The SPEAKER pro tempore. Under a
previous order of the House, the gentleman
from Texas (Mr. PAUL) is recognized
for 5 minutes.
1998 Ron Paul 97:1 Mr. PAUL.
Mr. Speaker, the largest
of all bubbles is now bursting. This is a
worldwide phenomenon starting originally
in Japan 9 years ago, spreading
to East Asia last year, and now significantly
affecting U.S. markets.
1998 Ron Paul 97:2 All financial bubbles are currency
driven. When central banks generously
create credit out of thin air speculation,
debt, and malinvestment result.
Early on the stimulative effect is welcomed
and applauded as the boom part
of the cycle progresses. But illusions of
wealth brought about by artificial
wealth creation end when the predictable
correction arrives. Then we see
the panic and disappointment as
wealth is wiped off the books.
1998 Ron Paul 97:3 These events only occur when governments
and central banks are given
arbitrary authority to create money
and credit out of thin air. Paper money
systems are notoriously unstable; and
the longer they last, the more vulnerable
they are to sudden and sharp
downturns.
1998 Ron Paul 97:4 All countries of the world have participated
in this massive inflationary
bubble with the dollar leading the way.
Being a political and economic powerhouse,
U.S. policy and the dollar has
had a major influence throughout the
world and, in many ways, has been the
engine of inflation driving world financial
markets for years.
1998 Ron Paul 97:5 But economic law dictates that adjustments
will be made for all the bad
investment decisions based on erroneous
information about interest rates,
the money supply, and savings.
1998 Ron Paul 97:6 The current system eventually promotes
overcapacity and debt that cannot
be sustained. The result is a slump,
a recession, or even a depression. When
the government makes an effort to prevent
a swift, sharp correction, the
agony of liquidation is prolonged and
deepened. This is what is happening in
Japan and other Asian countries today.
We made the same mistake in the
1930s.
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.
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.
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.
1998 Ron Paul 97:10 Protecting the dollar is our job here
in the Congress, and we are not paying
much attention. Although turmoil
elsewhere in the world has given a recent
boost to the dollar, signs are appearing
that the dollar, unbacked by
anything of real value, is vulnerable.
Setting a standard for the dollar with
real value behind it can restore trust
to the system and will become crucial
in solving our problems, soon to become
more apparent.
1998 Ron Paul 97:11 The sooner we understand the nature
of the problem and start serious discussions
on how to restore soundness to
our money the sooner we can secure
the savings, investments, and retirements
of all Americans.
Notes:
1998 Ron Paul 97:2
All financial bubbles are currency driven. probably should be hyphenated:
All financial bubbles are currency-driven.
1998 Ron Paul 97:7
IMF bailouts favored by the American taxpayer uses favored in the
sense of a favor funded by the American taxpayer. It does not suggest
the American taxpayer prefers to provide the bailouts.
