End the Fed, Save the Dollar: Ron Paul

Discussion in 'Money Talk$' started by KenH, Sep 17, 2009.

  1. KenH

    KenH
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    End the Fed, Save the Dollar: Ron Paul


    BOOKS, AUTHORS, READING, BOOK CLUB, BOOK CLUBS, LEADERSHIP, BUSINESS, RON PAUL, FEDERAL RESERVE, BEN BERNANKE, FED
    Posted By: Brian Beers | Senior Producer

    | 17 Sep 2009 | 10:31 AM ET


    This post was written by my colleague, Brian Beers a Senior Producer here at CNBC.com

    "Nothing good can come from the Federal Reserve," writes Texas Congressman Ron Paul in his latest book hitting shelves this week, titled "End the Fed."

    "It is the biggest taxer of them all. Diluting the value of the dollar by increasing its supply is a vicious, sinister tax on the poor and middle class."

    Paul makes the case that the Fed is the main culprit responsible for the current economic mess the country faces through the destructive policies of cheap credit and excessive money printing.

    "Prosperity can never be achieved by cheap credit," says Paul. "If that were so, no one would have to work for a living. Inflated prices only deceive one into believing that real wealth has been created."

    The Federal Reserve, created in 1913, has been acting as the main central bank of the United States for nearly one hundred years. Many Americans are either not sure or not interested in what role the Fed plays in managing the economy. "The economic crisis has changed everything," writes Congressman Paul.

    Paul is currently pushing for passage of a bill, H.R. 1207, that would allow for an unprecedented audit of the Federal Reserve. The bill has 289 co-sponsors, and is gaining solid momentum in the House of Representatives.

    "The worse the economy gets, the more power Congress is willing to grant to the Federal Reserve. Trillions of dollars created and distributed by the Fed with no requirement to submit to any oversight" argues Congressman Paul.

    - more at www.cnbc.com/id/32881898
     
  2. billwald

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    >Diluting the value of the dollar by increasing its supply is a vicious, sinister tax on the poor and middle class.

    The emphasis on monetary inflation is bogus and immaterial to the working class except in the case of runaway inflation. The only economic statistic that matters to me is how long must I work to purchase basic necessities, housing, food, clothing, energy. In all these basics, the stuff we buy is MUCH cheaper in work hours than it was 100 years ago because of increased productivity. Especially food and clothing. Housing would be about the same for an equivalent square footage if not for the costs of building permits and enviro laws. These days people want a bigger garage than were the houses the working class people lived in 100 years ago.
     
  3. KenH

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    Inflation creates a transfer of wealth to those who receive the first crack at the use of the newly created money.
     
  4. billwald

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    >Inflation creates a transfer of wealth to those who receive the first crack at the use of the newly created money.

    Maybe.

    Say the economy chugs along at a nice 2% or 3% a year. A union machinist gets a 30 year mortgage on a house. Every contract he gets a cola. Every year he pays his largest bill - the mortgage - with cheaper money.

    Then there is the little old retired lady who is living off the interest on a $10 million in tax exempt muni bonds. Every year her $400K tax free income buys 2% or 3% less. Breaks my heart.

    Me, American Express will let spend $18K, something like that, into existence. We usually spend around 3K into existence every month and pay it off every month. Thus I am continually inflating and deflating the money supply.

    Before the world went off the gold standard most people didn't have a credit card. Why? because they couldn't legally spend money into existence? We find them very handy. (For some people they are dangerous. Same as booze being dangerous for some people.)
     
  5. billwald

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    back to the IP

    If the Fed is operating as they claim and are keeping an honest set of books then I don't see the problem BECAUSE if monetary policy was up to Congress we would probably be in worse shape.

    If the Fed is cooking the books and sending money to Swiss bankers then they should be investigated BUT they hire the best accountants in the world. If the Fed can't hid a book keeping scam then they disappoint me. We should at least have competent crooks in charge.
     
  6. Crabtownboy

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    I might take Ron Paul a little more seriously if he were not one of the champions of adding earmarks to bills brought up before Congress. Earmarks simply run up the costs even higher.
     
  7. Bro. Curtis

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    You have brought up that point several times, yet will not engage anyone in a debate about them.

    I find it interesting that you will continue to support a failed money system, hurting our future in the process, for a perceived political slight. But you have had several chances to discuss this, and I can find no reason in your demeanor to believe this time would be different.
     
  8. TomVols

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    I know I've posted that about Paul several times, with verifying points and links. That said, I don't believe he's entirely off his rocker relative to the economy (I disagree with Congressional oversight of the Fed...those people can't even run a cafeteria, let alone an economy. I doubt many of them can read a balance sheet).

    As a Moderator's reminder, this is a fellowship forum, not a debate forum. The tone should reflect such. I won't allow anything else.
     
  9. KenH

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    Even if your point is valid I see no reason to dismiss the other 99% of his record.
     
  10. billwald

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    Paul thinks the world should go back to the gold standard. For the first 6000 years of history most of the working class didn't have any gold. It wasn't till gold was dumped that the working class had access to credit.

    As I recall, the US govt holds about one ounce of gold per person (per family . . . somewhere in that range). In other words, if we went back to a gold standard then the price of an ounce would be at least equal to the average (not median) total liquid assets per family.

    Most money advisers I read claim that a family should have liquid assets equal to a third of annual income. That would put the price of gold over $10,000/oz if it happened. In other words, a gold wedding ring would cost a third of a year's pay or more. You ladies going to be happy with stainless steel rings?
     
  11. KenH

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    And the dollar has been going down the drain since then.
     
  12. TomVols

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    That's true. Two observations. One, I don't know that the dollar wasn't in trouble prior to that. Two, remember that a confluence of other events happened at/around the same time the gold redemption window closed. Everyone assumes the gold window closing started the dollar downslide. It could be post hoc ergo propter hoc.

    I don't know that going back to a gold standard would inflate the price of gold that much. At the same time, I don't know that we can go back to a commodity based standard. That ship may have sailed. We maybe could've used silver before the spike, but it's questionable.
     
  13. billwald

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    Food, clothing, and equivalent housing is cheaper in terms of work hours needed to purchase than when we were on the gold standard. I suspect that equivalent medical treatment would also be cheaper.

    We went off the gold standard because the country was running out of gold and out of money.

    If the country has a finite amount of gold and each "dollar" must have an equivalent amount of gold to back it . . . the dollar is an IOU for existing gold . . . then the price of the gold in dollars per oz must be the total dollars in circulation divided by the total oz of gold.

    Less than 5% of the US money in circulation is cash and half of that 5% is outside of the country. 90% is electronic transfer, the rest is checks and other negotiable paper.

    So add up the total cash available in 48 hours to every person in the country. How much money might that be?

    Total gold the govt claims to hold: 261,498,899.316 troy oz, roughly one oz per person. see http://www.fms.treas.gov/gold/current.html

    The gold that represents my family's per capita share of the govt's gold holding would be worth about $25,000/oz?
     

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