Ron Paul: Don’t allow the Fed to destroy our money!

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A Spooked Economy in October

by Ron Paul

Last week we received worse than expected unemployment numbers, challenging recent claims that the recession has come and gone. Also, as the economy continues to suffer the after effects of the Federal Reserve-created bubbles of the last decade, there is renewed interest in gold. Fears that the Federal Reserve will pump even more money into the system had caused the price of gold to reach new highs. Also contributing to enthusiasm for gold is continued instability in the banking industry, symbolized this week by fraud allegations that have caused many banks to halt foreclosure proceedings, thus further destabilizing the housing market. Yes, October has a reputation for being a scary month economically and this month is shaping up to be frightening, as well.

The Fed has been wreaking havoc and devaluing our monetary unit steadily since 1913, and greatly accelerating it since the collapse of the Bretton Woods agreement in the 1970s. This severing of the dollar’s last tenuous link with gold allowed the Fed to create as much new money as it pleased, and it has taken full advantage of this opportunity.

In 1971, Gross Domestic Product (GDP) was $1.29 trillion. Today it is $14.6 trillion, nominally. But adjusted for all the inflating the Fed has been doing, it is only $2.73 trillion, which constitutes only a 1% real increase per year! So with all this extra money going around, we may appear nominally wealthier, but the reality is, we have barely moved at all. This is unfortunate especially for the prudent, conscientious savers, whose nest eggs are constantly being devalued. Unless of course, they have saved in something out of the Fed’s reach, like gold. While the economy has basically been in a holding pattern against the leeching of wealth by the Fed for 39 years, gold has seen an inflation adjusted increase in value of over 5% per year, if measured in 1971 dollars. This is due to the Fed’s ability to make dollars plentiful. And yet, this is the only tactic the Fed can come up with to rescue an economy already devastated by “quantitative easing”, as they call it.

The turmoil in the housing market demonstrates how disastrous it is to flood the economy with fiat money. Latest events with foreclosures are good examples of mistakes made in the market, in this case, by the banks, in the rush to soak up manipulated currency. This is why the truly free market depends on sound, honest money, free from false signals of artificially low interest rates.

The government finds ways to spend money even faster than the Fed can create it, bringing our national debt well past the point of the taxpayers ever being able to pay it off. Other nations who, in the past, have eagerly bought up any amount of debt we produced are now starting to resist. We are reaching a crucial point at which the dollar will no longer function, and in the absence of a functioning dollar, restoring sound money will be the only alternative.

The truly scary notion is that those in power might allow our system to collapse so chaotically to the detriment of so many people rather than simply obey the Constitution.

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399 responses to “Ron Paul: Don’t allow the Fed to destroy our money!”

  1. soulsurcher

    Down with Fed reserve!!! Down with the IRS!!!! Shame on them

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  2. Jack

    If I were President, I assert that by exercising the following prescription, I could arrest the present monetary failure in less than a day; and I could establish a perpetual, sustainable solution, or absolute economy, in perhaps less than a month.

    You may of course never elect me. But still the purpose of this page is to explain how to do so — how to immediately transform unsustainable systems of usury into mathematically perfected economy™. We have already sufficiently explained why.

    This program of course could be implemented by any nation, collection of nations, continent, and so forth. While world leaders can and have stood in the way of mathematically perfected economy™, nonetheless I further assert that mathematically perfected economy™ is inevitable not only for the reasons given already, but those to follow as well.

    Obviously, present world conditions call for this resolution loudly; and so, unless mathematically perfected economy™ can indeed be invalidated, those who will neither hear nor heed immediately, therefore condemn the rest of us to the calamity before us.
    This proposition is no casual or recent matter of relatively little development or survival of test cases. Its initial form was developed seriously since early 1979, before I provided computer models to the Reagan Administration just a few years later. Those models of course readily tested for interest free cases. Primarily however, they projected not only the otherwise unforeseen federal debt which President Reagan’s two terms eventually accumulated. They further anticipated in 1983 that for expected interest rates and growth, that public and private debt would multiply at rates which would develop terminal sums of U.S. debt, and potential world wide monetary failure. Our projections determined this would occur at approximately 2010 AD.
    Essentially then, the designed power of those elementary but potentially exceedingly accurate models, was to calculate the maximum possible lifespan of any purported economy subject to interest. You can still download the models from our pages.

    PRIMARY PRINCIPLES

    All subjects of contemporary, pretended economies have critical interests in veritable solution; and rightly, only by prevailing understanding can a publicly approved solution ever have emerged.
    That we can say there are legitimate representative governments, true representation always seeks and finds not only the ideal, but the due, certifiable approval of their apprised people. Given the critical circumstances, just such a process is to be expected now more than ever.

    Because the problems and consequences before us are universal, a model for real solution must solve for the innate, sustainable interests of all. That is, it must solve for the world — not just a country, not just a generation, not just a time, not just a class, not just a disposition.
    Effectively then, we can only seek to prosper so much as our contribution to the pool of wealth; and we must seek to prosper only so much, in whatever way cannot and will not deprive others of the opportunity to prosper likewise.

    No matter the issues necessarily addressed then, this is the primary object and final test not only of this proposition, but of any prospective/purported solution.

    WHAT IS THE CAUSE OF FAILURE WHICH WE MUST MOST URGENTLY ARREST?

    As we have said, the critical breaking point of the pretended financial systems of the world is predicated by irreversible, perpetual escalation of artificial sums of debt, which ultimately exceed a finite capacity to service debt. Vast, persistent housing foreclosures, marginalization of industry, and destruction of credit-worthiness are obvious, inevitable consequences of the final stages of this artificial, escalated multiplication.

    In the terminal stages of its practical lifespan, such a system requires paying the vastest costs of servicing debt out of circulation. Yet these very same terminal sums of debt finally destroy the last remaining possibility of sufficient credit worthiness to assume further debt. So much as the vital circulation can only be replenished by further borrowing then, the very multiplied indebtedness of the final state makes it impossible to justify “credit” as would maintain a vital circulation. It is at this juncture then that “the economy” suddenly collapses.

    To prevent this final, potentially sudden collapse, it is necessary therefore to prevent a final/terminal cycle of deflation.

    HOW TO ARREST THIS DEFLATION AND FURTHER DEVELOPMENT OF THE FAILURE IMMEDIATELY

    1. To avert a terminal cycle of deflation, and to arrest further development of the failure by further multiplication of indebtedness, we must immediately suspend all payments against debts subject to interest to “banks” (or “credit”/”lending” institutions), and from all intermediate “banks” to the “central bank.”

    2. To sustain other incidental lenders across a brief period of transition to mathematically perfected economy™, the accounts of small, private creditors (home owners carrying the paper on a sale of their home for instance) would be credited (artificially) with so much as the payments they are accustomed to receiving, without taking these payments from the debtor.

    3. Any other possible conduits of deflation are sealed, including taxation. Federal taxes are suspended and the states are asked or required to suspend state and local taxations.

    4. Accounts of retired persons are credited with advance sustenance as will be completed in later stages of what yet amounts to a more or less immediate recovery (4.g.), not just to pre-collapse conditions, but to a level of prosperity several times that.

    5. Necessary government programs are funded temporarily by new circulation, with the tolerance for this brief measure to sustain necessary government activities being the tremendous present deflation of the circulation.

    Effective immediately then, not only would critically marginalized home owners be able to stay in their homes, *all* home owners and all surviving industry would immediately have the entire former costs of servicing debt available instead to sustain necessary commerce. Immediately, industry would not only avoid and survive the imminent failure, but prosper across the transition period to substantial further extents which have otherwise been impossible.

    A capacity to sustain unlimited further prosperity is eventually provided by converting the present system to mathematically perfected economy™ — effectively concluding a transition period existing only so long as necessary to set up accounting infrastructures, and to refinance debt under mathematically perfected economy™.
    Meanwhile, there is no deflation; no need to borrow further to maintain a vital circulation; and we immediately prosper to whatever further degree we are relieved of servicing the existent sums of artificially multiplied debt.

    HOW TO AVOID “CAPITALIZATION” OF (STEALING) THE LIQUIDITY SUDDENLY REALIZED

    To avoid theft of the liquidity which would suddenly be realized:
    Prices would be frozen. Commodities traders would be eliminated from the chain of purchase. Products would be directly delivered to markets by natural processes of distribution, without unearned taking. Commodities traders would be paid for their existing assets with a separate currency, temporarily at least dedicated to unearned taking. Just settlement of their unearned wealth would be settled later.
    Having relieved not only the pressures of escalation, but the whole weight of servicing existent debt, no reason persists for bona fide industry to raise prices; and, granted such substantial further liquidity under existing price states, industry would immediately be free to sustain and generate further employment, while sustaining profit margins substantially beyond what was previously possible — if and only if truly free markets are liberated from predation.
    “REPAYMENT” OF ARTIFICIAL DEBTS TO THE CENTRAL BANK(S)

    To resolve all debt to the unassented and unlawful central bank(s), I would scribble onto a piece of paper, “Will pay to the bearer upon demand, infinity.”

    This like irredeemable promise to pay would be offered with a cordial invitation to challenge this resolution of all debt in a fitting court of law (manned of course and accountable to the people), where on behalf of the people we would argue:

    1. that inherently no private entity has any right deprivable from any other private entity or person to issue irredeemable promises to pay (“Federal Reserve Notes”);

    2. that therefore on the one hand, the paper I have submitted satisfies the purported obligations;

    3. or on the other hand, there is no legal basis whatever for the purported debts;

    4. and most of all, that as the implementation of interest inherently multiplies debt in proportion to an obligated circulation, the imposed currency cannot constitute lawful obligations to “repay” debts which ultimately are purposely made insoluble by the very artificial conditions imposed upon the arrangement.

    This of course would not resolve whatever assets have been acquired by equally/potentially illegitimate, unlawful means.
    For now, like the resolution of assets acquired by commodities traders, I leave it to the people ultimately to determine whether they want to go after these assets, or whether we shall just call termination of all this good enough.

    But should these banks or any advocate of the currency they have imposed upon us make any substantial effort from this time forth to obstruct or even discourage us from solution, I recommend instead not only to recover the assets/profits which have been dispossessed from us, but to try all persisting advocates for crimes against humanity — these being explicitly, whatever perpetuation of damages is suffered since these systems were imposed.

    RAMIFICATIONS

    These measures, necessarily carried out before the onset of fatal deflation, arrest further failure within a day, with the additional liquidity immediately established being capable of sustaining multiples of present industry.

    Those who delay implementation of this proposition therefore are responsible for the consequences this measure would avoid — 10,000 homes daily going into foreclosure, vast further dispossession, inevitable further failures of industry, and so forth. As the present arguments sufficiently demonstrate, all of said detrimental consequences can be arrested in less than a day.

    1. ESTABLISHING AN EMERGENCY, TRIAL IMPLEMENTATION OF MATHEMATICALLY PERFECTED ECONOMY™

    2. As soon as possible, to restore and sustain the industry we are capable of, an initial implementation of mathematically perfected economy™ is established under emergency conditions. Once electronic infrastructures are established to maintain the people’s accounts, that initial implementation comprises:

    3. refinancing of all private debt without interest, with schedules of payment being the rate of consumption or depreciation (which are to be understood to be equivalent);

    4. a general, de-escalated formula for depreciation shall be used for the initial implementation. Specialized formulas may be implemented thereafter;

    5. the remaining value of the related property shall be the refinanced sum, as determined by the general formula for depreciation;

    6. any payments so far made beyond the depreciation so far incurred and up to the full remaining value of the property shall be considered accumulated equity, counted against the balance of the remaining debt;

    7. equity in all property as determined by the general formula for depreciation can be financed likewise;

    8. thus the whole effective circulation is equal to the whole value of related wealth; and the remaining circulation is always equal to and redeemable in the very remaining value of the represented wealth, with this itself eliminating any cause or need for ostensible alternate monetary standards;

    9. debts which have been paid, in principal and interest both, to the extent of the remaining value of the property, shall be considered fulfilled;

    10. further financing for further production shall be made available under the same terms;

    11. private savings are converted into the new currency;

    12. otherwise, MPE™ currency is not interchangeable with the former Federal Reserve Note;

    13. mathematically perfected economy™ divorces itself from the previous, imposed system;

    14. to restore sustainable conditions with regard to retirement, the accounts of all working-age people are eventually to be credited with a facsimile of what they would have saved and could therefore have lived on should they have benefitted from mathematically perfected economy™ their whole working lives;

    To replace social programs which are unsustainable as a consequence of unfunded near term federal liabilities, a mandatory savings program is implemented in which the private individual takes an interest in preservation of the value of the currency (which is sustained by MPE™), and by which the individual is compelled to save some portion of their income over working years, which they may spend in retirement.

    For example, if for the purposes of calculation, working years are taken as the years 20 through 60, and savings are taken to necessarily account for 20 years thereafter, compulsive savings of 1/3 of income may be enforced across the 40 years to render the same standard of living across the latter 20. The ultimate terms of such a program are to be determined in the final implementation of MPE™ as agreed by the public.

    All people beyond the age of 20 then are to be credited so much, to establish a sustainable condition akin to what would have existed in mathematically perfected economy™ all this while. These savings of course are to serve in lieu of inherently unsustainable “social security.”
    Sustainable conditions are thus immediately established; illimitable further prosperity is readily funded; and all this costs us nothing.
    Under mathematically perfected economy™ then, a $100,000 home with a hundred year lifespan for instance would be financed at the overall rate of $1,000 per year or $83.33 per month, with the initial/general formula for depreciation dictating higher rates of payment in the initial phases of the debt, and substantially lower payments in the latter phases.

    The emergency implementation of mathematically perfected economy™ serves as a proving or trial period, after which the subject populace may determine to retain or reject the proposition, optionally returning to the conditions formerly imposed by the previous system, or electing to adopt any other potential solution.

    The time required to implement this trial depends upon development or adaptation of existing hardware and software technology to maintain the necessary accounts. Roughly a month of operation under emergency deflation prevention measures might be required before the necessary infrastructure can be developed/adapted, so that this perpetually sustainable trial phase of mathematically perfected economy™ can begin, for whatever duration the people elect to preserve it.

    PERMANENTLY ESTABLISHING MATHEMATICALLY PERFECTED ECONOMY™

    Should the public elect to retain mathematically perfected economy™ after the emergency trial, its ultimate implementation is determined in regard to specialized rates of depreciation, scope of financed wealth, and potential relationships with other programs.
    It can be said that no risk is involved, because in all respects, emergency or otherwise, by eliminating the vast costs and destructive consequences of “interest,” these provisions generally engender as much as a dozen times the liquidity possible under the conditions of interest-bearing systems — particularly of course, prior to the present and ensuing phases of failure.

    Ostensible “foreign” debt of the people shall be collected from the sellers of the debt in the currency of which the debts were issued.
    SUMMARY

    No one will ever stand for your liberation from usury so long as you, the people, fail to master the problem and its solution. When, and only when you will settle for nothing but the latter, none of the foes of justifiable economy can afford to stand against you.
    It is your obligation then to broadcast this proposition of solution if you so see fit. We have no candidate to serve us. None apparently dare respond; and yet we have a critical election just weeks away. But if each of us immediately sent this proposition of solution to our entire address books, the entire country could be prepared to vote for solution in only days.

    Shame on us then, if we can do no better.
    This page can be copied and pasted into an email; or the permalink to its online instance may be sent; and/or its zip (compressed) file can be distributed freely; or the link to download the compressed distributable may be sent. The recommended procedure is to send this page copied into a text email, complete with the following permalink to the page. Please see the distribution instructions below for further information. Many articles at the PFMPE™ web site (perfecteconomy.com) answer virtually any further conceivable question or issue.

    This of course is a serious appeal. Usury is not only terminal; its perpetuation requires usurpation, and that usurpation largely explains the undesirable world as it is. You will have no representation so long as there is apathy toward privatized currencies, which obviously have been imposed upon us for the very purpose of the multiplication of unearned profit which is responsible for the specter of world wide monetary failure before us.

    In the introductory quotes with which I began this page, Ayn Rand tells us that “Whenever destroyers appear among men, they start by destroying money.” I translate this and the rest to mean, “they start by imposing interest to multiply debt upon the circulation, for money free from that multiplication is mankind’s only protection from those men, and so, it is the only possible harbor of unsubverted moral existence.”

    At present, while 10,000 homes a day are going into foreclosure, the media those men own suppresses the truth, saying such remarkable, ongoing events — and all the related evidence not just of depression, but of utter world-wide failure — are only fueling “fears” of a severe recession. On the contrary, no distortion could be more conducive itself to engendering failure, because it asks us to remain ignorant of all the things we can no longer afford apathy.

    Before putting this matter to rest then, let us consider the opposite, positive case of Rand’s postulate:

    When we are ready to deliver ourselves from oppression, necessarily, we will so understand first and foremost that “interest” can only multiply debt upon the obligated circulation, that no just person will refrain for a moment from assimilating the opposing, vital principle.
    A succeeding republic of course must meet necessary minimal standards, first for deserving, and then for enforcing representation.
    A truly positive people are not deterred from unity and purpose by a handful of usurers and whatever panderers, generations, or classes tie themselves to purse strings at so much cost to all the rest; they are not discouraged by anything from the good and due things people can readily achieve. Especially, they do not settle for less than ideals, when the ideal can be handed to them.
    Here that ideal is. America used to be such a place; and no one in history has to look far to find that out.

    “To find the players in all the corruption of the world, ‘Follow the money.’ To find the captains of world corruption, follow the money all the way.”

    mike montagne — founder, PEOPLE For Mathematically Perfected Economy™, author/engineer of mathematically perfected economy™ (1979)

    © COPYRIGHT 2009, by mike montagne and PEOPLE For Mathematically Perfected Economy™.

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  3. Douglas

    OK, so now we see that the unconstitutional issuance of the Federal Reserve is wrong and very disproportional, so now what?

    They have already used the Dollar to the fullest degree. It is apparent that they have succeeded in using the Dollar to perpetuate a Global Economy. In other words the consumption of the US has become a bassist of their ‘Fractional Reserve System’.

    So now what? What they want is a Global Cashless System. Well some would recognize that this in many ways this has already been achieved if you consider the fact that most of US units of exchange are made through computer transitions.

    The final step is when citizens have only one choice. That is to accept their new system based on the implementation of a computer chip implanted within each Citizen. Without the chip you will not be able to buy or sell anything.

    This is how the Central Bankers plan to manage their ludicrous unsustainable system that will never work and those who accept their system will be tied to their history of karmic lunacy. So, it would be logically better for US Citizens to accept torture and death than to accept such and chip of karmic consequence.

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  4. Citizen

    Brian,

    Your on the right track, Meltdown is a great book for understanding the serious nature of our FED system run amok.

    Dr Paul's plea is to Ben Berneke to NOT participate in the deliberate debasing of our currency by dilution. To say NO to the federal government and special political interests and to continue to TRANSFER the Wealth from the poor and middle class into the hands of the Ultra Rich.

    The time has come to change the business as usual, we must re-gain control of our currency, by Ending the Fed, before the FED Ends US!

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    1. Jack

      Citizen,

      Why is it that you keep misleading people into your FED alternative (austrian economics) which will have the same terminal outcome as the FED?

      Explain to us what Ending the FED will accomplish for us? What will happen after we have End the FED?

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      1. Brian Handey

        When we end the fed, the free market will be allowed to function. Banks can only lend out what they have in reserves. There will be no more fractional-reserve banking without accepting risk of failure. Because when failure happens, the losses aren't socialized on the taxpayer. Banks will be run like businesses, because that's what they are. Some might fail, but the strong will survive and the consumer will be the ultimate decider. Soldiers also won't be deployed overseas multiple times in a row. We won't see all this spending overseas, just wasting money.

        Nothing in life is free. What you borrow, you'll have to pay back. And if you aren't responsible enough to pay your debt, then the people who lent it to you (future generations) will have to pay it back. That is what we have with The Fed.

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        1. Jack

          So how will your pretented free market solution function??

          If we are going to understand solution, we do have to understand where the so called “Austrian economists” stand. I will outline a few principles first; then I will come back to the Austrians:

          Yes, a finite (and relatively fixed) circulation is adverse to solution of the problems, because to sustain industry and markets (“commerce”), a circulation must come into existence and retire accordingly; and so the real issues here are simply the life cycle and integrity of every unit of currency.

          Gold or any other such relatively static/finite resource cannot serve such purposes. Suppose for instance that we determine even by seemingly logical processes that the value of the dollar ought to be so many fractions of an ounce of gold; and we issue this paper only as gold comes into the hands of the Treasury, by such exchange?

          Well, our first issue, if this is to be our principle of monetization, is that we have eliminated the far greater advantages of assuming debts qualified by legitimate credit-worthiness. All of a sudden, our couple has to save all their lives, hopefully to buy their $100,000 home by the ends of their lives, and all the while subject to predation by a lord class which may prevent them from ever saving so much.

          Furthermore, instead of using the gold for whatever we may benefit by, we instead keep so much of it in storehouses, that this might artificially drive up the price of gold for legitimate use — thus artificially inflating the cost of everything to which gold is a necessary or beneficial component.

          These are hardly principles of justice; but worse, as industry grows beyond the circulation to which previous industry may have been considered proportional, thus the value of the currency falls. This has no effect of making things cheaper (as the Austrians regularly assert), for it drives down the rewards of labor or production as well.

          So there no maintenance, nor even any means of maintenance of a circulation which preserves the value of money — or even the relative value of gold; for one volume of circulation ostensibly competes for a varying quantity of industry in proportion to gold — which thus defines perpetual corruption of value by the very principle the Austrians (merely) claim maintains consistent value. The principle, if applied, cannot do so, for in fact the proportions are constantly vacillating.

          Worse still, the same circulation can hardly sustain greater industry; and, as prices may be forced down, this only erodes margins of solubility. Typically, such industry crashes, instead of making its production cheaper, because its commitments are such that it has little if any leeway to reduce prices but at terminal consequences to itself.

          Even worse then, history has always resulted from these failings, in tolerance of further issues of artificial credit (a fractional reserve system exists then as a regular/inevitable consequence of the shortcomings of the gold standard). We don’t actually borrow money from the pretended banking system; we are actually only borrowing our own promissory notes into existence — which of course we would be better advised to issue ourselves. Not only does this obfuscation perpetually multiply artificial indebtedness as I have described then; it makes the purported central banking system the inevitable owner of all our production/wealth, and thus even of our gold.

          The Austrians tell you, that they want a return to Constitutional money; and to sound money. No bigger lie can be told!

          Why not?

          Check out their forums. Gold bugs everywhere; and what they want is NOT for gold to return to its Constitutionally defined value! They want to make out like the Federal Reserve!

          Worse then is the lie that they want to “end the Fed.”

          Why?

          As I have described, the fatal fault of the imposed monetary system is interest; and all further faults merely result from further failure to solve inflation and deflation. The Austrians, and Mr. Paul in particular, not only advocate interest; they advocate ELEVATED RATES OF INTEREST.

          Effectively, what they want is to remove the embossed letters which now say “Federal Reserve Bank,” and replace them with “Ron Paul’s ‘COMPETING’ Bank(s)” — a principle which he refuses to debate, further define, or justify. Of course, any ostensible “competition” would ostensibly, on the contrary, drive interest rates down. But Mr. Paul tells us that we wouldn’t have borrowed ourselves into this debt mess if higher rates of interest had discouraged excessive/reckless borrowing.

          Mr. Paul has never done the math: he tells you that all of you are going to benefit somehow therefore — oh and we so willingly believe this preposterous notion, don’t we? — he tells us we will benefit paying perhaps 17% interest on our homes than 5%. Sounds really like a good idea, doesn’t it? Especially since the rate of interest is the rate of multiplication of artificial indebtedness — higher rates of which instead necessitate greater rates of borrowing to maintain a vital circulation.

          Unfortunately, most people who exalt Austrian “economics” hardly know the first thing about it. They reject math — most of which is little more than counting — as if you could understand otherwise; and they could have possibly determined solution otherwise. In no legitimate discipline or walk of life does such reckless abandonment of principle hold.

          But Mr. Hayek, God of the Austrians tells us why they advocate interest and the current banking model — which are our very problem. See Hayek’s article at Mises org: “A Free Market Monetary System,” I think it’s called. Anyway, he thus justifies interest, that it makes banking “an extremely profitable business.”

          That’s right. There IS no justification, just an outright confession of the motive.

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        2. jack

          So how will your pretented free market solution function??

          If we are going to understand solution, we do have to understand where the so called “Austrian economists” stand. I will outline a few principles first; then I will come back to the Austrians:

          Yes, a finite (and relatively fixed) circulation is adverse to solution of the problems, because to sustain industry and markets (“commerce”), a circulation must come into existence and retire accordingly; and so the real issues here are simply the life cycle and integrity of every unit of currency.

          Gold or any other such relatively static/finite resource cannot serve such purposes. Suppose for instance that we determine even by seemingly logical processes that the value of the dollar ought to be so many fractions of an ounce of gold; and we issue this paper only as gold comes into the hands of the Treasury, by such exchange?

          Well, our first issue, if this is to be our principle of monetization, is that we have eliminated the far greater advantages of assuming debts qualified by legitimate credit-worthiness. All of a sudden, our couple has to save all their lives, hopefully to buy their $100,000 home by the ends of their lives, and all the while subject to predation by a lord class which may prevent them from ever saving so much.

          Furthermore, instead of using the gold for whatever we may benefit by, we instead keep so much of it in storehouses, that this might artificially drive up the price of gold for legitimate use — thus artificially inflating the cost of everything to which gold is a necessary or beneficial component.

          These are hardly principles of justice; but worse, as industry grows beyond the circulation to which previous industry may have been considered proportional, thus the value of the currency falls. This has no effect of making things cheaper (as the Austrians regularly assert), for it drives down the rewards of labor or production as well.

          So there no maintenance, nor even any means of maintenance of a circulation which preserves the value of money — or even the relative value of gold; for one volume of circulation ostensibly competes for a varying quantity of industry in proportion to gold — which thus defines perpetual corruption of value by the very principle the Austrians (merely) claim maintains consistent value. The principle, if applied, cannot do so, for in fact the proportions are constantly vacillating.

          Worse still, the same circulation can hardly sustain greater industry; and, as prices may be forced down, this only erodes margins of solubility. Typically, such industry crashes, instead of making its production cheaper, because its commitments are such that it has little if any leeway to reduce prices but at terminal consequences to itself.

          Even worse then, history has always resulted from these failings, in tolerance of further issues of artificial credit (a fractional reserve system exists then as a regular/inevitable consequence of the shortcomings of the gold standard). We don’t actually borrow money from the pretended banking system; we are actually only borrowing our own promissory notes into existence — which of course we would be better advised to issue ourselves. Not only does this obfuscation perpetually multiply artificial indebtedness as I have described then; it makes the purported central banking system the inevitable owner of all our production/wealth, and thus even of our gold.

          The Austrians tell you, that they want a return to Constitutional money; and to sound money. No bigger lie can be told!

          Why not?

          Check out their forums. Gold bugs everywhere; and what they want is NOT for gold to return to its Constitutionally defined value! They want to make out like the Federal Reserve!

          Worse then is the lie that they want to “end the Fed.”

          Why?

          As I have described, the fatal fault of the imposed monetary system is interest; and all further faults merely result from further failure to solve inflation and deflation. The Austrians, and Mr. Paul in particular, not only advocate interest; they advocate ELEVATED RATES OF INTEREST.

          Effectively, what they want is to remove the embossed letters which now say “Federal Reserve Bank,” and replace them with “Ron Paul’s ‘COMPETING’ Bank(s)” — a principle which he refuses to debate, further define, or justify. Of course, any ostensible “competition” would ostensibly, on the contrary, drive interest rates down. But Mr. Paul tells us that we wouldn’t have borrowed ourselves into this debt mess if higher rates of interest had discouraged excessive/reckless borrowing.

          Mr. Paul has never done the math: he tells you that all of you are going to benefit somehow therefore — oh and we so willingly believe this preposterous notion, don’t we? — he tells us we will benefit paying perhaps 17% interest on our homes than 5%. Sounds really like a good idea, doesn’t it? Especially since the rate of interest is the rate of multiplication of artificial indebtedness — higher rates of which instead necessitate greater rates of borrowing to maintain a vital circulation.

          Unfortunately, most people who exalt Austrian “economics” hardly know the first thing about it. They reject math — most of which is little more than counting — as if you could understand otherwise; and they could have possibly determined solution otherwise. In no legitimate discipline or walk of life does such reckless abandonment of principle hold.

          But Mr. Hayek, God of the Austrians tells us why they advocate interest and the current banking model — which are our very problem. See Hayek’s article at Mises org: “A Free Market Monetary System,” I think it’s called. Anyway, he thus justifies interest, that it makes banking “an extremely profitable business.”

          That’s right. There IS no justification, just an outright confession of the motive.

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        3. Jack

          So how will your pretented free market solution function??

          If we are going to understand solution, we do have to understand where the so called “Austrian economists” stand. I will outline a few principles first; then I will come back to the Austrians:

          The Austrians tell you, that they want a return to Constitutional money; and to sound money. No bigger lie can be told!

          Why not?

          Check out their forums. Gold bugs everywhere; and what they want is NOT for gold to return to its Constitutionally defined value! They want to make out like the Federal Reserve!

          Worse then is the lie that they want to “end the Fed.”

          Why?

          As I have described, the fatal fault of the imposed monetary system is interest; and all further faults merely result from further failure to solve inflation and deflation. The Austrians, and Mr. Paul in particular, not only advocate interest; they advocate ELEVATED RATES OF INTEREST.

          Effectively, what they want is to remove the embossed letters which now say “Federal Reserve Bank,” and replace them with “Ron Paul’s ‘COMPETING’ Bank(s)” — a principle which he refuses to debate, further define, or justify. Of course, any ostensible “competition” would ostensibly, on the contrary, drive interest rates down. But Mr. Paul tells us that we wouldn’t have borrowed ourselves into this debt mess if higher rates of interest had discouraged excessive/reckless borrowing.

          Mr. Paul has never done the math: he tells you that all of you are going to benefit somehow therefore — oh and we so willingly believe this preposterous notion, don’t we? — he tells us we will benefit paying perhaps 17% interest on our homes than 5%. Sounds really like a good idea, doesn’t it? Especially since the rate of interest is the rate of multiplication of artificial indebtedness — higher rates of which instead necessitate greater rates of borrowing to maintain a vital circulation.

          Unfortunately, most people who exalt Austrian “economics” hardly know the first thing about it. They reject math — most of which is little more than counting — as if you could understand otherwise; and they could have possibly determined solution otherwise. In no legitimate discipline or walk of life does such reckless abandonment of principle hold.

          But Mr. Hayek, God of the Austrians tells us why they advocate interest and the current banking model — which are our very problem. See Hayek’s article at Mises org: “A Free Market Monetary System,” I think it’s called. Anyway, he thus justifies interest, that it makes banking “an extremely profitable business.”

          That’s right. There IS no justification, just an outright confession of the motive.

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        4. Brian Handey

          Gold never had a constitutionally defined value. Unless of course, you’re talking about the 1930's when FDR confiscated gold from America's private citizens and began setting the price on his own, which in turn, immediately enriched the government. FDR sure was good at being a tyrant. It's not surprising, though. If you read about FDR, you soon realize that the man was a failure throughout his life, to include being a father and husband.

          And my solution, after ending the Fed, is to allow the free-market to function. It's pretty simple. Why do you think Wal-Mart is such a huge success? That's the best thing to happen to people, but you won't hear that from people who are leaning towards socialism and communism.

          It's like Thomas Woods said: "Whenever the private sector introduces an innovation that makes the poor better off than they would have been without it, or that offers benefits or terms that no one else is prepared to offer them, someone—in the name of helping the poor—will call for curbing or abolishing it."

          That statement explains the backlash and bitching we see from people who want to eliminate Wal-Mart.

          Capitalism, Jack...it's what's for dinner. So eat up. It's good for you.

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        5. Jake

          Brian, for your information: we systematically make lots of money every year trading inflation and deflation. So do not think for one minute we´re not in the capitalism camp. But I am prepared to make my contribution for humankind in general. Are you??

          btw; i cannot longer post under my previous login; Jack

          I guess that also tells you the story of the pretended solution promoted here. It´s just a continuation of the same. Purported solutions on the cheap, for the sheep.

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  5. GB

    Dr. Paul needs an ear high up in Washington. Just one. Please.

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  6. a humble citizen

    The federal reserve bought up "toxic assets" in order to save our society from collapse. What that really means is that they bailed out all of those individual investors who were willing to risk buying toxic bonds in the first place. The federal reserve should become transparent so we can see the secret banking that bails out a few, and hurts the masses.

    They claim to save the economy. But artificially low interest rates and a distorted financial system of fractional reserves systems and excessive credit was the cause of the crisis. It is not acceptable for the American people to ignore the culprit for economic collapse.

    The federal reserve system is also largely regressive. Their process of quantitative easing has led to inflation, destroying the value of the dollar. The way they do this is to give their friends in the corporate and political world (behind a closed door screaming for independence) preinflationary dollars and allowing the poor and middle class to deal with the inflation down the road.

    I look forward to a day where Ron Paul is president. I just hope he is brave enough to stand up for freedom and liberty once the special interests start to take aim.

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  7. Afi James

    END THE FED!

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  8. jmjfanss

    END THE FED!

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  9. Afi James

    Ron Paul 2012.

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  10. jmjfanss

    Ron Paul 2012.

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  11. Bead Stallcup

    The voice of truth and reason speaks again. Ron Paul for US President 2012.

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  12. Bead Stallcup

    The voice of truth and reason speaks again. Ron Paul for US President 2012.

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  13. BeadStallcup

    The voice of truth and reason speaks again. Ron Paul for US President 2012.

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  14. BeadStallcup

    The voice of truth and reason speaks again. Ron Paul for US President 2012.

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  15. chop98 .

    Then we agree to agree, Mr. Wag. :)

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  16. chop98

    Then we agree to agree, Mr. Wag. :)

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  17. BillymanWag

    LOL! Hey man, the only point I wanna make here is that the game with The Fed is all smoke and mirrors. They don't have any actual money, and whatever "money" they do have, it has been obtained by crooked means. They are totally crim.

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  18. chop98 .

    They didn't have the power. That's just it, man. They didn't have that 3/4 of the votes to ratify it either. Come to think of it...I'm not sure the 14th or maybe its the 16th Amendment has been ratified either. Any way...we're about to go under. There's no paying back the debt. It will most likely result in war and whoever is left will have to start from scratch. Know that tptb will do all they can to destroy the knowledge of their evil doings. Are you ready? :)

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  19. chop98

    They didn't have the power. That's just it, man. They didn't have that 3/4 of the votes to ratify it either. Come to think of it...I'm not sure the 14th or maybe its the 16th Amendment has been ratified either. Any way...we're about to go under. There's no paying back the debt. It will most likely result in war and whoever is left will have to start from scratch. Know that tptb will do all they can to destroy the knowledge of their evil doings. Are you ready? :)

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  20. chop98 .

    Oh yeah. I completely agree. That's why we're screwed. See...even with that currency act, we're screwed even being backed by gold and silver because we don't have any. The original backing of American Dollars was raw commodities. England got their foot in the door with the colonies early and came up with that act so it was easier to manipulate the economy of America. Even way back then we were under the control of England just like we are today. Where do you thing your taxes go?

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  21. chop98

    Oh yeah. I completely agree. That's why we're screwed. See...even with that currency act, we're screwed even being backed by gold and silver because we don't have any. The original backing of American Dollars was raw commodities. England got their foot in the door with the colonies early and came up with that act so it was easier to manipulate the economy of America. Even way back then we were under the control of England just like we are today. Where do you thing your taxes go?

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  22. chop98 .

    Listen pal. I never said anything about us actually being on the freakin' gold standard. I said it's "supposed to be that way!". I know there isn't any gold as well as anybody else. Point is...there is no more gold standard. At least you're going in the right direction as Nixon took us off that after the US lapsed on the Breton-Woods Agreement. Look that up. Shortly after WW2 is when the dollar became the world reserve currency because it has "some" value with gold backing.

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  23. chop98

    Listen pal. I never said anything about us actually being on the freakin' gold standard. I said it's "supposed to be that way!". I know there isn't any gold as well as anybody else. Point is...there is no more gold standard. At least you're going in the right direction as Nixon took us off that after the US lapsed on the Breton-Woods Agreement. Look that up. Shortly after WW2 is when the dollar became the world reserve currency because it has "some" value with gold backing.

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  24. GoldenDragon214

    - Our money should be backed by gold, but it isn't. The Federal Reserve Act delegated the power to create fiat currency to a private bank (The Fed). This power, by the way, was never conveyed to the Congress by the Constitution, so it seems odd that they could have delegated it.

    In any case, if the Congress does have the power to print money, why is the federal government in debt and why is it paying interest on the debt?

    The whole the thing is scam created by the banking cartel.

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  25. BillymanWag

    PLUS, how in God's name can we have gold to back up all of our paper when we are borrowing it????? That makes NO sense. You see what I'm saying. We don't have the money, (if we had the gold, we wouldn't need to borrow it) so we get it from somewhere else.

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  26. BillymanWag

    Uh, that doesn't mean the gold is still there. Actually, in 1973 I do believe, Nixon nixed (haha) any connection our money had with gold. The gold standard has been gone for a long time. If you think there is gold in Fort Knox, think again. No one will let anyone near there and they won't allow anyone to see what's inside. We are totally hoodwinked. You are wrong.

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  27. Brian Handey

    I keep reading articles in Fox and all these other news networks that recommend cuts in spending while extending unemployment benefits and adding more stimulus (not nearly the size of the first stimulus, they claim). But the thing of it is, how does that make any sense? They say because money needs to be spent. Money doesn't need to spent. How can you spend money to create jobs when you have no jobs to earn money with which to spend? You can't steal through taxation then give it away to a third party, have it spent, and expect that will do anything beneficial for society as a whole. That's forcing people to spend when they don't want to or they can't afford to.

    People need to start reading Thomas Woods book "Meltdown."

    I'm from NH, and even though I don't want to see Paul Hodes or John Lynch win in their races, I had to vote for the Libertarian candidates. People said I'm throwing my vote away because I didn't endorse the Republican candidates, but they advocate maintaining a presence in Afghanistan indefinitely and fiddling with the tax code as opposed to abolishing it, so in essence, they don't endorse what I believe in. So they didn't earn my vote.

    I did my research and the Libertarian candidates were the people on the ballot that I want in office. I also voted for one independent. But the point is, if everyone started researching and rejected the group mentality of Democrat vs. Republican, then maybe principled people could win seats in office if they offer the best philosophy, which is a constitutional position, which also happens to be in line with the philosophies of our founding fathers. We need people of principle, not more lawyers in office with no real world experience or knowledge on economics or defense. Having a business and military background are paramount. You can't understand the military-industrial complex unless you've seen it in action. And you can't understand economics unless you study and/or work in the private sector for part of your life.

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  28. benpadiah

    DC? Hell no, I won't go. But I'll vote for Dr. Paul proudly just like I did last time. As far as the prison-system goes, I don't abide torture, but I do recall a quote from "Project Valkerie" that goes, "when the revolution comes, his picture will be un-strung, and the Fhuher will be hung." Or at least... something like that. Peace. - Jon

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  29. Citizen

    The immediate danger is that the Dollar could go into a FREE FALL sooner than anyone would anticipate.

    While Ron Paul sounds the alarm, everyone is focused on the election of a new crop of Economically Clueless Politicians making new plans to rule OUR world.

    The mantra in Washington DC is spend, spend, SPEND to save our economy.
    Cut the off
    End the FED, before the FED ends US!

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  30. chop98 .

    Negative. Read your Constitution. Our money is backed by gold and silver per the Currency Act of 1789. Lots of lies out there. The Fed is just another one of them. Read that act, man.

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  31. chop98

    Negative. Read your Constitution. Our money is backed by gold and silver per the Currency Act of 1789. Lots of lies out there. The Fed is just another one of them. Read that act, man.

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  32. Eraser7622

    How does it feel to be a hero Dr. Paul? A real hero, not a pretender like most.

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  33. Joe ForLiberty

    Hey Ben.....
    wanna run in 2012.

    Seriously that is the Best Cold Turkey I've heard.
    That approach would be an over night infusion of Raw Freedom.

    Sadly that could only be possible if a large enough body of the American People actually understood what was good for them.

    p.s. don't forget we will also need to make extra space in the prisons for all those who have been cleaning their rears so thoroughly with the constitution.

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  34. TheBlitz1

    Actually capitalism has nothing to do with it, when you think of true capitalism, you should see low prices, high employment, capital investments, and high standards of living.

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  35. Darrick Wagner

    Globalization + Democracy + Capitalism + Socialism + Republicanism. What does that equal? Yes, our current problems with the human race today. In the next decades or so, expect corporations to be more powerful than countries. In some hard science fiction works, we will enter dystopia before reaching utopia as we descend into a space-faring society.

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