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 One was a call for the full employment mandate to be repealed, in order to allow the Fed to focus solely on stable prices.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.

  • Charlotte County,Florida for Ron Paul!!!


  • i dont know if i am the only one but i cant hear it, something wrong with the sound

  • Don’t let the lamestream media pick your winners and losers. Their delegate counts are inaccurate, and RP’s campaign has been the most enthusiastic and the strongest compared Romney, and all the other hypocrites in Washington. If you’re still naive enough to not vote for him because of what the media tells you, why not go to a one of his rallies and open your mind? You mind as well keep your mind open and educated rather than being ignorant asking for more of your tax dollars to be wasted.

  • Ron Paul is unelectable: pfft yeah explain how he’s been re- elected to congress 12 times

    Ron Paul is crazy: He knows much more than these other lunatics in D.C. You should do thorough economic/governmental studying and understand why big gov’t is a real pain in the ass to our economy and the morals of this nation.

    Ron Paul is too old: Really? Don’t you know he rides a bike 20 miles in the heat of Texas? Why are you so judgemental?

  • ▬▬▬▬▬▬▬▬▬ஜ۩☆۩ஜ▬▬▬▬▬▬▬▬▬▬▬
    ★ ☆ ★ ☆ ★ ☆ ★ Restore ★ ☆ ★ ☆ ★☆ ★ ☆ ★
    E n d the F E D!!! | RON PAUL | Join the R[̲̅ə̲̅٨̲̅٥̲̅٦̲̅]ution!
    ★ ☆ ★ ☆ ★ ☆ ★ Liberty! ★ ☆ ★ ☆ ★☆ ★ ☆ ★

  • ▬▬▬▬▬▬▬▬▬ஜ۩☆۩ஜ▬▬▬▬▬▬▬▬▬▬▬
    ★ ☆ ★ ☆ ★ ☆ ★ Restore ★ ☆ ★ ☆ ★☆ ★ ☆ ★
    E n d the F E D!!! | RON PAUL | Join the R[̲̅ə̲̅٨̲̅٥̲̅٦̲̅]ution!
    ★ ☆ ★ ☆ ★ ☆ ★ Liberty! ★ ☆ ★ ☆ ★☆ ★ ☆ ★

  • Ron Paul 2012 He can and will win! Power of the people! Come on if our For-fathers could do it we can!

  • the gov asks the fed for the loan, the fed types in the amount charges us the interest, where does the interest come from? well the fed has to “print” more money to cover it, :). it goes on and on and on

  • in response to ju88ff, youre missing the entire point, just keep grabbing your ankles while the fed continues to grab your wallet and rip you off

  • I like that Dr. Klein guy

  • Ron Paul won’t fucknig win so give it up!

  • ANOTHER RON PAUL doesn’t look like this guy in this video.

    Ron Paul’s butler is not going to win this 2012 election.

    Ron Paul’s butler did bad things to Ron Paul’s family.

    These are allegations.

  • you don’t know of what you speak:)

  • very well said

  • all that double talk it no wonder ish is so messed up!!!!

  • Remember when everyone was as exited as this for Obama? You fail to understand. They are all the same, all working under the same hidden agenda.

  • the banking institutions are more dangerous to our liberties than standing armies. if the american people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homless on the continent their fathers conquered. the issuing power should be taken from the banks and restored to the people to whom it properly belongs.

  • Surfisher

    Ron Paul to WIN — Or America to END 2012!
    (there are no other options!)

    Madeline’s comments are on the mild side. ‘Unsustainable’ is a very reserved term for the actual — DISASTROUS.

    To put is simply — the government, now under BO, has created a machine that works as follows:

    Put $3 into it, turn the handle — and out comes $1… (and there is no limit on how many times he can do this — since the Feds will keep on printing money to feed this Devil’s Machine).

    The Main Stream media only reports on what comes out (as “Economic Growth”), but NEVER says how much more was put in (the Government Debt of 3:1 to play this shell game)!

  • I accuse congress of hiding this top secret hidden fact-
    Barney Frank is a living breathing “HOT DOG” that can speak.

  • Did this get reported in the MSN?