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.

  • scotttwood

    I’m so glad that there is someone in Congress that knows what is going on. I love how neither party will endorse Ron Paul. He stands firm in what he believes. He has not been bought. He is a real champion for the people. He understands how the market works which is more than I can say for the vast majority of the representatives in Washington and our President!

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  • http://www.youtube.com/profile?user=MikeyKP420 MikeyKP420

    well said

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  • http://www.youtube.com/profile?user=birdman1968 birdman1968

    Bernanke and Geithner and all the people who are connected at the FED,and the wall street crooks should be convicted of theft of everyone in the u.s.Now the whole world is waking up and its just a matter of time before it all comes down. I hope Dr.Paul runs for president in 2012,it truly is like he said,a key point in history when hopefully greed and eliticism will be replaced by prosperity and transparency.

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  • 1dabirdman

    Bernanke and Geithner and all the people who are connected at the FED,and the wall street crooks should be convicted of theft of everyone in the u.s.Now the whole world is waking up and its just a matter of time before it all comes down. I hope Dr.Paul runs for president in 2012,it truly is like he said,a key point in history when hopefully greed and eliticism will be replaced by prosperity and transparency.

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  • http://www.youtube.com/profile?user=DeeCapitateSpammers Dee CapitateSpammers

    You go, Dr. Paul! Get that word out right now while you have the spotlight. People are more awake than ever. And you don’t have to say one thing different than before – while you have the spotlight, [new] multitudes can hear what they need to know.

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  • decapitatespammers

    You go, Dr. Paul! Get that word out right now while you have the spotlight. People are more awake than ever. And you don’t have to say one thing different than before – while you have the spotlight, [new] multitudes can hear what they need to know.

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  • Donna Peterson

    To have a balanced budget, we must get rid of the Federal Reserve System. How can we do that? How can I help? If Soros devalues our dollar any more,
    we will have a one world government.

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  • http://www.youtube.com/profile?user=AndrewWells Andrew Wells

    Go Dr. Paul!!

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  • awells88

    Go Dr. Paul!!

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

    well Ron has a couple more months to decided if he will run.. We sure hope so.

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  • dmhappy2777

    Man alive We need a whole congress of Ron Pauls!

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  • Gioxtream

    I really appreciate the fact That Dr. Paul warn us about this many times. If he become our President we should be patient with him too. WE will have to understand the conditions our country is at this point……he will do the best he can do.I know it wont be easy.But……At least we will going in the right direction with Dr. Paul. Thanks Ron Paul. Our Country Love You very Much.

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  • Lindsey

    Audit the Fed. and then ABOLISH it. Go Ron!!!!!!!!!!!!!

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

    Yeah, I read the Daily Mail here because I know England,s the Beta-test for whats coming here; I also read James Dellingpole,s book, “Welcome To Obama Land,I,ve seen Your Future And It Doesnt Work.” Iam watching to see in England when they confiscate the peoples retirement and 401ks…I read today Irelands now going the way of Greece. We need a worldwide lawsuit on these Bankers

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

    Yeah, I read the Daily Mail here because I know England,s the Beta-test for whats coming here; I also read James Dellingpole,s book, “Welcome To Obama Land,I,ve seen Your Future And It Doesnt Work.” Iam watching to see in England when they confiscate the peoples retirement and 401ks…I read today Irelands now going the way of Greece. We need a worldwide lawsuit on these Bankers

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  • http://www.youtube.com/profile?user=jx14aby jx14aby

    Gold’s at the top of the market today. Story of my life.

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

    I’m just curious as to what happened to the grand opening of RP’s 2012 presidential campaign.

    This 5 million…was that for the 2008 campaign or 2012 campaign?

    So far it seems that Rand got elected and Ron got promoted to a senior post on a committee.

    As I screamed in 2008, I will scream now…WHERE’S THE RON PAUL LEADERSHIP!

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  • http://www.youtube.com/profile?user=lsl70 lsl70

    It would be better to buy gold and silver. You’ll end up making more than interest on a savings account.

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  • proaudiohd

    Ron Paul needs to be in a higher seat of power!

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

    put it in your pocket.

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