The
Neo-Alchemy of the Federal Reserve
By Ron Paul
http://www.informationclearinghouse.info/article21468.htm
December 15,
2008 "ICH" -- - 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.