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.

  • All four of our assassinated Presidents were against the Rothschild’s central banks. Lincoln,Garfield,McKinley, Kennedy, Even Tyler recieved 100′s of assassination threats for his veto.
    First Bank of the United States,
    Second Bank of the United States
    Fed. Resv.
    All have one common factor, Rothschilds

  • klscott5

    All four of our assassinated Presidents were against the Rothschild’s central banks. Lincoln,Garfield,McKinley, Kennedy, Even Tyler recieved 100′s of assassination threats for his veto.
    First Bank of the United States,
    Second Bank of the United States
    Fed. Resv.
    All have one common factor, Rothschilds

  • Who decides what the threshold is? You make a lot of assertions, for example, that a threshold would “eliminate alot of this madness”. What madness, specifically, and how would it eliminate it? Monopolies are government grants for production. The way to eliminate monopolies is to eliminate government grants for production. The way to eliminate corruption is to eliminate government, because without government, corrupt businesses would not prosper.

  • RepentAndBeRaptured

    What we need to do to eliminate the corruption is simple tax all assets over a certain threshold. 100% of assets over 1billion dollars for instance would eliminate alot of this madness. It would also stimulate the economy through ineffiencies. It would eliminate monopolies. It would open up new opportunities for all americans. Consider microsoft with its tens of billions in revenue if it was limited to 1billion in assets how many more operating systems would there be?

  • 18bcarlsonify

    I think the best way for congress to show its disapproval of what the fed has done is by taking the ability away for the fed to have control over its own budget. Then slowly remove some of the fed’s responsibilities so that it does less. Finally Congress should impose consistent operating manual. But again what do I know. I am no economist, but I do think that a central bank, depending on how its ran, can be compatible with the Constitution.

  • 18bcarlsonify

    It seems to me that before cutting out the fed, at least we should take a long look before cut it out of the system. The fed has lasted for almost 100 years. At the same time the amount of money sloshing around the system is enormous. One of the reasons the fed is allowed independence is because the fed operates on its own budget.

  • Mabal Zarhairi, II

    Paul won’t run. It’s pointless. Educate the youth about fiat money (fix schools), so they will know better than to vote for politicians that support stupid policies.

    P.S. pass a law to publicly cane crooked politicians on TV and sell lottery tickets to fund education, lottery winner gets to swing the cane at football game halftime?


  • katsfanman



  • zeve14og

    all of these post are retard nutcases that can suck obamas 15 inch dick

  • AceDT311

    Check out my video of Ron Paul live at Iowa city.

  • DCUPtoejuice

    we now have a tiny nucleus of people in the federal government that understand this issue and it’s importance. We have a loooong way to go though.

  • VegEdGoku

    Turn off TV.
    Visit Benjamin Fulford site NOW!, Bill Cooper, David Icke, G. E. Griffin, Bill Hicks, Rafael Correa, Paul Craig Roberts, Carol Rosin, Jeff Rense, Alex Jones, We Are Change, Luke Rudkowski.
    Try to reach those people who don’t know The Truth, like reality show watchers.

  • campaign4liberty

    End The Fed
    and 97% of America’s problems would be over!
    visit LibertyPoet

  • johnnyfenger

    Spot on!!! Ron Paul 2012

  • AngryMuppet2012

    in the 2012 election we must elect more constitutionalists to get rid of federal reserve totally.,

  • uturniaphobic

    Monet eyes …? money ties…? oOOOOhh, monetize

  • delta3sLeader05

    after all is said and done-the u.s.a still owes many nations of the world(creditors)for credit which was borrowed against the u.s.a citizens,and there ability to paye taxes and generate wealth.

  • katey1dog

    Paul/Napolitano 2012

  • korzym
  • Gang5t3r916