The SPEAKER pro tempore. Under a
previous order of the House, the gentleman
from Texas (Mr. PAUL) is recognized
for 5 minutes.
2010 Ron Paul 19:1
Mr. PAUL.
I rise today to talk a bit
about our economy and the marketplace
which, if anybody has observed,
is in shambles. A couple of years ago,
we had a financial crisis; basically, a
bit of problems in debt with the financial
institutions, the banks, and a lot
of corporations. That was a rather hectic
period of time. But I think what
weíre moving into now is much, much
more serious, and what I see happening
is that this is not a financial problem
as much as a currency problem. Everybody
knows there are major problems
in Greece right now because of the debt
load that they have and they cannot finance,
and nobody is there at the moment
to bail them out.
2010 Ron Paul 19:2
A lot has been happening. I have been
interested in this subject for a long
time. As a matter of fact, in 1971, with
the breakdown of the Bretton Woods
agreement, I became fascinated with
economics and politics. At that time,
there was a devaluation of the dollar of
3.8 percent, and it was very, very big
news. And thatís when the dollar was
connected to gold and there was a devaluation
against gold. This was a
major event and ushered in a major
amount of inflation in the 1970s. Yet,
this process continues. As a matter of
fact, the breakdown in 1971 opened up
the doors to massive inflation. And
thatís what we have been doing for 35,
40 years of inflating the currency, creating
many and multiple financial bubbles
which have burst and have given
us a great deal of trouble. But a currency
crisis is much worse because people
lose confidence in the dollar.
2010 Ron Paul 19:3
Now, I have talked a lot about the
value of the dollar. And somebody
might wonder exactly why I would
come today and talk about the concern
I have for the value of the dollar, because
if you look at the dollar, the dollar
is a haven. The dollar has been
going up sharply in terms of other
international currencies. They would
say that this is a haven. Itís still
strong. People are buying our Treasury
bills. But I still argue the case that
there is a currency crisis going on. Because
if you look at the one true
money, the one money that has existed
for 6,000 years that outlasts all the
paper money and all the fiat currency,
that is gold. It doesnít look very good
and is sending a signal that a lot of inflation
lurks in the future.
2010 Ron Paul 19:4
In the past several years, maybe even
10 or 15 years, the dollar and the gold
relationship depended on gold acting as
a commodity. It moved with the stock
market. It moved with commodity
prices. But no longer. Instead of the
gold going down when the stocks went
down, instead of the gold going down
when the commodities go down, instead
of the gold going down when the
dollar goes up, all of a sudden people
are resorting to putting dollars and
other currencies in gold. This is sending
a signal that the confidence is
being lost in the entire fiat monetary
system. And the dollar, of course, is
the reserve currency of the world and,
therefore, a very significant event.
2010 Ron Paul 19:5
But there are even other statistics to
suggest that weíre in for a lot more inflation.
If we look at what has happened
to producer prices in the past 12
months, we find out that producer
prices have already moved up significantly.
For instance, finished consumer
goods are up 8.2 percent in the
last 12 months. Finished consumers
goods, excluding food, are up 8.3. Finished
energy goods are up 20 percent.
Now, that has not yet affected the Consumer
Price Index, but, in the months
to come, the producer prices will move
into the consumer products, so we can
expect a lot more inflation.
2010 Ron Paul 19:6
Now, the way we get in this trouble
is due to accepting some notions about
money that are false. We have believed
since 1971 that there should be no linkage
of our money to anything sound as
the Constitution mandates. There
should be no linkage of the dollar to
gold or silver, which then gives the
Congress leeway of spending endlessly;
deficits donít matter. We can tax and
we can borrow; but if we still donít
have enough money, we can depend on
the Federal Reserve just to print the
money.
2010 Ron Paul 19:7
Now, that has lasted for a long time,
and weíve been getting away with it;
but the market is more powerful than
the central bank and the politicians.
The market usually rules and they
come and say the money isnít worth
what it used to be. Thereís too much
mal-investment, thereís too much debt,
and therefore a correction must occur.
This happened with the financial situation:
there had to be a correction, the
bubble burst, and there are some adjustments.
2010 Ron Paul 19:8
But everything that we have done
over these past several years and even
over the last several decades has always
been to resort to more inflation,
print more money, spend more money,
which only produces a problem that
delays the inevitable. What I am afraid
of is the inevitable is here, and we
must do something about it.
