Ron Paul
2010 Ron Paul Chapter 21

Home Page   Contents   11 May 2010
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 21:1
Mr. PAUL. Madam Speaker, I rise to call attention to my colleagues of a vote that occurred in the other body today. Senator VITTER from Louisiana offered an amendment to the financial reform package in the Senate that was essentially—it was exactly the same as H.R. 1207, which is Audit the Fed bill. There was a vote on this, and unfortunately there were only 37 Senators that voted in favor of this Audit the Fed bill. This is rather sad because it is already in the House version of the financial reform bill, and in the House we have 319 cosponsors of this bill. So it is a very well-accepted bill by a broad spectrum of both Republicans and Democrats.

2010 Ron Paul 21:2
But the reason why this is so disturbing is because of the current events going on in the financial markets. Right now we are involved with bailing out Europe and especially bailing out Greece, and we are doing this through the Federal Reserve. The Federal Reserve does this with currency swaps. They do this by literally giving loans and guarantees to other central banks, and they can even give loans to governments. So this is placing the burden on the American taxpayers, not direct taxation, but by expanding the money supply, this is a tax on the American people because this will bring economic hardship to this country. And because we have been doing this for so many years, the economic hardship is already here. We have been suffering from it.

2010 Ron Paul 21:3
But the problem comes that once you have a system of money where you can create it out of thin air, there is no restraint on the spending in the Congress. And then the debt piles up, and then they get into debt problems as they are in Greece and other countries in Europe. And how do they want to bail them out? With more debt.

2010 Ron Paul 21:4
But what is so outrageous is that the Federal Reserve can literally deal in trillions of dollars. They donít get the money authorized. They donít get the money appropriated. They just create it, and they get involved in bailing out their friends, like they have been doing for the last 2 years, and now they are doing it in Europe.

2010 Ron Paul 21:5
So my contention is that they deserve oversight. Actually, they deserve to be reined in where they cannot do what they are doing. But initially, we need oversight, and that is why this vote of only 37 Senators willing to audit the Federal Reserve in a thorough manner and hold them in check, which means that there were 62 Senators that support the idea of maintaining a status quo with the Fed and that they will still be able to make these loans to these foreign central banks.

2010 Ron Paul 21:6
Now, what has this led to? It has led to tremendous pressure on the dollar. The dollar is the reserve currency of the world. We bail out all of the banks and all of the corporations. We have been doing this for the last couple of years to the tune of trillions of dollars, and even today it looks like the dollar is strong on the international exchange market. People are frightened about what is happening throughout the world, and they are buying Treasury bills and they are buying dollars and holding dollars. But the real truth is the dollar is very, very weak, because the only true measurement of the value of currency is its relationship to gold. For 6,000 years, gold has been the best measurement of the value of a countryís currency.

2010 Ron Paul 21:7
In the 1970s, we were very much aware of what was happening. Our dollar was depreciated to gold at 18 percent, and it ushered in a whole decade of inflation: prices going up 15 percent; interest rates up to 21 percent. In the last 10 years, our dollar has been devalued 80 percent in terms of gold. That means, literally, we have printed way too much money. Right now, we are just hanging on. The world is hanging on the fact that the dollar still is usable. But the whole problem is our financial situation is no better in this country than around the world. There is just a greater trust in our dollar because we have a military machine and we have economic growth in this country which is greater than others; but, quite frankly, it is quite weak.

2010 Ron Paul 21:8
So we face a very serious crisis. To me, it is very unfortunate that we are not going to have this Audit the Fed bill passed in the Senate. It has been passed in the House. Possibly we can salvage this in conference and make sure that this occurs. But since the Federal Reserve is responsible for the business cycle, for the inflation, and for all of the problems that we have, it is so vital that we stand up and say it is time for us to assume the responsibility, because it is the Congress, under the Constitution, which has been authorized to be responsible for the value of the currency.

2010 Ron Paul 21:9
As a matter of fact, the Constitution still says, it has not been amended or changed, but only gold and silver are supposed to be used as legal tender, not pieces of paper, not computer entries. This canít work. It is not working very well. The world is starting to recognize this, and I am really concerned about what is going to happen, because a currency crisis is much worse than a financial crisis. We have just been through the financial crisis. We are in the midst of it. But a currency crisis, which is on our doorstep, means that our dollar will be devalued.

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