Ron Paul On The Dangers Of Hyperinflation

In the first of a series of videos that will take us on a tour around Ron Paul’s Congressional office, the Congressman explains the dangers of hyperinflation and warns that it might eventually lead us towards totalitarianism and destruction.

Ron Paul: “This is a visual demonstration of what can happen with runaway inflation. It’s entitled ‘German Hyperinflation’.

The one thing about the destruction of money is that it can be gradual and insidious, and not really rapid, but the end stages of the destruction of a currency can go much quicker. Sometimes it’s slower than one would anticipate, and at other times it goes much faster.

Take for instance right here, in September of 1923 in the German inflation, 10 million marks would buy a loaf of bread. But it wasn’t too long after that, a few weeks later, that it took 50 million marks to buy, and then a month later it took 500 million, and of course the whole thing fell apart.

So, nobody should be reassured because they don’t see a lot of price inflation going on right now. What they should be looking at is what the Federal Reserve is doing: printing money like crazy. The day that we have to dread is the day the people lose confidence, or the world loses confidence in the dollar, because that’s when prices will soar, interest rates will go up, and then we will be forced into devising another monetary system.

We already have seen the destruction of the dollar based financial system established in 1971. It has ended, and we’re going through that right now. But the only thing we’re trying to do is prop it up by more of the inflation.

And if we’re not careful, we’re going to get exactly what the German government and the German people had to put up with back in 1923, and what happened as a consequence. It was the political disruption that came from the economic disruption of the destruction of a currency that ushered in the age of Nazi Germany and the age of Hitler.

So, this is why I’ve always had such great concerns about the monetary system, not only because of the economic danger that it poses for us, but the political chaos that might result as a consequence, and then of course that is the destruction of our personal liberties.

The Founders understood this quite well, and that is why they had a prohibition in the Constitution that we could not emit bills of credit, that we could not print money endlessly. And that is what we’re doing, so the sooner we wake up here in the Congress, and the sooner the American people wake up to the danger of hyperinflation, the better it will be for all of us.”

  • David

    The Nazis gained power during the period of deflation beginning in 1928. Before then, the Nazis had very little appeal.

  • Rose

    Hyperinflation and devaluing the dollar seems like the ground work to a one world government. Sure I may be off my rocker with that statement, however nationalizing banks is the beginning of a change that will be next to impossible to undo. Then what? The gov. goes broke everyone (who, the UN)steps in then what? This may oocur perhaps not our life time, but our kids and their kids. How will nationalizing banks really effect us? I realize we already have a level of socialism in the USA (welfare, medicare, public schools, political correctness with loaning money hince our big mess). Am I way of base here? Educate me!

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  • Its me

    Hey Ron,

    BTW your receptionist Anna is a cutie! wow!


  • Alex

    I wish we had a congresman like Ron Paul in Spain.
    I only someone could explain these things in Spain AND BE WATCHED ON TV!


  • Joe

    Mr. paul is not just pointing fingers, the fact is that in a fiat system without anything backing up the money, the only thing that gives the money value is how much of it is out there. Whether it is in the financial system or in your back pocket, it is still out there and furthur devalues what money we DO have. Once the amount of money out in the system hits critical mass, we can expect first inflation, and then hyperinflation…Mr. Paul knows exactly what he is talking about. It may even be too late to stop already. Sure, the Germans may have had the system in for 10 years before their inflation problems…ours have been going on since the 30’s. Once it starts rolling and gets a good head of steam up, it will start to happen faster and faster. More money DOES = inflation because the only thing that gives it any value is how much is active. When we print trillions of dollars in a matter of months, it is only a matter of time before the effects trickle down and a loaf of your grocery stores “cheap” bread costs 5 times as much because the money ITSELF is less valuable. Not because there is less of the bread. When you have BOTH working against you, less supply than you have demand AND so much money in the system that it has no value, then you are in HUGE trouble.

    • Sean

      Well actually there are two different view points. The one i’m describing and the one ron pauls describing.. The one i’m talking about is considered dominate bc of historical data proves it to be. 99% of economists from major universities agree with me.

      • Sean

        if you actually read the austrian theory of inflation and the value of money. It will tell you that its not just more money= less value.. it goes through all kinds of different variables. It says on wikipedia that it is too dificult to describe. If what your saying is true, everybody in the production business would look at a chart of how much money is going around and adjust their prices accordingly. Thats pretty far fetched.. You talk about all this money getting put into the system, but you dont talk about how much money is being taken away by other countries. We have a one trillion dollar a year trade deficit to factor into our total money supply.

      • Sean

        Actually, we don’t see a dollar devalue unless we print money without adding it to the deficit and if a country has a high level of inflation, it will naturally fall against gold or foreign currencies… The only thing we really have to worry about is if people sell our currency to buy foreign reserves, but we have such a high trade deficit, that it will never happen.

      • Matt

        Cite your source? And provide background?

    • You are right, Joe. But I think, Ron Paul is like Socrates in Athens.

      • Joe

        Hey thanks much…He IS Socrates in athens, but I don’t think it is because the others think he is wrong or crazy. I believe it is because the economy is ORCHESTRATED to crash…it is supposed to. That’s what they want, so they aren’t doing anything to fix it. Think about how easy it will be for the international bankers to push through the North American Union, and remove whatever freedoms we have left if the people are will ing to give anything up just to be able to feed their families. Make them hungry enough, desperate enough and scared enough and they will accept anything that is offered to feed their families. I also don’t believe the “economists” really even know what they are talking about either, because they have been learning what the governments WANT them to learn.

  • Sean

    It is a true fact that the federal reserve doesn’t care about inflation in normal markets. When we worry about inflation, we worry about the price of gas, steel and other commodities. This is what effects federal interest rates and inflation in other markets. It is the reason the fed raised interest rates in 1979 and 2005 causing both recessions.. We can see the price of oil rise due to rising world competition.. I’m pretty sure we don’t have to worry about hyperinflation because the federal reserve and treasury are putting money into the financial markets and not into consumer hands. Hyperinflation is a direct result to an imbalance of supply and demand.. If it was just more money=inflation, than we wouldn’t be seeing our dollar continue to strengthen over the past 4 months with all the money we’ve created this past year.
    We have an unreal trade balance that is sucking our economy dry and high interest rates have made it impossible to create new money. In fact, we would of had to create an extra 1.6 trillion dollars in order to keep up with our gdp and trade deficit from 2000 on.

    • Sean

      These german practices were going on for ten years before they had any inflation problems. The reason that inflation didn’t occur was bc necessities were rationed.. It was confidence in the market that led to the hyper inflation.. It was too much spending that caused the problem, not too much money. Federal interest rates is a macro level manipulation to control demand.. The federal reserve raised interest rates to stop hyper inflation from occuring because of the high demand and prices of oil.. This is what we have to worry about. We should start to understand why we took the actions we did and how we can fix them instead of just pointing fingers to whomever seems most convenient.

    • Justin

      The reason the dollar is rising has absolutely nothing to do with anything other than it is still viewed as the “safety” haven. The de leverage trade is unwinding across the world as TRILLIONS of debts have to be unwound and come home. That trade will end soon enough.

      Never in the history of mankind has increasing the monetary supply by such astronomical amounts resulted in deflation and a rise of a currency.

      This game is over as Dr. Paul has said. The amount of leverage still out there accounts for 10 times world GDP. It will have to collapse and be written off completely, which begs the question who owns what and what political system replaces it? You can bet it will not be a happy time.

      A fiat regime is about confidence and nothing more. You can see now what is happening in the UK as confidence is eroding fast. The dollar chart is pegged off on this latest rally and is tired, it will resume it’s decline and the bond market will collapse.

      It’s just time to wake up. You are being lied to by a corrupt fiat regime run by people without any ethics or morals. Only the pursuit of unearned riches.

      • Matt

        The game is over, lol. Sometimes people are the equivalent of ‘im right once a business cycle’I find it humorous you question the view that the market is a dummy when treating the dollar as a “safety haven”? Isn’t the market the smart one we depend on? When do you say the market is right or wrong, oh wait, just like everyone else.

        Meep, and ouch, apparently Dr. Paul didn’t know much about how the 1980’s were going to unfold? When would you say:

        “Today, thanks to 67 years of central bank control over the
        money supply, we face an economic and political crisis greater than any we have faced before.

        We probably will see widespread civil disorder in the 1980s,
        as a direct result of our faltering economic system. The dollar has been damaged by decades of interventionism, and Congress has legitimized depreciation of the dollar and forced redistribution of wealth through corporate and social welfare schemes.”

  • Mark L

    Well stated. As for the quote at the end, it’s actually LOVE of money which is the root of all kinds of evil. Jesus said that. However, devaluation is also evil, and I can certainly see the relation between the two.

  • Frank

    Today I met several people in the super market that had relatives, which had been laid off in the last month. The city I live in is small and much poorer then one would like to imagine with beautiful water front. I support you Ron Paul and I want you to stay strong and continue your effort in displaying your civil duty. Thank you!