Ron Paul: New Fed Boss, Same as the Old Boss

by Ron Paul

The news that Janet Yellen was nominated to become the next Chairman of the Board of Governors of the Federal Reserve System was greeted with joy by financial markets and the financial press. Wall Street saw Yellen’s nomination as a harbinger of continued easy money. Contrast this with the hand-wringing that took place when Larry Summers’ name was still in the running. Pundits worried that Summers would be too cautious, too hawkish on inflation, or too close to big banks.

The reality is that there wouldn’t have been a dime’s worth of difference between Yellen’s and Summers’ monetary policy. No matter who is at the top, the conduct of monetary policy will be largely unchanged: large-scale money printing to bail out big banks. There may be some fiddling around the edges, but any monetary policy changes will be in style only, not in substance.

Yellen, like Bernanke, Summers, and everyone else within the Fed’s orbit, believes in Keynesian economics. To economists of Yellen’s persuasion, the solution to recession is to stimulate spending by creating more money. Wall Street need not worry about tapering of the Fed’s massive program of quantitative easing under Yellen’s reign. If anything, the Fed’s trillion dollars of yearly money creation may even increase.

What is obvious to most people not captured by the system is that the Fed’s loose monetary policy was the root cause of the current financial crisis. Just like the Great Depression, the stagflation of the 1970s, and every other recession of the past century, the current crisis resulted from the creation of money and credit by the Federal Reserve, which led to unsustainable economic booms.

Rather than allowing the malinvestments and bad debts caused by its money creation to liquidate, the Fed continually tries to prop them up. It pumps more and more money into the system, piling debt on top of debt on top of debt. Yellen will continue along those lines, and she might even end up being Ben Bernanke on steroids.

To Yellen, the booms and bust of the business cycle are random, unforeseen events that take place just because. The possibility that the Fed itself could be responsible for the booms and busts of the business cycle would never enter her head. Nor would such thoughts cross the minds of the hundreds of economists employed by the Fed. They will continue to think the same way they have for decades, interpreting economic data and market performance through the same distorted Keynesian lens, and advocating for the same flawed policies over and over.

As a result, the American people will continue to suffer decreases in the purchasing power of the dollar and a diminished standard of living. The phony recovery we find ourselves in is only due to the Fed’s easy money policies. But the Fed cannot continue to purchase trillions of dollars of assets forever. Quantitative easing must end sometime, and at that point the economy will face the prospect of rising interest rates, mountains of bad debt and malinvested resources, and a Federal Reserve which holds several trillion dollars of worthless bonds.

The future of the US economy with Chairman Yellen at the helm is grim indeed, which provides all the more reason to end our system of central economic planning by getting rid of the Federal Reserve entirely. Ripping off the bandage may hurt some in the short run, but in the long term everyone will be better off. Anyway, most of this pain will be borne by the politicians, big banks, and other special interests who profit from the current system. Ending this current system of crony capitalism and moving to sound money and free markets is the only way to return to economic prosperity and a vibrant middle class.

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  • Surfisher

    How pathetic has our Nation become:

    1) We have a President that STILL refuses to show his ORIGINAL Birth Certificate (which we all must do to get a job). What valid credentials did Barrack Hussein Obama show to get his job, as president…NONE! What is he hiding — being born in Kenya, thus belonging behind bars as an impostor, and not in the White House?

    2) Hillery Clinton running for President 2016 — when she should be in jail for life in a Federal prison for allowing the deaths of Americans in Benghazi?

    3) The GOP Elite betraying the original Republican Principles in order to stay in power, regardless the damage they cause to our Nation?
    ——————————————————————————————-

    What has become of our Free Republic? Have, We The People, become so complacent to allow Criminals to evade not only Justice, but to run our Nation…are we slowly but surely becoming a Banana Republic where “Justice For All” means punishing the people only, but not the rulers since they are above The Law?

    Your thoughts on these infamies would be appreciated.

    Read more at http://www.uspresidentialelectionnews.com/2013/11/election-2013-post-mortem/#0m7pBZ3pYKScGE5G.99

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  • Surfisher

    You’d appreciate this 17 minute video by Ron Paul.

    http://www.youtube.com/watch?v=jKKF5vfZKaE

    Concisely describes our current state as a nation, and what will inescapably follow.

    Make it viral — America needs to wake up, to comprehend the EVIL that is the Obama Administration. And Obama’s probable endgame to declare Martial Law, and thus suspend elections and finally achieve his goal since childhood to become King (look up video 3 at minute 5:45 — he writes on his school steps “King Obama” as a child)!

    The below is a MUST SEE — “Who exactly is Barrack Hussein Obama?”

    part one:

    http://www.youtube.com/watch?v=6Og0Mq9Y1PM

    part two:

    http://www.youtube.com/watch?v=c1PVXH5JJ3M

    part three:

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

    RONPAULTROLLCUNT TYPE IN ALL CAPS… RONPAULTROLLCUNT HAVE YOUTUBE RAGE… RAWR… HEAR RONPAULTROLLCUNT ROAR!! RONPAULTROLCUNT WANTS YOU TO BE A GOOD LIBERTARIAN SLAVE. RAWR

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

    Its not about anti-semitic. Its about getting to the truth. I will give you a small example. I’m sure you’ve heard the “anti – semitic” rant “Jews control our money?” Well Alan Greenspan, Ben Bernanke, and now Janet Yellen have been in charge of the FED over the last +20 years and they’re all JEWISH. Is that being anti – semitic? Should this be just over looked, ignored like its a coincidence?

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  • http://www.youtube.com/profile?user=DeaddudeRS Deaddude RS

    leaders change, the ideas that shape the reality’s we live in are nearly immortal.

    you have been fooled, for if the leaders change, but the ideas that form the reality’s of this world, like your political and financial system do not, then the system that is meant to cast out greedy would be tyrants and there ideas that would create there tyranny has failed.

    always ask those who insist on the status quo, why they should keep it. And then replace with something better.

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  • http://www.youtube.com/profile?user=wethepeople947 wethepeople947

    Because they are awake…

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

    why does it seem that most, if not all, ron paul supporters are anti-semitic?

    Like or Dislike: Thumb up 0 Thumb down 1

  • http://www.youtube.com/profile?user=29render 29render

    at least they go to “church” on the same day! yayyy!

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  • http://www.youtube.com/profile?user=29render 29render

    exactly!

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

    Obama has NOOOO control. He is bought and paid for. I remember the pic of Obama praying in Israel at the wall before he was elected and its very clear who owns him and running almost everything I can see with any importance. MSM, FED, Military, most powerful Lobbies, etc.. Its so obvious now, I don’t think the Zionist even care if people know anymore. They’re in a position where it doesn’t see like anybody can stop them.

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  • http://www.youtube.com/profile?user=robertknight robert knight

    he is!~

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  • http://www.youtube.com/profile?user=robertknight robert knight

    the rothschilds are not jews they are who the Lord was referring to
    Rev 3:9

    Behold, I will make them of the synagogue of Satan, which say they are Jews, and are not, but do lie; behold, I will make them to come and worship before thy feet, and to know that I have loved thee.

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  • http://www.youtube.com/profile?user=ademar9988 ademar9988

    no the new one is JEW .. but i guess bernake was jew as well lol

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  • http://www.youtube.com/profile?user=MarkRawling Mark Rawling

    Oy Vey!!! Greenspan, Bernanke, Yellen…..ROTHSCHILDS ALL.

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