Ron Paul: End the Fed and Restore Sound Money

by Ron Paul

Last week I held a hearing to examine the various proposals that have been put forth both to mend and to end the Fed. The purpose was to spur a vigorous and long-lasting discussion about the Fed’s problems, hopefully leading to concrete actions to rein in the Fed.

First, it is important to understand the Federal Reserve System. Some people claim it is a secret cabal of elite bankers, while others claim it is part of the federal government. In reality it is a bit of both. The Federal Reserve System is the collusion of big government and big business to profit at the expense of taxpayers. The Fed’s bailout of large banks during the financial crisis propped up poorly-run corporations that should have gone under, giving them a market-distorting advantage that no business in the United States should receive. The recent news about JP Morgan is a case in point. JP Morgan, a recipient of $25 billion in bailout money, recently announced it lost another $2 billion. If a corporation shows itself to be a bottomless money pit of “errors, sloppiness and bad judgment,” the Fed shouldn’t have expected $25 billion in free money to change that or teach anyone a lesson in fiscal discipline. But it determined that this form of deliberate capital destruction was preferable to one business suffering bankruptcy. Clearly, some changes need to be made.

Several reforms for the Fed were discussed at the hearing. One was a call for the full employment mandate to be repealed, in order to allow the Fed to focus solely on stable prices.

Another reform calls for changes to the composition of the Federal Open Market Committee. Still another proposal was for outright nationalization of the Fed or of its functions. But if what the Fed does now is bad and inflationary, allowing the Treasury to print and issue money at-will would be even worse, and could possibly lead to a Weimar-like hyperinflation.

The problems and advantages of the gold standard were discussed at the hearing. The era of the classical gold standard was undoubtedly one of the greatest eras in human history. For a period of several decades in the late 19th century, the West made enormous advances. However, the gold standard was still run by government. The temptation to suspend gold redemption reared its head again with the outbreak of World War I. Once the tie to gold was severed and fiscal restraint thrown to the wind, undoing the damage would have required great fiscal austerity. Instead, the Western world proceeded to set up a gold-exchange standard which lasted not even a decade before easy money led to the Great Depression.

While returning to the gold standard would certainly be far better than maintaining the current fiat paper system, as long as the government retains the power to go off gold we may end up repeating the same mistakes.

The only viable solution is to get government out of the money business permanently. The way to bring this about is through currency competition: allow parallel currencies to circulate without receiving any special recognition or favor from the government. Fiat paper monetary standards throughout history have always collapsed due to their inflationary nature, and our current fiat paper standard will be no different.

It is imperative that the American people be educated on the dangers of the Fed and the importance of restoring sound money. The laying of the groundwork must begin today, so that the American people will be prepared for the day when the mirage the Fed has created evaporates completely. The full hearing footage is available on my website and I would encourage every American to take a look.

  • http://www.youtube.com/profile?user=SandeepVellore Sandeep Vellore

    u are correct in tour statement

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  • http://www.youtube.com/profile?user=SandeepVellore Sandeep Vellore

    u are correct in tour statement

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  • http://www.youtube.com/profile?user=Blackgam3r Blackgam3r

    LOL We bailed out Mexico too?!?!

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

    Doesn’t the interest money go back to the Treasury?

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

    I’d much rather prefer the Fed stay private than public. Imagine Frank or Pelosi determining what interest rates should be. That would be insane.

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  • http://www.youtube.com/profile?user=nair0bij0nes nair0bij0nes

    US citizens need to rise up to abolish the fed !

    Never to make the mistake of going down the road of centralized banking again..

    Not only is the fed ruining your country but they and their imf are enslaving the whole bloody world !!

    C’mon Americans, we love you… WAKE UP !

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  • http://www.youtube.com/profile?user=nair0bij0nes nair0bij0nes

    Ron Paul = Founding farther material re-incarnate !

    Christ America, please put someone with a brain and a conscience at the helm of your country, for all our sakes !

    »crosslinked«

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  • http://www.youtube.com/profile?user=DiamondDean Diamond Dean

    congress should just take over the fed

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  • http://www.youtube.com/profile?user=MichaelMengel Michael Mengel

    Barney Frank you have a tremendous tell. I would avoid poker.

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

    this committee central decision making stuff has got to go. We are living Atlas Shrugged today, and the shrugging is happening as more and more entrepreneurs leave this country. Then committies like this can preside over nothing.

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

    The Zionists are deliberately destroying all Western countries! They immigrated into our nations and then secretly declared war upon us!

    They conspired to take control of our nation’s infrastructure through carefully orchestrated acts of TREASON! They became our Bankers, Politicians & media owners. Their goal is to obliterate the middle class!!

    For a FREE informative BOOKLET & video on the Zionist-engineered INTENTIONAL destruction of White people go to:

    youtube. com/watch?v=n663eVTSyS8

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  • http://www.youtube.com/profile?user=NathanDawson Nathan Dawson

    What is your definition of “fiscal policy” and “monetary policy?”

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

    What is your definition of “fiscal policy” and “monetary policy?”

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

    Johnson: The problem is printing money, borrowing is ok.
    watch?v=jLq7NOB1Xm4&feature=plcp
    He’s not going to address monetary reform OR monetary and fiscal policy for that matter. More of the same.

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

    Johnson: The problem is printing money, borrowing is ok.
    watch?v=jLq7NOB1Xm4&feature=plcp
    He’s not going to address monetary reform OR monetary and fiscal policy for that matter. More of the same.

    Like or Dislike: Thumb up 0 Thumb down 0

  • http://www.youtube.com/profile?user=NathanDawson Nathan Dawson

    Fuck you, too!

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