Is the Federal Reserve's dollar the heart of the financial crisis?
*Texas Straight Talk, by Congressman Ron Paul, April 12, 2010:
''The reality is that the Federal Reserve relentlessly expanded the
money supply through artificially low interest rates for over two
decades, and this expansion of easy money caused a wholly predictable
bubble. To a myopic Keynesian regulator, the bubble may appear to
be caused by greed, but in truth it is completely predictable that
humans will act in their own perceived self interest. If the Fed
wants to dole out artificially cheap money, people and businesses-
including Wall Street businesses- will line up to take it. We can
condemn this as greed, but the fundamental problem is Fed policy
itself. There will always be demand for cheap money, but we
should not allow the Fed to debase our currency and create bubbles of
false prosperity to satisfy that demand.
What the commission really needs are experts who understand free market
economics rather than big government Keynesian fantasies. The
commission has none of these, and has called no true free market
witnesses. That perspective would only distract from their
predetermined goals.
The commission will bemoan the complexity and inscrutability of our
economic problems, but the solution is simple: allow freedom to operate
in our markets. Allow U.S. financial, labor, and housing markets
to normalize without political interference. Though solution is
simple, and rather obvious, it would not be easy or painless, but we’d
be so much better off for it in the long run. It would require
admitting fiat money is a tangled web of monetary deception prone to
catastrophic failure. It would require allowing Americans to
choose a system of sound money, where the money supply and interest
rates are set by market forces rather than centralized economic
planners. Unfortunately, fiat money is like a drug to a Congress
hopelessly addicted to spending vastly more than the Treasury collects
in revenues. Because of this, our problems can only get worse and
more complex before they get better.''
*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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