What happens when a doubled money supply makes its way into the economy?
*Texas Straight Talk, by Congressman Ron Paul, December 14, 2009:
''The Fed's Money Monopoly
Last week, in the name of protecting the little guy from Wall Street,
the House passed HR 4173 to increase the little guy’s false sense of
security in the financial system. This mammoth piece of
legislation would massively increase government regulation and
oversight in the banking industry under the misguided reasoning that
more government could have stopped faulty lending practices, when in
actuality it caused them. This bill would also greatly increase
the powers of the Federal Reserve, which too many in Congress still see
as savior rather than perpetrator in this mess.
One silver lining is that the amendment to audit the Fed is still
attached to the bill, and if it survives the Senate, the Fed will no
longer operate in secrecy. If any version of HR 4173 becomes law,
the Fed will be intervening and bailing out more rather than less, as
it will gain enormous new powers in addition to those it already
has. Whatever happens, the Fed and its defenders have seen that
people are becoming very wary of its methods of operation, and many are
downright angry at its very existence. Never again will the Fed
be immune from the scrutiny of its critics. This is very positive.
Because of legal tender laws that force acceptance of the dollar, the
Fed has absolute power over the currency. This absolute power is
leading to the absolute corruption of our currency. The money
supply has doubled in the last year or so, which is extremely
dangerous. The banks seem to be hoarding liquidity now but once
these dollars make their way into the economy, hyperinflation and
economic chaos will be a real possibility.
Every time hyperinflation rips through an economy, the middle class
gets completely wiped out. It is very alarming to watch the
purchasing power of an entire life savings reduced to that of a few
pennies. Those savings represent years of real labor, real time,
effort and sacrifice exchanged for corruptible pieces of paper that
politicians and bankers can destroy at whim.
Legal tender laws force the people to become subject to this risk for
the benefit of the rulers. Artificial demand for currency allows
the authorities to create arbitrary amounts of it to pay for wasteful
projects, like frivolous wars and an ever-expanding public
sector. This saps the private economy of jobs and purchasing
power, yet the temptation proves too great for politicians, time and
time again. Our government is no different. Although our
dollar has taken nearly a century to lose 98 percent of its purchasing
power, the fact that we are all obliged to participate in this slow
burn of the economy on pain of imprisonment is anathema to the
principles of liberty.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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