Counterpunch Cites Ron Paul on the Fed

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Mike Whitney writes:
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The current rise in stock prices does not indicate a healthy economy. It simply proves that the market is awash in cheap credit resulting from the Fed’s increases in the money supply. . . .

The Fed’s low interest rates have created a culture of borrowing which has convinced many people that debt equals wealth. It’s not; and the collapse in the housing market will prove how lethal that theory really is. . . .

We should now be able to see the straight line that connects the Fed’s low interest rates to the impending stock market meltdown. The problems began at the central bank.

Presidential candidate Rep. Ron Paul (R-Texas) summed it up best when he said:

“From the Great Depression, to the stagflation of the seventies, to the burst of the dot.com bubble; every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and artificial ‘boom’ followed by recession or depression when the Fed-created bubble bursts”.

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Thanks to Mark Brady, who adds, “It’s too bad self-indentified free market economists have no understanding of what’s happening. Perhaps they should read Counterpunch and learn something.”

10:30 pm on June 30, 2007