Ron Paul: The System is Coming to an End

Ron Paul discusses the Federal Reserve’s irresponsible actions with Neil Cavuto.

Date: 11/05/2010


Neil Cavuto: The world is fed up with the Fed: Germany, China, Brazil; just a few of the countries today blasting the Federal Reserve’s latest move to essentially print another 600 billion bucks. That’s what this really comes down to. Ron Paul says it is time to clamp down. And he’s ready to step up and do just that. The Republican Texas congressman could soon have the committee overseeing the Central Bank. He joins me on the phone. Congressman, good to have you.

Ron Paul: Thank you. Good to be with you.

Neil Cavuto: First of all, how do you feel about your son? I mean, the two of you are going to be power brokers on the Hill, huh?

Ron Paul: Well, who knows what will happen, but we were happy with the election, let me tell you that.

Neil Cavuto: I think you guys have got part of a dynasty. But who knows?

Ron Paul: It’s pretty early to tell that yet.

Neil Cavuto: Indeed. But, Congressman, it’s not too early—you say—to sort of reassess this whole Federal Reserve, and its ability to go into the markets and buy gazillions of dollars worth of bonds, and intervene. You’ve had, and say, “Enough!” What do you mean?

Ron Paul: Well, it’s been an issue that I’ve worked on a long time, because I consider it central economic planning, by monetary authorities. And they do it in secret, and usually the chairman is the boss. So we’re down to the point where one individual can dictate how much money we’re supposed to have circulating and what the interest rates should be. It’s the worst kind of central economic planning. It gets us into trouble. And then when the trouble really becomes apparent to everybody, then they go running to the Fed: “Bail us out!” That’s what they did a couple years ago. And what did they do? They printed a lot more money again. I mean, it’s such a foolish foreign policy. But probably, to me, the most outrageous legal part of this is that, this week he announced he’ll do 600 billion. He might do 900 billion. Who knows how much? They’ve done 1.7 trillion already.

Neil Cavuto: By the way, you’re referring to buying back a lot of Treasury paper mortgage-backed securities…

Ron Paul: Right.

Neil Cavuto: In an effort to keep rates very low. But I’m sorry. Go ahead.

Ron Paul: Yeah. But where and why did they get this authority? The Congress allowed them to have this. You know, it was assumed when we started our country, we’d have honest money. There was no printing, no emitting bills of credit. Congress would authorize expenditures and tax people and pay the bills. But here it is, literally trillions of dollars can be done off the budget. It makes Congress really irrelevant. If they can do that much, and Congress doesn’t even get a chance to really look at the books and audit the Federal Reserve, let alone have any input into this…

It’s coming to an end, because they have failed. The system was deeply flawed. And I think that’s what we’re facing. And that’s why I think it’s going to be very interesting studying and understanding what monetary policy is all about, and how it influences and causes the business cycle. So I think it’s a key period of time in our history in which we live. And I think it’s very important to people to come around to understanding. I am excited about it, because a lot more people are looking at the Fed. And like you said in your opening comments, even around the world they’re saying, “Hey, maybe this Fed is out of control,” which means maybe the American dollar is not so hot anymore. I’d say that’s big news.

Neil Cavuto: Well, would you disband the Fed? Would you just dissolve it?

Ron Paul: Well, that’s not my position. In my little booklet I wrote on it, I said that we should end the Fed. But I don’t call for the end tomorrow. I want just competition for a transition. I want to legalize the Constitution. I want to legalize contracts, legalize competing currencies, as has been advised by—

Neil Cavuto: But are you worried, Congressman? People would say that the reason for a Fed, or an organization like it, is to depoliticize this process. In Congress’ hands, everything’s going to be politicized.

Ron Paul: Yeah, but I’m not advocating that the Congress set monetary policy. I want the market to set interest rates, and the market to set the supply of money. So that’s a lot different than having Congress take it over. I’ve never advocated that. Some people do. A populist generally argues the case that the Congress should print the money, like Lincoln. “Lincoln backs the greenbacks.” And just pour the money out. I don’t accept that.

Neil Cavuto: Right. Okay.

Ron Paul: No, I think you should have gold and silver as legal tender. And the Congress has that responsibility to honor the integrity of the unit of account, and you don’t need a Central Bank to create money out of credit. The whole thing is, they came around to believing that they need to “inject capital” into the system, to make the world go ‘round and the economy to thrive. But when you create money out of thin air, it’s not capital. Capital comes from savings. So we have all this malinvestment and debt build-up over the last decade or so, and it was all from money out of thin air. It was not earned money. It was not true capital. So if we don’t understand the definition of “capital,” we can’t solve this.

But I think in the monetary collapse that is coming, we will be forced to it. And that’s why I want to do as much work as I can on this issue, on the Monetary Policy Subcommittee, to get people to understand how the dollar influences the business cycle, i.e. the Federal Reserve, who manages the dollar. And what we’re going to do, when we have to have reform, because the world will not accept what we’re doing. They’re getting antsy right now—

Neil Cavuto: Well that’s pretty clear. You’re right about that. Whatever we’re doing, they don’t like it. Ron Paul—

Ron Paul: That’s for sure, and I think it’s going to get worse.

Neil Cavuto: Yeah, well on that “happy” note, Ron Paul, thank you very much—and to your growing political dynasty. We’ll keep watching. Be well.

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  • Theponderingdinosaur

    Ron Paul Chair of the House Finance Committee. Please.

  • While Dr. Paul does advocate going with the Constitutional definition of legal tender as weights of gold and silver for government transactions, thereby curbing the State drive for debt-based currency, he also advocates freely competing currencies for free market transactions, so values of commodities would be determined by consumer choice.

  • While Dr. Paul does advocate going with the Constitutional definition of legal tender as weights of gold and silver for government transactions, thereby curbing the State drive for debt-based currency, he also advocates freely competing currencies for free market transactions, so values of commodities would be determined by consumer choice.

  • While Dr. Paul does advocate going with the Constitutional definition of legal tender as weights of gold and silver for government transactions, thereby curbing the State drive for debt-based currency, he also advocates freely competing currencies for free market transactions, so values of commodities would be determined by consumer choice.

  • <--- Gets it. Amen brother, testify!!

  • 9012jive

    the bottom line here, is that a currency should not be brought into existance with interest attached. remove the interest, and the currency doesn’t devalue over time, because its not created under conditions of exponential growth.

  • If you floated the American economy on gold. what do you think the price of gold would be per ounce? It would be astronomical.

    The other problem is, gold’s scarcity always creates plutocracy because the richest, wealthiest people own and control most of it.

    I accept that gold offers excellent protection against inflation but under the circumstances we are under right now, that protection will only only protect the rich and powerful, not Joe Plumber.

  • Quiltingsando

    Read Ron Paul’s books it is written for people who don’t understand a lot about the economy or government and what the founders had intended. His voting record is outstanding and his Youtube videos help a lot also. Give his message a chance don’t let others stop your own research. He predicted this monetary problems during his run for president when all the other talking heads were going on how great everything was. Question everything, good luck.

  • It doesn’t matter how much gold there is to paper money. Price levels would reflect whatever the exchange was. If there was a lot less paper money out there everything would just be less expensive although it wouldn’t change when compared to actual worth or percentage of a persons wealth. But don’t forget, he would first argue for competing currencies such as one that is gold backed. Gold is just the best commodity for the job.

  • I agree with you absolutely.

    Bill Still makes a strong case for government issued, debt free fiat money.

    I haven’t heard Ron Paul address how America’s economy can be floated on gold. It’s too scarce. And how much gold is there in Fort Knox? And who has a claim on ownership of what is stored there?

    But Bill Still poses a very convincing argument that it isn’t what you use as money, it is who controls its issuance that is the problem

  • randyinwa

    I agree with the good doctor on most things, but after watching the movie “The Secrets of OZ” here on youtube, I’ll have to call into question Paul’s support of gold backed currencies. Here’s the link for the movie… /watch?v=U71-KsDArFM

  • ghostlip1
  • You may also be interested in:

    “The American Form of Government”


    “The Story of Your Enslavement”

  • Sidney38SNJ

    Ron Paul, run for President again and you have this gay liberals vote! I am for human rights and I don’t care about your party affiliation. I respect your idea’s.

  • martls6

    Bernanke was appointed by a republican. Think for yourself.

  • ExhibitMan
  • campaign4liberty

    Ron Paul 2012
    uncensored news


    Ron Paul for Nobel Prize!
    Hey Paul Krugman, our dishwasher just died and we need an able hand to clean our plates in our restaurant.
    NB: PHD in economics are not accepted as qualifications.

  • AgnesBojaxhiu2000

    the 1 world govt wsj-foxnews-rushie ECONOMIC FREEFALL neocons is the obstruction politico of NO … the murdoch family (bod & largest shareholder) are mostly australians & rupert’s wife’s born in chicom Xuzhou … meocons CAN’T HANDLE THE TRUTH so they lie … take the gop … they lost 9 of 9 state wide offices in california … & in hawaii, only have 1 of 25 senate seats … it’s their hatred of colored peoples, gays, hispanics & muslims … support AMERICA … join the fox news sponsor