examine seriously the need for reform of the system of fiat currency that is responsible for the cycle of booms and busts that plague the American economy. Until this committee addresses those issues, I am afraid the American economy may suffer more recessions or even depressions in the future.
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Don’t Antagonize our Trading Partners
April 1, 2003 2003 Ron Paul 41:5
It is true that military might gives a boost to a nation’s currency; but this is not permanent if fiscal and monetary policies are abused. Currently, our budget deficits are exploding, as there is no restraint on spending.
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Don’t Antagonize our Trading Partners
April 1, 2003 2003 Ron Paul 41:9
The day will come when true monetary reform will be required. Printing money to finance war and welfare can never be a panacea.
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Second Amendment Restoration Act
9 April 2003 2003 Ron Paul 47:3
While I am against the federalization of tort reform, I must voice my complete disapproval for the nature of these very suits brought against gun manufacturers. Lawsuits for monetary damages form gun violence should be aimed at the perpetrators of those crimes, not the manufacturers! Holding manufacturers liable for harm they could neither foresee nor prevent is irresponsible and outlandish. The company that makes a properly functioning product in accordance with the law is acting lawfully and thus should not be taken to court because of misuse by the purchaser (or in many cases, by the one who stole the weapon). I fear these lawsuits are motivated not by a concern for justice but by a search for deep pockets, since gun manufactures have higher incomes than the average criminals, and a fanatical anti-gun political agenda.
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Neo – CONNED !
July 10, 2003 2003 Ron Paul 73:79
We know those who lead us—both in the administration and in Congress—show no appetite to challenge the tax or monetary systems that do so much damage to our economy. The IRS and the Federal Reserve are off limits for criticism or reform. There’s no resistance to spending, either domestic or foreign. Debt is not seen as a problem. The supply-siders won on this issue, and now many conservatives readily endorse deficit spending.
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Neo – CONNED !
July 10, 2003 2003 Ron Paul 73:83
The supply-siders’ policy of low-marginal tax rates has been incorporated into neoconism, as well as their support for easy money and generous monetary inflation. Neoconservatives are disinterested in the gold standard and even ignore the supply-siders’ argument for a phony gold standard.
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Legislation To Prohibit The Federal Government From Imposing A “Carry Tax”
17 July 2003 2003 Ron Paul 78:2
Proposals to punish people if their economic behavior meets with the disapproval of government officials form the foundation of the type of central planning which caused so much misery in the last century. The carry tax proposal is obviously incompatible with a free market. This proposal is also a major threat to personal and financial privacy and thus individual liberty. In order to enforce the carry tax, the government would need a means of monitoring how long each piece of currency has been in circulation and how many hands it passed through before coming into the possession of the person on whom the tax is assessed. Thus, enforcing this tax would also give the government the power to monitor the transactions of individual Americans. The Federal Government should not abuse the authority granted it by our current monetary system and legal tender laws as a backdoor means of prying into the private economic transactions of American citizens. That is why my legislation also forbids the Federal Government from placing any information storage capacity on any Federal Reserve notes.
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Legislation To Prohibit The Federal Government From Imposing A “Carry Tax”
17 July 2003 2003 Ron Paul 78:3
The carry tax was proposed as a measure to counteract the perceived risk of deflation. Yet, the problems this carry tax is intended to solve are caused by our government’s boomand- bust monetary policy. Any perceived deflation in the American economy is the result of the end of the inflationary period of the nineties that created the stock market bubble. When the bubble burst, there was the inevitable process of liquidating bad investments caused by the misallocation of credit as a result of the Federal Reserve monetary policy. In fact, this liquidation is necessary for the economy to recover from the economic misallocations caused by the Federal Reserve’s monetary policy.
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Legislation To Prohibit The Federal Government From Imposing A “Carry Tax”
17 July 2003 2003 Ron Paul 78:4
Unfortunately, rather than finally putting an end to the boom-and-bust cycle, most in Washington are preparing to resume the cycle by calling on the Federal Reserve and the Treasury to flood the economy with new money. If Congress is not going to stabilize the American economy by reforming our unstable monetary policy, it should at least refrain from using this government failure as an excuse to further restrict the American people’s liberty through an odious carry tax. I therefore hope my colleagues will join me in supporting this legislation.
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:1
Mr. PAUL. Mr. Speaker, I rise to introduce the Monetary Freedom and Accountability Act. This simple bill takes a step toward restoring Congress’ constitutional authority over U.S. monetary policy by requiring congressional approval before the President or the Treasury secretary buys or sells gold. I also ask for unanimous consent to insert into the RECORD articles by Kelly Patricia O Meara of Insight magazine detailing the evidence supporting allegations that the United States Government has manipulated the price of gold over the past decade and the harm such manipulation caused American investors, taxpayers, consumers, and workers.
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:2
Federal dealings in the gold market have the potential to seriously disrupt the free market by either artificially inflating or deflating the price of gold. Given gold’s importance to America’s (and the world’s) monetary system, any federal interference in the gold market will have ripple effects through the entire economy. For example, if the government were to intervene to artificially lower the price of gold, the result would be to hide the true effects of an inflationary policy until the damage was too severe to remain out of the public eye.
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:4
While the Treasury denies it is dealing in gold, the Gold Anti-Trust Action Committee (GATA) has uncovered evidence suggesting that the Federal Reserve and the Treasury, as detailed in the attached article. GATA alleges that the Treasury, operating through the Exchange- Stabilization Fund and in cooperation with major banks and the International Monetary Fund, has been interfering in the gold market with the goal of lowering the price of gold. The purpose of this policy has been to disguise the true effects of the monetary bubble responsible for the artificial prosperity of the 1990s, and to protect the politically-powerful banks that are heavy invested in gold derivatives. GATA believes federal actions to drive down the price of gold help protect the profits of these banks at the expense of investors, consumers, and taxpayers around the world.
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:7
Given the tremendous effects on the American economy from federal dealings in the gold market, it certainly is reasonable that the people’s representatives have a role in approving these transactions, especially since Congress has a neglected but vital constitutional role V in overseeing monetary policy. Therefore, I urge all my colleagues to stand up for sound economics, open government, and Congress’ constitutional role in monetary policy by cosponsoring the Monetary Freedom and Accountability Act.
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:15
According to Murphy, “The cartel has been able to get away with lying about the amount of gold in reserve because the International Monetary Fund [IMF] is the Arthur Andersen of the gold world.” He has provided to Insight documents from central banks confirming that the IMF instructed them to count both lent and swapped gold as a reserve. “In other words, the IMF told the central banks to deceive the investment and gold world[s]. Once this gold is lent [or] swapped, it’s gone until such time as it can be repurchased. And with the skyrocketing price of gold we’re now seeing, it would be incredibly expensive, let alone nearly physically impossible, to get it back.”
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:3
While fiat money is widely accepted thanks to legal tender laws, it does not maintain its purchasing power. This works to the disadvantage of ordinary people who lose the purchasing power of their savings, pensions, annuities, and other promises of future payment. Most importantly, because of the subsidies our present monetary system provides to banks, which, as Federal Reserve Chairman Alan Greenspan has stated, “induces” the financial sector to increase leverage, the Federal Reserve can create additional money, in Mr. Greenspan’s words, “ without limit .” For this reason, absent legal tender laws, many citizens would refuse to accept fiat irredeemable paper-ticket or electronic money.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:7
The advantages given banks and other financial institutions by our fiat monetary system, which is built on a foundation of legal tender laws, allow them to realize revenues that would not be available to these institutions in a free market. This represents legalized plunder of ordinary people. Legal tender laws thus enable the redistribution of wealth from those who produce it, mostly ordinary working people, to those who create and move around our irredeemable paper-ticket electronic money which is, in essence, just scrip.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:3
Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:5
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:6
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of the special interests and their own appetite for big government.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:7
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:8
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:24
After 90 years of manipulating interest rates, it is time to abolish the FED and return the country to the only sound monetary system that is consistent with liberty and prosperity — the gold standard.
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Legislation To Withdraw The United States From The Bretton Woods Agreement
17 July 2003 2003 Ron Paul 84:1
Mr. PAUL. Mr. Speaker, I rise to introduce legislation to withdraw the United States from the Bretton Woods Agreement and thus end taxpayer support for the International Monetary Fund (IMF). Rooted in a discredited economic philosophy and a complete disregard for fundamental constitutional principles, the IMF forces American taxpayers to subsidize large, multinational corporations and underwrite economic destruction around the globe. This is because the IMF often uses the $46.7 billion line of credit provided to it by the American taxpayers to bribe countries to follow destructive, statist policies.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:1
All great republics throughout history cherished sound money. This meant that the monetary unit was a commodity of honest weight and purity. When money was sound, civilizations were found to be more prosperous and freedom thrived. The less free a society becomes, the greater the likelihood its money is being debased and the economic well-being of its citizens diminished.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:2
Alan Greenspan, years before he became Federal Reserve Board Chairman in charge of flagrantly debasing the U.S. dollar, wrote about this connection between sound money, prosperity, and freedom. In his article “Gold and Economic Freedom” ( The Objectivist, July 1966), Greenspan starts by saying: “An almost hysterical antagonism toward the gold standard is an issue that unites statists of all persuasions. They seem to sense…that gold and economic freedom are inseparable.” Further he states that: “Under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth.” Astoundingly, Mr. Greenspan’s analysis of the 1929 market crash, and how the Fed precipitated the crisis, directly parallels current conditions we are experiencing under his management of the Fed. Greenspan explains: “The excess credit which the Fed pumped into the economy spilled over into the stock market- triggering a fantastic speculative boom.” And, “…By 1929 the speculative imbalances had become overwhelming and unmanageable by the Fed.” Greenspan concluded his article by stating: “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.” He explains that the “shabby secret” of the proponents of big government and paper money is that deficit spending is simply nothing more than a “scheme for the hidden confiscation of wealth.” Yet here we are today with a purely fiat monetary system, managed almost exclusively by Alan Greenspan, who once so correctly denounced the Fed’s role in the Depression while recognizing the need for sound money.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:5
But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be made more available to everyone. Those who believe in fiat money often believe wealth can be increased without a commensurate amount of hard work and innovation. They also come to believe that savings and market control of interest rates are not only unnecessary, but actually hinder a productive growing economy. Concern for liberty is replaced by the illusion that material benefits can be more easily obtained with fiat money than through hard work and ingenuity. The perceived benefits soon become of greater concern for society than the preservation of liberty. This does not mean proponents of fiat money embark on a crusade to promote tyranny, though that is what it leads to, but rather they hope they have found the philosopher’s stone and a modern alternative to the challenge of turning lead into gold.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:12
Money is a moral, economic, and political issue. Since the monetary unit measures every economic transaction, from wages to prices, taxes, and interest rates, it is vitally important that its value is honestly established in the marketplace without bankers, government, politicians, or the Federal Reserve manipulating its value to serve special interests. Money As a Moral Issue
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:14
When the government can replicate the monetary unit at will without regard to cost, whether it’s paper currency or a computer entry, it’s morally identical to the counterfeiter who illegally prints currency. Both ways, it’s fraud.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:15
A fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation. The insidious and eventual cost falls on unidentified victims who are usually oblivious to the cause of their plight. This system of legalized plunder (though not constitutional) allows one group to benefit at the expense of another. An actual transfer of wealth goes from the poor and the middle class to those in privileged financial positions.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:16
In many societies the middle class has actually been wiped out by monetary inflation, which always accompanies fiat money. The high cost of living and loss of jobs hits one segment of society, while in the early stages of inflation, the business class actually benefits from the easy credit. An astute stock investor or home builder can make millions in the boom phase of the business cycle, while the poor and those dependent on fixed incomes can’t keep up with the rising cost of living.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:20
Although the money issue today is of little political interest to the parties and politicians, it should not be ignored. Policy makers must contend with the consequences of the business cycle, which result from the fiat monetary system under which we operate. They may not understand the connection now, but eventually they must.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:22
The monetary issue, along with the desire to have free trade among the states, prompted those at the Constitutional Convention to seek solutions to problems that plagued the post-revolutionary war economy. This post-war recession was greatly aggravated by the collapse of the unsound fiat Continental dollar. The people, through their representatives, spoke loudly and clearly for gold and silver over paper.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:26
Again, in the presidential race of 1896, William McKinley argued the case for gold. In spite of the great orations by William Jennings Bryant, who supported monetary inflation and made a mocking “Cross of Gold” speech, the people rallied behind McKinley’s bland but correct arguments for sound money.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:28
A central bank and fiat money enable government to maintain an easy war policy that under strict monetary rules would not be achievable. In other words, countries with sound monetary policies would rarely go to war because they could not afford to, especially if they were not attacked. The people could not be taxed enough to support wars without destroying the economy. But by printing money, the cost can be delayed and hidden, sometimes for years if not decades. To be truly opposed to preemptive and unnecessary wars one must advocate sound money to prevent the promoters of war from financing their imperialism.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:31
We do hear some talk about monetary policy and criticism directed toward the Federal Reserve, but it falls far short of what I’m talking about. Big-spending welfarists constantly complain about Fed policy, usually demanding lower interest rates even when rates are at historic lows. Big-government conservatives promoting grand worldwide military operations, while arguing that “deficits don’t matter” as long as marginal tax rates are lowered, also constantly criticize the Fed for high interest rates and lack of liquidity. Coming from both the left and the right, these demands would not occur if money could not be created out of thin air at will. Both sides are asking for the same thing from the Fed for different reasons. They want the printing presses to run faster and create more credit, so that the economy will be healed like magic- or so they believe.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:32
This is not the kind of interest in the Fed that we need. I’m anticipating that we should and one day will be forced to deal with the definition of the dollar and what money should consist of. The current superficial discussion about money merely shows a desire to tinker with the current system in hopes of improving the deteriorating economy. There will be a point, though, when the tinkering will no longer be of any benefit and even the best advice will be of no value. We have just gone through two-and-a-half years of tinkering with 13 rate cuts, and recovery has not yet been achieved. It’s just possible that we’re much closer than anyone realizes to that day when it will become absolutely necessary to deal with the monetary issue- both philosophically and strategically- and forget about the band-aid approach to the current system. Money as an Economic Issue
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:35
There are also many conservatives who do not endorse central economic planning as those on the left do, but nevertheless concede this authority to the Federal Reserve to manipulate the economy through monetary policy. Only a small group of constitutionalists, libertarians, and Austrian free-market economists reject the notion that central planning, through interest-rate and money-supply manipulation, is a productive endeavor.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:37
Though the economic consequences of paper money in the early stage affect lower-income and middle-class citizens, history shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic and political structure becomes unstable. There’s good reason for all of us to be concerned about our monetary system and the future of the dollar.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:44
Our current monetary system makes it tempting for all parties, individuals, corporations, and government to go into debt. It encourages consumption over investment and production. Incentives to save are diminished by the Fed’s making new credit available to everyone and keeping interest rates on saving so low that few find it advisable to save for a rainy day. This is made worse by taxing interest earned on savings. It plays havoc with those who do save and want to live off their interest. The artificial rates may be 4, 5, or even 6% below the market rate, and the savers- many who are elderly and on fixed incomes- suffer unfairly at the hands of Alan Greenspan, who believes that resorting to money creation will solve our problems and give us perpetual prosperity.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:45
Lowering interest rates at times, especially early in the stages of monetary debasement, will produce the desired effects and stimulate another boom-bust cycle. But eventually the distortions and imbalances between consumption and production, and the excessive debt, prevent the monetary stimulus from doing very much to boost the economy. Just look at what’s been happening in Japan for the last 12 years. When conditions get bad enough the only recourse will be to have major monetary reform to restore confidence in the system.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:46
The two conditions that result from fiat money that are more likely to concern the people are inflation of prices and unemployment. Unfortunately, few realize these problems are directly related to our monetary system. Instead of demanding reforms, the chorus from both the right and left is for the Fed to do more of the same- only faster. If our problem stems from easy credit and interest-rate manipulation by the Fed, demanding more will not do much to help. Sadly, it will only make our problems worse.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:47
Ironically, the more successful the money managers are at restoring growth or prolonging the boom with their monetary machinations, the greater are the distortions and imbalances in the economy. This means that when corrections are eventually forced upon us, they are much more painful and more people suffer with the correction lasting longer. Today’s Conditions
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:48
Today’s economic conditions reflect a fiat monetary system held together by many tricks and luck over the past 30 years. The world has been awash in paper money since removal of the last vestige of the gold standard by Richard Nixon when he buried the Bretton Woods agreement- the gold exchange standard- on August 15, 1971. Since then we’ve been on a worldwide paper dollar standard. Quite possibly we are seeing the beginning of the end of that system. If so, tough times are ahead for the United States and the world economy.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:49
A paper monetary standard means there are no restraints on the printing press or on federal deficits. In 1971, M3 was $776 billion; today it stands at $8.9 trillion, an 1100% increase. Our national debt in 1971 was $408 billion; today it stands at $6.8 trillion, a 1600% increase. Since that time, our dollar has lost almost 80% of its purchasing power. Common sense tells us that this process is not sustainable and something has to give. So far, no one in Washington seems interested.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:51
Following the breakdown of the Bretton Woods agreement, the world essentially accepted the dollar as a replacement for gold, to be held in reserve upon which even more monetary expansion could occur. It was a great arrangement that up until now seemed to make everyone happy.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:55
Once this process starts, interest rates will rise. And in recent weeks, despite the frenetic effort of the Fed to keep interest rates low, they are actually rising instead. The official explanation is that this is due to an economic rebound with an increase in demand for loans. Yet a decrease in demand for our debt and reluctance to hold our dollars is a more likely cause. Only time will tell whether the economy rebounds to any significant degree, but one must be aware that rising interest rates and serious price inflation can also reflect a weak dollar and a weak economy. The stagflation of the 1970s baffled many conventional economists, but not the Austrian economists. Many other countries have in the past suffered from the extremes of inflation in an inflationary depression, and we are not immune from that happening here. Our monetary and fiscal policies are actually conducive to such a scenario.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:58
The long-term philosophic problem with this is that the central bank and the fiat monetary system are not blamed; instead free market capitalism is. This is what happened in the 1930s. The Keynesians, who grew to dominate economic thinking at the time, erroneously blamed the gold standard, balanced budgets, and capitalism instead of tax increases, tariffs, and Fed policy. This country cannot afford another attack on economic liberty similar to what followed the 1929 crash that ushered in the economic interventionism and inflationism which we have been saddled with ever since. These policies have brought us to the brink of another colossal economic downturn and we need to be prepared.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:59
Big business and banking deserve our harsh criticism, but not because they are big or because they make a lot of money. Our criticism should come because of the special benefits they receive from a monetary system designed to assist the business class at the expense of the working class. Labor leader Samuel Gompers understood this and feared paper money and a central bank while arguing the case for gold. Since the monetary system is used to finance deficits that come from war expenditures, the military industrial complex is a strong supporter of the current monetary system.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:60
Liberals foolishly believe that they can control the process and curtail the benefits going to corporations and banks by increasing the spending for welfare for the poor. But this never happens. Powerful financial special interests control the government spending process and throw only crumbs to the poor. The fallacy with this approach is that the advocates fail to see the harm done to the poor, with cost of living increases and job losses that are a natural consequence of monetary debasement. Therefore, even more liberal control over the spending process can never compensate for the great harm done to the economy and the poor by the Federal Reserve’s effort to manage an unmanageable fiat monetary system.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:62
Our current economic problems are directly related to the monetary excesses of three decades and the more recent efforts by the Federal Reserve to thwart the correction that the market is forcing upon us. Since 1998, there has been a sustained attack on corporate profits. Before that, profits and earnings were inflated and fictitious, with WorldCom and Enron being prime examples. In spite of the 13 rate cuts since 2001, economic growth has not been restored.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:67
Monetary policy today is designed to demonetize gold and guarantee for the first time that paper can serve as an adequate substitute in the hands of wise central bankers. Trust, then, has to be transferred from gold to the politicians and bureaucrats who are in charge of our monetary system. This fails to recognize the obvious reason that market participants throughout history have always preferred to deal with real assets, real money, rather than government paper. This contest between paper and honest money is of much greater significance than many realize. We should know the outcome of this struggle within the next decade.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:68
Alan Greenspan, although once a strong advocate for the gold standard, now believes he knows what the outcome of this battle will be. Is it just wishful thinking on his part? In an answer to a question I asked before the Financial Services Committee in February 2003, Chairman Greenspan made an effort to convince me that paper money now works as well as gold: “I have been quite surprised, and I must say pleased, by the fact that central banks have been able to effectively simulate many of the characteristics of the gold standard by constraining the degree of finance in a manner which effectively brought down the general price levels.” Earlier, in December 2002, Mr. Greenspan spoke before the Economic Club of New York and addressed the same subject: “The record of the past 20 years appears to underscore the observation that, although pressures for excess issuance of fiat money are chronic, a prudent monetary policy maintained over a protracted period of time can contain the forces of inflation.” There are several problems with this optimistic assessment. First, efficient central bankers will never replace the invisible hand of a commodity monetary standard. Second, using government price indexes to measure the success of a managed fiat currency should not be reassuring. These indexes can be arbitrarily altered to imply a successful monetary policy. Also, price increases of consumer goods are not a litmus test for measuring the harm done by the money managers at the Fed. The development of overcapacity, excessive debt, and speculation still occur, even when prices happen to remain reasonably stable due to increases in productivity and technology. Chairman Greenspan makes his argument because he hopes he’s right that sound money is no longer necessary, and also because it’s an excuse to keep the inflation of the money supply going for as long as possible, hoping a miracle will restore sound growth to the economy. But that’s only a dream.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:69
We are now faced with an economy that is far from robust and may get a lot worse before rebounding. If not now, the time will soon come when the conventional wisdom of the last 90 years, since the Fed was created, will have to be challenged. If the conditions have changed and the routine of fiscal and monetary stimulation don’t work, we better prepare ourselves for the aftermath of a failed dollar system, which will not be limited to the United States.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:72
The odds aren’t very good that the Fed will adopt a policy of not inflating the money supply because of some very painful consequences that would result. Also there would be a need to remove the pressure on the Fed to accommodate the big spenders in Congress. Since there are essentially only two groups that have any influence on spending levels, big-government liberals and big- government conservatives, that’s not about to happen. Poverty is going to worsen due to our monetary and fiscal policies, so spending on the war on poverty will accelerate. Our obsession with policing the world, nation building, and pre-emptive war are not likely to soon go away, since both Republican and Democratic leaders endorse them. Instead, the cost of defending the American empire is going to accelerate. A country that is getting poorer cannot pay these bills with higher taxation nor can they find enough excess funds for the people to loan to the government. The only recourse is for the Federal Reserve to accommodate and monetize the federal debt, and that, of course, is inflation.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:74
I agree, it would be politically tough to bite the bullet and deal with our extravagance, both fiscal and monetary, but the repercussions here at home from a loss of confidence in the dollar throughout the world will not be a pretty sight to behold. I don’t see any way we are going to avoid the crisis.
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Introduction Of The Steel Financing Fairness Act
10 September 2003 2003 Ron Paul 97:1
Mr. PAUL. Mr. Speaker, I rise to introduce the Steel Financing Fairness Act. This bill helps our Nation’s beleaguered steel industry by stopping the Government from forcing American steel workers to subsidize their foreign competitors. Specifically, the bill prohibits the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank (EXIMBANK) from providing any assistance to countries that subsidize their steel industries. The Steel Financing Fairness Act also instructs the Secretary of the Treasury to reduce America’s contribution to the International Monetary Fund (IMF) by a prorated share of the IMF’s assistance to countries that subsidize their steel industries.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:1
Mr. PAUL. Mr. Speaker, like all Americans, I am concerned about the loss of jobs in America’s manufacturing sector and the role currency manipulation plays in that loss. For many years, I have warned my colleagues that America’s monetary policy is endangering America’s economy. The economic difficulties currently facing this country are a classic example of the harm resulting from a boom-andbust cycle caused by an inflationary monetary policy. An open debate on monetary issues is therefore long overdue.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:2
However, instead of debating America’s monetary policy, we are debating China’s monetary policy. Specifically, the goal of this resolution is to pressure China to change the valuation of its currency. Whatever short-term benefit our manufacturers may gain from this action, the policies urged today are not in the long-term interest of the American people.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:5
Instead of having fluctuating currency exchange rates and the inevitable instability that accompanies them, we should be working to establish a gold-backed currency whose value is determined by the market. This would provide an objective measurement of the value of economic goods and services and thus strengthen the economy by freeing it from the negative effects of our unstable monetary policy.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:11
Congress can also improve America’s competitive position by ending the practice of forcing American workers to subsidize their foreign competitors through organizations such as the Export-Import Bank and the International Monetary Fund. I have introduced the Steel Financing Fairness Act (H.R. 3072) to accomplish this goal. H.R. 3072 prevents taxpayer funds from being sent to countries, such as China, that subsidize their steel industries. Of course, our ultimate goal should be to end all taxpayer subsidies of foreign corporations and governments.
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A Wise Consistency
February 11, 2004 2004 Ron Paul 2:10
Free Trade Fraud—Neo-mercantilism : Virtually all economists are for free trade. Even the politicians express such support. However, many quickly add, “Yes, but it should be fair.” That is, free trade is fine unless it appears to hurt someone. Then a little protectionism is warranted, for fairness sake. Others who claim allegiance to free trade are only too eager to devalue their own currencies, which harms a different group of citizens — like importers and savers — in competitive devaluations in hopes of gaining a competitive edge. Many so-called free-trade proponents are champions of international agreements that undermine national sovereignty and do little more than create an international bureaucracy to manage tariffs and sanctions. Organizations like NAFTA, WTO, and the coming FTAA are more likely to benefit the powerful special interests than to enhance true free trade. Nothing is said, however, about how a universal commodity monetary standard would facilitate trade, nor is it mentioned how unilaterally lowering tariffs can benefit a nation. Even bilateral agreements are ignored when our trade problems are used as an excuse to promote dangerous internationalism.
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A Wise Consistency
February 11, 2004 2004 Ron Paul 2:13
Paper Money, Inflation, and Economic Pain : Paper money and inflation have never provided long-term economic growth, nor have they enhanced freedom. Yet the world, led by the United States, lives with a financial system awash with fiat currencies and historic debt as a consequence. No matter how serious the problems that come from central-bank monetary inflations — the depressions and inflation, unemployment, social chaos, and war — the only answer has been to inflate even more. Except for the Austrian free-market economists, the consensus is that the Great Depression was prolonged and exacerbated by the lack of monetary inflation. This view is held by Alan Greenspan, and reflected in his January 2001 response to the stock market slump and a slower economy — namely a record monetary stimulus and historically low interest rates. The unwillingness to blame the slumps on the Federal Reserve’s previous errors, though the evidence is clear, guarantees that greater problems for the United States and the world economy lie ahead. Though there is adequate information to understand the real cause of the business cycle, the truth and proper policy are not palatable. Closing down the engine of inflation at any point does cause short-term problems that are politically unacceptable. But the alternative is worse, in the long term. It is not unlike a drug addict demanding and getting a fix in order to avoid the withdrawal symptoms. Not getting rid of the addiction is a deadly mistake. While resorting to continued monetary stimulus through credit creation delays the pain and suffering, it inevitably makes the problems much worse. Debt continues to build in all areas — personal, business, and government. Inflated stock prices are propped up, waiting for another collapse. Mal-investment and overcapacity fail to correct. Insolvency proliferates without liquidation. These same errors have been prolonging the correction in Japan for 14 years, with billions of dollars of non-performing loans still on the books. Failure to admit and recognize that fiat money, mismanaged by central banks, gives us most of our economic problems, along with a greater likelihood for war, means we never learn from our mistakes. Our consistent response is to inflate faster and borrow more, which each downturn requires, to keep the economy afloat. Talk about a foolish consistency! It’s time for our leaders to admit the error of their ways, consider the wise consistency of following the advice of our Founders, and reject paper money and central bank inflationary policies.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:13
Rather than embracing an agenda of expanded statism, I hope my colleagues will work to reduce government interference in the market that only benefits the politically powerful. For example, the committee could take a major step toward ending corporate welfare by holding hearings and a mark-up on my legislation to withdraw the United States from the Bretton Woods Agreement and end taxpayer support for the International Monetary Fund. If the committee is not going to defund programs such as Ex-Im, it should at least act on legislation Mr. Sanders will introduce denying corporate welfare to industries that move a substantial portion of their workforce overseas. It is obscene to force working Americans to subsidize their foreign competitors.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:15
Perhaps the most disappointing omission from the committee’s “Views and Estimates” is the failure to address monetary policy. This is especially so given the recent decline in the value of the dollar caused by the Federal Reserve’s continuing boom and bust monetary policy.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:17
In conclusion, the “Views and Estimates” report presented by the committee claims to endorse fiscal responsibility, yet also supports expanding international, corporate, and domestic spending. The report also endorses increasing the power of the federal police state. Perhaps most disturbingly, this document ignores the looming economic problems created by the Federal Reserve’s inflationary monetary polices and the resulting increase in private and public sector debt. I therefore urge my colleagues to reject this document and instead embrace an agenda of ending corporate welfare, protecting financial privacy, and reforming the fiat money system that is the root cause of America’s economic instability.
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Government Spending – A Tax on the Middle Class
July 8, 2004 2004 Ron Paul 52:3
Unfortunately no one in Washington, especially those who defend the poor and the middle class, cares about this subject. Instead, all we hear is that tax cuts for the rich are the source of every economic ill in the country. Anyone truly concerned about the middle class suffering from falling real wages, under-employment, a rising cost of living, and a decreasing standard of living should pay a lot more attention to monetary policy. Federal spending, deficits, and Federal Reserve mischief hurt the poor while transferring wealth to the already rich. This is the real problem, and raising taxes on those who produce wealth will only make conditions worse.
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Government Spending – A Tax on the Middle Class
July 8, 2004 2004 Ron Paul 52:4
This neglect of monetary policy may be out of ignorance, but it may well be deliberate. Fully recognizing the harm caused by printing money to cover budget deficits might create public pressure to restrain spending- something the two parties don’t want.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:12
Both supported our current monetary system, which permits the Federal Reserve to accommodate deficit spending by Congress through the dangerous process of debt monetization.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:17
More important was the reaction of the international exchange markets immediately following the election. The dollar took a dive and gold rose. This indicated that holders of the trillions of dollars slushing around the world interpreted the results to mean that even with conservatives in charge, unbridled spending will not decrease and will actually grow. They also expect the current account deficit and our national debt to increase. This means the economic consequence of continuing our risky fiscal and monetary policy is something Congress should be a lot more concerned about.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:27
Though the recent election reflected the good instincts of many Americans concerned about moral values, abortion, and marriage, let’s hope and pray this endorsement will not be used to justify more pre-emptive/unnecessary wars, expand welfare, ignore deficits, endorse the current monetary system, expand the domestic police state, and promote the American empire worldwide.
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The Deficit
16 March 2005 2005 Ron Paul 33:13
We have endorsed a program with this interpretation that spending is going to be endlessly increased, and we have devised a system whereby we have ignored the constraints through monetary policy by not only are we taxing too much and borrowing too much; we have now since 1971 endorsed a monetary system that if we come up short we just print the money. And I would suggest to the gentlewoman that one of the reasons why the workers’ purchasing power is going down is we print too many dollars and they are the ones who are most likely and first to suffer from inflation.
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Reject Taxpayer Bank Bailouts
May 4, 2005 2005 Ron Paul 46:7
Finally, I would remind my colleagues that the federal deposit insurance program lacks constitutional authority. Congress’ only mandate in the area of money, and banking is to maintain the value of the money. Unfortunately, Congress abdicated its responsibility over monetary policy with the passage of the Federal Reserve Act of 1913, which allows the federal government to erode the value of the currency at the will of the central bank. Congress’ embrace of fiat money is directly responsible for the instability in the banking system that created the justification for deposit insurance.
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United States Should Leave World Trade Organization
9 June 2005 2005 Ron Paul 57:17
So I ask Members to consider, why should we not reclaim some of our prerogatives, our authorities, our responsibility? We have given up too much over the years. We have clearly given up our prerogatives on the declaration of war, and on monetary issues. That has been given away by the Congress. And here it is on the trade issue.
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The Hidden Cost of War
June 14, 2005 2005 Ron Paul 58:29
The Federal Reserve was created in 1913, and shortly thereafter the Fed accommodated the Wilsonians bent on entering WWI by inflating and deficit financing that ill-begotten involvement. Though it produced the 1921 depression and many other problems since, the process subsequently has become institutionalized in financing our militarism in the 20 th Century and already in the 21 st . Without the Fed’s ability to create money out of thin air, our government would be severely handicapped in waging wars that do not serve our interests. The money issue and the ability of our government to wage war are intricately related. Anyone interested in curtailing wartime spending and our militarism abroad is obligated to study the monetary system, through which our government seductively and surreptitiously finances foreign adventurism without the responsibility of informing the public of its cost or collecting the revenues required to finance the effort.
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The Hidden Cost of War
June 14, 2005 2005 Ron Paul 58:31
The payment by American citizens will come as the dollar loses value, interest rates rise, and prices increase. The higher prices become the tax that a more honest government would have levied directly to pay for the war effort. An unpopular war especially needs this deception as a method of payment, hiding the true costs which are dispersed and delayed through this neat little monetary trick. The real tragedy is that this “inflation tax” is not evenly distributed among all the people, and more often than not is borne disproportionately by the poor and the middle class as a truly regressive tax in the worst sense. Politicians in Washington do not see inflation as an unfair seductive tax. Our monetary policy unfortunately is never challenged even by the proponents of low taxes who care so little about deficits, but eventually it all comes to an end because economic law overrides the politicians’ deceit.
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The Hidden Cost of War
June 14, 2005 2005 Ron Paul 58:39
A free society produces more wealth for more people than any other. That wealth for many years can be confiscated to pay for the militarism advocated by those who promote preemptive war. But militarism and its costs undermine the very market system that provided the necessary resources to begin with. As this happens, productivity and wealth is diminished, putting pressure on authorities to ruthlessly extract even more funds from the people. For what they cannot collect through taxes they take through currency inflation-- eventually leading to an inability to finance unnecessary and questionable warfare and bringing the process to an end. It happened to the Soviets and their military machine collapsed. Hitler destroyed Germany’s economy, but he financed his aggression for several years by immediately stealing the gold reserves of every country he occupied. That, too, was self-limited and he met his military defeat. For us it’s less difficult since we can confiscate the wealth of American citizens and the savers of the world merely by printing more dollars to support our militarism. Though different in detail, we too must face the prospect that this system of financing is seriously flawed, and our expensive policy of worldwide interventionism will collapse. Only a profound change in attitudes regarding our foreign policy, our fiscal policy, and our monetary policy will save us from ourselves.
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Belief In The Constitution Is A Conservative View
14 June 2005 2005 Ron Paul 60:6
Of course, I did mention in my prepared text that declaration of war is important but also if we would restrain, as the Constitution does, the monetary authorities from printing money at will to finance wars like this, I think we would be fighting a lot less wars.
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An Article By Mr. Lee Jackson
14 June 2005 2005 Ron Paul 62:1
Mr. PAUL. Mr. Speaker, I would like to place in today’s record the following article by Mr. Lee Jackson, a constituent of mine who is battling a perverse tax law. Mr. Jackson and several other individuals were the target of a frivolous lawsuit that rightfully was dismissed for its lack of merit. Mr. Jackson and his fellow defendants — all totally blameless — spent many thousands of dollars in legal fees fighting the meritless suit. They understandably filed their own lawsuit against both the original plaintiffs and the plaintiffs’ law firm. However, they cannot reach a monetary settlement for damages because our tax code treats all proceeds from such a settlement — even the portion Mr. Jackson owes to his attorneys — as taxable income for Mr. Jackson. As a result, Mr. Jackson literally cannot afford to settle his case because he will owe more in income taxes than he receives from the settlement! Furthermore, he cannot deduct his attorneys fees because of the alternative minimum tax. Mr. Jackson’s story, as told below, provides a vivid example of why Congress must change the tax code to ensure that attorney fees are deemed taxable income to the attorneys who actually receive them, not their clients.
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An Article By Mr. Lee Jackson
14 June 2005 2005 Ron Paul 62:6
Attending these issues were actions of legislatures, courts, and executive branches of government. Take the case of Cynthia Spina, the Illinois Forest Preserve policewoman who won a judgment against her employer after a six-year sexual-harassment lawsuit. Instead of netting $300,000 after paying $1 million to her attorney, she was taxed $400,000 by the IRS. The law that made such travesty possible was promulgated in 1996 that differentiate between types of damages. Gone was the concept of damages being a monetary amount determined by a jury as the amount necessary to bring a plaintiff back to equilibrium. Justice is now a taxable event.
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An Article By Mr. Lee Jackson
14 June 2005 2005 Ron Paul 62:19
There is another problem with taxing awards as income, and this is even more poignant. As mentioned earlier, awards are a jury’s determination of the monetary equivalent of restoring a client to equilibrium (without consideration for tax consequences). By definition, plaintiffs owned that equivalent value prior to the need to seek court intervention and thus is not income.
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The Coming Category 5 Financial Hurricane
September 15, 2005 2005 Ron Paul 98:2
There is no hint that we will resort to reason now that the failed welfare policies of the past 60 years have been laid bare. Certainly no one has connected the tragedy of poverty in New Orleans to the flawed monetary system that has significantly contributed to the impoverishment of a huge segment of American society.
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The Coming Category 5 Financial Hurricane
September 15, 2005 2005 Ron Paul 98:3
Congress reacted to Katrina in the expected irresponsible manner. It immediately appropriated over $60 billion with little planning or debate. Taxes won’t be raised to pay the bill-- fortunately. There will be no offsets or spending reductions to pay the bill. Welfare and entitlement spending is sacrosanct. Spending for the war in Iraq and the military-industrial complex is sacrosanct. There is no guarantee that gracious foreign lenders will step forward, especially without raising interest rates. This means the Federal Reserve and Treasury will print the money needed to pay the bills. The sad truth is that monetary debasement hurts poor people the most-- the very people we saw on TV after Katrina. Inflating our currency hurts the poor and destroys the middle class, while transferring wealth to the ruling class. This occurs in spite of good intentions and misplaced compassion.
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The Coming Category 5 Financial Hurricane
September 15, 2005 2005 Ron Paul 98:12
Our spending habits, in combination with our flawed monetary system, if not changed will bring us a financial whirlwind that will make Katrina look like a minor storm. Loss of confidence in the dollar and the international financial system is a frightening possibility-- but it need not happen if Congress can curb its appetite for buying the people’s support through unrestrained spending.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:8
Today, the principles are the same, but the process is quite different. Gold is no longer a currency of the realm; paper is. The truth now is he who prints the money makes the rules, at least for the time being. Although gold is not used, the goals are the same: compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:17
This transition only could have occurred with a dramatic change in monetary policy and the nature of the dollar itself. Congress created the Federal Reserve system in 1913. Between then and 1971, the principle of sound money was systematically undermined. Between 1913 and 1971, the Federal Reserve found it much easier to expand the money supply at will for financing war or manipulating an economy with little resistance from Congress while benefiting the special interests that influence Congress.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:22
It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency, and everyone recognized that some other monetary system had to be devised in order to bring stability to the markets. Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency, with no restraints placed on it, not even a presence of gold convertibility, none whatsoever.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:25
The arrangement gave the dollar artificial strength with tremendous financial benefits for the United States. It allowed us to export our monetary inflation by buying oil and other goods at a great discount as dollar influence flourished.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:27
During the 1970s, the dollar nearly collapsed as oil prices surged and gold skyrocketed to $800 an ounce. By 1979, interest rates of 21 percent were required to rescue the system. The pressure on the dollar in the 1970s, in spite of the benefits accrued to it, reflected reckless budget deficits and monetary inflation during the 1960s. The markets were not fooled by LBJ’s claim that we could afford both guns and butter.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:32
Even during the Depression, one of Roosevelt’s first acts was to remove free-market pricing as an indication of a flawed monetary system by making it illegal for American citizens to own gold. Economic law eventually limited that effort, as it did in the early 1970s, when our Treasury and the IMF tried to fix the price of gold by dumping tons into the market to dampen the enthusiasm of those seeking a safe haven for a falling dollar after gold ownership was relegalized.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:34
Even with all the shortcomings of the fiat monetary system, dollar influence thrived. The results seemed beneficial, but gross distortions built into the system remained. And true to form, Washington politicians are only too anxious to solve the problems cropping up with window dressing while failing to understand and deal with the underlying flawed policy. Protectionism, fixing exchange rates, punitive tariffs, politically motivated sanctions, corporate subsidies, international trade management, price controls, interest rate and wage controls, super- nationalist sentiments, threat of force, and even war are resorted to, all to solve the problems artificially created by a deeply flawed monetary and economic system.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:39
Greenspan, in his first speech after leaving the Fed, said that gold prices were up because of concern about terrorism and not because of monetary concerns or because he created too many dollars during his tenure. Gold has to be discredited and the dollar propped up. Even when the dollar comes under serious attack by market forces, the central banks and the IMF will surely do everything conceivable to soak up the dollars in hope of restoring stability. Eventually, they will fail.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:52
For the most part, the true victims are not aware of how they pay the bills. The license to create money out of thin air allows the bills to be paid through price inflation. American citizens as well as average citizens of Japan and China and other countries suffer from price inflation, which represents the tax that pays the bills for our military adventures. That is, until the fraud is discovered and the foreign producers decide not to take dollars nor hold them very long in payment for those goods. Everything possible is done to prevent the fraud of the monetary system from being exposed to the masses who suffer from it. If oil markets replace dollars with euros, it would in time curtail our ability to continue to print, without restraint, the world’s reserve currency.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:56
Our whole economic system depends on continuing the current monetary arrangement, which means recycling the dollar is crucial. Currently, we borrow over $700 billion every year from our gracious benefactors, who work hard and take our paper for their goods. Then we borrow all the money we need to secure the empire, which includes the entire DOD budget of $450 billion, plus more. The military might we enjoy becomes the backing of our currency. There are no other countries that can challenge our military superiority, and therefore they have little choice but to accept the dollars we declare are today’s “gold.” This is why countries that challenge the system, like Iraq, Iran, and Venezuela, become targets of our plans for regime change.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:83
The theft that the Federal Government commits against its citizens and the power that Congress has assumed illegally are the real crimes that need to be dealt with. In this regard, we truly need a new direction: get rid of the evil tax system, the fraudulent monetary system and the power of the government to run our lives, the economy and the world, and the Abramoff types would be exposed for the mere gnats they are. There would be a lot less of them since the incentive to buy politicians would be removed.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:106
A free nation as it moves towards authoritarianism tolerates and hides a lot of the abuse in the system. The human impulse for wealth creation is hard to destroy, but in the end it will happen here if true reform of our economic, monetary, and political system is not accomplished.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:1
Mr. PAUL. Mr. Speaker, I rise to introduce the Sunshine in Monetary Policy Act, which requires the Federal Reserve to resume reporting the monetary measure known as M3. M3 consists of M1 (M1 is currency in circulation plus travelers’ checks, demand deposits, Negotiable Order of Withdrawal (NOW) accounts, and similar interest-earning checking account balances) plus M2 (M2 is M1 plus household holdings of savings deposits, small time deposits, and retail money market mutual funds balances except for balances held in IRA and Keogh accounts) plus institutional money market mutual fund balances and managed liabilities of deposits consisting of large time deposits, repurchase agreements, and Eurodollars.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:2
The Federal Reserve Board has recently announced it will stop reporting M3, thus depriving Congress and the American people of the most comprehensive measure of the money supply. The cessation of Federal Reserve’s weekly M3 report will make it more difficult for policymakers, economists, investors, and the general public to learn the true rate of inflation. As Nobel laureate Milton Friedman famously said, “inflation is always and everywhere a monetary phenomenon.” Therefore, having access to a comprehensive measure of the money supply like M3 is a vital tool for those seeking to track inflation. Thorsten Polleit, honorary professor at HfB-Business School of Finance and Management, in his article “Why Money Supply Matters” posted on the Ludwig von Mises Institute’s website mises.org, examined the relationship between changes in the money supply and inflation and concluded that “money supply signals might actually be far more important for inflation — even in the short-term — than current central bank practice suggests,” thus demonstrating the importance of the M3 aggregate.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:4
Whatever lack of interest policymakers are currently displaying in M3 is no doubt related to the mistaken perception that the Federal Reserve Board has finally figured out how to effectively manage a fiat currency. This illusion exists largely because the effects of the Fed’s inflationary polices are concentrated in malinvestments in specific sectors of the economy, leading to “bubbles” such as the one that occurred in the stock market in the late nineties and the bubble that many believe is occurring in the current real estate market. When monetary inflation is reflected in sector- specific bubbles, it is easier to pretend that the bubbles are caused by problems specific to those sectors, instead of reflecting the problems inherent in a fiat currency system. Once the damage to our economy done by our reliance on fiat currency becomes clear, I am certain that policymakers will once again take more interest in M3.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:5
Economists and others who are following M3 have become increasingly concerned about inflation because last year the rate of M3 rose almost twice as fast as other monetary aggregates. This suggests that the inflation picture is not as rosy as the Federal Reserve would like Congress and the American people to believe. Discontinuing reporting the monetary aggregate that provides the best evidence that the Federal Reserve Board has not conquered inflation suggests to many people that the government is trying to conceal information about the true state of the economy from the American people. Brad Conrad, a professor of investing who has also worked with IBM, CDC, and Amdahl, spoke for many when he said, “It [the discontinuance of M3] is unsettling. It detracts from the transparency the Fed preaches and adds to the suspicion that the Fed wants to hide anything showing money growth high enough to fuel inflation...” Discontinuing reporting M3 will only save 0.00000699% of the Federal Reserve Board’s yearly budget. This savings hardly seems to justify depriving the American people of an important measurement of money supply, especially since Congress has tasked the Federal Reserve Board with reporting on monetary aggregates.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:6
Discontinuing reporting M3 may not be a violation of the letter of the Federal Reserve Board’s statutory duty, but it is a violation of the spirit of the congressional command that the Federal Reserve Board ensure the American public is fully informed about the effects of monetary policy.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:7
Mr. Speaker, knowledge of the money supply is one of the keys to understanding the state of the economy. The least the American people should expect from the Federal Reserve Board is complete and accurate information regarding the money supply. I urge my colleagues to ensure that the American people can obtain that information by cosponsoring the Sunshine in Monetary Policy Act.
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Tribute To Harry Browne
15 March 2006 2006 Ron Paul 16:3
Harry’s third book, You Can Profit from a Monetary Crisis, reached number one on the New York Times bestseller list. Other popular books by Harry include How I Found Freedom in an Unfree World, The Great Libertarian Offer, and Why Government Doesn’t Work. I was pleased to write the foreword for one of Harry’s books, Liberty A–Z: Libertarian Soundbites You Can Use Right Now, a collection of direct, thought-provoking, and often humorous responses to the questions advocates of the freedom philosophy face.
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Iran, The Next Neocon Target
5 April 2006 2006 Ron Paul 21:53
This willingness to print whatever amount of money the government needs to pursue the war is literally inflation. Without a fiat monetary system, wars would be very difficult to finance since the people would never tolerate the taxes required to pay for it. Inflation of the money supply delays and hides the real cost of war. The result of the excessive creation of new money leads to the higher cost of living everyone decries and the Fed denies. Since taxes are not levied, the increase in prices that results from printing too much money is technically the tax required to pay for the war.
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Iran, The Next Neocon Target
5 April 2006 2006 Ron Paul 21:55
A sound economic process is disrupted with a war economy and monetary inflation. Strong voices emerge blaming the wrong policies for our problems, prompting an outcry for protectionist legislation. It is always easier to blame foreign producers and savers for our inflation, our lack of savings, excessive debt and loss of industrial jobs. Protectionist measures only make economic conditions worse. Inevitably these conditions, if not corrected, lead to a lower standard of living for most of our citizens.
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Iran, The Next Neocon Target
5 April 2006 2006 Ron Paul 21:61
Economic interests almost always are major reasons for wars being fought. Noble and patriotic causes are easier to sell to a public who must pay and provide cannon fodder to defend the financial interests of a privileged class. The fact that Saddam Hussein demanded Euros for oil in an attempt to undermine the U.S. dollar is believed by many to be one of the ulterior motives for our invasion and occupation of Iraq. Similarly, the Iranian oil burse now about to open may be seen as a threat to those who depend on maintaining the current monetary system with the dollar as the world’s reserve currency.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:10
The point is that most who buy gold do so to protect against the depreciating currency, rather than as an investment in the classical sense. Americans understand this less than citizens of other countries. Some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:12
The belief that money created out of thin air can work economic miracles if only properly managed is pervasive in the District of Columbia. In many ways, we should not be surprised about this trust in such an unsound system. For at least four generations our government- run universities have systematically preached a monetary doctrine justifying the so-called wisdom of paper money over the foolishness of sound money.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:22
This introduces the factor of trust and confidence in our monetary authorities and our politicians, and these days the American people are casting a vote of no confidence in this regard and for good reasons.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:26
There is no single measurement that reveals what the Fed has done in the recent past or tells us exactly what it is about to do in the future. Forget about the lip service given to transparency by the new Fed Chairman Bernanke. Not only is this administration one of the most secretive across the board in our history, the current Fed firmly supports denying the most important measurement of current monetary policy to Congress, the financial community and the American public.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:27
Because of a lack of interest and poor understanding of monetary policy, Congress has expressed essentially no concern about the significant change in reporting statistics on the money supply. Beginning in March, though planned before Bernanke arrived at the Fed, the central bank discontinued compiling and reporting monetary aggregates known as M3. M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation. Yet this report is no longer available to us, and Congress makes no demands to receive it.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:28
Though M3 is the most helpful statistic to track Fed activity, it by no means tells us everything we need to know about trends in monetary policy. Total bank credit, still available to us, gives us indirect information reflecting the Fed’s inflationary policies. But ultimately the markets will figure out exactly what the Fed is up to, and then individuals, financial institutions, governments and other central bankers will act accordingly.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:33
The Fed tries to keep the consumer spending spree going, not through hard work and savings, but by creating artificial wealth in stock market bubbles and housing bubbles. When these distortions run these courses and are discovered, the corrections will be quite painful as was witnessed with the collapse of the NASDAQ bubble. Likewise a fiat monetary system encourages speculation and unsound borrowing.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:34
As problems develop, scapegoats are sought and frequently found in foreign nations. This prompts many to demand altering exchange rates and protectionist measures. The sentiment for this type of solution is growing each day. Though everyone decries inflation, trade imbalances, economic downturns and Federal deficits, few attempt a closer study of our monetary system and how these events are interconnected.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:35
Even if it were recognized that a gold standard without monetary inflation would be advantageous, few in Washington would accept the political disadvantages of living with the discipline of gold since it serves as a check on government size and power. This is a sad commentary on the politics of today.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:49
Today we hear threats from some Arab, Muslim and some Far Eastern countries about undermining the dollar system not by dishonest counterfeiting, but by initiating an alternative monetary system based on gold. Wouldn’t that be ironic? Such an event theoretically could do great harm to us. This day may well come not so much as a direct political attack on the dollar system, but out of necessity to restore confidence in money once again.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:50
Historically paper money never has lasted for long periods of time, while gold has survived thousands of years of attacks by political interests and big government. In time the world once again will restore trust in the monetary system by making some currency as good as gold.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:55
Unfortunately, that is the atmosphere under which we live today with essentially no respect for the Bill of Rights. Though great economic harm comes from a government monopoly, fiat monetary system, the loss of liberty associated with it is equally troubling.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:56
Just as empires are self-limiting in terms of money and manpower, so, too, is a monetary system based on illusion and fraud.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:57
When the end comes, we will be given an opportunity to choose once again between honest money and liberty on one hand, chaos, poverty and authoritarianism on the other. The economic harm done by a fiat monetary system is pervasive, dangerous and unfair.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:60
It is a mistake to blame high gasoline and oil prices on price gouging. If we impose new taxes or fix prices while ignoring monetary inflation, corporate subsidies and excessive regulations, shortages will result. The market is the only way to determine the best price for any commodity. The law of supply and demand cannot be repealed. The real problems arise when government planners give subsidies to energy companies and favor one form of energy over another.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:66
The Founders understood this great danger and voted overwhelmingly to reject “emitting bills of credit,” the term they used for paper money or fiat currency. It is too bad the knowledge and advice of our Founders and their mandate in the Constitution are ignored, and it is ignored at great peril. The current surge in gold prices, which reflects our dollar’s devaluation, is warning us to pay closer attention to our fiscal, monetary, entitlement, and foreign policy.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:67
A recent headline in the financial press announced that gold prices surged over concern that confrontation with Iran will further push oil prices higher. This may well reflect the current situation, but higher gold prices mainly reflect monetary expansion by the Federal Reserve. Dwelling on current events and their effect on gold prices reflects concern for symptoms rather than an understanding of the actual cause of these price increases. Without an enormous increase in the money supply over the past 35 years and a worldwide paper monetary system, this increase in the price of gold would not have occurred.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:85
These were momentous monetary events, and every knowledgeable person worldwide paid close attention. Major changes were endured in 1979 and 1980 to save the dollar from disintegration. This involved a severe recession, interest rates over 21 percent, and general price inflation of 15 percent.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:87
Will we one day complain about false intelligence, as we have with the Iraq war? Will we complain about not having enough information to address monetary policy after it is too late?
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What To Do About Soaring Oil Prices
2 May 2006 2006 Ron Paul 32:9
Exploding deficits due to runaway entitlement spending and the cost of dangerous militarism create pressure for the Fed to inflate the money supply. This contributes greatly to the higher prices we all claim to oppose. If we want to do something about gas prices, we should demand and vote for greatly reduced welfare and military spending, a balanced budget, and fewer regulations that interfere with the market development of alternative fuels. We also should demand a return to a sound commodity monetary standard. All subsidies and special benefits to energy companies should be ended; and, in the meantime, let’s eliminate Federal gas taxes at the pump.
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Introduction Of The Steel Financing Fairness Act
15 June 2006 2006 Ron Paul 44:1
Mr. PAUL. Mr. Speaker, I rise to introduce the Steel Financing Fairness Act. This bill helps our Nation’s beleaguered steel industry by stopping the government from forcing American steel workers to subsidize their foreign competitors. Specifically, the bill prohibits the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank (EXIMBANK) from providing any assistance to countries that subsidize their steel industries. The Steel Financing Fairness Act also instructs the Secretary of the Treasury to reduce America’s contribution to the International Monetary Fund (IMF) by a prorated share of the IMF’s assistance to countries that subsidize their steel industries.
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Big-Government Solutions Don’t Work
7 september 2006 2006 Ron Paul 74:14
Both parties agree on monetary, fiscal, foreign and entitlement policies. Unfortunately, neither party has much concern for civil liberties. Both parties are split over trade, with mixed debates between outright protections and those who endorse government-managed trade agreements that masquerade as free trade.
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Big-Government Solutions Don’t Work
7 september 2006 2006 Ron Paul 74:17
Our system of intervention assumes that politicians and bureaucrats have superior knowledge and are endowed with certain talents that produce efficiency. These assumptions don’t seem to hold much water, of course, when we look at agencies like FEMA. Still, we expect the government to manage monetary and economic policy, the medical system and the educational system, and then wonder why we have problems with the cost and efficiency of all these programs.
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Milton Friedman
6 December 2006 2006 Ron Paul 100:2
Milton Friedman’s most notable contributions to economic theory where in the area of monetary policy. His 1963 work A Monetary History of the United States 1857–1960, coauthored with Anna Schwartz, was among the first works to emphasize the role Federal Reserve policy played in causing the Great Depression. As Friedman said, “The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.”
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Milton Friedman
6 December 2006 2006 Ron Paul 100:3
Friedman’s work showed that inflation is not a result of markets but is, as he memorably put it, “always and everywhere a monetary phenomenon.” Friedman was the major originator and theoretician of monetarism. Friedman recommended restricting the Federal Reserve’s authority to increasing the quantity of money by a fixed yearly amount. While monetarism is far from the ideal free-market monetary system, Milton Friedman deserves credit for focusing the attention of economists on the Federal Reserve’s responsibility for inflation.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:1
Transparency in monetary policy is a goal we should all support. I’ve often wondered why Congress so willingly has given up its prerogative over monetary policy. Astonishingly, Congress in essence has ceded total control over the value of our money to a secretive central bank. Congress created the Federal Reserve, yet it had no constitutional authority to do so. We forget that those powers not explicitly granted to Congress by the Constitution are inherently denied to Congress-- and thus the authority to establish a central bank never was given. Of course Jefferson and Hamilton had that debate early on, a debate seemingly settled in 1913.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:4
Even before a currency collapse occurs, the damage done by a fiat system is significant. Our monetary system insidiously transfers wealth from the poor and middle class to the privileged rich. Wages never keep up with the profits of Wall Street and the banks, thus sowing the seeds of class discontent. When economic trouble hits, free markets and free trade often are blamed, while the harmful effects of a fiat monetary system are ignored. We deceive ourselves that all is well with the economy, and ignore the fundamental flaws that are a source of growing discontent among those who have not shared in the abundance of recent years.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:5
Few understand that our consumption and apparent wealth is dependent on a current account deficit of $800 billion per year. This deficit shows that much of our prosperity is based on borrowing rather than a true increase in production. Statistics show year after year that our productive manufacturing jobs continue to go overseas. This phenomenon is not seen as a consequence of the international fiat monetary system, where the United States government benefits as the issuer of the world’s reserve currency.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:7
Even if prices were held in check, in spite of our monetary inflation, concentrating on CPI distracts from the real issue. We must address the important consequences of Fed manipulation of interest rates. When interests rates are artificially low, below market rates, insidious mal-investment and excessive indebtedness inevitably bring about the economic downturn that everyone dreads.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:8
We look at GDP numbers to reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the higher standard of living that monetary inflation brings to the privileged few. Those few have access to the newly created money first, before its value is diluted.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:10
In 2006 dollars, the minimum wage was $9.50 before the 1971 breakdown of Bretton Woods. Today that dollar is worth $5.15. Congress congratulates itself for raising the minimum wage by mandate, but in reality it has lowered the minimum wage by allowing the Fed to devalue the dollar. We must consider how the growing inequalities created by our monetary system will lead to social discord.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:11
GDP purportedly is now growing at 3.5%, and everyone seems pleased. What we fail to understand is how much government entitlement spending contributes to the increase in the GDP. Rebuilding infrastructure destroyed by hurricanes, which simply gets us back to even, is considered part of GDP growth. Wall Street profits and salaries, pumped up by the Fed’s increase in money, also contribute to GDP statistical growth. Just buying military weapons that contribute nothing to the well being of our citizens, sending money down a rat hole, contributes to GDP growth! Simple price increases caused by Fed monetary inflation contribute to nominal GDP growth. None of these factors represent any kind of real increases in economic output. So we should not carelessly cite misleading GDP figures which don’t truly reflect what is happening in the economy. Bogus GDP figures explain in part why so many people are feeling squeezed despite our supposedly booming economy.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:12
But since our fiat dollar system is not going away anytime soon, it would benefit Congress and the American people to bring more transparency to how and why Fed monetary policy functions.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:19
We need more transparency in how the Federal Reserve carries out monetary policy, and we need it soon.
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Shareholder Vote On Executive Compensation Act
18 April 2007 2007 Ron Paul 43:2
Mr. Chairman, I rise in opposition to this bill. I happen to agree with all of the concerns expressed by those sponsoring the bill due to the inequities in the amount of money that some of the CEOs are getting. But I am also convinced that this particular piece of legislation won’t do very much to help, and I am convinced that unless we deal some day with our monetary system and understand better how it participates in these inequities, we will never get a solution for this because the monetary system does play a role in this.
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Shareholder Vote On Executive Compensation Act
18 April 2007 2007 Ron Paul 43:12
In addition to repealing laws that prevent shareholders from exercising control over corporations, Congress should also examine United States monetary policy’s effects on income inequality. When the Federal Reserve Board injects credit into the economy, the result is at least a temporary rise in incomes. However, those incomes do not rise equally. People who first receive the new credit — who in most instances are those already at the top of the economic pyramid — receive the most benefit from the Fed’s inflationist polices. By the time those at the lower end of the income scale experience a nominal rise in incomes, they must also contend with price inflation that has eroded their standard of living. Except for the lucky few who take advantage of the new credit first, the negative effects of inflation likely more than outweigh any temporary gains in nominal income from the Federal Reserve’s expansionist polices.
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Statement On Chinese Currency
9 May 2007 2007 Ron Paul 50:9
Financing deficits with monetary inflation is in itself a weak dollar policy in the long term. Trust in our currency due to our economic and military strength artificially props up the dollar on international exchange markets. Since these benefits come not from production or sound money policies, they only contribute to the instability and imbalances in international trade.
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Statement On Chinese Currency
9 May 2007 2007 Ron Paul 50:11
Our current account deficit and huge foreign indebtedness is a reflection of the world monetary system of fiat money. The longer the trade imbalances last, the more difficult the adjustment will be. The market will eventually force these adjustments on us.
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In The Name Of Patriotism (Who Are The Patriots?)
22 May 2007 2007 Ron Paul 55:7
True patriotism today has gotten a bad name, at least from the government and the press. Those who now challenge the unconstitutional methods of imposing an income tax on us, or force us to use a monetary system designed to serve the rich at the expense of the poor are routinely condemned. These American patriots are sadly looked down upon by many. They are never praised as champions of liberty as Gandhi and Martin Luther King have been.
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In The Name Of Patriotism (Who Are The Patriots?)
22 May 2007 2007 Ron Paul 55:20
A free society rejects all notions of involuntary servitude, whether by draft or the confiscation of the fruits of our labor through the personal income tax. A more sophisticated and less well-known technique for enhancing the state is the manipulation and transfer of wealth through the fiat monetary system operated by the secretive Federal Reserve.
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In The Name Of Patriotism (Who Are The Patriots?)
22 May 2007 2007 Ron Paul 55:21
Protesters against this unconstitutional system of paper money are considered unpatriotic criminals and at times are imprisoned for their beliefs. The fact that, according to the Constitution, only gold and silver are legal tender and paper money outlawed matters little. The principle of patriotism is turned on its head. Whether it’s with regard to the defense of welfare spending at home, confiscatory income tax, or an immoral monetary system or support for a war fought under false pretense without a legal declaration, the defenders of liberty and the Constitution are portrayed as unpatriotic, while those who support these programs are seen as the patriots.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:2
Absent legal tender laws, individuals acting through the market will determine what is money. Historically, when individuals have been free to choose their money they have selected items that are portable, widely accepted, and have a stable value. Having the market, rather than the government, define money is integral to the functioning of a free economy. As Edwin Vieira, perhaps the Nation’s top expert on constitutional monetary policy says, “. . . a free market functions most efficiently and most fairly when the market determines the quality and the quantity of money that’s being used.”
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:3
While fiat money produced by the State is portable and, thanks to legal tender laws, widely accepted, it is certainly not of stable value. In fact, our entire monetary policy is predicated on the government’s ability to manipulate the value of the currency. Thus, absent legal tender laws, many citizens would refuse to accept government money for their transactions.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:6
Legal tender laws may disadvantage average citizens but they do help power-hungry politicians use inflationary monetary policy to expand the government beyond its proper limits. However, the primary beneficiaries of legal tender laws are the special interests who are granted the privilege of producing and controlling the paper money forced on the public via legal tender laws. Legal tender laws thus represent the primary means of reverse redistribution where the wealth of the working class is given, via laws forcing people to use debased money, to well-heeled, politically powerful bankers.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:7
The drafters of the Constitution were well aware of how a government armed with legal tender powers could ravage the people’s liberty and prosperity. This is why the Constitution does not grant legal tender powers to the federal government. Instead, Congress was given powers to establish standards regarding the value of money. In other words, in monetary matters the Congress was to follow the lead of the market. When Alexander Hamilton wrote the coinage act of 1792, he simply adopted the market-definition of a dollar as equaling the value of the Spanish milled silver coin.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:8
Legal tender laws have reversed that order to where the market follows the lead of Congress. Beginning in the 19th century, Federal politicians sought to enhance their power and enrich their cronies, by using legal tender powers to change the definition of a dollar from a silver-or-gold-backed unit whose value is determined by the market, to a piece of paper produced by the State. The “value” of this paper may be normally backed in part by gold or silver, but its ultimate backing is the power of the State, and its value is determined by the political needs of the State and the powerful special interests who influence monetary policy.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:1
Mr. PAUL. Madam Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle-and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:3
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:4
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:5
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the Federal Government to erode the American standard of living via an inflationary monetary policy.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:6
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our Nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:1
Mr. PAUL. Madam Speaker, I rise to introduce the Sunshine in Monetary Policy Act, which requires the Federal Reserve to resume reporting the monetary measure known as M3. M3 consists of M1, M1 is currency in circulation plus travelers’ checks, demand deposits, Negotiable Order of Withdrawal, NOW, accounts, and similar interest-earning checking account balances; M2, M2 is M1 plus household holdings of savings deposits, small time deposits, and retail money market mutual funds balances except for balances held in IRA and Keogh accounts, plus institutional money market mutual fund balances and managed liabilities of deposits consisting of large time deposits, repurchase agreements, and Eurodollars.
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:2
The Federal Reserve Board ceased reporting M3 on March 22, 2006, thus depriving Congress and the American people of the most comprehensive measure of the money supply. The cessation of the Federal Reserve’s weekly M3 report will make it more difficult for policymakers, economists, investors, and the general public to learn the true rate of inflation. As Nobel laureate Milton Friedman famously said, “inflation is always and everywhere a monetary phenomenon.” Therefore, having access to a comprehensive measure of the money supply like M3 is a vital tool for those seeking to track inflation. Thorsten Polleit, honorary professor at HfB-Business School of Finance and Management, in his article “Why Money Supply Matters” posted on the Ludwig von Mises Institute’s Web site mises.org, examined the relationship between changes in the money supply and inflation and concluded that “money supply signals might actually be far more important for inflation — even in the short-term — than current central bank practice suggests,” thus demonstrating the importance of the M3 aggregate.
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:4
Whatever lack of interest policymakers are currently displaying, in M3 is no doubt related to the mistaken perception that the Federal Reserve Board has finally figured out how to effectively manage a fiat currency. This illusion exists largely because the effects of the Fed’s inflationary polices are concentrated in malinvestments in specific sectors of the economy, leading to “bubbles” such as the one that occurred in the stock market in the late nineties and the bubble that many believe is occurring in the current real estate market. When monetary inflation is reflected in sector- specific bubbles, it is easier to pretend that the bubbles are caused by problems specific to those sectors, instead of reflecting the problems inherent in a fiat currency system. Once the damage to our economy done by our reliance on fiat currency becomes clear, I am certain that policymakers will once again take more interest in M3.
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:5
Economists and others who are following M3 have become increasingly concerned about inflation because in 2005 the rate of M3 rose almost twice as fast as other monetary aggregates. This suggests that the inflation picture is not as rosy as the Federal Reserve would like Congress and the American people to believe. Discontinuing reporting the monetary aggregate that provides the best evidence that the Federal Reserve Board has not conquered inflation suggested to many people that the government was trying to conceal information about the true state of the economy from the American people. Brad Conrad, a professor of investing who has also worked with IBM, CDC, and Amdahl, spoke for many when he said, “It [the discontinuance of M3] is unsettling. It detracts from the transparency the Fed preaches and adds to the suspicion that the Fed wants to hide anything showing money growth high enough to fuel inflation . . .”
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:6
Discontinuing reporting M3 was only expected to save 0.00000699 percent of the Federal Reserve Board’s yearly budget. This savings hardly seems to justify depriving the American people of an important measurement of money supply, especially since Congress has tasked the Federal Reserve Board with reporting on monetary aggregates. Discontinuing reporting M3 may not be a violation of the letter of the Federal Reserve Board’s statutory duty, but it is a violation of the spirit of the congressional command that the Federal Reserve Board ensure the American public is fully informed about the effects of monetary policy.
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:7
Madam Speaker, knowledge of the money supply is one of the keys to understanding the state of the economy. The least the American people should expect from the Federal Reserve Board is complete and accurate information regarding the money supply. I urge my colleagues to ensure that the American people can obtain that information by cosponsoring the Sunshine in Monetary Policy Act.
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Opening Statement Committee on Financial Services Paulson Hearing
20 June 2007 2007 Ron Paul 71:5
The recent sharp rise in interest rates may well be signaling the end to the painless easy money decade that has allowed us to finance our extravagant welfare/warfare spending with minimal productive effort and no savings. Monetary inflation and foreign borrowing have allowed us to live far beyond our means – a type of monetary arrangement that always comes to a painful end.
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Opening Statement Committee on Financial Services Paulson Hearing
20 June 2007 2007 Ron Paul 71:6
As our problems worsen, the blame game will certainly accelerate. Claiming it is all due to China’s manipulation of its currency and demanding protectionist measures will unfortunately continue to gain considerable attention. Unfortunately, there is little or no concern for how our own policies - monetary, tax, and regulatory- have contributed to the problems we face.
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Opening Statement Committee on Financial Services Paulson Hearing
20 June 2007 2007 Ron Paul 71:12
Monetary depreciation is clearly a sinister tax placed on the unsuspecting poor. Too many well meaning individuals falsely believe that deficit financed assistance programs can help the poor, while instead the results are opposite.
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Remembering Dr. Hans Sennholz
27 June 2007 2007 Ron Paul 72:5
I first met Dr. Sennholz in the early 1970s during the campaign to legalize the private ownership of gold. He was a tremendous influence on me and introduced me to other eminent economists of the Austrian School. Dr. Sennholz consistently taught the beneficial effects of the gold standard and was a tireless opponent of inflation. He never ceased to persist in pointing out the problems of fiat currency, the evils of inflation, and the perils of the Federal Reserve’s loose monetary policy.
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Statement before the Financial Services Committee – Humphrey Hawkins Prequel Hearing
17 July 2007 2007 Ron Paul 76:4
Price stability attempts to disadvantage consumers by keeping prices stable, rather than allowing them to take their natural course of decline. This policy comes from two misguided notions: that lower prices lead to lower profits, and that lower prices lead to deflation. In its effort to ensure price stability, the Federal Reserve resorts to inflation targeting, using the federal funds rate and open market operations to increase the money supply at an ostensible low rate, introducing a subtle but pernicious inflation into the monetary system. Inflation benefits the government and the well-off, the first users of the new money, but harms those who receive the new money last, those who are predominantly poor and middle class.
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Statement before the Financial Services Committee – Humphrey Hawkins Prequel Hearing
17 July 2007 2007 Ron Paul 76:6
Until the Congress realizes that the economy cannot be managed by a group of economists, no matter how large or how brilliant the group may be, the result will be the same. Inflation will continue to rise, and the American people will continue to grow poorer. We would be far better off if the Congress were to reassert its Constitutional authority over the monetary system, establish a sound currency, and eliminate its meddling in the free market.
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Statement in Opposition to H.Res 552
4 September 2007 2007 Ron Paul 88:2
Attempting to force the hand of the Chinese government by requiring them to open their markets to United States financial services firms is akin to playing with fire. Politicians today fail to realize just how deeply our profligate fiscal and monetary policies of the past three decades have left us in debt to China. The Chinese government holds over one trillion dollars in reserves, leaving the future of the dollar highly vulnerable to the continued Chinese demand.
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Statement before the Financial Services Committee
20 September 2007 2007 Ron Paul 93:1
Mr. Chairman, the situation facing us now in the mortgage industry has its roots in the Federal Reserve's inflationary monetary policy. Without addressing the roots of the current crisis, any measures undertaken to improve the situation will be doomed to fail.
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Statement before the Financial Services Committee
20 September 2007 2007 Ron Paul 93:2
As with asset bubbles and investment manias in past history, the fuel for the current housing bubble had its origins in monetary manipulation. The housing boom was caused by the Federal Reserve's policy resulting in artificially low interest rates. Consumers, misled by low interest rates, were looking to consume, while homebuilders saw the low interest rates as a signal to build, and build they did.
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Statement before the Financial Services Committee
20 September 2007 2007 Ron Paul 93:7
Further regulation of the banking sector, of mortgage brokers, mortgage lenders, or credit rating agencies will fail to improve the current situation, and will do nothing to prevent future real estate bubbles. Any proposed solutions which fail to take into account the economic intervention that laid the ground for the bubble are merely window dressing, and will not ease the suffering of millions of American homeowners. I urge my colleagues to strike at the root of the problem and address the Federal Reserve's inflationary monetary policy.
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House Financial Services Committee – Subcommittee on Domestic and International Monetary Policy
17 October 2007 2007 Ron Paul 99:3
While I empathize with the investors who have lost money through the Yukos incident, the fact remains that markets are fraught with risk. Our loose monetary policy and stimulation of credit have led to expectations of permanent positive economic growth. The technology bubble and the housing bubble have caused many to believe that markets can only go up. When bubbles burst, when stocks decline, something must have gone awry, and the government is called upon to right the wrong.
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Statement Before the Joint Economic Committee
8 November 2007 2007 Ron Paul 103:6
Finally, the Federal Reserve's loose monetary policy and lowering of interest rates were a major spur to the housing boom. Low interest rates influence marginal buyers, those who are sitting on the fence, and encourage them to take on a mortgage that they otherwise would not. Even when interest rates are raised, no one expects them to stay high for long, as there is always pressure from politicians and investors to keep rates low, as no one wants the cheap credit to end.
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Introducing The Free Competition In Currency Act
13 December 2007 2007 Ron Paul 110:3
Due to nearly a century of inflationary monetary policy on the part of the Federal Reserve, the U.S. dollar stands at historically low levels. Investors around the world are shunning the dollar, and millions of Americans see their salaries, savings accounts, and pensions eroded away by rising inflation. We stand on the precipice of an unprecedented monetary collapse, and as a result many people have begun to look for alternatives to the dollar.
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Statement of Ron Paul on H.R. 5140
29 January 2008 2008 Ron Paul 2:7
Tax cuts by themselves will not restore long-term economic health unless and until this body finally addresses the fundamental cause of our economic instability, which is monetary policy. The inflationary policies of the Federal Reserve are the root of the boom-and-bust cycle that has plagued the American economy for almost 75 years. The Federal Reserve’s inflationary polices are also at the root of the steady decline in the American people’s standard of living. A good step toward monetary reform would be for Congress to pass my HR 2576, which repeals the federal legal tender laws. This would allow people to use alternatives to government-issued fiat money and thus protect themselves from Federal Reserve-created inflation.
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Statement of Ron Paul on H.R. 5140
29 January 2008 2008 Ron Paul 2:10
In conclusion, Madame Speaker, HR 5140 does not provide the kind of permanent, deep tax relief that will protect long-term economic growth, and will actually compound the damage Congress has already done to the housing market. Instead of pretending that we are addressing America’s economic problems via temporary tax cuts, Congress should address the fundamental problems of the American economy by pursing serious monetary reform, spending cuts, and regulatory reform. Congress should also provide real long-term tax relief to the American people by passing legislation such as HR 5109 and HR 3664.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:13
The final step to ensuring competing currencies is to eliminate capital gains and sales taxes on gold and silver coins. Under current federal law, coins are considered collectibles, and are liable for capital gains taxes. Short-term capital gains rates are at income tax levels, up to 35 percent, while long-term capital gains taxes are assessed at the collectibles rate of 28 percent. Furthermore, these taxes actually tax monetary debasement. As the dollar weakens, the nominal dollar value of gold increases. The purchasing power of gold may remain relatively constant, but as the nominal dollar value increases, the federal government considers this an increase in wealth, and taxes accordingly. Thus, the more the dollar is debased, the more capital gains taxes must be paid on holdings of gold and other precious metals.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:15
In conclusion, Madam Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government’s ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies.
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Foreign Government Investment in the U.S. Economy and Financial Sector
March 5, 2008 2008 Ron Paul 11:2
The two major types of sovereign wealth funds are those which are funded by proceeds from natural resources sales, and those funded by accumulation of foreign exchange. The former category includes sovereign wealth funds in Saudi Arabia, Kuwait, and the UAE. Flush with dollars due to the high price of oil, they are looking for opportunities to make that money work for them. The high price of oil is due in large part to our inflationary monetary policy. We have literally exported inflation across the globe, spurring malinvestment and a subsequent commodities boom.
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Foreign Government Investment in the U.S. Economy and Financial Sector
March 5, 2008 2008 Ron Paul 11:3
The second major category of sovereign wealth funds includes China’s sovereign wealth fund, which has the potential to draw on China’s more than $1 trillion in foreign exchange reserves. Because of China’s current account surplus, it continues to accumulate foreign exchange. Much of this is due to the United States’ persistent current account deficit. Inflationary monetary policy and a desire to stimulate the economy at all costs has led us to become the world’s largest debtor, and this debt must eventually be repaid. The current account deficit has come about because our economy does not produce enough capital goods to satisfy the wants of our foreign creditors. Tired of holding increasingly worthless dollars, it is only natural that our creditors would want to purchase tangibles, which in the present case are stakes in American companies.
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Foreign Government Investment in the U.S. Economy and Financial Sector
March 5, 2008 2008 Ron Paul 11:5
I have always been a staunch advocate of abandoning our loose monetary policy and facing the consequences now, rather than continuing easy money in the hopes of never having to face a recession. Now that it is clear that decades of Federal Reserve monetary manipulation have led to a severe recession, the thought of sovereign wealth funds investing in the financial sector holds far more appeal than that of a complete collapse of major industry players which would cause catastrophic effects throughout the economy.
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Foreign Government Investment in the U.S. Economy and Financial Sector
March 5, 2008 2008 Ron Paul 11:6
Sovereign wealth funds are a necessary consequence of fiscal and monetary policies which have left us overextended. Actions to stifle the operations of sovereign wealth funds and corresponding retaliatory actions by foreign countries could have the same detrimental effects on the economy as the trade wars begun after passage of the Smoot-Hawley tariff. Rather than take actions to limit or prohibit the actions of sovereign wealth funds, I would urge my colleagues to take action to end our inflationary monetary policy.
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Statement on Coinage
March 11, 2008 2008 Ron Paul 12:4
Congress’ unconstitutional delegation of monetary policy to the Federal Reserve and its reluctance to exercise oversight in that arena have led to a massive devaluation of the dollar. If we fail to end this devaluation, we will undoubtedly hold future hearings as the metal value of our coins continues to outstrip the face value.
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Hearing on “The Economic Outlook”
April 2, 2008 2008 Ron Paul 18:6
The latest regulatory plan from the Treasury Department, with the potential to turn the Federal Reserve into a super-regulator overseeing state-chartered banks, bank holding companies, and acting as a guarantor of market stability, is another in a long line of half-baked government responses to financial difficulty. Recession after recession has not impressed upon government leaders the reality that the Federal Reserve’s monetary policy activities are what lead to market instability.
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Hearing on “The Economic Outlook”
April 2, 2008 2008 Ron Paul 18:7
The business cycle, contrary to what Secretary Paulson and others seem to believe, is not endemic to the free market. It is always and everywhere the result of monetary inflation and subsequent malinvestment, which when it is discovered must of necessity be liquidated in order for a true recovery to occur. Delaying the liquidation will only prolong the crisis and ensure that the next crisis will be more severe.
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CONGRESS MUST ACT TO HELP SHRIMPERS
19 June 2008 2008 Ron Paul 36:4
The problems shrimpers face are compounded by foreign competitors who are taking advantage of the government-created vulnerabilities in the American shrimp industry. Adding insult to injury, the federal government is forcing American shrimpers to subsidize their competitors through international agencies such as the Overseas Private Investment Corporation, the Export-Import Bank, and the International Monetary Fund! In fact, United States taxpayers have provided over $16,500,000,000 to the home countries of the leading foreign competitors of American shrimpers since 1999.
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Statement: “Something Big is Happening”
9 July 2008 2008 Ron Paul 42:13
By 1945, further restraints were removed by creating the Bretton-Woods Monetary System making the dollar the reserve currency of the world. This system lasted up until 1971. During the period between 1945 and 1971, some restraints on the Fed remained in place. Foreigners, but not Americans, could convert dollars to gold at $35 an ounce. Due to the excessive dollars being created, that system came to an end in 1971.
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Statement: “Something Big is Happening”
9 July 2008 2008 Ron Paul 42:17
Printing dollars over long periods of time may not immediately push prices up — yet in time it always does. Now we’re seeing catch-up for past inflating of the monetary supply. As bad as it is today with $4 a gallon gasoline, this is just the beginning. It’s a gross distraction to hound away at “drill, drill, drill” as a solution to the dollar crisis and high gasoline prices. Its okay to let the market increase supplies and drill, but that issue is a gross distraction from the sins of deficits and Federal Reserve monetary shenanigans.
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Statement: “Something Big is Happening”
9 July 2008 2008 Ron Paul 42:26
If more hear the message of liberty, more will join in this effort. The failure of our foreign policy, welfare system, and monetary policies and virtually all government solutions are so readily apparent, it doesn’t take that much convincing. But the positive message of how freedom works and why it’s possible is what is urgently needed.
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Humphrey Hawkins Hearing on Monetary Policy
July 16, 2008 2008 Ron Paul 46:3
At the heart of this economic malaise is the Fed’s poor stewardship of the dollar. The cause of the dollar’s demise is not the result of a purely psychological response to public statements on US dollar policy, but is rather a reaction to a massive increase in the money supply brought about by the Federal Reserve’s loose monetary policy. The policies that led to hemorrhaging of gold during the 1960’s and the eventual closing of the gold standard are the same policies that are leading to the dollar’s decline in international currency markets today. Foreign governments no longer wish to hold depreciating dollars, and would prefer to hold stronger currencies such as the euro. Foreign investors no longer wish to hold underperforming dollars, and seek to hold better-performing assets such as ports and beer companies.
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Humphrey Hawkins Hearing on Monetary Policy
July 16, 2008 2008 Ron Paul 46:4
Every government bailout or promise thereof leads to moral hazard, the likelihood that market actors will take ever riskier actions with the belief that the federal government will bail them out. Bear Stearns was bailed out, Fannie and Freddie will be bailed out, but where will the line be drawn? The precedent has been established and the taxpayers will end up footing the bill in these cases, but the federal government and the Federal Reserve lack the resources to bail out every firm that is deemed “too big to fail.” Decades of loose monetary policy will lead to a financial day of reckoning, and bailouts, liquidity injections, and lowering of the federal funds rate will only delay the inevitable and ensure that the final correction will be longer and more severe than it otherwise would. For the sake of the economy, I urge my colleagues to resist the temptation to give in to political expediency, and to oppose loose monetary policy and any further bailouts.
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UNTITLED
23 July 2008 2008 Ron Paul 47:4
But today we have a bill before us that does a lot more than just bail out the mortgage company. I think there are some impositions in this bill that we ought to be concerned about. There is a Federal registry in here to register anybody in the broker industry. And if you work in the industry, you will be fingerprinted. Now, let me guarantee you one thing: we didn’t get into this crisis because the people who work in the mortgage industries weren’t fingerprinted. We got into this crisis because of a monetary system and a system of laws that encourage the very bubble that we are dealing with today. If we don’t deal with the creation of bubbles, you can’t solve the problem by more of the same thing. We created this problem with inflation; you can’t solve it with more inflation.
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Full Committee Hearing on “Implications of a Weaker Dollar for Oil Prices and the U.S. Economy”
July 24, 2008 2008 Ron Paul 50:3
In Germany in the 1920s, South America in the 1980s, and Zimbabwe today, everyone recognizes that inflation was caused by the government running the printing presses non-stop, with the resulting exponential rise in prices being the necessary result of monetary growth. Yet somehow, both the empirical and theoretical reality of inflation as a rise in money supply is ignored in this country. Inflation is conflated with price inflation, the increase in the overall price level, and is viewed as something both endogenous to the market economy while at the same time influenced by exogenous price shocks.
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Full Committee Hearing on “Implications of a Weaker Dollar for Oil Prices and the U.S. Economy”
July 24, 2008 2008 Ron Paul 50:4
Because no one understands that inflation is growth in the monetary supply, no one is able to combat it effectively. We hear all sorts of hand-wringing about increasing inflation, and all sorts of explanations about how rising oil and food prices will make inflation worse. At the same time, the fact that MZM, the closest approximation to total money supply that still is reported by the Fed, is still rising by almost 15% per year and that M2 is rising significantly as well is quietly ignored. The pundits have causation backwards, it is inflation that leads to rising prices of oil and food, and not vice versa.
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Statement on Sovereign Wealth Funds
September 10, 2008 2008 Ron Paul 58:3
In either case, most politicians overlook the fact that we are in this situation because of our loose monetary and fiscal policy. Actions that would stifle the operations of foreign sovereign wealth funds would likely result in corresponding retaliatory actions by foreign countries against American pension funds and could have the same detrimental effects on the economy as the trade wars begun after passage of the Smoot-Hawley tariff. Rather than limiting or prohibiting investment by sovereign wealth funds, we should be concerned with striking at the root of the problem and addressing inflationary monetary and fiscal policy.
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Statement on Sovereign Wealth Funds
September 10, 2008 2008 Ron Paul 58:4
Debtors cannot continue building debts forever, and we now face strong indications that our creditors are eager to begin collecting what is owed them. It is not too late to correct our mistakes, but we must act now and cannot dally. We must drastically reduce government spending, end wasteful and disastrous interventions into financial markets, and rein in the Federal Reserve’s inflationary monetary policy. Failing to do so will ensure a descent into financial catastrophe.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:8
The beneficiaries of the corrupt monetary system of the last 3 decades are now desperately looking for victims to stick with the bill after they have reaped decades of profit and privilege.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:9
The difficulties in our economy will continue because the legislative and the executive branches have not yet begun to address the real problems. The housing bubble’s collapse, as was the dot corn bubble’s collapse, was predictable and is merely a symptom of the monetary system that brought us to this point.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:15
But what politicians are willing to say that the financial “skyscraper”—the global financial and monetary system-is a house of cards. It is not going to happen at this juncture. They’re not even talking about this. They talk only of bailouts, more monetary inflation, more special interest spending, more debt, and more regulations. There is almost no talk of the relationship of the Community Reinvestment Act, HUD, and government assisted loans to the housing bubble. And there is no talk of the oversight that is desperately needed for the Federal Reserve, the Exchange Stabilization Fund, and all the activities of the President’s Working Group on financial markets. When these actions are taken we will at last know that Congress is serious about the reforms that are really needed.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:19
It is bad economic policy—By refusing to address the monetary system while continuing to place the burdens of the bailout on the dollar, we can be certain that in time, we will be faced with another, more severe crisis when the market figures out that there is no magic government bailout or regulation that can make a fraudulent monetary system work.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:20
Monetary reform will eventually come, but, unfortunately, Congress’ actions this week make it more likely the reform will come under dire circumstances, such as the midst of a worldwide collapse of the dollar. The question then will be how much of our liberties will be sacrificed in the process. Just remember what we lost in the aftermath of 9–11.
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Statement on HR 1424
October 3, 2008 2008 Ron Paul 67:2
The Federal Reserve has already injected hundreds of billions of dollars into US and world credit markets. The adjusted monetary base is up sharply, bank reserves have exploded, and the national debt is up almost half a trillion dollars over the past two weeks. Yet, we are still told that after all this intervention, all this inflation, that we still need an additional $700 billion bailout, otherwise the credit markets will seize and the economy will collapse. This is the same excuse that preceded previous bailouts, and undoubtedly we will hear it again in the future after this bailout fails.
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UNTITLED
10 December 2008 2008 Ron Paul 73:6
We are dealing with only finding victims. We cannot get rid of the debt, whether it is our national debt or whether it is corporate debt, but we have to put it on somebody else. We need to look at the cause of these bubbles, and it has to do with monetary policy and the Federal Reserve system.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:1
Mr. PAUL. Madam Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:3
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:4
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:5
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:6
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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FEDERAL RESERVE IS THE CULPRIT
February 25, 2009 2009 Ron Paul 17:11
Wealth cannot be achieved by creating money by fiat. It instead destroys wealth and it rewards the special interests. Depending on monetary fraud for national prosperity or a reversal of our downward spiral is riskier than depending on the lottery.
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FEDERAL RESERVE IS THE CULPRIT
February 25, 2009 2009 Ron Paul 17:12
Inflation has been used to pay for all the wars and empires, and they all end badly. Inflationism and corporatism engenders protectionism and trade wars. It prompts scapegoating; blaming foreigners, illegal immigrants, ethnic minorities, and too often freedom itself for the predictable events and suffering that results. Besides, the whole process is unconstitutional. There is no legal authority to operate such a monetary system. So let’s stop it. Let us restore a policy of prosperity, peace and liberty. The time has come. Let’s end the Fed.
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Humphrey-Hawkins Hearing Statement
February 25, 2009 2009 Ron Paul 18:2
We find ourselves mired in the deepest economic crisis to afflict this country since the Great Depression. Yet, despite the failure of all the interventionist efforts to date to do anything to improve the economy, each week seems to bring new proposals for yet more bailouts, more funding facilities, and more of the same discredited Keynesian ideas. There are still relatively few policymakers who understand the roots of the current crisis in the Federal Reserve’s monetary policy. No one in government is willing to take the blame, instead we transfer it onto others. We blame the crisis on greedy bankers and mortgage lenders, on the Chinese for being too thrifty and providing us with capital, or on consumers who aren’t spending as much as the government thinks they should.
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Humphrey-Hawkins Hearing Statement
February 25, 2009 2009 Ron Paul 18:5
Chairman Bernanke and others in positions of authority seem to gloss over these systemic instabilities and assume an excessively rosy outlook on the economy. I believe we are at another major economic crossroad, where the global financial system will have to be fundamentally rethought. The post-Bretton Woods dollar standard system has proven remarkably resilient, lasting longer than the gold-exchange system which preceded it, but the current economic crisis has illustrated the unsustainability of the current dollar-based system. To think that the economy will begin to recover by the end of this year is absurd. The dollar’s supposed strength exists only because of the weakness of other currencies. The Fed’s increase of the monetary base and establishment of “temporary” funding facilities has set the stage for hyperinflation, and it remains to be seen what results.
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Humphrey-Hawkins Hearing Statement
February 25, 2009 2009 Ron Paul 18:6
If banks begin to lend their increased reserves, we will see the first steps towards hyperinflation. Now that the Fed has increased the monetary base, it finds itself under pressure to withdraw these funds at some point. The question, however, is when? If it withdraws too soon, banks’ balance sheets collapse, if too late, massive inflation will ensue. As in previous crises, the Fed’s inflationary actions leave it compelled to take action that will severely harm the economy through either deflation or hyperinflation. Had the Fed not begun interfering 18 months ago, we might have already seen a recovery in the economy by now. Bad debts would have been liquidated, inefficient firms sold off and their resources put to better use elsewhere. As it is, I believe any temporary uptick in economic indicators nowadays will likely be misinterpreted as economic recovery rather than the result of Federal Reserve credit creation. Until we learn the lesson that government intervention cannot heal the economy, and can only do harm, we will never stabilize the economy or get on the road to true recovery.
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The Federal Reserve Transparency Act
February 26, 2009 2009 Ron Paul 20:1
Mr. PAUL. Madam Speaker, I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near- complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.
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The Federal Reserve Transparency Act
February 26, 2009 2009 Ron Paul 20:6
The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much- needed transparency of the Federal Reserve. I urge my colleagues to support this bill.
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EARMARKS
March 10, 2009 2009 Ron Paul 24:17
So, the sooner we in the Congress wake up to our responsibilities, understand what earmarks are all about, and understand why we need a lot more earmarks, then we will come to our senses, because we might then have a more sensible monetary and banking system, the system that has brought us to this calamity. So, the sooner we realize that, I think it would be better for the taxpayer.
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Blame Congress For Bonuses
March 19, 2009 2009 Ron Paul 35:5
This is politically driven, I happen to believe. I think people would like to express their outrage, and they do. And it’s an easy target, picking on AIG, but we create these problems; we create them by doing things that are unconstitutional. We come up with these schemes and these expressions and excuses, and at the same time, we don’t address the subject of why do we spend money, and why do we allow a monetary system to operate without any supervision by the Congress? That’s where our real problem is. And someday we will address that and deal with this rather than doing it in the political way of saying, well, it’s not our fault, it’s their fault.
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Federal Reserve Monetizes Debt
April 1, 2009 2009 Ron Paul 41:3
You know, they say so often that there is not enough bipartisanship around here. We hear that complaint a lot of time. But, you know, when I look at it, I see that there’s been too much bipartisanship in creating the problem we have had. And it hasn’t been the last – this crisis that we’re in the midst of, this financial crisis, didn’t pop up here in the last 60 days. It didn’t pop up here in the last 8 years, but it’s taken several decades to get to this point where we are today dealing with a budget that is just totally out of control and a monetary and economic system that is uncontrollable as well.
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Federal Reserve Monetizes Debt
April 1, 2009 2009 Ron Paul 41:7
If we understood the tenth amendment, we wouldn’t be doing all of this. We wouldn’t have a deficit. If we understood monetary policy, we wouldn’t have a monetary system that encourages all of this that gets us off the hook because conservatives like to spend a lot of money, and liberals like to spend a lot of money. And they don’t have to worry. We raise taxes. We borrow it. And we do it, and we’ve been doing it for decades and getting away with it. But it’s coming to an end because we’ve always been dependent on the Fed to come in and monetize the debt.
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HONORING JACK KEMP
May 6, 2009 2009 Ron Paul 53:1
Mr. PAUL. Mr. Speaker, I support H. Res. 401, which honors the legacy of former Representative Jack Kemp. I became friends with Jack when we served together in the House of Representatives from 1976 to 1985. Our friendship was based on our shared conviction that low taxes and sound monetary policy are essential to liberty and prosperity.
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HONORING JACK KEMP
May 6, 2009 2009 Ron Paul 53:2
Jack is probably best known for the key role he played in the “supply side revolution” that led to the tax rate reductions of the early eighties. However, what I most remember about Jack was that he was one of the few politicians I have met who understood how fiat money harms Americans. Jack was passionate about reforming monetary policy so America would again have, as Jack memorably put it, a “dollar as good as gold.” It was largely due to Jack’s efforts that the Republican Party platform of 1980 endorsed a return to the gold standard. Jack’s support was instrumental in me being named to the U.S. Gold Commission in 1982. While I was not always in total agreement with Jack’s views on monetary policy, I always appreciated his interest in the issue.
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Statement on War Supplemental Appropriations
June 16, 2009 2009 Ron Paul 67:2
This conference report, being a Washington- style compromise, reflects one thing Congress agrees on: spending money we do not have. So this “compromise” bill spends 15 percent more than the president requested, which is $9 billion more than in the original House bill and $14.6 billion more than the original Senate version. Included in this final version – in addition to the $106 billion to continue the wars in Afghanistan and Iraq – is a $108 billion loan guarantee to the International Monetary Fund, allowing that destructive organization to continue spending taxpayer money to prop up corrupt elites and promote harmful economic policies overseas.
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Statement at Financial Services Committee Hearing
July 21, 2009 2009 Ron Paul 82:2
Real unemployment is now 20% and there has not been any economic growth since the onset of the crisis in the year 2000, according to non-government statistics. Pyramiding debt and credit expansion, over the past 38 years, has come to an abrupt end – as predicted by free-market economists. Pursuing the same policy of excessive spending, debt expansion, and monetary inflation, can only compound the problems and prevent the required correction. Doubling the money supply didn’t work; quadrupling it won’t work either. The problem of debt must be addressed.
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Statement at Financial Services Committee Hearing
July 21, 2009 2009 Ron Paul 82:3
Expanding debt when it was a principal cause of the crisis is foolhardy. Excessive government and private debt is a consequence of a loose Federal Reserve monetary policy. Once a debt crisis hits, the solution must be paying it off or liquidating it. We are doing neither. Net US debt is now 372% of GDP. In the crisis of the 1930s it peaked at 301%. Household debt services requires 14% of the disposable income – an historic high. Between 2000 and 2007 credit debt expanded five times as fast as gross domestic product.
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THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207
July 30, 2009 2009 Ron Paul 88:2
Federal Reserve Chairman Ben Bernanke argues that H.R. 1207, the legislation to audit the Federal Reserve, would politicize monetary policy. He claims that monetary policy must remain “independent,” that is, secret. He ignores history, because chairmen of the Federal Reserve in the past, especially when up for reappointment, do their best to accommodate the President with politically driven low interest rates and a bubble economy.
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THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207
July 30, 2009 2009 Ron Paul 88:3
Former Federal Reserve Board Chairman Arthur Burns, when asked about all the inflation he brought about in 1971, before Nixon’s re-election, said that the Fed has to do what the President wants it to do, or it would “lose its independence.” That about tells you everything. Not by accident, Chairman Burns strongly supported Nixon’s program of wage and price controls, the same year; but I guess that’s not political. Is not making secret deals with the likes of Goldman Sachs, international financial institutions, foreign governments and foreign central banks, politicizing monetary policy? Bernanke argues that the knowledge that their discussions and decisions will one day be scrutinized will compromise the freedom of the Open Market Committee to pursue sound policy. If it is sound and honest, and serves no special interest, what’s the problem?
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THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207
July 30, 2009 2009 Ron Paul 88:4
He claims that H.R. 1207 would give power to Congress to affect monetary policy. He dreamt this up to instill fear, an old statist trick to justify government power. H.R. 1207 does nothing of the sort. He suggested that the day after an FOMC meeting, Congress could send in the GAO to demand an audit of everything said and done. This is hardly the case. The FOMC function, under 1207, would not change. The detailed transcripts of the FOMC meetings are released every 5 years, so why would this be so different, and what is it that they don’t want the American people to know? Is there something about the transcripts that need to be kept secret, or are the transcripts actually not verbatim?
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THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207
July 30, 2009 2009 Ron Paul 88:5
Fed sychophants argue that an audit would destroy the financial market’s faith in the Fed. They say this in the midst of the greatest financial crisis in history, brought on by none other than the Federal Reserve. In fact, Chairman Bernanke stated on November 14, 2007, that “a considerable amount of evidence indicates that central bank transparency increases the effectiveness of monetary policy and enhances economic and financial performance.”
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THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207
July 30, 2009 2009 Ron Paul 88:6
They also argue that an audit would hurt the value of the U.S. dollar. In fact, the Fed, in less than 100 years of its existence, has reduced the value of the 1914 dollar by 96 percent. They claim H.R. 1207 would raise interest rates. How could it? The Fed sets interest rates and the bill doesn’t interfere with monetary policy. Congress would have no say in the matter; and besides, Congress likes low interest rates. It is argued that the Fed wouldn’t be free to raise interest rates if they thought it necessary. But Bernanke has already assured the Congress that rates are going to stay low for the foreseeable future, and, again, this bill does nothing to allow Congress to interfere with interest rate setting.
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H.R. 3269
July 31, 2009 2009 Ron Paul 89:5
In order to understand the reasons behind excessive executive compensation, we need to take a look at the root causes. The salaries and bonuses raising the most ire are those from the financial sector, the sector which directly benefits from the Federal Reserve’s loose monetary policy. Loose monetary policy leads to speculative bubbles which drive up stock prices and enrich executives who cash in their stock options. It makes debt cheaper, which encourages reckless business expansion. And it shuttles money from industries that produce valuable products and services to industries that are favored by the federal government. H.R. 3269 is a well-intended but misguided piece of legislation. Until we strike at the root of the problem, we will never get our financial system back on a firm footing.
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TRANSPARENCY AT THE FEDERAL RESERVE
December 1, 2009 2009 Ron Paul 100:3
Since the Fed is the source of all economic downturns, it’s impossible for any central banker to regulate in such a manner to prevent the problems that are predictable consequences of his own monetary management. The Federal Reserve fixes interest rates at levels inevitably lower than those demanded by the market. This manipulation is a form of price control through credit expansion, and is the ultimate cause of business cycles and so many of our economic problems, generating the mal- investment, excessive debt, stock, bond, commodity, and housing bubbles.
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TRANSPARENCY AT THE FEDERAL RESERVE
December 1, 2009 2009 Ron Paul 100:4
The Federal Reserve’s monetary inflation, indeed, does push the CPI upward, but concentrating on the government’s reports of the CPI and the PPI is nothing more than the distraction from the other harm done by the Federal Reserve’s effort at central economic planning through secret monetary policy operations. Real inflation, the expansion of our money supply, is greatly undercounted by these indices. In response to our latest financial crisis, the Federal Reserve turned on its printing press and literally doubled the monetary base. This staggering creation of dollars has yet to be reflected in many consumer prices, but will ultimately hit the middle class and poor with a cruel devaluation of their savings and real earnings.
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TRANSPARENCY AT THE FEDERAL RESERVE
December 1, 2009 2009 Ron Paul 100:7
What he does not recognize – nor does he want to admit – is that he is talking about symptoms while ignoring the source of the crisis: the Federal Reserve itself. More regulations will never compensate for all the distortion and excesses caused by monetary inflation and artificially low interest rates. Regulation distracts from the real cause while further interfering with the market forces, thus guaranteeing that the recession will become much deeper and prolonged.
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TRANSPARENCY AT THE FEDERAL RESERVE
December 1, 2009 2009 Ron Paul 100:9
My bill, H.R. 1207, has nothing to do with interference with monetary policy. This was explicitly stated in the amendment voted on in the Financial Services Committee. Bernanke’s argument for protecting the independence of the Fed is his argument for protecting the secrecy of the Fed. Chairman Bernanke concludes that “America needs a strong” – think cartel – “nonpolitical” – think Goldman Sachs – “and independent” – think secret – “central bank with the tools to promote financial stability, in the midst of a horrendous financial crisis, and to help steer our economy to recovery without inflation.”
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:12
The final step to ensuring competing currencies is to eliminate capital gains and sales taxes on gold and silver coins. Under current federal law, coins are considered collectibles, and are liable for capital gains taxes. Short- term capital gains rates are at income tax levels, up to 35 percent, while long-term capital gains taxes are assessed at the collectibles rate of 28 percent. Furthermore, these taxes actually tax monetary debasement. As the dollar weakens, the nominal dollar value of gold increases. The purchasing power of gold may remain relatively constant, but as the nominal dollar value increases, the Federal Government considers this an increase in wealth, and taxes accordingly. Thus, the more the dollar is debased, the more capital gains taxes must be paid on holdings of gold and other metals.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:14
In conclusion, Madam Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the U.S. Government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government’s ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies and cosponsor the Free Competition in Currency Act.
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Abortion and National Sovereignty: No Compromises
26 January 1998 Texas Straight Talk 26 January 1998 verse 4 ... Cached
Recently, there have been attempts to tie the bare-minimum pro-life "Mexico City" Policy to the issues of funding for the United Nations and the International Monetary Fund. But those attempts are now coming back to haunt those of us who believe in both the sanctity of human life and the inviolability of US sovereignty. I expect that very early in this second session of the 105th Congress, which begins Tuesday, January 27, we will see a "grand deal" struck which will see liberals "back down" from their opposition to a revised Mexico City Policy in exchange for conservative members voting to support funding of the United Nations and IMF.
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Asian economic crisis result of suppressed liberty
25 May 1998 Texas Straight Talk 25 May 1998 verse 6 ... Cached
The crisis in Indonesia is the predictable consequence of decades of monetary inflation. Timing, severity, and duration of the correction, is unpredictable. These depend on political perceptions, the day's realities, subsequent economic policies, and the citizenry's reaction to the escalating events. The issue of trust in the future and concerns for personal liberties greatly influences the outcome, as well. Even a false trust, or an ill-founded sense of security from an authoritarian leader, can alter the immediate consequences of economic malaise, but it cannot prevent the inevitable collapse, as is occurring slowly in the more peaceful Japan and rapidly and violently in Indonesia.
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Asian economic crisis result of suppressed liberty
25 May 1998 Texas Straight Talk 25 May 1998 verse 7 ... Cached
But what we cannot lose sight of is that the Indonesian economic bubble was caused by a flawed monetary policy which led to all the other problems. Monetary inflation is the mother of all "crony capitalism."
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Asian economic crisis result of suppressed liberty
25 May 1998 Texas Straight Talk 25 May 1998 verse 11 ... Cached
Further, international efforts to prop-up an ailing economy after the financial bubble has popped prolongs the agony and increases the severity of the correction. Restoration of free markets, including the establishment of a sound monetary policy, has not yet been considered though those are the only real solutions. The people of Indonesia and the rest of the world should prepare for the worst as this crisis spreads.
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Taxpayer cash flowing again to non-citizens
31 August 1998 Texas Straight Talk 31 August 1998 verse 12 ... Cached
But these programs of giving away Americans' tax dollars to non-citizens is not limited to welfare programs at home. We see it also with the subsidization of foreign corporations and foreign nationals through the International Monetary Fund, the World Bank and other organizations. Of course, supporters of these welfare programs like to claim that they "help" America's small businessmen and farmers, but the proof simply doesn't exist. In fact, much like the recent "farm legislation," the pay-out to the foreign nationals and corporations is much larger than the small bones thrown to our people as a form of sick appeasement, to keep them paying into, and believing in, the system of redistribution.
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 4 ... Cached
Although taxes, spending, regulatory policies, and special interest cronyism compounds the problems, all nations of the world operate with a fiat monetary system and it has allowed the financial bubble to develop. Easy credit and artificially low interest rates starts a chain reaction that by its very nature guarantees a future correction. The later bad consequences of inflating a currency are certain, no matter how beneficial the earlier ones may seem.
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 8 ... Cached
Markets inevitably devalue currencies that have been inflated by the monetary authorities. The degree depends on the amount of previous monetary inflation and political perceptions but, on the short run, countries frequently accelerate the devaluation in a competitive fashion in an effort to compete with their trading partners.
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 17 ... Cached
Congress has an explicit responsibility in the area of money and finance and we must assume this responsibility. Manipulating the money supply with the pretense of helping ourselves is unacceptable and destructive. Before our economy is lost, we should work diligently to restore soundness to our monetary policy.
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Economic crisis looms
19 October 1998 Texas Straight Talk 19 October 1998 verse 16 ... Cached
Third, we must abandon the tradition of bailing out bad debtors, foreign and domestic. No International Monetary Fund and related institution funding to prop up bankrupt countries, and no Federal Reserve-orchestrated bailouts such as Long Term Capital Management LP. Liquidation of bad debt and investments must be permitted.
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Economic crisis looms
19 October 1998 Texas Straight Talk 19 October 1998 verse 18 ... Cached
Following a policy of this sort could quickly restore growth and stability to any failing economy and soften the blow for all those about to experience the connections that have been put in place by previous years of mischief, mismanagement and monetary inflation.
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The Ominous Budget Deal
26 October 1998 Texas Straight Talk 26 October 1998 verse 11 ... Cached
One of the most egregious expenditures is $17.9 billion for the International Monetary Fund. Conservatives have battled for the past year to stop more money from going to this corrupt organization that props-up the failed economies of two-bit dictators the world-over.
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A New Pandora's Box
25 January 1999 Texas Straight Talk 25 January 1999 verse 14 ... Cached
While Federal Reserve chairman Alan Greenspan and I are often at odds on issues of monetary policy, he perhaps best described the president's plan. "Let me just say it's not so much a trade-off of benefits versus costs. I'm frankly just hard-pressed to find any benefits there are in doing it."
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Confused priorities
04 October 1999 Texas Straight Talk 04 October 1999 verse 12 ... Cached
But worse, the president's idea of foreign aid would use American dollars to actually subsidize the foreign competition of American farmers. The president announced Wednesday he wants to cancel competing countries' debt to the United States -- amounting to a $3.5 billion loss for the taxpayers -- from loans we made through government operations, such as the Export-Import Bank. Further, his administration is participating in a $27 billion debt forgiveness initiative by the International Monetary Fund and World Bank, of which U.S. taxpayers are principle stakeholders.
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Overall Review
27 December 1999 Texas Straight Talk 27 December 1999 verse 6 ... Cached
Federal spending increased last year. New federal programs were started and the national debt continues to soar. In spite of the fact that we hear so much talk about budget surpluses, our federal monetary and fiscal policies continue to push our nation dangerously close to the edge of a very steep cliff. Once we hit the edge, we are headed for a deep economic downturn.
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 6 ... Cached
But one thing ignored is the fact that a fiat monetary system is incompatible with a free market economy. Instead of depending on production and savings for capital, today's economy depends on new "capital" coming from the Fed's credit machine. When credit is created out of thin air for investment purposes and interest rates are driven artificially low, mal-investment results. This monetary inflation, of which we have had plenty, has already set the stage for the next recession.
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 7 ... Cached
Many are delighted that Greenspan will stay in charge, believing he can prevent an economic turndown with proper monetary management. Sorry, but it's too late. The distortions are already in place, and because the most recent economic cycle has lasted longer than usual, it means there's been more credit creation and distortion than usual. Therefore a bigger downturn will result. The only policy available to the Fed today is to further inflate the currency in an attempt to delay the inevitable correction.
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 8 ... Cached
Greenspan has already supervised one serious recession in the early 1990s. No matter how astute a chairman of the Federal Reserve Board is, it's impossible to avoid recessions when managing a fiat monetary system. Alan Greenspan has been quite generous when it comes to creating new money. Since 1987 when Greenspan took over, high-powered money, as measured by the monetary base, has increased by 138%. This has resulted in an increase of nearly $3 trillion of bank deposits as measured by M3. This new money creation keeps interest rates lower than they otherwise would be, making the banks and Wall Street happy. It also pleases the spendthrift politicians who during Greenspan's term have increased the national debt by $32 trillion. Almost the entire increase in the national debt since 1987 has been monetized or paid for by Greenspan printing new money.
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 14 ... Cached
Alan Greenspan was at one time a free market adherent and gold standard advocate. Read what he had to say about the Federal Reserve Board policy of the 1920s and the subsequent depression. The experts in the 20s had also declared a New Era economic growth without price inflation resulting from technological advances and wise monetary management. Greenspan explains: "The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late. By 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a constant demoralizing of business confidence." (Gold and Economic Freedom, 1966)
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 16 ... Cached
This is not to say that anyone else can do any better than the current chairman in the coming years. Central planning, whether it's in the monetary system or in the economy itself, just doesn't work. The debate should not be over who is best at managing the economy, determining the money supply and knowing the proper interest rates. It should be over whether or not we should have a monetary system that requires its manager to know things he cannot know. Instead of arguing over whether and when interest rates should go up or down, we should debate whether or not market interest rates and commodity money is superior to fiat money in preventing price inflation, recessions and painful periods of unemployment.
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Sound Money Needed More Than Ever
28 February 2000 Texas Straight Talk 28 February 2000 verse 6 ... Cached
This is in fact an obvious truth but at the same time a startling admission from our nation's leading maker of monetary policy. Of course, one thing of which Greenspan is quite aware due to his familiarity with the economics of sound money, is the fact that the creation of units of monetary exchange out of thin air will lead to a recession.
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Sound Money Needed More Than Ever
28 February 2000 Texas Straight Talk 28 February 2000 verse 7 ... Cached
In addition to Greenspan's admission regarding the difficulty of a centrally managed money supply there is a darker problem to which he is far less likely to own up. That is the fact that centrally planned monetary policy is open to political pressures as well. For years Chairman Greenspan had been concerned about the over-expansion of the money supply, dating back at least to his "irrational exuberance" statements. So why did Greenspan not begin the monetary tightening that he now counsels at a much earlier period?
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Sound Money Needed More Than Ever
28 February 2000 Texas Straight Talk 28 February 2000 verse 10 ... Cached
The bottom line is that Greenspan's admission suggests that, even without the negative affects of political considerations, a fiat monetary policy is doomed to fail. When we add to the mix the all-too-human tendency of central planners responding to political pressure, as Greenspan and the fed money making machine clearly did throughout the impeachment process, what we have is a recipe for disaster. Unfortunately, Greenspan's admission points anew to the fact that a big mess is coming. But fortunately for those who are listening, it also presents proof-positive that the best way to avoid such calamities in the future is to reset our monetary policy on a firm and sound basis.
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Answering the Middle Class Squeeze
27 March 2000 Texas Straight Talk 27 March 2000 verse 9 ... Cached
In the current instance the diagnoses indicates that the squeeze of the middle class is caused not by low wages, but rather by increased costs resulting from central planning. And the key pillars of our current central-planning regime can be found in tax and monetary policies.
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Time To Get Serious With Big Government
17 April 2000 Texas Straight Talk 17 April 2000 verse 3 ... Cached
This week protesters came to Washington, DC, to make known their opposition to the policies of international institutions such as the World Bank and the International Monetary Fund. Many of these people were also present at the Seattle protests against the World Trade Organization.
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Time To Get Serious With Big Government
17 April 2000 Texas Straight Talk 17 April 2000 verse 5 ... Cached
My other criticism is that these groups really tend to focus on minor side issues and never really address the principle upon which their argument depends. In short, the problem with the alphabet-soup of international financial organizations is not the policy of the current group administering these programs. Rather, the real issue is that these organizations threaten the very idea of self-government and self-determination. We do not need to change the policies these institutions are following. We need to shut down the entire international monetary apparatus and end the international welfare state.
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Time To Get Serious With Big Government
17 April 2000 Texas Straight Talk 17 April 2000 verse 6 ... Cached
The World Bank and IMF are not merely a significant drain on U.S. taxpayers and a threat to self-government. They also use the leverage that they purchase with our tax dollars, as a means to force less developed countries to take on new and harmful fiscal, monetary and economic regulations. This serves to leave these countries further impoverished.
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The Conflict Between Collectivism and Liberty is Reflected in the Presidential Election
27 November 2000 Texas Straight Talk 27 November 2000 verse 8 ... Cached
The goal of liberty has long been forgotten. An impasse was destined to come, and already signs of a fundamental conflict are evident. The presidential election in many ways demonstrates both an economic and political reality. The political stalemate mirrors the stalemate that is developing in the economy. Both eventually will cause deep division and hardship. The real problem- preserving the free market and private property rights- will worsen if ignored. The only solution offered by Washington will be more government intervention, increased spending, increased monetary inflation, more debt, and increased military interventionism throughout the world.
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Economic Woes and the Federal Reserve
19 March 2001 Texas Straight Talk 19 March 2001 verse 8 ... Cached
Second, the Fed also steadily increased the monetary supply throughout the 1990s by printing money. Recent Fed numbers show yearly increases of nearly 15% in the M2 money supply. Since 1996, the Fed has poured more than $100 billion in new dollars into the U.S. economy. These new dollars may make Americans feel richer, but the net result of monetary inflation has to be the devaluation of savings and purchasing power. Prices seemed stable over the last decade, but many types of inflation were not reported as such. An obvious example is stock prices, where companies making little or no profit often sold shares at ridiculous price/earnings ratios. Housing and energy prices also rose dramatically, and wholesale price inflation is an increasing threat. So while monetary inflation creates a sense of prosperity in the short run, long-term it simply makes your dollars worth less.
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Economic Woes and the Federal Reserve
19 March 2001 Texas Straight Talk 19 March 2001 verse 9 ... Cached
Only six months ago, market pundits were still proclaiming a new era of unending prosperity. They claimed that the fundamentals no longer mattered, that technology would save us from any more bear markets. Technology is wonderful, but it cannot save us from our own misguided monetary policies. Until we stop permitting the Fed to manipulate the economy, real prosperity will elude us. The Fed received credit for the boom times of the 1990s, yet its policies are responsible for the market correction and economic recession we are experiencing today.
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Argentine Default and the IMF
14 January 2002 Texas Straight Talk 14 January 2002 verse 4 ... Cached
Believe it or not, such an institution exists, and it's called the International Monetary Fund. The IMF is an international organization comprised of member states, much like the UN, that takes your tax dollars and sends them overseas. It's expensive, too, just like the UN, enjoying a $37 billion line of credit provided by American taxpayers.
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Optimism or Pessimism for the Future of Liberty?
11 February 2002 Texas Straight Talk 11 February 2002 verse 7 ... Cached
The economic ramifications of our war on terrorism are also quite serious. Although the recession certainly cannot be blamed solely on the September 11th attacks, the huge increases in federal spending and the effects of all the new regulations cannot help the recovery. When one adds up the domestic costs, the military costs, and the costs of new regulations, it is certain that deficits will grow significantly. The Federal Reserve will remain under great pressure to continue its dangerous monetary inflation by printing dollars and expanding credit. This policy will result in higher rather than lower interest rates, a weak dollar, and rising prices. The danger of our economy spinning out of control cannot be dismissed.
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Predictions for an Unwritten Future
29 April 2002 Texas Straight Talk 29 April 2002 verse 20 ... Cached
Inflationary Federal Reserve policies will accelerate, with massive credit creation worsening the dollar crisis. Gold will be seen as an alternative to paper money as it returns to its historic monetary role.
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Your Taxes Fund South American Bailout
12 August 2002 Texas Straight Talk 12 August 2002 verse 3 ... Cached
This money, we are told, is just a "bridge loan" to give Uruguay a little breathing room until it receives its next cash infusion from the International Monetary Fund. In other words, the plan for Uruguay is to pay off one loan by getting a bigger loan, like a hapless spendthrift using one credit card to pay off another. What’s worse is that American taxpayers already fund the IMF with a $37 billion line of credit, so Uruguay will be paying us back with our own money! The same goes for Brazil, which just received a record $30 billion from the IMF to deal with its own looming bank collapse.
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Your Taxes Fund South American Bailout
12 August 2002 Texas Straight Talk 12 August 2002 verse 6 ... Cached
The real concern behind schemes like the Exchange Stabilization Fund and the International Monetary Fund is the corporate interests they subsidize. American banks and corporations have a great deal of money invested in South America, and a bank default by any country there directly threatens those dollars. The multinational banks especially fear a chain reaction of economic meltdowns, beginning with Argentina and spreading to Uruguay, Brazil, and beyond. So they use political influence to thwart the free market process and prop up bankrupt economic policies in Uruguay.
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Government Policy and False Prosperity
27 January 2003 Texas Straight Talk 27 January 2003 verse 3 ... Cached
President Bush’s plan to end the double taxation of stock dividends, which I support, has been both lauded and denounced by the usual factions in Washington. Some of the President’s supporters, however, make the argument that a dividend tax cut will boost stock prices. While tax cuts are always good for the economy, it’s dangerous to promote the idea that government can create value in the financial markets. The collapse of stock prices in the last two years provides stark evidence that the Federal Reserve’s monetary policies of the 1990s did not create lasting prosperity, and we should understand that tax policy is no different. Centralized planning via tax policy is every bit as harmful as centralized planning in monetary policy.
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Government Policy and False Prosperity
27 January 2003 Texas Straight Talk 27 January 2003 verse 5 ... Cached
The financial markets demand real value. Merely reducing taxes on dividends or capital gains cannot make a company or stock fundamentally more valuable. Any increase in a company’s stock price not based on real gains in productivity cannot be sustained for long, especially when the increase is caused by a reaction to government policies. Simply believing a company is worth a certain amount doesn’t make it so. In the end, only results- in the form of profitability and growth- matter. When government interferes in the financial markets through its monetary or tax policies, company values become distorted and investor knowledge become even more imperfect. This encourages the kind of uneducated speculation we saw during the 1990s, and many investors today find themselves mired in debt and holding almost worthless stocks.
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The 2003 Spending Orgy
03 March 2003 Texas Straight Talk 03 March 2003 verse 6 ... Cached
Meanwhile, Federal Reserve Chairman Greenspan recently suggested before a congressional committee that billions could be saved if the Treasury used lower inflation estimates. In other words, if we say inflation is lower than the Consumer Price Index and other barometers indicate, Congress won’t have to spend as much on cost-of-living adjustments for programs like Social Security. This amounts to lying to the American people about our monetary policies, by hiding the true rate of inflation caused by printing too many dollars and keeping interest rates artificially low.
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Declining Dollar, Declining Fortunes
23 June 2003 Texas Straight Talk 23 June 2003 verse 3 ... Cached
Of course capitalism is based on the premise that centralized economic planning is bad. I’m always amazed that otherwise pro-market conservatives, who rightfully scorned disastrous Soviet economic policies, are so willing to accept centralized monetary planning by the Fed. True capitalism requires a free market for money and interest rates, just as surely as it requires a free market for wages and prices.
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Declining Dollar, Declining Fortunes
23 June 2003 Texas Straight Talk 23 June 2003 verse 7 ... Cached
Both Congress and the Fed should be promoting sound dollar policies, because a sound and stable currency is required for sustained economic growth. Instead, both have through default and deliberate action promoted fiat policies that systematically depreciate the dollar. The financial markets understand this, and investors track the minute-by-minute fluctuations in value of the dollar seeking an investment advantage. This kind of speculation would not exist in a sound monetary system.
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Federal Reserve Inflation Punishes Saving
21 July 2003 Texas Straight Talk 21 July 2003 verse 8 ... Cached
Yet even as the Chairman warned about the supposed danger of deflation, he also discussed his view that rising natural gas prices pose a serious threat to the U.S. economy. There seems to be no coherent message coming from Mr. Greenspan: we’re warned about “irrational exuberance” even as the Fed cuts interest rates and wildly inflates the money supply; we’re told there is no inflation, yet housing prices skyrocket; we’re told that only our central bank planners have the wisdom to determine proper monetary policies, yet the Chairman himself seems to equivocate constantly and provide only the fuzziest answers to straightforward questions.
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Federal Reserve Inflation Punishes Saving
21 July 2003 Texas Straight Talk 21 July 2003 verse 9 ... Cached
Centralized planning is as disastrous in monetary affairs as in economic affairs. Just as Russian commissars could not determine prices or production levels in the absence of a free market, the Federal Reserve Board cannot determine the “proper” level for interest rates or the money supply. Our fiat currency and artificially low interest rates can only result in the deterioration of the U.S. dollar through inflation, which in the end will cause interest rates to rise no matter what the Fed says or does. Older Americans especially stand to suffer most from Mr. Greenspan’s easy money policies.
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The Tyranny of Paper Money
08 September 2003 Texas Straight Talk 08 September 2003 verse 4 ... Cached
We need to understand why a fiat system is so popular with economists, the business community, bankers, and government officials. One explanation is that a fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation. The insidious and eventual cost falls on unidentified victims, who are usually oblivious to the cause of their plight.
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The Tyranny of Paper Money
08 September 2003 Texas Straight Talk 08 September 2003 verse 5 ... Cached
Another explanation is that it’s human nature to seek the comforts of wealth with the least amount of effort. This desire is quite positive when it inspires efficient work and innovation in a capitalist society. Productivity is improved and the standard of living goes up for everyone. But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be increased out of thin air.
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The Tyranny of Paper Money
08 September 2003 Texas Straight Talk 08 September 2003 verse 6 ... Cached
Most Americans are oblivious to the entire issue of monetary policy. We all deal with the consequences of our fiat money system, however. Every dollar created dilutes the value of existing dollars in circulation. Those individuals who worked hard, paid their taxes, and saved some money for a rainy day are hit the hardest. Their dollars depreciate in value while earning interest that is kept artificially low by the Federal Reserve easy-credit policy. The poor and those dependent on fixed incomes can’t keep up with the rising cost of living.
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The Tyranny of Paper Money
08 September 2003 Texas Straight Talk 08 September 2003 verse 8 ... Cached
Fiat dollars allow us to live beyond our means, but only for so long. History shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic and political structure becomes unstable. Spendthrift politicians may love a system that generates more and more money for their special interest projects, but the rest of us have good reason to be concerned about our monetary system and the future value of our dollars.
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Lessons from the California Recall
13 October 2003 Texas Straight Talk 13 October 2003 verse 5 ... Cached
Federal politicians, however, can use government printing presses to sweep economic problems under the rug and hide the effects of deficit spending- at least for a time. Our fiat monetary system permits politicians to spend money now to win votes and fund popular programs, while delaying the harms until later. When the federal government monetizes debt by magically paying its bills with newly printed money, the economic effects are diffused throughout the economy. Over time, however, we all pay for the increased number of dollars in circulation. Prices go up, personal savings are eroded, and the dollar becomes weaker against other currencies.
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Economic Woes Begin at Home
03 November 2003 Texas Straight Talk 03 November 2003 verse 2 ... Cached
Many in Washington are concerned about the loss of jobs in our nation’s manufacturing sector, but few seem to understand the role Federal Reserve currency manipulation plays in that loss. The economic problems currently facing this country are the direct result of a boom-and-bust cycle caused by inflationary Fed policies. An open debate on monetary issues therefore is long overdue.
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Economic Woes Begin at Home
03 November 2003 Texas Straight Talk 03 November 2003 verse 3 ... Cached
However, instead of debating America’s monetary policy, Congress wants to debate China’s monetary policy. The goal is to pressure China to change the valuation of its currency, to unlink it from the U.S. dollar so that its value fluctuates. The main beneficiary of this would be certain U.S. manufacturers, at least in the short run. But American consumers would be the overwhelming losers in the long run, as the price of countless consumer items would rise. Manufacturing interests have powerful lobbies in Congress, but consumers do not.
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Economic Woes Begin at Home
03 November 2003 Texas Straight Talk 03 November 2003 verse 4 ... Cached
China exports many products into the United States, which makes her a convenient scapegoat for our economic problems. Demanding that China adjust its currency valuation is merely a distraction from addressing the real economic dilemmas facing our country, however. Congress should be focused on our own disastrous monetary policies. As long as the Fed can print money at will and set interest rates, the value of our dollars will be subject to the whims of politicians and the perceived economic needs of politically powerful special interests.
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Inflation- Alive and Well
08 March 2004 Texas Straight Talk 08 March 2004 verse 3 ... Cached
Austrian- school economists demonstrate that true inflation is monetary inflation. True inflation therefore can be measured by an increase in the money supply. Mr. Greenspan and Fed policy makers have more than doubled the M3 money supply in less than ten years. While Treasury printing presses can print unlimited dollars, there are natural limits to economic growth. This flood of newly minted US currency can only increase consumer prices in the long term, as more and more dollars chase available goods and services.
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The Federal Reserve Debt Engine
26 April 2004 Texas Straight Talk 26 April 2004 verse 3 ... Cached
Congress and the financial press treat Mr. Greenspan as an all-knowing sage, seeking his wisdom on political and even social issues that have nothing to do with monetary policy. During last week’s hearing Mr. Greenspan was asked his opinion on topics such as Social Security, tax cuts, federal spending, corporate accounting rules, the congressional budget process, and even immigration. It seems bizarre that a credulous Congress and public are willing to accept the judgment of on unelected, virtually unaccountable central banker while knowing little or nothing about the Federal Reserve itself.
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The Federal Reserve Debt Engine
26 April 2004 Texas Straight Talk 26 April 2004 verse 4 ... Cached
Judging by Mr. Greenspan’s statements to a Senate committee in February, Fed economists are confusing debt with wealth. Mr. Greenspan praises the “sustained expansion of the US economy,” but then goes on to highlight the real reason for the expansion: loose monetary policy and near-zero interest rates. Since Fed bankers set interest rates artificially low, the cost of borrowing money is very cheap. This leads to more and more consumer spending, which Mr. Greenspan touts as the driving force for economic growth.
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A Texas Platform for the GOP
30 August 2004 Texas Straight Talk 30 August 2004 verse 5 ... Cached
The Texas GOP platform also calls for a congressional audit of the Federal Reserve Bank, and demands full public access to the written minutes from Fed board meetings. Such an audit could at the very least serve to educate the American people about Fed inflation and the dangers of fiat currency. In Washington, the Federal Reserve system is virtually never discussed by Congress or the administration, despite its enormous impact on our economic well-being. Monetary policy is simply off the table as a political and policy matter for both national parties, but the Texas GOP recognizes the importance of sound money.
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The IMF Con
27 September 2004 Texas Straight Talk 27 September 2004 verse 3 ... Cached
You won’t hear either presidential candidate say much about the issue of foreign aid during this election season, despite the record levels of federal spending and debt that plague our economy. Very few Americans realize the extent to which Congress sends billions of their tax dollars overseas to fund the most counterproductive foreign welfare schemes imaginable, always in the guise of helping the poor. A recent report by the congressional Joint Economic Committee on which I serve highlights the reckless manner in which one organization, the International Monetary Fund, wastes your money around the world.
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 3 ... Cached
Nearly 40 years ago, Federal Reserve chair Alan Greenspan wrote persuasively in favor of a gold monetary standard in an essay entitled Gold and Economic Freedom. In that essay he neatly summarized the fundamental problem with fiat currency in a few short sentences: “The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value… Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 8 ... Cached
Third, Fed policies do indeed have adverse political ramifications. Fiat currency and big government go hand-in-hand. Without a gold standard, Congress is free to spend recklessly and fall back on monetary expansion to pay the bills. Politically, it’s easier to print new dollars than raise taxes or borrow overseas. The Fed in essence creates paper reserves that enable Congress to undertake spending measures that far exceed tax revenues. The ill effects of this process are not felt by the politicians, who can always find popular support for new spending. Average Americans suffer, however, when their dollars are “confiscated through inflation,” as Mr. Greenspan termed it.
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Deficits Make You Poorer
14 March 2005 Texas Straight Talk 14 March 2005 verse 8 ... Cached
Deficits mean more monetary inflation. Deficit spending necessitates the creation of more fiat dollars by the Federal Reserve to keep the government afloat. Congress knows it can always fall back on the Fed money machine, which of course encourages more deficit spending. It’s a vicious cycle that ultimately makes every dollar you have worth less.
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Does the WTO Serve Our Interests?
16 May 2005 Texas Straight Talk 16 May 2005 verse 8 ... Cached
In reality, the WTO is the third leg of the globalists’ plan for a one-world, centrally-managed economic system. The intention behind the creation of the WTO was to have a third institution to handle the trade side of international economic cooperation, joining two institutions created by Bretton Woods, the World Bank and the International Monetary Fund. For the United States to give up any bit of its sovereignty to these unelected and unaccountable organizations is economic suicide. International organizations can never “manage” trade better than it naturally occurs in a true free market of goods and services. At best, WTO acts as a meddling middleman, taking a cut for unnecessary services provided. At worst, it forces the United States to change its domestic laws in ways that seriously harm our economy and our sovereignty.
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Congress and the Federal Reserve Erode Your Dollars
23 May 2005 Texas Straight Talk 23 May 2005 verse 6 ... Cached
The root of the problem is the Federal Reserve and our fiat monetary system itself. Since US dollars and other major currencies are not backed by gold, they have no inherent value. Their relative values are subject to political events, and fluctuate constantly in highly volatile currency markets. A fiat system means every dollar you have can be eroded into nothing by the actions of politicians and central bankers. In essence, paper currencies like the US dollar operate as articles of faith-- faith in the policies of the governments and central banks that issue them. When it comes to a government as deeply indebted as our own, that faith is sorely lacking among investors worldwide. Politicians often manage to fool voters and the media, but they rarely fool financial markets over time. The precipitous drop in the US dollar over the past few years is proof that investors around the globe are very concerned about American deficits and debt. When investors lack faith in the U.S. dollar, they really lack faith in the economic policies of the U.S. government.
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NeoCon Global Government
13 June 2005 Texas Straight Talk 13 June 2005 verse 8 ... Cached
This new policy is given teeth by creating a “Peacebuilding Commission,” which will serve as the implementing force for the internationalization of what were formerly internal affairs of sovereign nations. This Commission will bring together UN Security Council members, major donors, major troop contributing countries, appropriate United Nations organizations, the World Bank, and the International Monetary Fund among others. This new commission will create the beginning of a global UN army. It will claim the right to intervene in any conflict anywhere on the globe, bringing the World Bank and the IMF formally into the picture as well. It is a complete new world order, but undertaken with the enthusiastic support of many of those who consider themselves among the most strident UN critics.
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Borrowing, Spending, Counterfeiting
22 August 2005 Texas Straight Talk 22 August 2005 verse 3 ... Cached
Few Americans truly understand how our Federal Reserve system enables Congress to spend far beyond its means, but the cycle of spending and printing money affects all of us. Simply put, the more money our Treasury prints, the less every dollar is worth. Our pure fiat money system, in place since the last vestiges of a gold standard were eliminated in the early 1970s, has reduced the value of your savings by 80%. Disregard the government’s Consumer Price Index, which substantially underreports price inflation. Monetary inflation is true inflation, and we only need to look at the cost of homes, cars, energy, and medical care to recognize that a dollar buys far less today than ever.
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Deficit Spending and Katrina
19 September 2005 Texas Straight Talk 19 September 2005 verse 8 ... Cached
My simple suggestion to my colleagues is this: Find dollar-for-dollar offsets for all hurricane relief spending while public attention remains focused on the destruction in New Orleans. Once interest in Katrina fades, other spending priorities will reassert themselves and any sense that tax dollars are finite will be lost. Congressional spending habits, in combination with our flawed monetary system, could bring us a financial whirlwind that makes Katrina look like a minor storm.
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Empowering the UN in the Guise of Reform
03 October 2005 Texas Straight Talk 03 October 2005 verse 5 ... Cached
According to the UN, this commission will bring together the UN Security Council members, major donor states, major troop contributing countries, United Nations organizations, the World Bank, and the International Monetary Fund to develop and integrate conflict prevention, post-conflict reconstruction, and long-term development policies and strategies. The commission will serve as the key coordinating body for the design and implementation of military, humanitarian, and civil administration aspects of complex missions. Think of this as the core of a future UN army that will claim the right to intervene in any conflict anywhere.
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More of the Same at the Federal Reserve
28 November 2005 Texas Straight Talk 28 November 2005 verse 5 ... Cached
What I mean is that Mr. Bernanke appears to have embraced the idea that the Federal Reserve can create prosperity more than Mr. Greenspan ever did. Like his predecessor, Mr. Bernanke views our system of fiat currency as a tool for creating wealth out of thin air by producing more dollars, whether paper or electronic. But he seems to take things further than Greenspan by refusing even to consider the destructive consequences of monetary expansion. In fact, he earned dubious notoriety for this quote in a 2002 speech discussing the supposed threat of deflation in the American economy: "The U.S. government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost."
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More of the Same at the Federal Reserve
28 November 2005 Texas Straight Talk 28 November 2005 verse 6 ... Cached
But there is a cost, and it's a heavy one. It's called monetary inflation, which destroys the value of the dollar and punishes those who save and invest. The money supply, as measured by the Fed's own M3 figure, has increased about 5 times since 1980. Yet for years officials at the Fed have insisted that inflation is firmly in check.
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More of the Same at the Federal Reserve
28 November 2005 Texas Straight Talk 28 November 2005 verse 7 ... Cached
Inflation is not in check, as anyone who examines the cost of housing, energy, medical care, school tuition, and other basics can attest. In one sense the remarkable rise in housing prices over the last decade really just represents a drop in the value of the dollar. The artificial boom in the 1990s equity markets, engineered by Mr. Greenspan's relentless monetary expansion and interest rate cutting, ended badly for millions of Americans holding overinflated stocks. What will happen when the same thing happens with housing?
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The Perils of Economic Ignorance
27 March 2006 Texas Straight Talk 27 March 2006 verse 6 ... Cached
I certainly have seen firsthand a great deal of economic ignorance in Congress over the years. Few members pay any attention whatsoever to the Federal Reserve Bank, despite the tremendous impact Fed policy has on their constituents. Even many members of the banking and finance committees have little or no knowledge of monetary policy. Perhaps this is why so many in Congress seem to believe we can all become rich by printing new dollars, or that we can make 2+2=5 by taking money from some people and giving it to others.
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The Perils of Economic Ignorance
27 March 2006 Texas Straight Talk 27 March 2006 verse 8 ... Cached
I strongly recommend that every American acquire some basic knowledge of economics, monetary policy, and the intersection of politics with the economy. No formal classroom is required; a desire to read and learn will suffice. There are countless important books to consider, but the following are an excellent starting point: The Law by Frederic Bastiat; Economics in One Lesson by Henry Hazlitt; What has Government Done to our Money? by Murray Rothbard; The Road to Serfdom by Friedrich Hayek; and Economics for Real People by Gene Callahan.
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Foreign Policy, Monetary Policy, and Gas Prices
08 May 2006 Texas Straight Talk 08 May 2006 verse 1 ... Cached
Foreign Policy, Monetary Policy, and Gas Prices
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Foreign Policy, Monetary Policy, and Gas Prices
08 May 2006 Texas Straight Talk 08 May 2006 verse 9 ... Cached
We also must understand the effect monetary policy has on gas prices. The price of gas, like the price of all things, goes up because of inflation. And inflation by definition is an increase in the money supply. The money supply is controlled by the Federal Reserve Bank, and responds to the deficits Congress creates. When deficits are excessive, as they are today, the Fed creates new dollars out of thin air to buy Treasury bills and keep interest rates artificially low. But when new money is created out of nothing, the money already in circulation loses value. Once this is recognized, prices rise-- some more rapidly than others. That’s what we see today with the cost of energy.
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Foreign Policy, Monetary Policy, and Gas Prices
08 May 2006 Texas Straight Talk 08 May 2006 verse 10 ... Cached
If we want to do something about gas prices, we should demand greatly reduced welfare and military spending, a balanced budget, and fewer regulations that interfere with the market development of alternative fuels. All subsidies and special benefits to energy companies should be ended. We also should demand a return to a sound commodity monetary system.
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Foreign Policy, Monetary Policy, and Gas Prices
08 May 2006 Texas Straight Talk 08 May 2006 verse 12 ... Cached
Oil prices are at a level where consumers reduce consumption voluntarily. The market will work if we let it. But as great as the market economy is, it cannot overcome a foreign policy that is destined to disrupt oil supplies and threaten the world with an expanded and dangerous conflict in the Middle East. And it cannot overcome a monetary policy destined to inflate our dollars into oblivion.
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Monetary Inflation is the Problem
04 December 2006 Texas Straight Talk 04 December 2006 verse 1 ... Cached
Monetary Inflation is the Problem
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Monetary Inflation is the Problem
04 December 2006 Texas Straight Talk 04 December 2006 verse 4 ... Cached
This decline in the value of the dollar is simple to explain. The dollar loses value as the direct result of the Federal Reserve and U.S. Treasury increasing the money supply. Inflation, as the late Milton Friedman explained, is always a monetary phenomenon. The federal government consistently wants to spend more than it can tax and borrow, so Congress turns to the Fed for help in covering the difference. The result is more dollars, both real and electronic-- which means the value of every existing dollar goes down.
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Monetary Inflation is the Problem
04 December 2006 Texas Straight Talk 04 December 2006 verse 8 ... Cached
Second, the Fed steadily increased the monetary supply throughout the 1990s by printing money. Recent Fed numbers show double-digit annual increases in the M2 money supply. These new dollars may make Americans feel richer, but the net result of monetary inflation has to be the devaluation of savings and purchasing power.
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Inflation and War Finance
29 January 2007 Texas Straight Talk 29 January 2007 verse 6 ... Cached
Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve system is a creation of Congress.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 1 ... Cached
Monetary Policy is Critically Important
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 3 ... Cached
Federal Reserve Chairman Ben Bernanke testifies twice every year before the congressional Financial Services committee, and I look forward to these opportunities to raise questions about monetary policy. I believe monetary policy is critically important yet overlooked in Washington. Money is the lifeblood of any economy, and control over a nation's currency means control over its economic well being. Fed bankers quite literally determine the value of our money, by controlling the supply of dollars and establishing interest rates. Their actions can make you richer or poorer overnight, in terms of the value of your savings and the buying power of your paycheck. So I urge all Americans to educate themselves about monetary policy, and better understand how a small group of unelected individuals at the Federal Reserve and Treasury department wield tremendous power over our lives.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 5 ... Cached
Transparency in monetary policy is a goal we should all support. I've often wondered why Congress so willingly has given up its prerogative over monetary policy. Astonishingly, Congress in essence has ceded total control over the value of our money to a secretive central bank.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 10 ... Cached
We look at GDP numbers to reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the higher standard of living that monetary inflation brings to the privileged few. Those few have access to the newly created money first, before its value is diluted.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 12 ... Cached
In 2006 dollars, the minimum wage was $9.50 before the 1971 breakdown of Bretton Woods. Today that dollar is worth $5.15. Congress congratulates itself for raising the minimum wage by mandate, but in reality it has lowered the minimum wage by allowing the Fed to devalue the dollar. We must consider how the growing inequalities created by our monetary system will lead to social discord.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 14 ... Cached
We need more transparency in how the Federal Reserve carries out monetary policy, and we need it soon.
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The Federal Reserve Monopoly over Money
09 April 2007 Texas Straight Talk 09 April 2007 verse 5 ... Cached
Few Americans give much thought to the Federal Reserve System or monetary policy in general. 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.
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The Federal Reserve Monopoly over Money
09 April 2007 Texas Straight Talk 09 April 2007 verse 9 ... Cached
Fiat dollars allow us to live beyond our means, but only for so long. History shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic and political structure becomes unstable. Spendthrift politicians may love a system that generates more and more money for their special interest projects, but the rest of us have good reason to be concerned about our monetary system and the future value of our dollars.
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The Money Has to Come From Somewhere
23 September 2007 Texas Straight Talk 23 September 2007 verse 2 ... Cached
After the current turmoil in the markets, I was hoping that new Federal Reserve Chairman Ben Bernanke would see the big picture and act judiciously. Instead he signaled, with an aggressive rate cut, that we can expect a continuation of the monetary policies that got us here to begin with. Alan Greenspan released his memoir this week explaining his policies and decisions in the wake of the irrational exuberance they fueled. His successor should see that it is now time for a change of policy that addresses the root of our troubles. But instead of seeing an inflation problem, the Federal Reserve sees a liquidity problem, which is a little like extinguishing a forest fire with gasoline. In the wake of the rate cut, the Dow jumped and brokers cheered. Behind the headlines, however, the dollar quietly fell and was abandoned by more of the world in favor of more solid stores of wealth.
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The Money Has to Come From Somewhere
23 September 2007 Texas Straight Talk 23 September 2007 verse 3 ... Cached
The Fed does not act in a vacuum. Mr. Greenspan rightly criticizes Congress and the administration for abandoning principles of fiscal responsibility. However, monetary policy at the Fed did nothing solve money problems, but merely delayed impending crises by creating bubbles.
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The Money Has to Come From Somewhere
23 September 2007 Texas Straight Talk 23 September 2007 verse 8 ... Cached
The Fed tries to keep up with government’s spending habits, but is sending inaccurate signals to mask bad monetary policy. Ultimately, we’ll get back on track financially only when government spending is held in check and the free market controls monetary policy, not the other way around.
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Pain at the Pump
25 November 2007 Texas Straight Talk 25 November 2007 verse 3 ... Cached
Taxation is the most direct way government increases Americans' cost at the pump. The national average price of gas now is well over $3.00 per gallon now, $4 in some areas. Federal taxes take 18.4 cents, while state and local taxes average another 28.5 cents per gallon. That's an average of 47 cents per gallon Americans are paying just for government, but that is just the tip of the iceberg. Less directly, our loose monetary policy gives taxpayers double jeopardy at the pump, simultaneously increasing prices and undermining purchasing power. Wages always lag behind price increases, making average Americans feel as though they can never quite keep up, never quite get out of debt. Not to mention the ripple effect of higher diesel costs on the trucking industry. When trucking and shipping is more expensive, everything is more expensive.
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On Money, Inflation and Government
30 March 2008 Texas Straight Talk 30 March 2008 verse 8 ... Cached
The end game for this policy of monetary inflation is that the money in your bank account loses purchasing power. So, by keeping failing banks afloat, the Fed punishes those who have lived frugally and saved. The power to create money is a power that should never be granted to government. As we can plainly see today, the Fed has abused this power, and taxpayers are paying the price.
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Bailing Out Banks
13 April 2008 Texas Straight Talk 13 April 2008 verse 3 ... Cached
The current market crisis began because of Federal Reserve monetary policy during the early 2000s in which the Fed lowered the interest rate to a below-market rate. The artificially low rates led to overinvestment in housing and other malinvestments. When the first indications of market trouble began back in August of 2007, instead of holding back and allowing bad decision-makers to suffer the consequences of their actions, the Federal Reserve took aggressive, inflationary action to ensure that large Wall Street firms would not lose money. It began by lowering the discount rates, the rates of interest charged to banks who borrow directly from the Fed, and lengthening the terms of such loans. This eliminated much of the stigma from discount window borrowing and enabled troubled banks to come to the Fed directly for funding, pay only a slightly higher interest rate but also secure these loans for a period longer than just overnight.
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Big Government Responsible for High Gas Prices
04 May 2008 Texas Straight Talk 04 May 2008 verse 3 ... Cached
Instead of imposing further restraints on the market, Congress should consider reforming the federal policies that raise gas prices. For example, federal and state taxes can account for as much as a third of what consumers’ pay at the pump. The Federal Government’s boom-and-bust monetary policy also makes consumers vulnerable to inflation and to constant fluctuations in the prices of essential goods such as oil. It is no coincidence that oil prices first became an issue shortly after President Nixon unilaterally severed the dollar’s last link to gold.
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Big Government Responsible for High Gas Prices
04 May 2008 Texas Straight Talk 04 May 2008 verse 5 ... Cached
Last year, in order to provide the American people with relief from high oil prices, I introduced the Affordable Gas Price Act (HR 2415). This legislation protects the American people from gas price spikes by suspending the federal gas tax whenever the national average gas price exceeds $3.00 per gallon. The Affordable Gas Price Act also expands the supply of gasoline by repealing the federal moratorium on offshore drilling, including in the ANWR reserve in Alaska . HR 2415 also provides tax incentives and protection from nuisance lawsuits for those seeking to build new refineries. Finally, HR 2415 authorizes a federal study on the link between our nation’s monetary policy and the price of oil.
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Rising Energy Prices and the Falling Dollar
09 June 2008 Texas Straight Talk 09 June 2008 verse 3 ... Cached
Part of the answer lies in understanding bubbles and monetary inflation, but especially the Federal Reserve System. The Federal Reserve is charged with controlling inflation through interest rate manipulation, however, many fail to realize that creating money, and therefore inflation, is really its only tool. When the Federal Reserve inflates the dollar as drastically as it has in the past few decades, the first users of the newly created money go in search of investments for their dollars. They must invest this money quickly and aggressively before it loses value. This causes certain sectors to expand beyond what would naturally occur in the free market. Eventually the sector overheats and the bubble bursts. Overinvestment in dotcoms eventually led to a collapse of the NASDAQ. Next we had the housing bubble, and now we are seeing the price of oil being bid up in the creation of another new bubble. Investors are now looking to commodities like oil, for stability and growth as they pull capital out of real estate. This increased demand for investment vehicles related to oil contributes to driving up the price of the actual product.
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Iraq or the Economy?
16 June 2008 Texas Straight Talk 16 June 2008 verse 5 ... Cached
All war, but most particularly war funded by monetary inflation, bleeds a country in multiple ways. Obviously, many of the young people who are in the military literally give their blood, and sometimes their lives, fighting in wars of this type. Meanwhile, those who do not fight the war, but fund it, are forced to pay both the immediate costs, as well as seeing their long term purchasing power erode, as the twin pillars of debt and inflation are foisted upon the backs of current taxpayers and future generations. Neither conspiracy nor coincidence explains steep increases in the price of gas as the war drags on. No, this is simply a reality of the inflationary policies that, among other things, make this war possible.
Texas Straight Talk from 20 December 1996 to 23 June 2008 (573 editions) are included in this Concordance. Texas Straight Talk after 23 June 2008 is in blog form on Rep. Paul’s Congressional website and is not included in this Concordance.
Remember, not everything in the concordance is Ron Paul’s words. Some things he quoted, and he added some newspaper and magazine articles to the Congressional Record. Check the original speech to see.