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Article posted Sep 14 2012, 12:46 AM Category: Economy Source: ZeroHedge Print

Ron Paul: "Country Should Panic Over Fed's Decision"

by Tyler Durden

What took Ben Bernanke sixty minutes of mumbling about tools, word-twisting, and data-manipulating to kinda-sorta admit - that in fact he is lost; Ron Paul eloquently expresses in 25 seconds in this Bloomberg TV clip. Noting that "we are creating money out of thin air," Paul sums up Bernanke's position perfectly "We've Lost Control!"



25-second quick clip



Full 5 minute clip - must watch! from Mal-investment to Bernanke's frustration...

Paul's reaction to more Federal Reserve stimulus:
"It should not surprise anybody, but it is still astounding. To me, it is so astounding that it does not collapse the markets. [Bernanke] said, 'We are in very big trouble. We are going to do something unprecedented and we believe it will not hurt the dollar.' And yet the stocks, they say 'we love this stuff.' But the dollar didn't do so well today and the real value of the dollar is measured against gold, and gold skyrocketed from its very low to its highest. It means we are weakening the dollar. We are trying to liquidate our debt through inflation. The consequence of what the Fed is doing is a lot more than just CPI. It has to do with malinvestment and people doing the wrong things at the wrong time. Believe me, there is plenty of that. The one thing that Bernanke has not achieved and it frustrates him, I can tell--is he gets no economic growth. He doesn't do anything with the unemployment numbers. I think the country should have panicked over what the Fed is saying that we have lost control and the only thing we have left is massively creating new money out of thin air, which has not worked before, and is not going to work this time."
On potential unintended consequences:
"The biggest unintended consequence is what we need is a restoration of confidence. If the Fed is expressing a lack of confidence and they do not know what to do, it does not do anything to restore confidence. People might restrain from doing anything. 'Interest rates are low. I do not have to buy my house this year. I will wait until next year. It might be a little easier. Prices might come down.' So people are restrained and it is the opposite of when you expect that housing prices are going up, and you are afraid interest rates are going up. That is why the market rate of interest is so crucial. The rate of interest should give the businessman, the entrepreneurs, the investors and the savers information. But there is no market to interest rates. That is why there is such gross distortion and why we do not have a market economy. We have a rigged economy through central economic planning by central banking. The system is failing, it was doomed to fail and we have to wake up to that fact."
On whether the Federal Reserve needs discipline:
"Short of getting rid of the Fed, which is not going to come and I wouldn't do that overnight anyway, I would say that Congress has the authority to say, do not buy debt. Do not buy any debt. The Congress can yell and scream and pander to the people. They can say the deficits are terrible and terrible. But nobody wants to cut overseas spending or food stamps for the poor. They say, 'we cannot do it without the Fed. The Fed has to buy this debt.' That is a moral hazard for the politician. If the Fed couldn't buy the debt, and interest rates would rise all of the sudden the burden would be on the Congress to get their house in order to restore confidence. Even that would panic a lot of people because live within your means? We do not like that. We like this idea that we can give people anything they want for free, so we can get reelected. Well, all of this is coming to an end."
On whether Bernanke should be pulling back liquidity and raising interest rates right now instead:
"Liquidity should be determined by the market. I don't think he should raise rates. He should just get out of rigging rates. The system is so biased. It helps the bankers who get free money and then they buy government debt. What about the people who are frightened, they do not like the stock market and they are frugal and want to take care of themselves? What do they get--1% on a CD? That is unfair. It's bad economics. You want to let the market determine interest rates and let it sort it out. People get so nervous, because we have lived so long with a Keynesian economic model of fixing interest rates and intervening in the market."
On whether Romney would do the right thing with the Federal Reserve if elected:
"So far, I have not heard that he would, but he has changed his mind before. If he gets to be president, we will keep our fingers crossed."





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Comments 1 - 2 of 2 Add Comment Page 1 of 1
Anonymous

Posted: Sep 14 2012, 4:23 PM

Link
72234 Was there ever any doubt that this was what they would do? It is like being surprised that a dog ate your lunch when you left the room. Did the country, which has been run now for years, if not always, by men with an agenda, not really in the best interest, of most people in the U.S. expected at 1 second to midnight, a real plan to revitalize the American economy. They shot us in the foot, in the knee, in the groin, in the belly and now are aiming at our chest and head. So if you are surprised now at the prospect of new devastation for your future and your family, I am not sure what it will take to get reality to actually make you believe. Ron Paul was literally treated like a virus by the Republican Party and media and still feels that we could legislate ourselves back to health with small non-interfering government policy. (for the agencies that monitor all communications, I am using an analogy--not advocating violence or saying that they are using actual bullets--so be nice when you put the black bag on our collective heads)
Anonymous

Posted: Sep 20 2012, 5:48 AM

Link
50135 The world markets did not collapse when the credit default swap (CDS) market crashed, so why would it collapse afterward? The world debt is from the CDS crash. The 162 central banks have the system totally within their private hands... there will be no crash. There will only be a mainstream media and alternative media regular, ongoing insinuation of a crash, which will keep the general populations open to world communitarian government to come and steal their rights so that they may be saved from the fake impending doom.

The best way to control people is through ongoing chaos, or at least the ongoing impression of chaos.


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