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




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 Comments:

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

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  2. 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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  3. 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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  4. 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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  5. 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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  6. 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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  7. 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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  8. 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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  9. - 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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  10. 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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  11. 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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  12. 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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  13. 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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  14. 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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  15. 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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  16. 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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  17. How does it feel to be a hero Dr. Paul? A real hero, not a pretender like most.

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  18. 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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  19. 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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  20. 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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