• The Fed's Money Monopoly

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    Last week,
    in the name of protecting the little guy from Wall Street, the House
    passed HR 4173 to increase the little guy’s false sense of
    security in the financial system. This mammoth piece of legislation
    would massively increase government regulation and oversight in
    the banking industry under the misguided reasoning that more government
    could have stopped faulty lending practices, when in actuality it
    caused them. This bill would also greatly increase the powers of
    the Federal Reserve, which too many in Congress still see as savior
    rather than perpetrator in this mess.

    One silver
    lining is that the amendment to audit the Fed is still attached
    to the bill, and if it survives the Senate, the Fed will no longer
    operate in secrecy. If any version of HR 4173 becomes law, the Fed
    will be intervening and bailing out more rather than less, as it
    will gain enormous new powers in addition to those it already has.
    Whatever happens, the Fed and its defenders have seen that people
    are becoming very wary of its methods of operation, and many are
    downright angry at its very existence. Never again will the Fed
    be immune from the scrutiny of its critics. This is very positive.

    Because of
    legal tender laws that force acceptance of the dollar, the Fed has
    absolute power over the currency. This absolute power is leading
    to the absolute corruption of our currency. The money supply has
    doubled in the last year or so, which is extremely dangerous. The
    banks seem to be hoarding liquidity now but once these dollars make
    their way into the economy, hyperinflation and economic chaos will
    be a real possibility.

    Every time
    hyperinflation rips through an economy, the middle class gets completely
    wiped out. It is very alarming to watch the purchasing power of
    an entire life savings reduced to that of a few pennies. Those savings
    represent years of real labor, real time, effort and sacrifice exchanged
    for corruptible pieces of paper that politicians and bankers can
    destroy at whim.

    Legal tender
    laws force the people to become subject to this risk for the benefit
    of the rulers. Artificial demand for currency allows the authorities
    to create arbitrary amounts of it to pay for wasteful projects,
    like frivolous wars and an ever-expanding public sector. This saps
    the private economy of jobs and purchasing power, yet the temptation
    proves too great for politicians, time and time again. Our government
    is no different. Although our dollar has taken nearly a century
    to lose 98% of its purchasing power, the fact that we are all obliged
    to participate in this slow burn of the economy on pain of imprisonment
    is anathema to the principles of liberty.

    I introduced
    the Free Competition in Currency Act last week to free the people
    from these governmental threats. HR 4248 would repeal legal tender
    laws, prohibit taxation on certain coins and bullion, and repeal
    certain laws related to coinage. The prospect of people turning
    away from the dollar towards alternate currencies should provide
    incentive for Congress to regain control of the dollar and halt
    its downward spiral. Restoring soundness to the dollar will remove
    the government’s ability and incentive to inflate the currency and
    keep us from launching unconstitutional wars that burden our economy
    to excess. With a sound currency, everyone is better off, not just
    those who control the monetary system.

    See
    the Ron Paul File

    December
    15, 2009

    Dr. Ron
    Paul is a Republican member of Congress from Texas.

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