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

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.


  • you damn assholes are spying on us but not only for military reasons you are also spying on our corporations,you are the most egoistic valueless and un-ethic country this world has ever seen.we know that you have financed a. hitler,your texaco has provided the fuel additive needed for the german airforce,without this additive hitler would´ve not been able to bomb who ever,he got financial support from america, in fact it was us america who brought hilter up just in order to enslave the germans

  • guess how you americans are welcomed in france , in the netherlands , in belgium and everywhere else, there is only hate , hate , hate you even kill your own people for the sake of war , more then 85 % think 9/11 was an inside job in co operation with the mossad. no one , from the first day on believed your stupid fairy tales , in fact i do not know even one nation in europe who would have sympathy with you , how does it feel to be the most hated persons on this planet ?

  • same i croatia during the balkan wars,when the americans came to dalmatia south of croatia people throw eggs and tomatoes at your rotten soldiers , when the germans came in the girls showed their breasts and the man lifted their right hand ( not that i think that is a good thing but it shows how much they hate you ) in serbia a bus was stopped for two days because two US assholes dared to travel through serbia , they had to stay two days in a police station , i hope they got their beating .

  • when i was in BG/sofia you seem to have marines there,i saw one in uniform walking through the streets.i never saw so many people spitting on the street after a soldier,must be a good feeling to know how much the people are hating you.i asked what are these ass… doing here,answer:no prob not even the ugliest will talk with them,they´re treated like sick animals who have to be separated from the public,you may think bulgaria is friendly to you but in fact the russians are our brothers you NEVER

  • this was a try to be ironic, obviously i failed , but never the less, i think it is not that hard to understand what i wanted to express .

  • i hope you got my two other answers in your mailbox , i think it is enough to answer one time but i also think that it is important to show you what you are , my english may not fit your canadian slang but it should be enough for you idiot to understand what i mean , nothing more is needed for a conversation with an imbecile. by the way where did you got your education from ?

  • lol you american imbecile.
    english is my 6th language,i got my eduction from a german private jesuit school and what you may think about me is as important as a fly on a piece of chinese moron are probably not even able to speak one more language then your retarded english which is actually not even real english just a moron slang of some former european criminals we have send over the great ocean to get rid of scumbags like you are one , so shut the fuck up and get back into your cave

  • Jesse Ventura 2016. Join his channel: JesseVenturaCampaign

  • Learn better English, then earn a better education.

  • Surfisher

    GOP = Crooks-R-Us

    On the rotting GOP — actually they’ve become temporarily stronger (since having created a dictatorship within the Republican Party with their CRIMINALLY FALSE “The Ayes Have It” (the whole World saw the print on the teleprompter as the end result, BEFORE the vote was taken (a machine “knew” IN ADVANCE the “final vote tally”))!

    See this infamy here — at minute 1:57 the teleprompter is already starting to show the end result: “In the opinion of the Chair, the “ayes” have it, and the resolution is adopted.”
    Then at minute 1:59 the Chair asks all those opposed to say “no”. And at minute 2:00 you hear a resounding NO till minute 2:03…but why bother to hear the people, when their “ayes” already “won”…before to vote was taken!

    And our media is still SILENT — but all around the world saw it — 2:35 minute video recording that will never go away!


    Since all dictatorships use strong armed tactics to ensure their dead dogma is unchallenged and nurtured, they always prosper historically for a while (especially in the beginning after the dictatorial creation).

    But, eventually their DEAD DOGMA becomes exposed without, and no matter how hard their enforces try to resuscitate it within, it implodes by lack of observable merit. (History is the ultimate litmus test, showing this to be always true, so far).

    The short term danger is that now The Mitt has dictatorial control over the GOP — and should he remotely succeed in winning the election, his 2nd run WILL BE as THE CHOSEN AND ONLY ONE REPUBLICAN (no other will even be acknowledged as existing — Rand Paul will neutered de facto, and will become persona non grata under this scenario)!

    The beneficial side is that the FRAUDS (upon frauds, and frauds) committed by the GOP to assure this Dictatorial Takeover of the Republican Party has been witnessed and recorded for posterity.
    Should The Mitt lose (and that’s a MUST to save our Nation) — the GOP Elite will take such a beating that the Republican Party will take years to recover (opening the door for a Valid Third Party)!

  • French Canadian


    When I saw Miller, I thought it was Gary Jonhson, they look a lot alike (that was without my glasses…lol). After putting my glasses on, I saw a bit of a difference between them.

    But I can understand why people are saying he is a racist… I also feel the same way. When I hear the word Zionist (that’s the signal)… I know right away that the guy has to be a racist. And the women with her scarf is also one.

    I am more like Ron paul, Gary Jonhson and Alex Jones. I believe in Israel sovereingty, I want the Jewish people to have a land. It doesn’t matter if it was the Americans who created the UN to give them a country so Americans could have an ally in this region of the World. They now have one and should be allowed to keep it.

    Do you really think that USA and Canada did any better? Stealing the lands from the Natives, killing them and putting them in Reserves? I don’t. But is it your fault or mine what our ancestors did? No, it isn’t. And now that we we’re born and live in our respectful countries, we should be alowed to keep the sovereignty of our countries.

    Americans cannot face the truth, this is what I’m realizing everyday that passes by. Instead of speaking of the corrupted Foreing Banksters, they say the Jewish Banksters or worse, the Zionist Banksters. Giving the impression that alll JEWS are evil, when in fact it is only this small group of Banksters (6 major banks in America). And who allowed them to run your banks and country? Americans did. Face the facts and stop looking for scapegoats. So they control your medias… who give then that right? Americans did. Wake-up folks!

    How can this Miller point out to Israel on 9/11 when there is absolutely NO proof of that so far, just speculation? A true investigation was never done. The few facts we have so far points out to America, Saudi Arabia, Britain and Israel… in that order. But the first guilty one is AMERICA (CIA) who allowed it to happen.

    I see people on this site linking to things Zionists wrote to make them look bad, like I saw on neoconservative sites, people linking to things Islamist’s wrote to also make them look bad. All these people a true racists in my book and are trying to reject the fault on either the Zionists or the Islamists. NONE of them ever blames America… lol. I guest when you are too close to a tree, you cannot see the forest.

    Conclusion: In my book Merlin Miller is a true racist. And he ain’t going anywhere. Unless he takes his blinders off and sees America for what it really is. But it is unlikely he ever will. We do not need people like him trying to divide us more. We need to unite.

    Evil comes from every country and the Globalists scums are from all Nations. Till we understand this, there is NO hope for this world.

    Sorry Robin, but I don’t like this Miller.

  • They don’t want Ron Paul because he’s too honest.
    The banisters want dishonest people in the house.

  • French Canadian


    If people would only know about these horrific experiences done on Americans by the government, there would be a major revolt and the Right/Left paradigm would immediately stop to exist. Knowledge is power!

    The Army’s Secret Cold War Experiments on St. Louisans


    “Folks in St. Louis woke up to disturbing news this morning. If they hadn’t got the memo, their city was apparently used as a secret Army experimentation laboratory during the 50s and 60s where citizens were intentionally, but unknowingly, infected with harmful biological agents.

    … Last year, we covered a 1977 Senate hearing on Health and Scientific Research confirming “that 239 populated areas had been contaminated with biological agents between 1949 and 1969, including San Francisco, Washington, D.C., Key West, Panama City, Minneapolis, and St. Louis.”

    Indeed, the classified testing of chemicals on human populations by our own government is extensive and well documented.”

  • Surfisher

    The solution — End the Fed!

    First by getting rid of Bankster patsy Senator Harry Reid who has vowed to block any motion on the Senate floor to Audit the Feds .

    Also, follow what was done in Boston — LOL, serving them eviction notice (all major cities must follow this example).

    Serving Eviction Notice to the Federal Reserve Bank of Boston — watch this great video!

    Quote of the month: “The lesser of two evils is still evil” — Jim Gray.


    • French Canadian


      Great video!

      This how Alex jones ruined his voice by bullhorning Federal Reserve buildings for years… lol

  • That’s funny, and all these years I thought it was the White man who stole America from the Indians.
    Karma is a BEOTCH!!

  • John

    RON PAUL has turned into CHICKEN LITTLE.For a Real Leader see

  • sustainable economy

    You may not agree with my opinion, but I will state my reasoning here anyway:

    The definition of ‘economy’ is either unclear or wrong, at least for the current times.

    One main component of the economy is the currency, and this would represent a main node for society viability or progress or deterioration. So that by adjusting currency value to population status and activities in beneficial proportion a problem is solved. Or by adjusting currency quantity. But the dilemma seems to be which one of the two is better to adjust so that the role of an economy in society can be achieved. And as far as most people understand it its role is to be able to trade goods and services for life improvement, or just for sheer survival.

    If neither money quantity or nor its value is accessible for real the economy is restricted to those participants that can keep it afloat and derive who knows what many benefits.

    Maybe the knowledgeable economists, or the aficionados, ought to hold free web seminars discussing a topic at a time with the only aim to solve the priorities. Like, amount vs value, the pros and cons.

    So basically i’m seen a need to re start the economic system, with input from the majority of participants.

  • Gary Johnson 2012

  • Citizen

    Hi French Canadian,

    It’s hardly worth the effort to even consider Gary Johnson….
    WE ALL agree on the Libertarian principals
    It isn’t going to happen!

    I think Mittens will win the election and it will business as usual.
    -Increased Defense spending
    -Gratuitous cuts in Entitlements but nothing significant
    -but definitely nothing will be done about the FED.

    The world Central Banks run everything, and the FED is the Lead Player.
    The Banksters are severally over-extended and their only solution is to
    INFLATE the currency to Paper Over the problem

    The Elite Banksters will destroy the middle class to cover their SINS!

    • French Canadian


      I know it will not happen. But won’t this send a message to the Establishment if Gary Jonhson gets a lot of votes?

  • Ladies and Gentlemen, dont get involved in others issues, like GJ and the others. The only actions are: WRITE-IN RON PAUL 2012 and Complete the TAKE-OVER of the REPUBLICAN PARTY. Join the Campaign WRITE-IN RP 2012 of the Grassroots RP and bring all the FRACTIONS FOR FREEDOM-LIBERTY TOGETHER. Dont waste your time, money, energy, etc on somethingelse NOW! UNITE AND SPREAD THE MESSAGE!

    Sincerly yours
    aurel barber