Ben Bernanke to Ron Paul: “I will resist any attempt to dictate monetary policy.”

Event: Congress’ Joint Economic Committee
Date: 5/5/2009


Ron Paul: Welcome, Chairman Bernanke. I have a couple of questions, but first I want to mention that I find it awfully frustrating at times when we always talk about inflation and we only talk about the prices and say, “We have prices under control, there is no inflation”. We have to realize that the monetary base, the liquidity was doubled in a few short months. To me there is a lot of inflation out there. It’s already inflated, we’re in the midst of inflation. Because the prices haven’t gone up doesn’t mean we don’t have the distortion. And it was that system that gave us the financial bubble. Artificially low interest rates, the mal-investment, all the mistakes made. And now we’re trying to correct all that by doing the very, very same thing.

So, I think someday we’re going to have to address this somewhat differently because I’m not very optimistic that we can solve our problems with more spending and more borrowing and more inflation in order to solve those problems. But you’ve answered this question several times, I want to bring it up again and this question has to do with when will some of this liquidity be drained? And I don’t think the answer you’ve given is very specific and I don’t expect to get a more specific answer, but I’m going to try.

What if we have a situation where prices, which is not the best measure of inflation, but let’s say the consumer price index (CPI) is going up 8% to 10% and there is no economic growth. Where are you then, because that’s not impossible, it’s happened. It’s happened in our history, it happens throughout the world, it’s a common thing, it puts you between a rock and a hard place. If you drain, interest rates go up and the economy further crashes. If you don’t, you have the explosion.

Can you give me an idea what you precisely would do if you face the situation where prices were going up 10% with no economic growth?

Ben Bernanke: Well, I think that’s an unlikely scenario but we certainly would have to take steps to ensure price stability, because if inflation gets out of control we know it has very adverse effects on the economy, both in the medium and long term and so we would obviously have to address that.

Ron Paul: Which means you would have to raise interest rates?

Ben Bernanke: This is exactly the same problem which is always faced by monetary policy, which is in a recovery when the economy is starting to grow but has not yet gotten very far, perhaps, and unemployment is still above where we would like it to be. You know, you have to take away the punch bowl, as someone once said, in order avoid the inflation risk.

Ron Paul: I see this as the real problem because we practice economic planning through manipulation of money and credit. Socialism always fails because they don’t have a pricing structure. Interventionism and inflationism fail because we don’t have a free market pricing system of money; the interest rates. Therefore it fails, it comes to conclusion and inevitably it leads to a more socialized economy. Just witness what we’re talking about. Taking over companies, taking over insurance companies, taking over banks. This has been the prediction of the free market economists and yet we continue down this path of socializing our entire economy.

I do want to address one other subject and it has to do with transparency. You said you have made a commitment to transparency and openness, which is very good and there is a lot of us that want that. And I have dealt with that and have a legislation, HR 1207, dealing with that. But in a real sense, I know what you’re doing here, but the code really protects you from telling us some of the things we’d like to know. For instance, in 1978 when the GAO was given the authority to audit the Fed, it put the exclusion in there that you can’t ask these questions. Precisely, if I wanted to know about all your agreements and discussions with foreign central banks, with foreign governments, with international financial organizations, you have no obligation and you haven’t volunteered to do this. So is there a way that you would, since you’re moving in this direction, move and consider supporting a position where Congress has a right to know these very, very crucial, vital issues dealing with their money?

I mean, everything you do deals with their money. Would you ever be open to repeal some of these provisions?

Ben Bernanke: Yes I would. Now, if you let me be specific. We have many programs where we lend money, we take collateral, and obviously we are repaid. I want to assure you, first of all, that we have very substantial oversight and controls, we have precise internal divisions which monitor these things, we have an independent IG and we have an external auditing company, a private company which provides audits every year and has given us a clean bill of health on all our financial controls, all levels of Sarbanes-Oxley requirements. That being said, if Congress needs more information about the operations that we’re doing, exactly how we manage our collateral and how we manage our lending and those sorts of things, I think we can talk to you about providing more information about that and if necessary working with the GAO.

Where I’ll be very careful, where I’d like to be just very clear, there’s been some discussion of the GAO “auditing monetary policy”. I don’t know what that means, but I certainly would resist any attempt to dictate the Federal Reserve how to make monetary policy. It’s the independence of monetary policy which is crucial to the maintenance of price stability and economic growth in this country. And that would not be acceptable but if it’s an issue of making sure that we’re appropriately managing our systems and doing what we’re saying we’re doing in terms of our lending, we want to be open, we want you to understand that we’re taking every precaution to protect the taxpayer.

Ron Paul: Of course, the policy is the only thing that really counts.

  • Patrick Greene

    His answers, and all notFederal noReserve answers, are always odd and they have trouble explaining what they are doing because they don’t decide the plan – they are told what to do and they do it. Then they try to explain why they are taking actions that are destroying the country.

    The answer is because they are told to.

    Look at the Secretary of the Treasury – he is going after tax cheats. All he has to do is arrest himself and his cronies.

  • Peter

    “It’s the independence of monetary policy which is crucial to the maintenance of price stability and economic growth in this country.”-Bernanke

    Well, if what you say is true Mr. Bernanke, then why are our nation’s finances so screwed up? Time to open the windows and let some fresh air into the room buddy.

    My brother recently went on vacation with the owner of an American Insurance Company.The man is as wealthy as D.Trump. And even this very wealthy man felt like a peasant compared to some of the rich people that they ran into in Italy and Greece. Now where and how in God’s name can two little countries amass such wealth?
    With 1/80th the economy of the U.S. Especially after WWII. How?

    I’ll tell you how. Somehow,someway I suspect that a huge chunk of America’s wealth has been funneled across the ocean to fund these liberal countries.Because their big Government/Socialist ideals don’t promote free markets. Therefore, they need our money to be sent to be them, via the Fed ON A REGULAR BASIS. For decades now. That’s how. Hell, did you know that America pays for Ireland’s TV Cable? And that’s just what is made public.

    Which would explain the Fed’s defiant secrecy,Obama’s European popularity and America’s urgent need to clean house. Or in President Jackson’s words ” I’m going to shut down the Banker’s grip on America and rout you out like the vermin you are!”- Andrew Jackson

    God I can’t wait to read the front page news: ” Congress Shut’s Down the Fed”. One can only dream. Ha ha!. Bye bye Bernanke.Bye Bye Europe! Bye Bye Golden Parachutes. Bye Bye Fannie and Fred.No more free ride from America. From now on everyone will have to go back to earning money the old fashioned way,
    work for it.

    • …LOL… I’ll tell you how. Somehow,someway I suspect that a huge chunk of America’s wealth has been funneled across the ocean to fund these liberal countries… LOL… Because their big Government/Socialist ideals don’t promote free markets… LOL… Therefore, they need our money to be sent to be them, LOL… via the Fed ON A REGULAR BASIS…LOL… For decades now…LOL… That’s how…LOL… Hell, did you know that America pays for Ireland’s TV Cable?…LOL… LOL… And that’s just what is made public… LOL… Which would explain the Fed’s defiant secrecy, Obama’s European popularity and America’s urgent need to clean house… LOL…this very wealthy man felt like a peasant compared to some of the rich people that they ran into in Italy and Greece. LOL…

      I haven’t had a better laugh for ages, Peter, just incredibly funny! LOL!… and then the punch, -“Bye Bye Europe”… LOL… Please write more!

      • Peter

        OK Mr.Einstein (Brandulph).

        You’re response has the trademark of adolescence. Please stay out of the bars and try to study so maybe you’ll learn something while wasting your parent’s money in college.

        I guess all of the post-Obama-Campaign ACCORN Bloggers are out of work and have been hired by an obviously nervouse FED to harrass supporters of Paul’s bill.

        • Hi there Peter!
          – Evidently I have totally misunderstood you… I honestly thought that you WERE joking.
          – I am an EC citizens (Norwegian of birth, 70 years old in a few days, living in Germany and in Spain).
          – Hence, my reaction to your posting, linked with your reaction to my response, might sadly serve as an indication of how far away we (US/EC) might stand apart in our perception of the world in which we live, at times.
          – My Blog however,- – ought to serve you as an ample proof of the fact that we are on the same side of the “fence”, regarding the FED and related matters.
          – As for the sad fact that I evidently have upset you with my “European” interpretation of your posting, please accept my apologies.
          – However, Peter, for most of us Europeans, it is clear, that people anywhere in the world, linked to the “international bankers scam”, have the possibility of becoming as wealthy as any “Donald Trump” or whatever their name is.
          – Further on, the nailing of the FED, is not a matter of importance for USA alone. It is of vital importance for the whole world economy, and I trust you are aware of the fact, that the ECB is plain a copy of the FED… and that it is ran by the very same jackals.
          – Please hang in there, Peter, and fight onwards in this most important battle, fronted by an unbelievable courageous man, Dr. Ron Paul. (Europe by and large is unaware of it!)


          • Peter

            apologies excepted. I too apologize.And yes we are all in this together. On both sides of the pond.

            When I was young my family was wealthy. We had oil royalties from numerous oil wells across Texas and Oklahoma.But the US Congress passed a bill in the late 60s and revived it again in the 80s to penalize US oil wells that produced barrels of oil over a certain allowed amount.This was handled (of course) in the form of extremely high taxes. Hence, our money and life style dwindled until my father passed away a broken and depressed man. He felt betrayed by the very same country he loved and fought so bravely for.He was a wounded US Army Captain in WWII.

            It seems that the control of money and the power to make monitary policy has no morals or values. We all have a stake in this.

            There’s a lot more going on with the Fed than just controlling interrest rates and the flow of money.They have their hands in everything. Which explains the need for the secrecy. There is definitely a sinister element involved.The defiant nature and energetic attempts to side track Paul’s Bill is evidence of this. My father witnessed it first hand. Not a conspiracy. Reality.

            This is why I am amused at some of the bloggers here who ridicule Paul supporters as being Chicken Little. They really trust the Fed? Then why block an audit? What is there to hide? I’ve read every argument from the cost of the audit,the futility of an audit,the unplanned procedures of an audit to the detailed technicalities of an audit. So what?? Let’s have an audit and get it over with.

            Isn’t Norway one of the clever countries that uses the steam from underground geisers to power their energy needs? 🙂

          • – Well, Peter, you have witnessed the whole scam at close range, and of course, you are absolutely right when you write, -“There’s a lot more going on with the Fed than just controlling interest rates and the flow of money.They have their hands in everything.”
            – “They” are, and have for a hundred years or so, been the REAL government of the USA. Simple as that, Peter, simple as that. 😉
            – When I was young, and made my first long haul on my own sailing boat, my grandpa told me, -“Remember this one thing, son. When the going gets rough, and you stand there at the helm in a bad storm, never let go of the rudder! Never ever fall on your knees, folding your hands and pray to a god for help to get you through the heavy weather. ‘Cause if you do that, you will lose your cargo, your ship and everyone sailing with her… and of course… you will be gone too! Hang on to the rudder, son… never, ever, fall on your knees in prayers! If you don’t know how to handle your ship in a bad storm… you’re not worthy of her! Sail!.. navigate!… curse the devil… but don’t pray!”
            – Well, in my long life I have weathered many a storm… and it has always surprised me how frequently most Americans call on a “god” to get get themselves out of some “bad weather”. 😉 The misery of religion i guess.
            – And by the way, the country with natural energy in abundance under their feet, is Iceland. Inhabited by good old “vikings”. 🙂

    • longryder

      You boys kissed and made up yet? ..good..All of us here that are not working for the perverts in D C need to support each other ..Help educate each other ..and stand together by forming plans that we can perhaps implement as a group rather than as an individual..I was evesdropping into your emails Peter and Mr Brandulph and what I am ftnding so fasconating is that we all bring our own unique knowledge and experiences regarding this absolute lie of all lies valled the Fed..I read a story a year or so ago that I wish now I had kept. The author who only identified himself as a former Federal Reserve mid level employee stated that a substatial amount of our gold and silver reserves has been transferred to the Fedreal Reserve as payment due..and is now buried within Fed owned Bank somewhere in Europe..Perhaps just a loon trying to scare the crap out of us..But once again, how would we really know if that is true or false?..If true, than how can we ever hope to build a monetary system based on precious metals again..?

  • Alan Greenspan, Ben Bernanke, Henry Paulson, Phil Gramm, Larry Summers, Chris Dodd, and every C-level executive in mortgage lending and investment banking belong in jail for the accounting rules that were yo-yo’d to create the “credit crunch” to then justify defrauding Americans out of $700 billion and some. Political corruption is at the heart of this. The Watergate scandal with Nixon is naive and innocent in comparison to what has and is happening. What is missing are relentless journalists, wide scale prosecutions, and a 1960s-style revolution that forces a house cleaning. The Federal Reserve has done the same thing by yo-yo-ing interest rates and the money supply, by “creating” an economy when there is none. No one is better off today even after 20 or 30 years of living in the U.S.

  • Sam

    Only man in Congress who truly put his love for this country and truth before his comfort,career and life !

    You are My HERO and inspiration to make a difference..

  • Frank Collatt

    Praise God for RON PAUL!! He is right on point, and right on his suspicions of what is going on with the money at the Federal Reserve. IF the Federal Reserve was NOT doing “shady business”, they would gladly accept an audit. What business in America can operate this way, and stay afloat? Abolish the Fed, return our country back to it’s original owners(we the people), and prosecute those global elitist bankers that have decimated our society with their crap and outright theft. Ask yourself this question? Why in the world does America owe so much money to China? I rest my case, and thank God for RON PAUL. At least honest, integrity, and ethics still mean something to this Great American!!

    • Well spoken, Frank Collatt, but how about starting with the prosecution of all the corrupt politicians who are ON THE TAKE by those who have the power to create and issue money out of nothing?… i.e. the “Rothschild” clan.

      • Frank Collatt

        I AGREE!! In fact, maybe we need to create a company that hires U.S. Attorneys and Prosecutors!! From the daily news there is so much corruption, we have a shortage of attorneys assigned to prosecute all of these corrupt politicians and business people. Amazing isn’t it? Who would have thought America would have ended up headed in this direction? If other members of Congress would have the Ethics and Intergrity of RON PAUL, then we could nip this problem in the bud!! Take a look at Stanford Financial Services, the SEC was warned back in 2002′, and this individual was allowed to scam investors for another seven(7) years……

  • David Fernandez

    Audit the Fed, hell we should just get rid of it. Ever since we let them set up shop and control monetary policy, our dollar has lost value consistently. Either these guys are as smart as they want us to think they are or they are stupid as hell to lead our economy to the way it is now.

  • Cliff

    Thank you Mr. Paul. You are a true patriot. I love seeing Ben Bernanke squirm and we soon will be there. Contact your congressman and tell them to support this bill.

  • Wolfman


    • – Well spoken, Wolfman, well spoken!
      – The very essence of the problem, which you point at, must be attacked and dealt with. Remove the cause of the cancer, and all the symptoms will disappear by themselves.
      – “Let me issue and control a nation’s money and I care not who writes its laws.” are words uttered by Amschel (Bauer Mayer) Rothschild way back in 1838. And, in those words is embedded the reason for the “cancer” in the whole world ecconomy… a “cancer” made possible by the acts of corrupt politicians, world wide.
      – And at present in the US, the list of politicians who do NOT support Ron Pauls bill to audit the FED, are the names of US politicians who are on the take by the “Rothschilds”.

    • Steven Berry

      A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.

      For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murder is less to fear: Cicero Marcus Tullius – Born on January 3, 106 BC and was murdered on December 7,

      “There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties taken away from them, but will rather enjoy it, because they will be distracted from any desire to rebel by propaganda or brainwashing, or brainwashing enhanced by pharmacological methods. And this seems to be the final revolution.” – Aldous Huxley, Tavistock Group, California Medical School,

      “A popular government without popular information or the means of acquiring it is but a prologue to a farce or a tragedy, or perhaps both. Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.” — James Madison
      (1751-1836), Father of the Constitution for the USA, 4th US President Source: letter to W. T. Barry, August 4, 1822, Ref: Letters and other Writings of James Madison, vol. 3 (276)

      “Liberty, according to my metaphysics, is an intellectual quality, an attribute that belongs not to fate nor chance. Neither possesses it, neither is capable of it. There is nothing moral or immoral in the idea of it. The definition of it is a self-determining power in an intellectual agent. It implies thought and choice and power; it can elect between objects, indifferent in point of morality, neither morally good nor morally evil. ” — John Adams (1735-1826) Founding Father, 2nd US President Source: Letter to John Taylor 16 April 1814

      Do not wait; the time will never be “just right’. Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along. — Napoleon Hill

      • Pols

        A good, you found the copy/paste function on your computer.

    • longryder

      The “Wolf-Haddy” has it down hard and straightfellow Infadels..Thank You Wolf for your making us all pay attention to the facts..Bad Ben Bernanke like hid fellow thieves and traitors ro this Country is nothing but a shyster with a clean night shirt…Now I am trying to stay calm and focused here but I am going to challenge anyone that even hints that Bernanke is anything more than a water boy for the slags that Wolf named in his BLOG..Tell me gentlemen..where am I in error here?..What has these den of thieves that make up the core group of the Federal Reserve Corp. done since crashing our party back in make America a better, more financially solvent, more productive and better country for we the people to live in?..How many here and I know there are some pedigreed and brilliant thinkers here..How many of those fellas objected when our filthy self serving Congress decided that we were mo longer a Republic..but rather ..we were reborn as a Democracy..When did that change take place?..Who authotized it? What the hell..difference is it ..right?..WRONG..My hunch is that the bosses at the Fed..ordered the subtle change around the time when we were busy fighting a war they probably started ..I will guess about 1950..Amd we just like lemmings marched our stupid asses closer and closer to the cliff..haven’t we? Well I am not a scholar like most here ..But let me take a stab at why this Denmcracy lie is so important to the bosses..Democracy’s anywhere and everywhere are doomed to failure..WHY? Because -and it is being played out before our very eyes gents- Because Democracy says that the Majority rules..period…Which is ok when you have leaders that are not part of the swindle..but when everyone turns out to be just the same as the previous liars and thieves..and they are the majority (liberals).than they know that majority rules..NOT OUR GOD_DAMN CONSTITUTION..that is exactly wha thas happened to us fellow slaves..We let them get away with our money..our dignity..and if they are not stopped soon ..and with the voting majority officially makes us a Democracy..The Costitutional Law of this land will simply have no power all..A Republic on the other hand will always consider the Constitution to be the final authority as to what is legal..That is why rhe Founders made damn sure in the Federalist Papers which is never taught at our failed Ed system are so damn important right now..Where am I in error here? How many of us has written letters to the Perverts in Congress pointing out this travesty of thinking we were just going to allow them to rape our Republic to death was poor thinking on their part..Tell me gents I like making to much of this..? Is there anyone here that thinks that anyone other than the secret elite within the Fed are the monsters who own our debt?..What does that mean..?..Educate me .. I have a great 6 minute video that tells the difference between Republic and Democracy much better than I did ..Can I upload that here so everone can have a copy of it..educate me Rebels..BUT please do not dignify any of those tramps at the Fed..They are slime balls worthy of only out anger and our vows to make them pay ..some day

  • Dr. Paul, Thanks for taking on the independence of the FED. These guys think they are above scrutiny, which, to me, makes it more obvious that they are operating without any oversight (of any consequence). Hang ’em high. Its about time to return to the intent of our founding fathers. In earlier times they may have been tarred and feathered (more likely candidates of being drawn and quartered). I am so tired of looking at the smug looks of Bernanke and Geithner. Sometimes I think they are on the verge of laughing at the questioners. Is there anybody investigating the FED, SEC or Treasury? Surely they are not above the law. (Oh that’s right, Paulson tried to pass the original bailout with the stipulation that no matter what he couldn’t be held legally responsilbe for anything he did (or didn’t do)).

  • Bernanke said it would not be acceptable for our Congress to dictate monetary policy.
    It would NOT be acceptable for our elected representatives to represent us.
    Wow, what exciting times we live in.

  • Phil Alford

    Everyone here needs to read “The Creature from Jekyl Island” by Griffin. The “Federal” Reserve does not serve the American people, it serves the World Bank, the CFR, the Round Table, and the mega wealthy. Remember the “Federal” Reserve is a private Corporation.

    Ron Paul knows what is in this book and others like it. Thanks to Ron Paul, who by the way got an “A” on, the word is slowly getting out about the corruption in government, both in the U.S. and abroad.

    • This private corporation we call the “Fed” (what a joke) has
      bled every aspect of this country dry. There is not anyone
      or anything that has been left untouched by this monster. They
      were responsible for JFK’s assassination! There is no doubt about this. These bastards need to be rounded up and
      executed for all the suffering they have caused! I hope to God that there is a revolution in this country like in France!
      Thomas Paine said “that revolution from time to time is good.” We need to end the “Fed” once and for all!

  • M Russell

    An honest man in Washington!!!???? You are appreciated more than you know,sir.

  • Samuel DiMuzio

    Ron Paul is onto the federal reserve manipulating money/interest rates. And Bernanke cannot shake him. What is frustrating are my three reprensentatives (house John Mica and senators Nelson and Martinez. These three just will not fight to take back control of the banks and funds. Honestly, these three are whimps and I am ashamed of them.

  • Taggart

    I just want to say thank you Dr. Paul, you’re a true patriot! It’s good to see there’s still a Congressman with a backbone who’s willing to stand up for WE THE PEOPLE and OUR CONSTITUTION! The truth will eventually overcome all the corrption in our country…GOD BLESS Dr. RON PAUL, you’re in my prayers Brother!!! KEEP THE TRUTH ALIVE…

    • nothin will happen if we sit back and watch, i honestly dont think theres enough people trying to change things not just for us but for the next generations of people. or not enough people who are realizing whats goin on rite in front of them. as long as people are comfort in there own zone then they dont want to change, and this makes it difficult for us and i can understand now why alex jones becomes to frustrated

  • Casey Pena

    Woot!! Rip him a new one!!!

  • What is so frustrating is the fact that Fed policy over the years has been a disaster. But, the Fed never learns, does not seem to care about history or past results. Just continues along the same old failed past. With that said, why be concerned about policy suggestions which might just be a whole lot better? Is it pride, ego or no-one is smarter than the Fed?

    • kyle

      how about this: they want to create another depression, because it is in THEIR best interest.

  • Pingback: Paul vs Bernanke « Rants & Ravings & Other things I find interesting()

  • thanks congressman Dr. Ron Paul, i can safely say your my idol and i just wish in my lifetime (im only 20 lol so still a long way to go) that i will be as smart and grow the balls to stand up to these people. I am very intimdated by the courts and the law and am trying to learn the laws and my rights.
    i just wanna show my appreciation for standing up for the people and as i am canadian and have never been to america i still realize what happens in america effects us tremendously.
    For all you people that are looking for ways to contribute i can give u a few examples of what i have done. I have started a facebook group down with one world government, i have been following the co-sponsors to the HR 1207 bill to AUDIT THE FED, and have been asking people and calling in myself, to the reps who have not co-sponsored the bill. also i have been leaveing messages on youtube, other facebook groups, and forums. and just for spite have started going into chat rooms and jus chatting it up with people and trying to raise awareness in the hopes even one person looks into this or even does a little research, becasue a little research can go along way. peace to all and i hope we get out of this mess before its to late,,, luckily i have a cabin tucked away here in the maritimes in case it gets to that point aha anyone is welcome to join 🙂

  • T Reamonn

    Soon he’ll have to bend over and take it.

    • NW

      Bernanke needs to be arested… not given quarter to continue to stel the taxpayers money….

  • Narf

    I’ve noticed Bernanke is increasingly squirming under Paul’s questioning.. 124 and growing!