December 01, 2008 - By True Patriot and
Congressman
Ron
Paul
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.
Read more Articles by Ron Paul at http://www.house.gov/paul/legis.shtml
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