Ron Paul: How the Fed’s “Wise Gurus” Devastate America

185 Responses



by Ron Paul

One of the most enduring myths in the United States is that this country has a free market, when in reality, the market is merely the structural shell of formerly free institutions. Government pulls the strings behind the scenes. No better illustration of this can be found than in the Federal Reserve’s manipulation of interest rates.

The Fed has interfered with the proper function of interest rates for decades, but perhaps never as boldly as it has in the past few years through its policies of quantitative easing. In Chairman Bernanke’s most recent press conference he stated that the Fed wishes not only to drive down rates on Treasury debt, but also rates on mortgages, corporate bonds, and other important interest rates. Markets greeted this statement enthusiastically, as this means trillions more newly-created dollars flowing directly to Wall Street.

Because the interest rate is the price of money, manipulation of interest rates has the same effect in the market for loanable funds as price controls have in markets for goods and services. Since demand for funds has increased, but the supply is not being increased, the only way to match the shortfall is to continue to create new credit. But this process cannot continue indefinitely. At some point the capital projects funded by the new credit are completed. Houses must be sold, mines must begin to produce ore, factories must begin to operate and produce consumer goods.

But because consumption patterns have either remained unchanged or have become more present-oriented, by the time these new capital projects are finished and begin to produce, the producers find no market for their goods. Because the coordination between savings and consumption was severed through the artificial lowering of the interest rate, both savers and borrowers have been signaled into unsustainable patterns of economic activity. Resources that would have been used in productive endeavors under a regime of market-determined interest rates are instead shuttled into endeavors that only after the fact are determined to be unprofitable. In order to return to a functioning economy, those resources which have been malinvested need to be liquidated and shifted into sectors in which they can be put to productive use.

Another effect of the injections of credit into the system is that prices rise. More money chasing the same amount of goods results in a rise in prices. Wall Street and the banking system gain the use of the new credit before prices rise. Main Street, however, sees the prices rise before they are able to take advantage of the newly-created credit. The purchasing power of the dollar is eroded and the standard of living of the American people drops.

We live today not in a free market economic system but in a “mixed economy”, marked by an uneasy mixture of corporatism; vestiges of free market capitalism; and outright central planning in some sectors. Each infusion of credit by the Fed distorts the structure of the economy, damages the important role that interest rates play in the market, and erodes the purchasing power of the dollar. Fed policymakers view themselves as wise gurus managing the economy, yet every action they take results in economic distortion and devastation.

Unless Congress gets serious about reining in the Federal Reserve and putting an end to its manipulation, the economic distortions the Fed has caused will not be liquidated; they will become more entrenched, keeping true economic recovery out of our grasp and sowing the seeds for future crisis.

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185 responses to “Ron Paul: How the Fed’s “Wise Gurus” Devastate America”

  1. Citizen

    Obama says he has a 5 point plan to improve the economy….

    WHAT!!
    Are you going to believe him or your lying eyes and ears?

    Don’t forget, the Totalitarian State wants you to be obedient…
    Silence… I kill you!

    p.s.
    As for IAMHEWHOAM
    he/she/it is a total Sociaopath without moral compass.

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  2. Francozilla

    Democrat or Republican, makes no difference. USA badly needs a 3rd & 4th option, a serious grassroots movement. Democrats and Republicans are the SAME, they’re both EVIL, does not matter which is lesser, evil is evil. Candidates of Libertarian & Green parties should be allowed into the debates, as well as major independent candidates.

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  3. IAMHEWHOAM

    ……..and you paultards are the PUNCHLINE!

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  4. IAMHEWHOAM

    wRONg Paul is a batshit crazy, old, egg sucking wannabe. wRONg Paul is a fucking JOKE!

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  5. TheOneartist

    Most every major empire, including the Roman Empire and early 20th century Germany, have followed the same exact steps that led to economic collapse.

    For America, this problem began with the Federal Reserve, and by removing the gold standard. We are on a fiat currency, and not one fiat currency in history has ever survived. We are currently in the middle of inflation and a major wealth transfer, which will be far larger than the Great Depression. The housing collapse was only the beginning.

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  6. Spedskate

    Ron Paul is out Gary Johnson is your only option. WHO IS GARY JOHNSON?!? LET HIM DEBATE!

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    1. French Canadian

      Spedskate.

      In this last night interview on Infowars Nightly News, Tom Woods talks about Gary Jonhson and what are his options:

      They Have Rigged The System to Ensure Fraud: Tom Woods Speaks with Infowars
      http://www.infowars.com/they-have-rigged-the-system-to-ensure-fraud-tom-woods-speaks-with-infowars/

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  7. Surfisher

    Ron Paul’s senior adviser, Doug Wead, received this message from me today!
    (let me know your take)
    ——————————————————

    Doug, are you still Ron Paul’s senior adviser?

    If so, please, have a conversation with Dr Paul, and then inform us what his intentions are. We spent too much effort trying to get him elected, to be left now with just silence on your and his part. We, his supporters, have been left in limbo!

    If he is to utilize the Liberty Movement, that has grown exponentially in numbers, to endorse Gary Johnson (or have us Write In Ron Paul as protest vote)— it needs to be announced ASAP! With only 39 days left, it is negligent to the extreme to allow an election that goes unchallenged by a Third Party with all the support that has been garnered so far in opposition to the BO and the Mitt.

    Awaiting an announcement by end of week!
    ————————————————————–———————-

    Doug Wead, if you are no longer Ron Paul’s adviser, let us now — so we can decide what should be done without adhering to your blog’s intent.

    Thank you in advance,

    Surfisher

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    1. Surfisher

      MUST WATCH this 6 minute video!

      12 year-old Canadian girl (who’s IQ is probably higher than the combined IQs of the Barrack and the Mitt) slams the International Banksters!
      Canada has their own Private Banking Cartel — mirroring our Federal Reserve Board — whose goals are the destruction of the Value of our Money !

      Share and make it viral!

      http://www.youtube.com/watch?v=Cktqks_HL2Q

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  8. French Canadian

    Robin,

    I have news concerning Dr Steve Pieczenik. Alex said he invited him last week, but he doesn’t want to come right now, maybe later. If you want to hear him saying this, I have to put you in context, so start listening at: 02:33:49 to 02:46: 40

    Alex Jones Show: Wednesday (9-26-12) Paul Craig Roberts & Dr. David Schnare
    http://blogdogcicle.blogspot.ca/2012/09/alex-jones-show-wednesday-9-26-12-paul.html

    Now, if you want to know what was the video he was talking about in the passage I’ve just linked you to… here is the video:

    Breaking!! Israel Lobbyist – We Need a False Flag to Start War with Iran!
    http://www.youtube.com/watch?v=PfoaLbbAix0&feature=player_embedded

    ——————-

    By the way, on today’s show, Dr Craig Roberts really gave a powerful interview. If you want to listen to it, it starts at: 1:01:18

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    1. Surfisher

      French Canadian — one of your own makes monkeys out of the BO and the Mitt, and more!

      MUST WATCH this 6 minute video!

      12 year-old Canadian girl (who’s IQ is probably higher than the combined IQs of the Barrack and the Mitt) slams the International Banksters!
      Canada has their own Private Banking Cartel — mirroring our Federal Reserve Board — whose goals are the destruction of the Value of our Money !

      Share and make it viral!

      http://www.youtube.com/watch?v=gd71ZPjv0W8&feature=youtu.be

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      1. Surfisher

        LOL — youTube block it!

        Try this one:

        http://www.youtube.com/watch?v=Cktqks_HL2Q

        (share, before this one is gone, too)!

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      2. French Canadian

        Surfisher,

        This 12 years old girl is one smart cookie! She explained it simply with few words.
        But if you want to learn about how it happened, watch this very interesting video that I’ve been spreading to everyone I know in Canada for years::

        The Crime of the Canadian Banking System 1/4
        http://www.youtube.com/watch?v=jghiU55O5eY

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  9. IAMHEWHOAM

    Fearful of what? You people are just too fuckin’ goofy to know fantasy from reality. You’re all living in the “Twilight Zone”!
    Next thing ya know, you’ll be telling me how you believe in Bigfoot and flying saucers, you dumb fuckin’ wack-jobs!

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  10. TheOneartist

    He has a point. You sound incredibly fearful.

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  11. IAMHEWHOAM

    Go fuck your mother, you pathetic crackpot.

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  12. Tommy Jackets

    You’re the kind of person that is going to be saying everything is alright… One day you’ll be breaking down your dining room table into firewood and you’ll be saying to your family and yourself… “Everything is going to be ok… it’s getting better… the unemployment is down to 8.1% now!!!”

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  13. mdreiger

    I’ll put this on my public access TV show

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  14. loghmon

    Iran is a self sustaining industrialised nation, the legality of its nuclear program is meet accordingly with the international atomic energy agencies protocol.  Pakistan is not a member of the IAEA, yet no word of its nuclear program’s legitimacy is questioned.

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  15. loghmon

    Iran is a self sustaining industrialised nation, the legality of its nuclear program is meet accordingly with the international atomic energy agencies protocol.  Pakistan is not a member of the IAEA, yet no word of its nuclear program’s legitimacy is questioned.

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  16. French Canadian

    Great interview with Carl Mayer.
    It starts at: 0:56:30

    Alex Jones Show: Tuesday (9-25-12) Carl Mayer
    http://blogdogcicle.blogspot.ca/2012/09/alex-jones-show-tuesday-9-25-12-carl.html

    “Carl Mayer, the attorney representing American Pulitzer Prize-winning journalist Chris Hedges in his legal battle to keep President Obama’s power to send US citizens to military prisons without right to trial or attorney, or NDAA privilege, at bay

    ————————-

    Last night I had a friend phone me up after listening to the beginning of the Show till Carl Mayers interview at (0:56:30)
    It was the first time he was listening to the Alex Jones Show. A friend gave him the link. I had never bothered giving him the link I thought he was too misinformed… lol. I believed it was a waste of time. Anyway he phoned me up to tell me to listen to this SHOW…lol.
    WOW! Only 56 minutes listening to the show and he woke-up. This is how you wake-up people. NO ONE can wake-up people as fast as Alex Jones.

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  17. French Canadian

    Do you want to wake-up people? Do you really want to wake them up? Well this is how you do it. People wake -up by identifying themselves with ordinary people.
    Islamist or Zionist bull wont do it, you will only be called a racist. But ordinary event with ordinary people will wake them up faster than you wished.

    See this great interview with this brave Amy Larson who was arrested and jailed for Sidewalk chalking: “Youtube Building 7″

    The interview of Amy Larson starts at 0: 45:37

    Infowars Nightly News: Tuesday (9-25-12) Amy Larson
    http://www.youtube.com/watch?v=U7SLU2xffeI&feature=player_embedded#!

    You can also watch this short clip:

    Infowars Reporters Encounter Jackboots at The Alamo
    http://www.infowars.com/infowars-reporters-encounter-jackboots-at-the-alamo/

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  18. H3llionCinema

    “Connect with your community.”

    Mark that line people, it is very important or at least your families if something does go wrong. As they say, strength in numbers.

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  19. amdramatic

    RON PAUL 2012
    OBAMA AND ROMNEY CAN GO SCREW THERE SELFS…

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  20. MrJoycepaul

    I’m sad he will not run 3rd Party. I wish Ireland had such a good politician. We have plenty of bent politicians already, so you can keep Obama and “Mitt”

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  21. IAMHEWHOAM

    You are completely insane! Get psychiatric help before you hurt yourself or someone who gives a shit.

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  22. IAMHEWHOAM

    You’re nuts!

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  23. rangers2721

    as a “paultard” i can only say… i hope you’re right. I really hope you’re right

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  24. briteness

    I doubt that Ron Paul would advocate writing his name in, but I do not know. I strongly supported his candidacy, but now I plan to vote for Gary Johnson.

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  25. IAMHEWHOAM

    You fuckin’ paultards are just a bunch of Sicko,Psycho, crybaby, losers!
    YOU NEED TO BE COMMITED TO THE FUNNY FARM!

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  26. GonG108

    i am really scared and afraid of this america New World Order and as someone who had to flee from a soviet like totalitarian regime i can tell you that right now you are experiencing the first steps into a totalitarian dictatorship a police state without any human rights,you have right now more people in prisons then any other country world wide, it is enough to smoke marijuana 3 times and you can say good bye to the free world .this is very well known everywhere here in europe we are not blind.

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  27. GonG108

    call me crazy but i know very well what kind of people pass such acts,laws and no one can tell me that this can´t be used against me,obama has only promised that HE would not use it against americans,what with the next president and what with people like me who are actually no americans , i have to be mad or suicidal to travel to the US and , we all know that obama has his personal hit list and no one knows for what reason you can get on that assassination list. is this your land of the free ?

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  28. GonG108

    the level of police brutality and crime ( it is a crime in every other country they would have been looked up ) is so unbelievable that you have to fear that they will kill you if your front or rear light does not work , i´ve seen live footage of such incidents , and i´ve made up my mind of the land of the free,thats a bad joke,so bad that you even can´t call it a joke it is a catastrophe , i am serious i really fear to travel to this dictatorship,they don´t even need to charge me with anything

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  29. GonG108

    i saw your police body slamming a 35 year old mother who dared to use her cellphone in a car ,her child was next to her ,the damage on her face was so devastating that it had to be blurred , but not enough after she was unconscious lying on the ground she had the joy of getting teaseled and this is only one thing i sw on youtube i could go ahead and would probably still talking about it next week , use is a totalitarian police state,it is enough to steal an apple 3 times and you get a lifetime

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  30. GonG108

    is it really necessary to tell you that no law on this planet is made for not using it ?can you imagine how many people here in germany fear to travel to the US only because they have black hair and have arabic or muslim roots? i personally got called mad by my family when i told them that i´ld like to travel to the US,you may see things different but we know very well how such laws are beeing used. i am no muslim but i think it´s enough what i´ve said here to arrest and lock me away for ever

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  31. GonG108

    i know that the germans are no bad people in fact we are right now the most tolerant nation world wide, but we are still considered a thread to the rest of the world and in fact we cannot do anything without the permission of the us americans , so , yes you are right not every german is a bad boy but where is the problem to end this ww2 and to give us a peace treaty? can you explain this to me? thanks for your wishes but i would prefer if you would get frank face the things like they really are

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  32. GonG108

    and yes PEACE TREATY you americans are calling us allies , but are we alies when we still have only ceasefire and no peace treaty , germany was never a souvereign nation after world war 2 that is a fact . germany is a non government org. not recognized by international law , that is a fact too. so you call us alies but you refuse to give us the status of an independent republic is this what you call friendship ?

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  33. GonG108

    and i am not going to dsicuss with you the obama nazi laws because if you take your time and translate the so called german enabling act of adolf hitler an compare it with the patriot act I and II and specially the NDAA section 1031 you will see how close your obama is to this monster adolf hitler . my familly has suffered a lot from both sides ,the russians killed my grandfather and the german nazis stormed our homeland , i have no sympathies for nazis and no sympathies for soviets.

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  34. GonG108

    listen, i am a bulgarian whose grandfather was a general under the Zar ( king ) he refused to go into exile and 4 years later the russians took him , my mother was 4 years old and he vanished , we do not know what exactly happened to him, AND we bulgarians did not hand over a single jew or anyone else , the germans had to get along with it , i am no german but i like the germans because now it is my homeland and i would fight for germany if it is necessary , same with bulgaria and croatia

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  35. mikeknight4u

    A peace treaty? I take it from your profile you’re German? Not sure under what authority the obummer would kill you. I find it shocking how you lump all Americans with obummer. That’s like saying all Germans are bad because of Hitler. You should know that there were many Germans who hated Hitler during WWII and risked their lives to save Jews. Just because one person or a government is bad doesn’t mean all the citizens are bad. Good luck to you.

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