Ron Paul 0wnz the Federal ReserveShow Video Details ↓ Ron Paul: Thank you Mr. Chairman and welcome Chairman Bernanke. I am very pleased to be here today as the ranking member and in the midst of great optimism of monetary policy and how the economy's doing I still have some concerns and of course one of mine long term goals has always been to emphasize maintaining the integrity or integrity of the monetary unit rather than looking superficially at some of our statistics. But I also share the concern of the chairman of the committee of our responsibilities for oversight and your interests as well, Chairman Bernanke, on having the transparency that I think we all desire. Transparency in monetary policy is a goal we should all support. I've often wondered why congress has so willingly given up this prerogative over monetary policy. Congress in essence has ceded total control of the value of our money to a secretive Central Bank. Congress created the Federal Reserve yet it had no constitutional authority to do so. We forget that those powers not explicitly granted to the Congress by the constitution are inherently denied to the congress and thus the authority to establish a Central Bank was never given. Of course Jefferson and Hamilton had that debate early on and the debate seemingly we settled in 1913. But transparency and oversight are something else and they are worth considering. Congress, although not by law, essentially has given up all its oversight responsibilities over the fed. There are no true audits, Congress knows nothing of the conversations, the plans, and the action taken in concert with other Central Banks. We get less and less information regarding the money supply each year, especially now that we don't even have access to M3 statistics. The role the fed plays in the President's secretive working group on financial markets goes essentially unnoticed by congress. The Federal Reserve shows no willingness to inform congress voluntarily about how often the working group meets, what action it takes that affects the financial markets or why it takes these actions. But all these actions directed by the Federal Reserve alter the purchasing power of our money and that purchasing power is always reduced. The dollar today is worth only four cents compared with the dollar that the Federal Reserve started with in 1913. This has significant consequences on our economy and our political stability. All paper currencies are vulnerable to collapse and history is replete with examples of great suffering caused by these collapses especially to the nations poor in the middle class. This can lead to political turmoil as well. Even before a currency collapses, the damage done by a fiat system is significant. Our monetary system insidiously transfers wealth from the poor and the middle class to the privileged rich. Wages never keep up with profits on Wall Street and the banks, thus sowing the seeds of class discontent. When economic trouble hits, free markets and free trade are often blamed while the harmful effects of a fiat monetary system are ignored. We deceive ourselves that all is well with the economy and ignore the fundamental flaws that are a source of growing discontent among the various groups. If you understand that our consumption and apparent wealth is dependent on a current account deficit running approximate eight hundred billion dollars a year, this deficit shows that much of our prosperity is based on borrowing rather than a true increase in production. Statistics show year after year that our productive manufacturing jobs... [silence] I think they finally cut me off. [laughs] Is it on now? OK, this phenomenon is not seen as a consequence of the international fiat monetary system where the United States government benefits as the issuer of the world reserve currency. Government officials consistently claim that inflation is in check at barely two percent but middle class Americans know that their purchasing power, especially when it comes to housing, energy, and medical care and school tuition is shrinking much faster than at two percent a year. Even if prices are held in check, in spite of our monetary inflation, concentrating on the CPI statistics distracts from the real issue. We must address the important consequences of the fed manipulation of interest rates. When interest rates are artificially low, below market rates insidious mal-investment and excessive indebtedness inevitably brings about the economic downturns that everyone dreads. We look at GDP figures and reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the high standard of living that monetary inflation brings to the privileged few. Those who benefit the most are the ones that get to use the newly created credit first. Man: The gentleman's time has expired. If the gentleman would come to a conclusion. Ron Paul: OK, I will yield back. |