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 One was a call for the full employment mandate to be repealed, in order to allow the Fed to focus solely on stable prices.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



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378 Comments:

  1. TIN-FOIL HAT AFICIONADOS FOR RON PAUL!!!

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  2. Barney Frank... OMG, a crooked politician!

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  3. Absolutally!

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  4. BUFFALO NY for RON PAUL 2012!!! DONT TREAD ON ME!!! Crash JP Morgan buy physical SILVER!!!!

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  5. Audio is horribly imbalanced in this vid :\

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  6. Audio is horribly imbalanced in this vid :\

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  7. Buffalo NY for RON PAUL!!!

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  8. " some of you even prove it by making uneducated comments about a man that wants to wake us all up to what's really going on"

    I apologize, but was that directed at me or did I misunderstand that. Please excuse me. I'm in defensive mode because some idiot black thugs that are across the street from my behind neighbors keep waking me up with stupid loud bass rap music and had to deal with cops to get it to stop. ( I work night shift so 4 a.m. to 11 a.m. is equal to the 8-5 work's 2 a.m.)

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  9. a sheep knows not that he is only a sheep.

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  10. Cynthia and I send our condolences. The Kennedy family and I are well connected
    Google Rose Kennedy, Edward Kennedy Patrick Kennedy and even Arnold Schwartzneggar
    from endorsing me back in 2004 when I ran against Mark Foley.
    I remember putting it online at Dr. Blass home with my third campaign Manager Al Rogers
    Google the above names with mine jeff Fisher and help Cynthia and I restore America in 2012 through 2020. FisherMcKinney2016 yahoo com

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  11. Yahoo has frozen our account to send
    We can receive.
    Tell yahoo to unfreeze us please.
    I love yahoo and recommend their stock with MSN, and Google always plus so many more
    Please in the name of God spread this posting all over yahoo and ABC and NBC and CBS and MSNBC and CNN and cnbc and BBC plus many more please.

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  12. Load of good people already have !!

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  13. load of good people going to loose their jobs.

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  14. load of good people going to loose their jobs.

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  15. Ireland for Ron Paul 2012 ... Americas only hope !

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  16. Malaysia for Ron Paul 2012

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  17. Why is the soundd screwed up?

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  18. they incorrectly says who is left because little dumb sheep believe whatever they say but are not independent enough to research their own news. these people like most of our parents are still stuck in last century and have the "I don't care what happens anyways attitude" Globalists count on you to act that way, they think you are dumb and stupid which some of you even prove it by making uneducated comments about a man that wants to wake us all up to whats really going on......

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  19. You don't even have a clue how ignorant you are and make yourself look, hows it feel to be a sheep?

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  20. Germany for Ron Paul 2012

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