QE2: The Fed’s Last Stand?

The World Shorts the Dollar

by Ron Paul

A remarkable confluence of recent events has brought unprecedented but very welcome attention to both U.S. monetary policy and the global political economy in general.

First, Federal Reserve Board Chairman Ben Bernanke recently announced that the Fed would embark upon another round of monetary easing by purchasing $600 billion worth of U.S. Treasury debt. This amounts to an admission that markets have run out of patience with our profligacy, and therefore our own central bank literally must serve as the buyer of last resort for Treasury debt.

Second, World Bank president Robert Zoellick openly suggested that gold could play a helpful role in the global monetary system by serving as reference against more volatile fiat currencies. This is almost heresy coming from a neoconservative globalist like Mr. Zoellick. It hints at an obvious but unspoken truth that is anathema to politicians and central bankers alike: namely, that gold could be viewed as…. money!

Finally, Mr. Obama attended the G20 summit in South Korea last week and found a very chilly reception for his vision of American economic policy. Mr. Obama argued for continued worldwide stimulus, via continued debasing of the U.S. dollar, to bolster American exports. Several powerful European and Asian finance ministers, however, rejected this approach out of hand as nothing short of a currency war. They are committed to austerity measures at home, and don’t want to let the U.S. simply monetize its past sins at their expense.

All of these events culminated in a tremendous amount of political and media scrutiny aimed the Fed. Ordinary Americans are demanding answers and accountability, and they are putting heat on their political representatives in Washington to end the cozy “independence” from congressional oversight the Fed has enjoyed for so long.

In the 35 years I have been studying, speaking, and writing about monetary policy I have never before seen Congress or the financial press pay much attention to the Fed. Monetary policy has always been considered boring on Capitol Hill, something left to remote policy wonks far away from the din of presidential or congressional politics. Congress always has been eager to leave Fed governors well alone, with no oversight or accountability, as long as they played along and papered over the growing budget deficits.

But it’s amazing what a global economic meltdown will do to the political and media landscape. In just two short years, the Fed has become the hot topic and a lightning rod for criticism. While it is gratifying to see so many formerly uninterested politicians, economists, talk show hosts, and pundits suddenly rally to attack the Fed, one can only wonder whether they truly understand that central banking is inherently incompatible with our Constitution and a free market economy.

In other words, it’s not enough to show outrage at the latest Fed action or argue about the relative merits of Mr. Bernanke compared to his predecessors. To reclaim our dollar and our economy, Americans must oppose central banking per se. Fiat currencies cannot be “reformed” or “managed”. They are fundamentally subject to ruinous debasement courtesy of the political and economic ruling class. History shows that this is true in all nations at all times.

  • silversobe

    “The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money” — Charles A. Lindbergh Sr., 1923

    »crosslinked«

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  • GreatDepressionTwo

    So in the end of this pyramid scheme; We are forced to be the greater fools.

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  • 71twimom1918

    Run under Constitutionalist!!!!!! You are the man!!!!!!!!!!!

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  • echelonexcursions

    RP..true hero!

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  • 71twimom1918

    RON PAUL 2012!!!

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  • vjacq88

    Listen to Ron Paul.

    Damn it! He really is Uncle Sam! Kick their asses Ron.

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  • waterchildtera

    if the fed wants to stay in business
    they must for give all debt !
    it was all counterfeit !
    and go to 100% backed currency or forget it !
    no more fractional reserve banking that has been outlawed and punishable by life in prison up to death !

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  • MikeFromTheUK1

    Ron Paul 2012

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  • 1dabirdman

    seems like the fed wants to compromise now that their ass is in the spotlight! no way! keep pushing them for NO LESS THAN A CRIMINAL INVESTIGATION! you know Dr.Paul has got to be loving this! congress is finally pulling their heads out of their ass.Berstanke best be gettin outta dodge.He should do time as well as Paulson,Geithner,and all of the wall st.scum that have been hedging their bets with OUR money! THE NEW REVOLUTION HAS BEGUN! PAUL FOR PRESIDENT 2012

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  • freesk8

    Yay, Ron Paul!
    Tell it like it is!

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  • Krupification

    Definately the smartest person in politics today.

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  • goldcurrent1

    Ron should run as an Independent for pres in 2012.

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  • fatbob1950

    I hope we don’t get boondoggled with the slow reaction from Congress to this fiscal problem. I would like to see quick and decisive action as I am sure you do.

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  • vigorosoPIMPJr

    Ron Paul for President………

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  • irdial

    “History shows this is true in al nations at all times”. This is why the ‘greenbackers’ are wrong; you can NEVER trust the state with the power to print money; they ALWAYS abuse this power, inflate the currency for themselves and their cronies and the currency ALWAYS ends up being destroyed.

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  • HG2013

    Thank you Mr. Paul! We need to take back our lives people!

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  • Xylogeist

    Ron Paul continues to speak the truth.

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  • madmallard11

    I used to be very much behind you Ron Paul. .but you’re starting to make me nervous by saying things like “abolish medicare and social security” Medicare is why my grandmother is alive. Obamacare will not kill my grandmother but if you abolish medicare THAT will surely do the trick. If you propose some alternative I’ll listen but I can not support such an in-compassionate wish.

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  • 1eyednewt

    Put a torch to your Reps!!!
    End the FED!!!

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  • CitizenInvestigator

    Thank you.

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