Ron Paul: We Must Stop the Fed from Causing More Harm

Later this month Congress will have an unprecedented opportunity to force the Federal Reserve to provide meaningful transparency to lawmakers and taxpayers. HR 459, my bill known as “Audit the Fed,” is scheduled for a vote before the full Congress in July. More than 270 of my colleagues cosponsored the bill, and it has the support of congressional leadership. But its passage in the House of Representatives is only the beginning of the battle, as many Senators and the President still don’t see the critical need to have a national discussion about monetary policy.

The American public now senses that the Fed’s actions, especially since 2008, are enormously inflationary and will cause great harm to the American economy in the long run. They are beginning to understand what so many economists still don’t understand, which is that inflation is a monetary phenomenon, and rising prices are merely a symptom of that phenomenon. Prices eventually rise when the supply of US dollars (paper or electronic) grows faster than the available goods and services being chased by those dollars.

This fundamental truth has been thoroughly explained by Milton Friedman and many others, so today’s Keynesian economists have no excuse for their claims that “inflation is under control.” Ordinary Americans don’t need a PhD simply to look at the Fed’s balance sheet and understand the staggering amount of money creation that has occurred in recent years. They know it will have harmful consequences for all of us eventually.

I’ve spoken at length about inflation, and how Fed money creation is effectively a tax. Every dollar created out of thin air dilutes the value of the dollars in your pocket and your savings in the bank. But the truth is that we are only beginning to see the results of the Fed’s dramatic increase in the money supply. As former Fed Chair Alan Greenspan himself explained last week to Larry Kudlow, most of the dollar deposits created by the Fed via successive rounds of “quantitative easing” remain on the balance sheet of Fed member banks. Because of very rational economic fears, banks are not lending, businesses are not expanding, and individuals are shedding debt. So, the trillions of dollars created by the Fed since 2008 remained largely undeployed. When those dollars eventually make their way into the world economy, prices across all sectors of the economy are likely to rise dramatically.

The true evil of inflation is that newly created money benefits politically favored financial interests, especially banks, on the front end. Over time, however, the net result of monetary inflation is always the devaluation of savings and purchasing power. This devaluation discourages saving, which is the key to capital accumulation and investment in a healthy economy. Inflation also tends to hurt seniors and those living on fixed incomes the most.

For decades the Fed has operated without any meaningful oversight whatsoever, resulting in the loss of savings, loss of purchasing power, and loss of quality of life for all Americans. It causes individuals and businesses to make bad decisions, misallocating their capital because market signals have been distorted. It causes financial ruin by engineering the inevitable boom and bust cycles that so many erroneously blame on capitalism. And it does all this in secrecy, to the benefit of the financial and political classes. It is time to Audit the Fed, as a first step toward ending its unchecked power over our money and economic fortunes.


  • That is sooooooooooooo cute.

  • French Canadian

    If Ron Paul doesn’t become your President, this is what is awaiting you:

    Troops Ordered To Kill All Americans Who Do Not Turn In Guns (Video)

    “Only UN peacekeepers will be allowed to carry firearms”.

  • This is joyous news. Hopefully we will be able to take our country back.

  • because he finally settled for a compromise

  • The Fed already ate it.

  • RON PAUL y u no be president :(?

  • You imbecile. Look up Trade Weighted U.S. Dollar Index: Broad (TWEXB) on the St Louis Fed site (FRED)

    dollar was 95 in June 2008 and now is 102. So it’s 7.3% stronger than it was when the Fed cut federal funds rate to .25%.

    It is working dumb ass. Maybe you ought to check the numbers before making a prediction.

  • Ice Saya

    No ones cooler than Ron

    I can’t wait to see if mainstream media gives it any coverage.
    This is BIG
    assbuttINhated BIG

    WOOOOooooh! GO RON!!

    Start dressing a little sportier.
    Get out of those hots suits!
    Start wearing really comfortable shoes! And get some professional orthopedic inserts. They’ll hurt for the first few days, but you’ll get used to them!
    They’ll boost your posture and make you feel a little younger.

    Start taking a fold-up bike with you EVERYWHERE YOU GO!
    Ride it every day RON. We need you fit and with spring in your step for the convention.
    Get a little tan PLEASE!
    hhaa Im sure everyone knows why that would be clever and hilarious.

    I LOVE YOU RON. Via con dios mi buen padre!! Vive la Vie RON!!

  • Collapse is impossible for a country that exports 12% of GDP. You fucking imbecile.”

    Not working. 😉

  • French Canadian


    By the way don’t give up on the Drudge Report too soon. Matt Drudge is slowly waking up. Since about 9 months, he often links articles from Infowars.. WOW! Who would have thought that one day, Matt Drudge would recognize the truth that Alex spreads.

    At that rythm, I believe in less than a year he will have finally completely waken up to reality.

  • French Canadian


    I know your relative has family who have firsthand information and are well=educated and that they know exactly what has been going on there and Syrians support Assad.
    I just wanted you to forward them this article so they will know, that we also know. Fox News was discredited a long time ago and so were all the other mainstream médias… but alternative medias like infowars always tells the truth and they have known about the scam in Syria from day one. I thought that might console them to know that WE also know what is really going on out there. I felt they would feel better if they knew that they are not alone with the truth.

    As far as the KID is concern, you are right. Like Alex Jones always say about these people: “They are dammage goods.. don’t lose time with them… move to someone else that is ready to learn something”.

  • luis

    Audit the fed !

  • Maybe he will.It matters not.They all work for the banksters,and read from the same teleprompter— and they’re all headed up by the zionists.America’s toast either way it goes.One man can’t unbuild this machine that is so near completion,anyway.The Kennedy bros thought they’d try that a while back,too… 🙂 You know 2013 is the 100 year anniversary of bankster control throught the FED,right? 13.That’s an important number for those people… it’s all like a big clock.America’s done.

  • look what rand paul is doing in there…look at the bills he proposed …and tell me he really endorses romney!! you will be suprised…and they are desperate is why they are pushing it now…their calendar is up and they need to have complete control between 2012 and 2015 …people are wakeing up and thats real bad for them..we need to revolt!!

  • what exports? What does the US create even if our dollar falls? NOTHING.

    News flash… the dollar just won’t fall… It will collapse.

  • I’m secretly slightly hoping that Obama wins. Just so the GOP suffers for what they did to Ron Paul. At least Obama never did to Ron Paul, what the GOP establishment did.

  • End fractional reserve banking, it’s a detriment to humanity.

  • robin

    French Canadian,
    Don’t waste your time on those guys on here. I will pass on the info. you shared about Syria, but my relative has family who have firsthand information and are well=educated. They know exactly what has been going on there and Syrians support Assad. I am trying to share this with those in our GOP who have bought into all the lies that the MSM puts out-conservative media like Fox News, Drudge Report, etc. We want to take down the Middle East because they are the last stronghold of traditional family values and the power elites have been unable to control them. To create instability there means that they can help to get rid of religion=Christian and Muslim. They’ve already done that in Yemen which is completely westernized and a material mecca…

  • Surfisher

    Ron Paul to WIN — or America to END 2012!

    (there are no other options!)

  • He should at least endorse Gary Johnson so that the supporters won’t be divided between writing his name in and voting for another liberty-lover that will actually be on the ballot.