Ron Paul Statement on Money, Inflation and Government From March 31, 2008

Related Post: Ron Paul Statement on HR 5512 to Change Pennies from Copper to Steel

• Ron Paul posted a statement on www.house.gov/paul on Money, Inflation and Government on March 31, 2008.
• The following are excerpts from the statement:
  

The total money supply, M3, as calculated by private sources, is growing at a disturbing 17% rate. The Fed is pumping dollars into the economy at an alarming rate. Just recently the Fed announced new loan auctions totaling $100 billion. That is new money created from thin air.

Wall Street bankers cry out for more liquidity, but what is really needed is more value behind the dollar.

You see, the Fed creates new money and uses it to purchase securities from banks.
Flush with funds, these banks seek to put this money to use. During the Fed's expansionary period, much of this money went to home loans. Through a combination of federal government inducements to lend to risky borrowers, and the Fed's supply of easy money, the housing bubble took shape.

Wall Street made a killing during the housing bubble, reaping record profits. Now that the bubble has burst, these same firms are trying to dump their losses on the
taxpayers.

Even the most educated, well-intentioned central planners cannot plan the market better than the market itself. Those that understand economics best, understand this reality.

In free markets, both success and failure are options. If government interventions
prevent businesses, like Bear Stearns, from failing, then it is not truly a free market.

The end game for this policy of monetary inflation is that the money in your bank account loses purchasing power. So, by keeping failing banks afloat, the Fed punishes those who have lived frugally and saved.

Click here to read Ron Paul's full statement on Money, Inflation and Government.

Related Post: Ron Paul Statement on HR 5512 to Change Pennies from Copper to Steel