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

Transcript

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.

  • davison1021

    about time say the word ron and im in

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  • http://www.youtube.com/profile?user=Jhonsun Jhonsun

    I don’t think I’ve ever seen Neil Cavuto so deferential to someone in an interview as he was to Ron Paul here. I’ve noticed that if Cavuto disagrees with someone, he’s usually very quick to press his concern. He doesn’t allow interviewees to go on long diatribes full of propaganda rhetoric. To his credit, he asked very good questions of Dr. Paul and allowed him to give full answers while listening very respectfully. Cavuto was great and Ron Paul knocked it out of the park.

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  • mjhonsun

    I don’t think I’ve ever seen Neil Cavuto so deferential to someone in an interview as he was to Ron Paul here. I’ve noticed that if Cavuto disagrees with someone, he’s usually very quick to press his concern. He doesn’t allow interviewees to go on long diatribes full of propaganda rhetoric. To his credit, he asked very good questions of Dr. Paul and allowed him to give full answers while listening very respectfully. Cavuto was great and Ron Paul knocked it out of the park.

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  • goldcurrent1

    Stop the NWO.

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  • truthshallsetusfree

    If we do not abolish the Fed, we will never return to being a true democratic republic.

    The Fed truly is near the end of their game; we must destroy them before they finish destroying us. QE2 is one of the final straws that will break our country’s back.

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  • jimbobanalbeats

    lmao. Ok. FEMA camps.

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  • sefrzan

    This anchor sounds like yogi bear

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  • jimbobanalbeats

    The military has already closed bases in the US that they no longer needed. They wouldn’t reopen them just to let people get their jobs. People are discharged regularly when they become redundant. An administrator or security guard on a German base isn’t needed on a base in the US. Those jobs are already filled. Would some people get new jobs? Of course. A great many would be discharged though. It’s just economics.

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  • jimbobanalbeats

    By saying you want to stop the empire building you are by default saying that the military budget will be smaller. He’s said this many times. Yes, bases are closed, but not very many of them. Personnel are laid off when that happens. Think about it like this, if a company is closing factories, does it give everybody new jobs in the other factories? Of course not. Our military would be much smaller if the many bases around the world were closed, as they would be closed to save money.

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    • k2000k

      I think you are partially correct. Yes some soldiers will no longer be soldiers, but what I am willing to wager, is that the majority of our defense spending goes towards contractors, and industries that somehow support our military. We have over 1.5 million active duty soldiers, China over 2.2, India 1.3, Russia 1 million. All their economies are smaller than ours. I don’t think it is outside the realm of possibility to cut back on spending without losing that many boots. If you really think about it, simply moving many of our overseas soldiers back to the states would drastically reduce the budget in and of its self. Realistically we won’t move all our soldiers back. We will continue to have a large and active navy, and a presence in the pacific ocean as that is now the gateway to the world; meaning troops in Japan and Korea. But at least we can stop subsidizing Europe’s or Saudi Arabias defense

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  • jimbobanalbeats

    Except that they wouldn’t have jobs. They exist as personnel so they can work in Germany. The capacity doesn’t exist. Downsizing bases is downsizing personnel. If they have no money and no job here, they will be on the dole which doesn’t really help in the long run. If there were demand and jobs in the US at the moment it might be a different story.

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  • SomethingSea1

    Political dynasty?

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  • truthislibertyus

    Ben Shalom will not destroy the dollar. I promise.

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  • BillymanWag

    The Fed has got to go. No bones about it everyone. EVERYONE LISTEN! Write your congressmen and senators! The Fed has got to go!! We need all of America behind the call!

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  • WNxShisno

    Holy crap, I almost forgot that Dr. Paul could now chair the banking committee. THANK GOD, this means we don’t have to hear Barney “Pedo Pimp” Frank talk as much.

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  • http://www.youtube.com/profile?user=AdamHoisington Adam Hoisington

    Looks like someone never read Rothbard. Never discuss gold without having read “What Has Government Done to Our Money?”

    To quote:
    “An increase in the money supply [gold], then, only dilutes the effectiveness of each gold ounce; on the other hand, a fall in the supply of money [gold] raises the power of each gold ounce to do its work. We come to the startling truth that it doesn’t matter what the supply of money is.”

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  • http://www.youtube.com/profile?user=strych97 strych97

    Looks like someone never read Rothbard. Never discuss gold without having read “What Has Government Done to Our Money?”

    To quote:
    “An increase in the money supply [gold], then, only dilutes the effectiveness of each gold ounce; on the other hand, a fall in the supply of money [gold] raises the power of each gold ounce to do its work. We come to the startling truth that it doesn’t matter what the supply of money is.”

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  • NEPatriot

    DO not ask Steve Cooper of The Conservative Monster about Ron Paul…HE CALLS HIM A COMMUNIST AND ISLAMIC SYMPATHIZER! WELL COOPER, YOU ARE A POLICE STATE WAR MONGERING NEOCON!

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  • CheeezMaster

    QE-2 is masterfully masked massive malignant insanity of the most malicious kind.

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  • http://www.youtube.com/profile?user=ummagumma21 ummagumma21

    The vast majority of the GOP and many Democrats are slaves to big-dollar interest. They stagnate the economy by not letting the big corps succumb to the tides of the free-market (i.e. go bankrupt when they are, not get bailed out).
    Much progressive thinking does agree with the Fed setting monetary policy, but most progressives view that the government’s role in advocating action and/or regulation in these areas should focus on promoting overall social wellness v. bandaids for corps

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  • kenroar

    STOP THE FED NOW!!! They, along with the progressives are destroying our country very quickly.

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