It’s Time To Abolish The Fed And The SEC



On January 5, Ron Paul addressed the House Financial Services Committee’s hearing on the Madoff Ponzi scandal. He pointed out that Bernard Madoff was operating under the supervision of the SEC, that more regulation will only make the job of cunning fraudsters easier because they can claim to be approved by the government, and that two of the biggest government-run Ponzi schemes are the Social Security system and even the monetary system itself. These scams create a climate of fraud that sucks in the people and teaches them to imitate the government. This outrage must be stopped and it can be done by abolishing the Federal Reserve and the SEC, and returning to an honest monetary system based on gold and/or free competition in currencies.

Ron Paul: “For a good many years now, since the 1930s, every time a problem like this comes up, like in the Depression, we think that it is a lack of regulation, so we introduce regulatory agencies like the SEC, and, like after Enron, that was a major problem so we appropriate more money, and hire more people… that doesn’t do any good.

But this circumstance I think really makes my point, that the approach is completely wrong. [The approach] that the regulatory agencies are preempting people from doing bad things, just doesn’t work. There are millions and millions and millions of transactions. You can’t do it. All they do is give a false sense of security.

This is a perfect example of it. The SEC was involved with Madoff over the last decade. And that sort of gives the stamp of approval and says, “oh, must be okay”. So everybody’s guard is let down. This creates the moral hazard that allows people to make these mistakes and not to assume responsibility for themselves.

Does that mean we should ignore the problem? No! The problem comes because people commit fraud. And fraud laws are on the books. All the people involved with Enron were prosecuted under state laws of fraud, and the market took care of the stocks. But just adding on new regulations and spending millions and millions if not billions of dollars on regulating enterprise doesn’t do any good. It contributes to it. It is the problem.

We should look more to how the atmosphere is created by the Congress. If you look at the principle of fractional reserve banking, that in a way is a Ponzi scheme. This gets people doing things and building a mountain of debt… debt on debt, in this manner.

Also, if you really want to look at a big Ponzi scheme, and it is said too often that people end up doing what governments to, if we set examples, and believe me, everybody knows the Social Security system is a Ponzi scheme.

So yes, 50 billion dollars is horrendous, but what about an 8 trillion dollar loss in the stock market? So what do we do? We rush and pump in 8 trillion dollars. Where do we get the money? We create it out of thin air, furthering this whole idea of moral hazard and believing that we can create an unmanageable system.

It’s not the fault of the individuals at the SEC. They have an impossible job and they have to pretend they’re doing something to feel relevant the same way we do here in the Congress. We have to feel relevant we need the market to work, we need to get rid of the bad policies, the monetary system, and these mountains of debt. We say, well we’re relevant because we’re gonna hire more bureaucrats and we’re gonna appropriate more money we don’t have. And we’re gonna solve all our problems.

We’ve been doing this for 78 years, and we’ll do it again, but believe me, this will not solve our problems. We need to think about eliminating this whole regulatory process. And actually, we don’t need the SEC at all, and we could thrive even better and we would dwell on self-reliance, self-policing and the idea that people can’t commit fraud, but the government should not commit fraud either. We should not set an example.”

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147 Comments:

  1. Pingback: News Radio WEBO

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  3. I think Ron Pauls bookEnd The Fed” says it all when it comes to economics consequences. All countries can have a peaceful transition if they introduce competing currencies. Fiat currency is incredibly useful in terms of liquidity/loans but I want a sound commodity based currency for investment/savings. Presently, a person can invest in commodities but it is not nearly as easy or efficient as saving sound money.

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  4. Well I feel the Fed should be alive, but only when it comes to foreign policy. The income tax should either be replaced with national sales tax around 15% or a 30% tariff. Now personally I don’t favor Paul as much as I like Chuck Baldwin, because I feel his stance on immigration is better than Paul’s. Yet I never really will vote for Paul, because when it comes to foreign policy I don’t really care for him there. On economic policy I agree with him 99% of the time, but still not enough for my vote.

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  5. Pingback: Thank God I…am an American!!! | His Side | Her Side

  6. “Do we have to end fractional reserve banking at the same time?”

    Absolutely, and then we have to prosecute those who started it and end the torutre, secret renditions, AIPAC/Egypt Lobbies and the rest which was caused by the Federal Reserve.

    Then we can tear apart nine eleven like a fresh wound. Get rid of the Federal Fractional Reserve scam of crime and evil and give us back sound money.

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  7. If we end the Fed and print our own money, how do we make sure the new printers don’t cause the same kind of inflation?

    Do we have to end fractional reserve banking at the same time?

    Is there actually any gold in fort knox to back our own paper money?

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  8. americans are ASLEEP

    wake up for gods sake wake up

    henrymakow.com

    infowars.com

    goodnewsaboutgod.com

    AMERICA IS GOING TO BE IN THE WORST DEPRESSION ITS EVER KNOWN

    MY GOD even JIM Rogers says get rid of the federal reserve fractional banking system
    and he packed his family up and MOVED TO CHINA

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  9. Nail on the head, Dixon.

    RP is not talking about a gold standard, he’s referring to the Fractional Reserve Policies of the FED, and the fact that inflation is a constant as long as the US money supply is loaned to us at interest. This is clearly outlined in the book “Web of Debt” and movie “Zeitgeist: Addendum”. The FED is a non-private, non-government “entity” which propagates the deflation of the value of our currency, regardless of the inflation of productivity. Under a government-controlled money system outlined by Stephen Zerlanga’s American Monetary Act (http://www.monetary.org/American_Monetary_Act_version_10_feb_06.htm) the money (and therefore inflation) would be controlled by an ACTUAL government agency, subject to transparency under the freedom of information act. This worked before the FED, it would have worked with Lincoln’s Greenbacks, and it will at least improve, if not completely restore, our economy right now. However, another interesting theory is Jacque Fresco’s “Resource Based Global Economy”
    It is my belief that with the intelligent management of all of the Earth’s resources, and the removal of money and any monetary system, is mandatory in order to succeed as a global human race, at the rate of population expansion, technological innovation, and rapid degradation of the environment in the last century. It is hard for me to imagine a world absent of money, trade, or barter, but the more I research the concept, the more logical and alluring it seems. Find out for yourself. http://www.thevenusproject.com

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  10. Matthew Stone, Sean, jacob frankerton… and i might have missed other scumbags, that are “participating” in this discussion with only one purpose…

    to spam this place with loads of garbage, and to deviate from the main idea being discussed, which is to ABOLISH THE FEDERAL RESERVE SCAM and re-establish American Freedom again.

    It is UNCONSTSITUTIONAL and ILLEGAL, and discussion about what we should have instead or will there be enough gold is irrelevant.

    United States existed and prospered 140 years before the federal reserve leeched on and started robbing the Americans.

    D. Dixon

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  11. Great article on what I am talking about in terms of gold production to worldwide availablility and production. The total amount of gold available to be mined and added to the current numbers is 19% over the course of 25 years. Key quote is: http://www.zealllc.com/2007/goldprod.htm
    “Interestingly, according the USGS, global reserves in 1980 were estimated at 1.13 billion ounces. As of the end of 2005, global reserves were estimated at 1.35 billion ounces. So in 25 years global reserves have grown by about 19%.”

    Interesting opinion article on the change of the dollar from gold to float point. http://2ndlook.wordpress.com/2008/01/21/gold-production-the-world-financial-system/

    “In 1971 (August 15th), the world got the Nixon Chop – where even Governments could not redeem dollar holdings. The dollar was put on float. In little time, dollar value depreciated from US$35 per ounce of gold to US$225 per ounce – 80% reduction in value of dollar value.”

    There are my quotes for my current opinion. If you search on Google for gold production current reserves mined, you will find numerous sites with the same exact information all from investing companies.

    The ability to find, mine and put into circulation gold that is currently unknown is very, very small. As is the situation with oil, it is getting increasingly more expensive to mine gold out of the reserves.

    And as I said before basing your currency on Gold means you are equating your currency to a certain volume of gold. In cases where there is no more gold supply, then you simply change the volume of the gold that can be traded, which inherently inflates your currency. That is the key of gold, you cannot arbitrarily change your currency to a new value, it is always specifically tied to a commodity, and that commodity is specifically quantifable amount.

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    • Dave,

      None of that matters. The pricing structures can change to accommodate the growth of the economy. As long as a loss of purchasing power doesn’t occur the deflationary pricing structure change wouldn’t truly be deflationary.

      Do you understand? If I am wrong on this, please walk me through it.

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  12. time to organize and revolt

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  13. One more thing…

    “The high office of the President has been used to foment a plot to destroy the Americans freedom and before I leave office I must inform the Citizen of his plight.”
    PRESIDENT JOHN F. KENNEDY (10 days before he was murdered)

    I think the same people doing Gaza also run our central banks, so if you do tackle this, you’re a brave man!

    If this world does not find a real leader, a truely brave man, we are all toast… thats humanities real problem now.

    Remember you looking at the USA, but the whole world is failing.

    Oil and population we can solve if we get rid of this evil proxy government (FED) first, and fast!

    Now why did Bush just warn the USA against another possible 911.
    I think the USA’s real enemy lives in Washington!

    Good Luck Ron

    I already know you the American president, the USA needed yesterday, but missed… now what?

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  14. By the way, if you know how to get rid of the crooked politicians, then I know how to fix this financial “crisis” (fraud).
    Without which, this world is going to go to war, thats becoming more obvious by the day.

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  15. “The money powers prey upon the nation in times of peace and conspire
    against it in times of adversity. It is more despotic than a monarchy, more
    insolent than autocracy and more selfish than a bureaucracy. It denounces,
    as public enemies, all who question its methods or throw light upon its
    crimes. I have two great enemies, the Southern Army in front of me and the
    bankers in the rear. Of the two, the one at the rear is my greatest foe.”
    PRESIDENT ABRAHAM LINCOLN – 1866

    He is telling you what is wrong, 200 years in advance!
    Damn the Americans in congress are stupid!
    … or criminals!

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  16. Ron, you warm, but you missing the problem.

    FEDs (central banks) must not be private, all banks in the chain can do fractional reserves and price money, EXCEPT the central bank, because it should belong to the people, and people charging them selves to issue their own money is just stupid!
    The other reason is that when a FED charges interest it causes instability if that money is not taken out of circulation.

    But here is the thing you really not getting; the FED is raping the USA.
    This is the scam… the FED borrows 10 billion from China.
    Then it lends 9 billion to the banking inner circle to start say a casino’s and a banking HQ’s in China.
    Think about that, now the USA is paying for an asset it doesn’t even have!!!
    Now let me put it together for you, you are in hyperinflation already, but you are a reserve currency and thus depreciation can be traded for hyper debt.
    Look at how fast your debt is rising, in the order of $100,000 per SECOND.
    If they stop that, it swaps for hyperinflation!
    Yes the system is broken already.
    What the FED is doing is covering its tracks with BIS and the IMF and China, because if you guys wake up, you’ll see, China makes loan, FED invests in China, China now has too much money, they make another loan, and its an endless circular banking fraud.
    You don’t need regulation instead you need to send the FED administrators to jail.
    Ask yourself how its possible to have such a strong currency when your banks have collapsed and you have a 12 trillion dollar debt?
    That’s impossible, unless there is a gearing engine at work, look at why your debt is still flying up like a rocket and you’ll see the crime against the USA. The FED is more than dirty, its evil.
    You do have to stimulate the real economy, not bail bankers and you have to give the FED back to Americans. One other thing you need to understand, the same people that control your FED, also control my FED, and many other countries. There is no loyalty to the USA, it’s a world proxy government, and if China is a better investment, they have and will screw you, and still are.
    Wake up America, private central banks are evil!

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  17. couldn’t pricing structures just change on a gold standard to accommodate growth of an economy? I understand that dropping prices is considered deflationary by some of you, and thus bad. But, if the purchasing power stays the same with deflationary prices, there is no difference whatesoever.

    i guess it would be hard to do business 50 years down the road using decimal points? so, solution: change the notation or deal with it.

    fiat money has always failed. Rome went to a floating currency and their currency eventually collapsed. What happened next? The dark ages; where fuedal systems surfaced and economic progress was a thing of the past. Bammm! Then the return to a bimetallic standard by the Bank of England preceded the industrial revolution.

    Point is: You don’t want to use a value of measurement for your currency that can change drastically in supply: from excess printing or from speculation. Currencies are a value of measurement, that is all.

    Here is the problem and why we will never have an ideal government and economic policy to support an empire that can last for thousands of years: It is human nature to be greedy. Simple as that. A return to gold standard will no doubt happen after all of these fiat experiments ultimately fail. I won’t be alive to see it happen, but it will.

    Also, a gold standard would limit expansion of credit and thus could make economic expansion and slower. But, the expansion would be very REAL.

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  18. The big discovery in Utah? 150 million barrels? big discovery? America consumes 20 million barrels a day and thats 25% of the worlds consumption, so that big reserve would last 2 days… Gold is becoming more and more scarce. The only new reserves are only found in “fragile remote places of the world.” – National Geographic. There are 100 million people who mine for gold. Thats a 1/3 of our population and a majority of them are slaves.. Do you know how much waste comes from mining? A company had to pay 600 million dollars for proper disposal. It takes 15 tons of rocks to make one wedding ring worth of gold and there are a million people a year getting married in India.

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  19. im guessing quite a few of you posters are on amphetamines.

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  20. I haven’t joined this conversation in a while, but the central idea of a commodity backed currency has still not been debunked, and most of the misgivings of a fiat currancy have not been answered.

    Fact: there is not enough gold in production anywhere in the world to accurately flood the market in a way that would rapidly devalue our currency.
    Fact: a fixed commodity currency does not mean there cannot be inflation or changes to inflation. It does mean that your currency is not a floating point calculation which has more standard deviations from source information as to lend itself to errors and manipulation. Inflation or deflation is a function of printing or removing bills in such a way as to change the ratio of bills to owned gold assets.

    Sean as you have pointed out alot of our problem in recent years has been in our trade deficit. Which under either currencies could result in the printing of more bills, however under a gold standard there is a firm, easily calculated, easily understood inflation rate. The citizen should demand that their wages be increased to keep up with the times, and the ability to keep a standard of living is much easier.

    A fiat currency is backed by a moving target that changes rapidly and is subject to many different inputs, calculations, and interpretations. GDP is a result of including and exluding information to be inputted based on the interpretation of those who want to calculate it one way or another. This can obviously change as market emerge, change, mature and die. The result is a backing by something that is not easily understood, calculated, or have something concrete in which to represent its value.

    The point is this, if you want to force gov’t to report exactly what its doing so that the populous can demand change, or get the means (through increase of wages) to maintain a standard of living then you need a way of holding them accountable. A fiat currency does not lend itself to that accountability, therefore it could be concluded the only reason to have a fiat currency is to rob the people of the power to hold those in power accountable for devaluing their money.

    The whole point of a commodity currency is to have a hard asset that is scare and hard to devalue (ie gold production can not readily increase the total amount of gold already in existance). That results in a hard asset as which to control a ratio of bills to commodity. That ratio readily explains the fluctuation of inflation or deflation to the populous. That accountability reduces the ability to misinform the public, which then allows those in power who do not make the right decisions to be aptly removed.

    Again there is nothing democratic about a fiat currency controlled by a central, private bank that in essence controls the wealth of everyone in nation. Through manipulation of the publish inflation rate which may not keep up with the actual buying power of goods by the consumer, a transfer of wealth is defintely assured.

    By this I mean by charging more money for goods and services, but not paying people more to keep the net transfer of money exchanged the same, more money is paid to those who provide those goods and services and through the net of trades and sells, that passes up the economic ladder to the rich. Deflation reverses that trend which is why all of a sudden the press is rich with downselling the hit deflation that is currently going on to the US dollar.

    Fiat money and the Fed is a racketeering operation that continually robs from the poor to feed the rich and is set up to keep the general population misinformed and blind to the loss of their wealth.

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    • Dave Says:

      “The whole point of a commodity currency is to have a hard asset that is scare and hard to devalue (ie gold production can not readily increase the total amount of gold already in existance).”

      Really?

      Other than your crappy spelling. Do you really believe you can predict that say, my friends in South Africa aren’t coiled and ready to strike if their damn mines come on line once china or the middle east funds it?

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    • And please when you say “FACT” as in cite your source please:

      ‘Fact: there is not enough gold in production anywhere in the world to accurately flood the market in a way that would rapidly devalue our currency.

      Fact: a fixed commodity currency does not mean there cannot be inflation or changes to inflation.’

      Really? Fact? Sooo rad, please cite?

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