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As
the printing presses for the bailouts run at full speed, those in power are
no longer even pretending that the new giveaways will fix our problems. Now
that we are used to rewarding failure with taxpayer-funded bailouts, we are
being told that this is “just a start,” more funds will
inevitably be needed for more industries, and that things would be much worse
had we done nothing.
The
updated total bailout commitments add up to over $8 trillion now. This
translates into a monetary base increase of 75 percent over the last two
months. This money does not come from some rainy day fund tucked away in the
budget somewhere – it is created from thin air, and devalues every
dollar in circulation. Dumping money on an economy, as they have been doing,
is not the same as dumping wealth. In fact, it has quite the opposite effect.
One
key attribute that gives money value is scarcity. If something that is used
as money becomes too plentiful, it loses value. That is how inflation and
hyperinflation happens. Giving a central bank the power to create fiat money
out of thin air creates the tremendous risk of eventual hyperinflation. Most
of the founding fathers did not want a central bank. Having just experienced
the hyperinflation of the Continental dollar, they understood the power and
the temptations inherent in that type of system. It gives one entity far too
much power to control and destabilize the economy.
Our
central bankers have had a tremendous amount of hubris over the years,
believing that they could actually manage a paper money system in such a way
as to replicate the behavior and benefits of a gold
standard. In fact, back in 2004 then Fed Chairman Alan Greenspan told me as
much. People talk about toxic assets, but the real toxicity in our economy
comes from the neo-alchemy practiced by the Federal Reserve System. Just as
alchemists of the past frequently poisoned themselves with the lead or
mercury they were trying to turn to gold, today’s bankers are poisoning
the economy with accelerated fiat money creation.
Throughout
the ages, gold has stood the test of time as a consistently reliable medium
of exchange, and has frequently been referred to as “God’s
money,” as only God can make more of it. Seeking superhuman power over
money in the way alchemists did in ancient times caused society to shun them
as charlatans. In much the same way, free people today should be sending the
message that this power and control over our money is no longer acceptable.
The
irony is that even had the ancient practice of alchemy been successful, and
gold was suddenly, magically made abundant, alchemists still would have
failed to create real wealth. Creating gold from lead would have cheapened
its status to that of rhinestones or cubic zirconia.
It is unnatural and dangerous for paper to be considered as precious as a
precious metal. Our fiat currency system is crumbling and coming to an end,
as all fiat currencies eventually do.
Congress
should reject the central bank as a failure for its manipulations of money
that have brought our economy to its knees. I am hoping that in the 111th
Congress my legislation to abolish the Federal Reserve System gains traction
so that the central bank can no longer destroy our money.
Ron Paul
www.house.gov/paul
Congressman
Ron Paul of Texas enjoys a national reputation as the
premier advocate for liberty in politics today. Dr. Paul
is the leading spokesman in Washington for limited constitutional government,
low taxes, free markets, and a return to sound monetary policies based on
commodity-backed currency. For more information click on the Project Freedom website.
Published
with the authorization of Dr. Paul.
Copyright
Dr. Ron Paul
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