Ron Paul gives us his thoughts on how the markets lost confidence and what can be done to address the real problems.
I wanted to visit a little bit with you about the press conference that George Bush held today. Once again, the President addressed the nation for the purpose of restoring confidence to the market. He gave a five minute talk and during that time I noticed that the stock market went down approximately 200 points.
This to me is not a surprise. It is true – there is a loss of confidence, and confidence is what is necessary. But quite frankly, if over a trillion dollars worth of new credit pumped into the economy didn’t restore confidence, a five minute talk by the president is not going to restore confidence.
This loss of confidence is a consequence of the type of system we’ve had for so many years because it was built on a confidence in a system that was non-viable. It’s just discovered that everything that we’ve been doing for so long – the accumulation of debt and all the malinvestment that has gone on, the overtaxation and overregulation – it’s finally given out. And it’s justified for the markets to lose confidence, and a [...] talk is not going to solve that problem.
It’s only going to be solved when we address the real problem. And the real problem is big government big spending, deficits, a foreign policy that contributes so much deficit financing for us.
So, another talk is not going to work. Another program, another bailout package will not work because they’re doing exactly the opposite of what they’re supposed to do.
When the system is built on an inflationary monetary system, the excessive debt and the malinvestment and the dislocation [...] needs correcting, and they’re doing everything to prevent that correction. This is exactly what they did in the Depression, and now we’re repeating the same mistakes.
So yes, we need a restoration of confidence, but it will not come with another program or another five minute talk by anybody.
Ron Paul answered additional questions today. Watch his response here…