Although I greatly admire Ron Paul’s ideas, as I watched the latest RP vs. the FED battle, I was quite disappointed. The FED is gasping for air. They caused the mother of all bubbles, and it’ll finally pop next year. Dr. Paul took over 4 minutes of his precious 5 minutes pontificating about the glory of Austrian economics and the horror of the FED instead of pressing home an attack. Art of War 101: “Cut off his head before waxing eloquent.”
In Ron Paul’s latest video released on his Congressional site he talks about his questioning of Bernanke yesterday. The video is a bit of a scholastic lecture on our fiat money system. During it, he claims, more than once, that our financial system has collapsed.
Bruce Fein, a laywer who specializes in constitutional and international law, gave what arguably could be considered one of the best speeches at Ron Paul’s Rally For The Republic earlier this year. He also testified at a Congressional hearing regarding the Executive Branch’s (i.e. Bush Administration’s) power-hungry ways. In light of Obama’s (and the Congress’) endorsement of Troubled Asset Relief Act of 2008 (TARA) — in addition to all the financial bailouts to date — Fein wrote an editorial in the Washington Times, railing against such ill advised interventions which he claims “reward political machinations inside the Beltway; distort economic competition by favoring some industries or companies over others; and, kill new jobs or innovation - earmarks of a healthy economy.”
Writing 220 years ago in Federalist 62, James Madison descried incessant changes in the law that altered the economic playing field. Legal instability confers on lobbyists and their clients a preferred position over men and women whose labors are economically productive. Anticipating modern-day Jack Abramoffs, Madison observed that mutability in government financial decrees gives “unreasonable advantage … to the sagacious, the enterprising, and the moneyed few over the industrious and uninformed mass of the people. Every new regulation concerning commerce or revenue, or in any way affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow citizens. This is a state of things in which it may be said with some truth that laws are made for the FEW, not for the MANY.”
Fein goes on to illustrate how Madison’s sage words fits today’s situation perfectly. Read the whole article here.
Yesterday, Secretary of the Treasury Henry Paulson published an Op-Ed piece in the New York Times. It was filled with doublespeak, platitudes, lies, and incredible ignorance. Chris Martenson parsed Paulson’s words, paragraph by paragraph, to shed some truth of the situation. Here’s a snippet:
[Paulson writes:]
I have always said that the decline in the housing market is at the root of the economic downturn and our financial market stress. And the economy, as it slows further, threatens to prolong this decline, as well as the stress on our financial institutions and financial markets.
My Comment: Um, no, Hank, sorry, this is not true. Here are some recent quotes from you:
April 20, 2007 — “I don’t see (subprime mortgage market troubles) imposing a serious problem. I think it’s going to be largely contained.”
July 26, 2007 — “I don’t think it [the subprime mess] poses any threat to the overall economy.”
This article by Chris Martenson is quite revealing, even entertaining (if you’re into black comedy). Read the whole thing here.
A new article by Liberty Hero Thomas DiLorenzo over at LRC entitled “Tales From an Academic Looney Bin” discusses the frightening reality that so-called ‘Cultural Marxists’ have infiltrated and taken over many higher-learning institutions. We’ve heard this type of thing for years, and DiLorenzo’s examples at Baltimore’s Loyola College are no exception.
…[Cultural Marxists] took over and began acting, well, like lunatics. I learned from the local media that the former academic vice president had rejected an applicant for a top job because the applicant “wasn’t black enough.” The job was academic vice president for diversity and the interviewee was an African-American man with very impressive credentials. According to news reports, this man was told that he was well qualified, but that the College preferred an African-American with somewhat darker skin.
So here was a man who had probably been discriminated against in employment during his lifetime who had reached the peak of his professional career, and was interviewing for what was probably his dream job. And he is told he wasn’t getting the job, once again, because of his skin color. And you probably thought “lunatic” was too strong a word.
This is a very entertaining article. Highly recommended. Read it here.
For once it seems that when it comes to the auto industry bailout Ron Paul agrees with Mitt Romney, or is it the other way around? Romney said the following about the bailouts in a New York Times op-ed.
“If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.”
“Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.”
I couldn’t agree with Romney more. Paul and Romney’s reasoning may come from different sources, but the result is the same, at least on this particular bailout. I’m happy to see Romney not taking the same line of Bush Republicans, saying that the bailout is required but must not come from the $700 billion bailout money.
Ron Paul appeared today on CNN in the time slot usually reserved for Glenn Beck, but Beck is off to FOX News now. His replacement Jane Velez-Mitchell is mostly right with her views, but after listening to her you may need a few ibuprofen.
They discuss the auto bailout and bailouts in general. Neither Velez-Mitchell nor Paul think this auto bailout is necessary, of course. Paul seems to hint around that he doesn’t necessarily believe the auto bailout bill is as “dead” as many are making it out to be.
Ron Paul appeared on FOX Business News today following his grilling of Ben Bernanke on Capitol Hill. He accuses Bernanke and Paulson of price fixing among some other choice words. Paul’s contention is that they are fighting against what the market wants and their efforts to subvert the market will fail because the “market is more powerful than the central bankers”.
A favorite Paul comment:
“No I didn’t get answers, and I didn’t expect any.”
Ron Paul questioned Ben Bernanke this morning regarding the entire financial system as it relates to the bailouts. Again, Paul says the words that no one wants to hear, but truly needs to hear. A few choice quotes from Paul:
“Something has to give, or we are going to waste more time trying to patch this system together.”
“Does this thought come up… about a new world reserve currency?”
“The dollar system has essentially been declared dead.”
A step-by-step explanation of how the Federal Reserve, America’s Central Bank, can manipulate monetary policy.
by Jake, the Champion of the Constitution Originally published November 17, 2008 at http://www.nolanchart.com/article5489.html
Part 5 covered the origins of fractional reserve banking. In this article I will formally define fractional reserve banking and describe how it works. Next I will share how the Federal Reserve controls monetary policy and supply with its three major tools – “printing” or “de-printing” money (technically referred to as “open market operations” by the FED), bank reserve requirement ratios, and the infamous “Fed-rate.”
Fractional Reserve Banking - a banking system in which banks are supposed to maintain a quantity of reserves from its depositors that is a fixed fraction of the amount of new money the bank is then allowed to create. This newly created money, or credit, is then loaned to the bank’s borrowers.
Fractional reserve banking has two major flaws in practice. The first is that it is an arguably criminal act, which is a topic more suited for Part 7. (See Rothbard’s “The Case Against the Fed” below, pages 40-45.)
The second flaw is insolvency. This is generally known as a “bank run” and is easy enough to understand. If the system’s depositors demand in excess of the reserve amount within a short enough time span, the entire system theoretically just runs out of printed cash and goes broke. Realistically in today’s world this would cause the government to begina a massive physical printing of dollars, resulting in massive currency devaluation and eventual worthlessless and death of the currency via hyperinflation.
For example, let’s suppose the entire banking system consisted of $100 at a 10% reserve ratio. This means the banks would loan out $90 and keep $10 as its reserves to satisfy depositors. However, if the depositors of $10.01 ask for their money back, the bank will NOT be able to satisfy the request and will need to close down all redemptions of deposits until it receives cash flow from its loan investments. This is similar to the dilemna faced by those devious medieval goldsmiths from Part 5, except we are dealing with paper money instead of commodity money.
Liberty Maven
Fractional Reserve Banking - a banking system in which banks are supposed to maintain a quantity of reserves from its depositors that is a fixed fraction of the amount of new money the bank is then allowed to create. This newly created money, or credit, is then loaned to the bank’s borrowers.
