• Toward Sensible Monetary Policy

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    by Ron Paul: Recipe
    for a Successful 2011



    to Ron Paul.

    Last week the
    112th Congress was sworn in. I am pleased that I will be chairing
    the Monetary Policy Subcommittee of the Financial Services Committee,
    which has oversight of the Federal Reserve. Obviously, this position
    will facilitate my efforts to ensure the Fed provides the American
    people with more information about what they have been doing with
    and to our money. Not surprisingly, since my chairmanship was announced,
    apologists for the Fed have been recycling the old canard about
    how increased transparency threatens the Fed’s so-called political

    By independence,
    they are referring to the Fed’s ability to greatly impact the
    economy with virtually no meaningful oversight. We only recently
    learned that the bankers at the Fed were able to use the latest
    financial crisis to bail out Wall Street cronies and foreign central
    banks with billions of dollars that were created and wasted, instead
    of appropriated and voted on by representatives of the people. The
    Fed and its supporters in Congress vehemently fought even this small
    bit of transparency and without this one-time provision in the financial
    reform act forcing disclosure, we would still not have this information.
    Indeed, we are in the dark on so much of what the Fed has done.
    This is extremely dangerous for our country, yet this power and
    secrecy is defended as some kind of public good, which is patently

    Our government
    is based on a system of checks and balances. With no check on the
    Fed, it is no surprise it has thrown the economy wildly off balance.
    The solution is not to re-inflate the bubbles the Fed created, or
    to continue to devalue the currency, or to throw billions at failing
    banks and corporations. The solution is to return sanity and freedom
    to monetary policy. Forcing the entire country to use a medium of
    exchange that is subject to the whims of elite bankers and their
    cronies on Wall Street is not sanity. Hoping that an unchecked,
    all-powerful, behemoth banking cartel will solve any economic problem
    is not sanity.

    The problems
    the Fed was originally created to solve now look miniscule compared
    to the problems it has created. If “political independence”
    erodes the purchasing power of the currency by 98%, destabilizes
    the economy with radical booms and busts, all while increasing unemployment
    and tipping us ever closer to hyperinflation, perhaps it is time
    to try a little transparency and accountability instead. Better
    still – we should try giving the people true economic freedom.

    Make no mistake:
    the Fed is not truly independent of political pressure. Its chair
    is appointed by the president, and it is a creature of Congress.
    Congress has a duty, albeit a neglected one, to exercise oversight
    of the Fed. However, even if it was politically independent, it
    is not independent of the influences of Wall Street. One only has
    to look at the revolving door between the Fed and the big banks
    to know that. Disclosures on TARP funds confirm this.

    It is nothing
    short of cruel and criminal for Congress to stand idly by while
    the life savings of Americans are inflated away to nothing. It is
    high time Congress insist on getting complete information on what
    the Fed has been doing, and for whom. My hope is that exposing the
    truth will demonstrate the insanity of the status quo and more people
    will call for sensible changes, such as legalizing competing currencies.

    the Ron Paul File

    5, 2011

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

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