Wes Moss: Is Ron Paul crazy?

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB

Rep. Ron Paul (R-TX) wants to get rid of the U.S. Federal Reserve System – an issue that he has made the centerpiece of his campaign for the Republican presidential nomination. Paul, and like-minded libertarians, think the Fed’s constant intervention in our economy leads to disasters like the housing collapse, banks taking on too much risk, and the debasement of the dollar.

Is Paul right? Or is he off his rocker?

First, a quick explanation of the Fed’s role:

The Fed’s over-arching mission is to maintain full employment and keep inflation at a gradual or moderate pace. Its open market committee controls the money supply and uses that power to manipulate short-term interest rates. If the economy needs a boost, the Fed will lower rates, making cheap money available for investment. If the economy is facing threat of inflation, the Fed can raise rates, putting a brake on economic activity.

Ron Paul thinks the Fed’s “tinkering” with the economy leads to more extreme and drawn out financial bubbles. Take the 2008 financial crisis. In the early part of the 2000s the Fed kept interest rates very low in an effort to bolster the economy in the aftermath of technology stocks collapsing and the 9/11 attacks. Those low rates lead to dirt-cheap mortgages that allowed people to buy houses at an unprecedented rate. This sent home prices soaring above historical levels and set the stage for an inevitable bubble burst.

But instead of allowing basic supply and demand to bring equilibrium back to the market, the Fed has done everything in its power to slow the natural order of things. It has further lowered interest rates and helped bail out big banks hurt by holding bad mortgages. As a result, it has unnecessarily extended the length of the housing crisis to its current six years. Or so Ron Paul would argue.

So maybe the Fed isn’t perfect. Should we eliminate it? Not before considering the possible downsides. Without the Federal Reserve we could see:

1. Haywire interest rates: Who would control interest rates in a Fed-less world? An unfettered free market? A cabal of Wall Street bankers? Congress? You can see the problems with these scenarios.

2. More bank failures: The Fed serves as a last-resort lender for struggling financial institutions. Without it, we’d almost certainly see more bank failures, from Main Street to Wall Street.

3. Less lending: Without the support of the Fed and other safeguards, banks would be far more conservative in their lending. Fewer people would qualify for mortgages, fewer businesses would be funded, and the economy would look very different.

Are Americans willing to work without the safety net the Fed provides… or do most people think of the Fed as some mysterious black box? Is Ron Paul Crazy… or the only sensible one at the table?

– By Wes Moss, for Atlanta Bargain Hunter

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247 comments Add your comment

pete

January 23rd, 2012
4:13 am

Ron Paul is America’s last chance.

Faceh

January 23rd, 2012
4:14 am

“Rep. Ron Paul (D-TX) wants to get rid of the U.S. Federal Reserve System”

Okay, first off, he’s a Republican. Rep Ron Paul (R-TX). I assume that’s an honest mistake. And Paul’s plan is not to literally end the Fed in one day he’s certainly in favor of reigning it in and auditing it, but he also advocates for competing currencies to find one that is more stable than our current one.
The fact that the Fed allows for far riskier lending is a large factor in why we are in the current mess. And the only two responses the Fed has… to lower interest rates and to print money, cannot correct this but can merely prolong the process.

Bill Greenjeans

January 23rd, 2012
4:30 am

When gold and silver were the normal money the economy was controlled by the people who possessed it. In history when fiat has been introduced people objected to it because the ones who created it controlled the economy. We are a very tolerant people because for a hundred years we have tolerated Federal Reserve fiat. In the past people weren’t so nice to counterfeiters who debased the currency. In the Coinage Act of 1792 the penalty for debasing the currency was death. Ron Paul’s bill introduced in the House H.R. 1098: Free Competition in Currency Act of 2011 he is simply giving average people the opportunity to be in control of their own economy Look here for what this bill is all about: http://www.fame.org/HTM/Ron%20Paul%20Introduces%20HR2779%20The%20Honest%20Money%20Act%20-%20REPEAL%20OF%20LEGAL%20TENDER%20LAWS.htm
One question Wes. What is your interest in keeping Fed fiat alive.

dBW

January 23rd, 2012
4:31 am

1) The Fed IS a cabal of SECRET bankers who make adjustments to suit thier whims, Are they beholden to the US when a trail of bailout money is seen going overseas? Constitutionally, it is Congress that controls the money supply. Now Congress can’t even get straight answers from the Fed. It takes a FOIA request and ensuing legal battle to get only partial information as they see fit. It’s time the free market see who the cloaked money changers are and what they’ve been up to.

2) If the banks have made bad business decisions they should fail. If the banks are involved in fraud they should be prosecuted.

3) Too much lax lending due to easy money helped create the mortgage crisis.

Ron Paul is quite sane and is pointed in the right direction!

Jusitn Raimondo

January 23rd, 2012
4:36 am

What a stupid headline. But then again, I’m not surprised: after all, this is the Atlanta Journal-Constitution.

Tom

January 23rd, 2012
4:36 am

First of all, Ron Paul in 2003 with his knowledge of the Federal Reserve’s negative role in the economy predicted the financial collapse specifically. Those who supported the necessity of the Fed said all was well. Current events have proven without a doubt that Ron Paul is not the crazy one. He was one of the few sane individuals who saw what was coming.

Now to address your 3 talking points, all of which have been regurgitated throughout the past 100 years to cover up the literal theft that is made possible by the Federal Reserve system and fractional reserve banking.

1. Current interest rates ARE haywire, and the Federal Reserve makes them so. The free market will control interest rate without such a central bank. Read up on an economic textbook about why price controls are disastrous. Interest rates are the price of borrowing money. The rate will thus be based on the supply of savings in the economy and the demand for borrowing money. These rates function to balance time preferences (buying something now, or saving to buy something later). Read up on the Hayekian triangle model. Normally, a price set below the market price will result in a shortage of what is being priced. Since the Federal Reserve can create money out of thin air, there is no shortage of money, but there is also no new wealth. The result will be malinvestment, rising prices, and eventually a collapse of industries built on savings that never really existed. If you could print your way to prosperity, the Weimar Republican would have become the richest nation on the world. We all know that didn’t happen.

2. The banks that would fail are the banks that make bad loans and bad investment. The same bad loans and investments that led to the economic crisis. Why would a bank regulate its actions if its losses are subsidized by a central bank? Such a system is the antithesis to free market profit and loss, and will breed corruption, waste, fraud, abuse, and a stagnating financial sector (and, guess what, it has).

3. Look what happened to the people who qualified for housing mortgages when they shouldn’t have. They lost their homes and are now much worse off than before. Is that what you want? You cannot print prosperity, period. The result will be poverty. This recession should have made that perfectly clear. Also, the notion there will be less lending does not necessarily hold true. Lending will depending on the supply of actual savings rather than government created money (that ends up resulting in inflation, hence distributing wealth from the poor to the rich bankers who get the money first before the inflation hits).

You have completely bought into the government myth of the Federal Reserve. The author clearly displays a lack of any economic education of the functions of money, prices, interest rates, time preference, and Austrian economic theory. The Federal Reserve is not a safety net protecting us from disaster. It is the noose tied around our necks, strangling us all to death.

[...] Wes Moss: Is Ron Paul crazy?Atlanta Journal Constitution (blog)Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly. Rep. Ron Paul (D-TX) wants to get rid of the US Federal Reserve System – an issue that he has made the …and more » [...]

Brian58

January 23rd, 2012
4:39 am

The three downsides listed in this article pale in comparison to the damage the Fed is causing. And Ron Paul IS the only sensible one at the table.

Jay

January 23rd, 2012
4:42 am

Betteridge’s Law of Headlines:

“One thing though: This story is a great demonstration of my maxim that any headline which ends in a question mark can be answered by the word ‘no’. The reason why journalists use that style of headline is that they know the story is probably bullsh*t, and don’t actually have the sources and facts to back it up, but still want to run it.”

This article is weak sauce from another pro-bank bail-out shill.

Constitution

January 23rd, 2012
4:45 am

The Fed is legalized counterfeiting and theft. The CPI is merely a measure of how much they have stolen, and they can’t even be honest with that.

Simplified example of the theft.

Lets assume $100 exists in the entire world. And we have a market that consists of 10 apples. You own $10. You have 10% of the worlds wealth in the example. The apples have a basic value of $10 each. You have enough purchasing power to buy 1 apple.

Now I’m going to steal your wealth and you are going to keep your $10.

I’m the Fed, and the banks who practice fractional reserve banking. I’m going to introduce a loan to the ACME corporation for $100, and it’s interest free for now.

Now, there is $200 in the world. 10 apples still in the world, and you still own $10. Now you only have 5% of the worlds wealth, and each apple has a basic value of $20 each. Now you can only afford half an apple to eat. Half your purchasing power was stolen from you and I never touched your wallet. The price increase is of course inflation. But the price didn’t go up, the value of your dollar goes down, and people wrongly blame the price because that is where they see the change, not where it actually occurred.

Meanwhile, the ACME corporation is gaining wealth. Lots of it. Because they get the newly created money. So do you see what happened? A transfer of wealth. This is why the rich get richer and the poor get poorer.

And this is only the tip of the iceberg on the transfer of wealth in this country. Interest money is never created, except by future loans(which come at interest), which creates a state of natural deflation in the economy, so as soon as the lending stops, we get a recession. And as more loans are paid, there is less money to go around. But the banks can of course choose to lend money and bailout their friends etc, and pick winners/losers.

And government contracts are the worse. While the ACME corporation has to pay back the above loan if the money is done as a government contract, then it goes as debt and the people have to pay it back. Even though the actual value of the money comes from the peoples money in the form of the inflation tax.

Income taxes biggest purpose is to pay interest on the debt.

In the very least, we could have the treasury take care of the money supply instead and save the debt burden from the people in the money it created. Which is exactly what Kennedy tried to do months before his assassination, and apparently LBJ didn’t take too kindly to the executive order as he repealed it within 6 month. Now you know what makes the Kennedy dollar special(in addition to being backed in silver).

Ron Paul isn’t crazy. Ron Paul stands up for the people. But hey, if you want to keep watching the rich get richer and the poor get poorer, keep voting the way you have been. They thank you for the tribute.

My example is pretty simple meant to include the point. A good intro story to the evils of fractional banking is called “I want the earth plus 5%”. Google it and just watch the youtube video. You won’t believe you could have been so foolish about money.

mike Cohen

January 23rd, 2012
5:06 am

Ron Paul is the right choice for President..
He by far is for the American people.
I just worry he will be assassinated by our own government like Kennedy or by Israel.

david kompes

January 23rd, 2012
5:12 am

Wes, Ron Paul’s problem is not his ideas. They are actually widely discussed by academics and economists. Many, who don’t sit on current bank boards and who are not regularly appearing on MSM write books which espouse much what Paul is saying. Ron Paul is just a poor speaker. If some one who can communicate effectively, like an Obama or even Gingrich, held his views none of this would be thought of as wacky. Rather, it is entirely prudent and would permit the productive economy to do its job. Sadly, we have all come to accept government intervention as a ubiquitous necessity.

Brendan

January 23rd, 2012
5:15 am

1. Haywire interest rates. Who would control interest rates.

No one, and everyone. Yes, the free market. Are car prices haywire? What about phones? Computers? There’s no reason to believe that free market interest rates would be haywire.

2. More bank failures.

Possibly, but so what? Lots of companies fail every year, but no one considers that a bad thing; that’s how the free market works. The best companies succeed and the bad ones fail. People would be more careful about what money they invest their money in.

3. Less lending.

Well, less lending, but only relative to the insane amount of credit the fed and it’s member banks have given over the last 40 years. There would still be plenty of lending, but it would be realistic to what the market could bear, and it would have to actually come from saving, not created out of thin air. The upside is that people would get better interest on their savings, so there would be an incentive to save, instead of constantly trying to invest in risky ventures.

Neil Elliott

January 23rd, 2012
5:21 am

1. The definition of crazy: DOING THE SAME THING OVER AND OVER EXPECTING DIFFERENT RESULTS. The Fed created low interest rates that caused the bust, but persist in continuing the same policy. The Fed bosses are obviously nuts. I made my fortune on 8-16% mortgages. With 4% mortgages the market has collapsed, but the Fed can’t take the hint.

2. Banks SHOULD fail. Insure depositors, not banks.

3. Banks couldn’t be more conservative in their lending than they are now.

Neil Elliott

January 23rd, 2012
5:25 am

What is Wes Moss’ investment track record? He doesn’t say.

[...] Wes Moss: Is Ron Paul crazy? – Atlanta Journal Constitution (blog) Posted in Ron Paul | Tags: atlanta-journal-, campaign, centerpiece, constitution, establishment, federal, federal-reserve, his-campaign, journal, ron paul, the-centerpiece, think-the-fed /* [...]

Brad

January 23rd, 2012
5:50 am

Mr. Moss-
The downsides you mentioned assume that the present way of operating withing the rules established by the banking industry are our best and only option? What if American’s started living within their means and not borrowing from the banks? Or what if we did allow a few crooked banks to fail, no matter how big they were? Wouldn’t the ones who ran clean books benefit naturally?
What’s more crazy, continuing on the same path and expecting different results, or taking a step back and realizing the path we are on isn’t right and needs to be altered? We are tired of having to drink the Kool-Aid Mr. Moss.

Hector W Padilla

January 23rd, 2012
5:53 am

Lol, unreal!!! Lee Seltzer just wrote something similar to this, around the same time. I mean literally, same date, hour, minute the same topic Ron Paul is crazy … Because he wants to end the fed, explains what the fed does, gives a destorted ( flat out lie) about it’s history, the catastrophy that would insue if erradicated; I mean you would think they would be smart enough in the XXI century to not put out the same propaganda at the same time.

Cam

January 23rd, 2012
6:07 am

No, Ron Paul is not crazy. Trusting the Fed and the likes of Ben Bernanke is crazy. Not doing a full audit of the Fed is crazy.

Fred C

January 23rd, 2012
6:11 am

First off Ron Paul is a republican not a democrat.. I have to say, its hard to take the rest of an article seriously when the author knows so little about the subject of the story.

1. Haywire interest rates:
What would be so bad if interest rates were set off the investment type and the fluctuated based on the market? When high wouldn’t that suggest a weak market and insure only those who are serious about lending and have a real plan to succeed be the one borrowing? Wouldn’t that then strengthen the Market?

2. More bank failures:
Yes the ones making bad decisions would fail.. So what? I live in a town of 4k people and we have 10 or so banks. They are the only businesses NOT FAILING! They are investing to make money. Their services are not free so why should they not have the same risk every other business has? Don’t worry no way all the banks will fail. There will always be one to take over where another left off.

3. Less lending:
No it would put a higher demand on savings. This would lead to a better investing rate for those who have money to put in the bank. That higher rate would lead to more money being put in our U.S banks instead of off shore banks. If demand grew high enough and the pay out on savings grew to draw in the money It would even lead to companies from over seas putting money in our U.S. banks to draw the interest. Those who were able to make enough money to put into savings would then be able to make revenue on their investment in the banks.. Beings all money would be backed by something and holding its value those being able to put money into savings would be assured in 40 years that savings would be able to buy the same amount in goods as the day they put it in.. Now the value of our money is dropping faster then any pay out on having the money in savings so 40 years after it is put in the money wont buy a 3rd of what it would have when it was invested. That leads to people not putting it in U.S. banks and instead going over seas with it. when that happens the fed has to print more money so the banks have it in order to lend. That in itself is killing the Value of our dollar!

So the answer to your question is simple.. No! Ron Paul is not crazy!

Mindy

January 23rd, 2012
6:15 am

I want to thank all the folks who posted comments to this article – while the article itself was incredibly disappointing and lacked substance, the posts have wonderful, informative, and helpful. Furthermore, i take offense to the title – is a 12 term congressman who has been consistent and logical in his views throughout his career CRAZY? You wouldn’t write that about others (Is Mitt crazy? Is Gingrich crazy? Is Obama crazy? Is the economist i don’t agree with crazy?) , but everyone seems to think they have a free pass to criticize Ron Paul in the most derogatory of terms. It’s really sickening and sensationalist at its core.

Reggie

January 23rd, 2012
6:15 am

The Federal Reserve is a criminal enterprise. It counterfeits and it loan at usurious interest. Those are federal crimes.
It is illegal, not to mention unconstitutional, for only Congress can emit currency, and only gold and silver at that.
The Fed artificially keeps interests rates low to encourage spending, and since it only LOANS us the paper money we use AS currency, the debt accumulated BY the very act of using it puts us all in perpetually mounting debt.
Whoever controls the debt controls the people. And in comes tyranny. Our forefathers warned us about this.
The Fed is traitorous. And whoever promotes it is a traitor too.
Free America Now

Chace Daley

January 23rd, 2012
6:18 am

All three (3) of your stated “concerns” are not really concerns at all, and should be titled as follows:
1. Stopping Price Fixing (NOT Haywire Interest Rates) – Interest rates are a price, the price of money over time. Thus, artificially keeping the rate low is price fixing, and the resulting distortion permeates throughout the market. Price fixing is devastating to a free economy.
2. Business Accountability (NOT More Bank Failures) – Any banks that would fail would do so because they were over leveraged and poorly managed. People deserve to know who these banks are, and artificially propping them up is not only avoiding reality but hiding it from consumers which only makes matters worse.
3. Less Malinvestment (NOT Less Lending) – The lending which would not occur SHOULD not occur. It is not a valid concern that banks would only lend to individuals and businesses that could plausibly payback the loan. You’re right though, the economy would look different, it would be stable.

Mark

January 23rd, 2012
6:18 am

Wes, I understand your concern, but a bank failure, or even interest rate volatility, is a short-term problem. Pimco has already told us we are now into a ’secular change’ in our economic decline, meaning our golden age is through. Doesn’t that bother you? Are you resigned to that? Are you aware of it? Our golden age is through. That is a far greater disaster than a bank failure. Fareed Zakaria points out it is about the ‘Rise of the Rest,’ but it is certainly no time to be caught deep in debt. Please, let’s be careful not to underestimate our peril as we watch Europe slip-slide into economic oblivion. It isn’t a bank failure we must fear now.

Obama has certainly worked hard to create jobs and he is doing almost all the right things, if you believe in a Keynesian model. But if Keynes was wrong, it could just be that a large chunk of our debt was wasted on frivolity, and now we will have to pay with higher and higher interest (as in the 1970s, when we had far less debt) or else never get our economy primed to where we can ride out (as in the 1980s, when we started making ourselves indebted to rev the engines and drive out). What is more, incremental debt ceiling increases has become a new political cultural norm. This could be very bad, very soon.

But Ron Paul has gotten me to believe that maybe we can still mobilize our citizenry to do what is required to turn things around, because we still have a great country and lots of resources. But we are already on the downward slope. We need a wake-up call here. WAKE UP!

Darryl Schmitz

January 23rd, 2012
6:31 am

We have a dilemma. The Fed is run by bankers, with much more self-interest and cronyism at heart than the best interests of average Americans when the Fed makes policy. And it has little oversight, operating within a cloud of secrecy. Perhaps setting it up as an independent governor over the ebb and flow of money, monetizing debt and economic hiccups was a noble and well-intended experiment to begin with, but like any other system free of checks and balances and transparency, we’ve seen this one become very corrupted by self-serving interests. I understand the criticism of Paul’s desire to “end the Fed”, but I think most people should agree with his qualification that at the very least, they should be audited so we can all make sure unethical and perhaps illegal profiteering is not going on. There are many more independent economists who should be allowed to critique the Fed’s now-secretive policies before we are all burdened with severe, unintended consequences.

rkm

January 23rd, 2012
6:42 am

If and when Ron Paul ends the FED, he will be following Jefferson and Jackson…nuff said.

Some Guy

January 23rd, 2012
6:42 am

The answer is he’s sensible, of course.

JT

January 23rd, 2012
6:44 am

Ron Paul 2012 , last chance this nation has before the zionist neocon coalition tears this once great country limb from limb..

Nathan

January 23rd, 2012
6:58 am

Maybe instead of just blindly supporting the fed you could write about the negative consequences of Central Planning, Or the government taking away constitutionally sound money to replace it with notes of credit that can devalue it for their own profit.

Steve

January 23rd, 2012
7:09 am

I’d say there are over 14 TRILLION reasons why Ron Paul isn’t crazy and why the current system is completely broken.

Add in Obama’s mission to destroy the constitution, one that Romney, Gingrich and Santorum would be only happy to continue, and you have the only sane candidate for President I think anyone that isn’t a sheep blindly listening to the mainstream media can possibly choose.

asher

January 23rd, 2012
7:14 am

WOW–you lose right out of the gate by labeling him a Democrat…Fact checking is hard. ;)

Bob

January 23rd, 2012
7:15 am

This author is completely oblivious to the true nature of money.

liz

January 23rd, 2012
7:18 am

Rom Paul is right on the mark! Unfortunately most Americans are not aware of how financeial institutions operate and how money is created/managed by the Fed. Basically the US Govt is borrowing money from the FED (a group of Bankers). Then we pay it back to them w/ Interest. The Fed is making $$$ off of this system & the tax payers are being hurt. It has to end!

Scott

January 23rd, 2012
7:20 am

ciscokid

January 23rd, 2012
7:23 am

^—– “Ron Paul is our only hope for because he is NOT corruptible”!!

ciscokid

January 23rd, 2012
7:24 am

Every American watch this video and you will understand… make it viral!

The Money Makers:
http://www.youtube.com/watch?v=JXt1cayx0hs

ManinNH

January 23rd, 2012
7:27 am

And whats wrong with a little competition in the free market? Instead of false pricing to guide the Wall Street Bugs they can use real economically based pricing that the market decides the price, as it should be. Without the Fed, you would actually have to guess. Imagine that.

John Miller

January 23rd, 2012
7:38 am

Your title shows contempt for Ron Paul. Since you show no respect, why should we show you any?

Sean

January 23rd, 2012
7:39 am

We did just fine without the Federal Reserve before. Actually The Great Depression occurred right after the Federal Reserve was founded….Kinda funny huh.

John Miller

January 23rd, 2012
7:40 am

At the time the FED was created, it was to serve but only but a purpose. The purpose is long gone, so should the FED.

Dylan Krueger

January 23rd, 2012
7:43 am

The article failed to mentioned that Ron Paul passed a bill for a partial audit of the Federal Reserve and found that they were lending trillions of dollars overseas without even mentioning this to the American people. Massive cash was sent to Iraq and other middle eastern countries, which ultimately debase the dollar even further. The author seems to question whether the free market can be the solution, while in fact it is the only solution. We need to utilize free market principles and bring the dollar back to the gold standard to regain fiscal sanity.

Johnny Q

January 23rd, 2012
7:51 am

As long as no one can audit the FED, then yes, I’d say that’s a Black Box. As long as America’s currency is controlled by 3rd-parties, I’d say that’s a Black Box. I’m sorry Wes but a large population of Americans do not believe the “Bail-Out” worked, and I’m pretty sure if American tax payers were given a choice, they would rather pay their own State Income Tax instead of the Federal Income Tax. Ron Paul has been preaching this message since at least the 1980s and everyone is finally starting to listen. Restore America Now – Vote Ron Paul 2012.

John Miller

January 23rd, 2012
7:51 am

YOU DIDN’T DO YOUR HOME WORK. The FED’s work is NOT TO CREATE EMPLOYMENT. IT’S NOT to regulate inflation (because there isn’t supposed to be any in the first place – so therefore ill equiped for this function). INFLATION is caused by the Fractional banking system. As an example, If you borrowed from the bank “all the money in the world” and expected to pay back with 10% interest, where are you going to get the interest from? unless you mint money?? So therefore you will be expected to “create money” from thin air! So again, lets assume you deposit that money in a bank account under compound interest, where will the interest to be added going to come from?? This vacuum is what inflation is. As you see, its a vicious cycle. There is a saying that says: If you find yourself in the hole by digging, STOP digging!

jmc855

January 23rd, 2012
7:58 am

Umm, your listed points are all the reasons TO eliminate the Fed. We NEED more conservative lending. We NEED insolvent, non profitable institutions to fail and Americans NEED to reduce their consumption based spending. The Fed has no mandate to employment, and they ARE a “cabal of bankers”!. This country excelled and expanded based on good market principles through the Industrial Revolution with all the “terrible” things you fear here in this article. Face it, Keynes was wrong, and the Fed is a sham.

Alex Smith

January 23rd, 2012
8:02 am

Ron Paul wants to end the FEd and return the power the Fed has back to where it belongs,,,,,,, in Congress. Congress is the branch of Gov’t closest to the people and the only one we directly elect. (Pres is via electoral college and supreme court justices appointed.)
END THE FED!! VOTE Ron Paul……and if he does nto win maybe newt or Mitt could appoint him to supreme court or Sec of treasury

AJ Weberman

January 23rd, 2012
8:09 am

Mike

January 23rd, 2012
8:14 am

First read “Creature from Jekell Island”. There is also a Youtube video. If you watch that and see how the Fed is really a scam on the American People and still think Paul is crazy then God help this country. FYI The Fed Reserve was a lie to the American People from the start.

gilbert

January 23rd, 2012
8:18 am

I like how the author didn’t give any positive scenarios without the fed. The author really shouldn’t open his mouth and talk about the FED when he has clearly not read much about monetary theory. Yes, it’s that obvious you don’t know much about the FED except what you read on Wikipedia after the blackout was over…

END THE FED! RON PAUL 2012!!!!!!!!!

Doug

January 23rd, 2012
8:20 am

I wonder if some of these same questions were asked amongst the people in the U.S.S.R. when discussing if government should stop setting the price of blue jeans?
1) Who would set the price of blue jeans if the blue jean agency didn’t? The free market? Blue jean manufacturers? You can see the problems arising from this.
2) More blue jean manufacturer failures.The blue jean agency bails out the manufacturers when they fail to produce a product that consumers want. We’d almost certainly see blue jean manufacturers come and go. The horrors.
3) Less blue jean sales. Without the safeguards of the blue jean agency blue jean retailers would sale their blue jeans to less people.

See how crazy this is once you step back and view it from a perspective of that’s the way it’s always been (well for about 100 years now) and that’s the only way it can work? Currency is like any other product or service. It is subject to supply and demand like any product and service, and the buyers and salers (us) should set it’s demand, not a small group of individuals who claim all hell will break loose if it weren’t for their benevolent price fixing. Of course the difference between blue jeans and currency is the importance they play in all of our lives. If the blue jean agency screwed up we’d just look a little funny wearing parachute pants or some other alternative, but when the money fixers screw up, well we get kicked out of our homes and wonder where our next meal is coming from.

sinepopuli

January 23rd, 2012
8:20 am

@1. The interest rate is nothing else than the price of credit. Idea of regulated prices always lead to malinvestments and shortages in the world of real goods. See the example of Eastern block countries, N. Korea, Cuba etc. In the world of paper goods- like money-, the only part that is being affected ( when in comparison to real goods, there is unlimited ability to print the money) is ‘we the people’ through inflation.
@2 No more bank failures as more careful approach would be undertaken by the depositors, bank shareholders and professionals investors employed by the banks. Less malinvestments in economy will occur in the area of real estate, industrial, retail investment as well, as there will be much less speculators (that includes huge government) having ability to put someone else money on the line.
@3 The Gilded Age with NO central bank and NO fiat money was THE period when U.S. economy grew at the fastest rate in its history, with real wages, wealth, GDP, and capital formation!!!