One of the most vocal and important critics of the Federal Reserve is Congressma
ID: 1213865 • Letter: O
Question
One of the most vocal and important critics of the Federal Reserve is Congressman Dr. Ron Paul, who wrote a book in 2009 titled End The Fed. The second chapter of the book is available on the website of the Ludwig von Mises Institute at http://mises.org/daily/3687
1. The Comptroller of the Currency in 1914 said that with Federal reserve System, “financial and commercial crises, or ‘panics,’ as this country experienced in 1873, in 1873, and again in 1907, with the attendant misfortunes and prostrations,seem to be mathematically impossible.”
2. How does Dr. Paul respond to this mathematically Impossibility? Where does Dr. Paul believe that the business cycle starts: in the bust, or in the boom?
Explanation / Answer
Dr Paul feels that this is no mathematical impossibility.One only needs to reflect on the dramatic decline in the value of the dollar that has taken place since the Fed was established in 1913. The goods and services you could buy for $1.00 in 1913 will now cost nearly $21.00. Another way to look at this is from the perspective of the purchasing power of the dollar itself. It has fallen to less than $0.05 of its 1913 value. We might say that the government and its banking cartel have together stolen $0.95 of every dollar as they have pursued a relentlessly inflationary policy.
He believes it starts in the bust
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