Dr. Ron Paul, Call Your Office

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The Fed’s present crisis may make its 1929 version look like a walk in the park. Unfortunately, Ambrose Evans-Pritchard apparently advocates hyperinflation as a cure, but it’s still a fascinating article. BTW, when the Fed tried that in the early 1930s, it didn’t work:

“Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.

“As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world’s central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportions.

“‘Liquidity doesn’t do anything in this situation,’ says Anna Schwartz, the doyenne of US monetarism and life-time student (with Milton Friedman) of the Great Depression.

“‘It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue,’ she adds.”

Read the rest.

Can there be any doubt that we need fundamental monetary reform? And that only Dr. Ron Paul and his hard-money revolution can give it to us?

3:58 pm on December 24, 2007