Ron Paul: How The Fed Creates Inflation

Congressman Ron Paul comments on the Federal Reserve’s decision to maintain interest rates and raises concerns about inflation on June 25, 2008.


  • Jimbo

    While the effects of the housing market implosion continue to ripple throughout the economy, the Federal Reserve resorts to its favorite bailout strategy of cutting the fed funds target rate. The slightest sign of weakness in the US economy prompts the Fed to blindly jump to action even as more prudent heads prevail in Europe. Weakness in the dollar combined with the global commodities boom resulting from the industrial emergence of China and India have affected a dramatic rise in core inflation that further threatens our fragile economic stability.

  • Ann Raabe

    Why would J. P. Morgan fight or pretend to fight? Good question. Maybe he loved this country or maybe all his money was in Gold. However, securities (a promise to pay all or part of the principle or interest on a debt) otherwise known as FRNs, are inflatable. During the Depression, money was not in circulation and not inflatable. Plastic or elastic in this case is inflatable The gold standard was basically abridged by Proclamation. All the gold was collected and supposedly put in Fort Knox. If however, you had a bunch of matchsticks and only matchsticks could be used for money, then the one who makes the matches is the richest. If nobody else is allowed to make matches, then you are set for life. But can an act of Congress, repeal a portion of the Constitution? No. Definitely not, right or wrong it is unlawful for us to be on any other than a Gold or Silver standard.

  • Adam

    I’ve been a longtime Ron Paul supporter because he was the only candidate who seemed to fight for our civil liberties.

    I’m still not clear on the economy, however, so I would appreciate it if someone could answer a question. I know one of his major issues is to abolish the Fed and reinstate the gold standard. From what I’ve read, banks were generally in favor of the Fed because they can get everyone into debt because we have to take out credit in order to maintain our standard of living despite inflation.

    Tonight I just read about the American Liberty League. (So much for our public education teaching us modern history) What I don’t understand is why would JP Morgan fight FDR about getting off the gold standard if it would help him become more powerful? It doesn’t seem like he needed a coup to lead one of the most powerful organizations in the country.