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  • Book Review: End the Fed by Ron Paul 2 comments
    Dec 3, 2009 12:13 PM
     
    Gold is trading over $1200/oz. The Federal Reserve is holding Interest rates at 0% in an attempt to re-inflate the economy. President Obama is continuing and expanding the Bush administration’s policies of deficit spending, corporate bailouts, and war. What better time to review a book that explains it all and recommends a solution? Ron Paul’s book End the Fed does just that: abolish the Federal Reserve and go back to hard money based on the gold standard.
     
    Paul’s book begins by explaining why all Americans should care and why abolishing the Federal Reserve is a good idea:
    ·        It would bring an end to dollar depreciation
    ·        It would prevent the funding of continual unnecessary wars
    ·        It would enable real freedom and protect our liberties
    ·        It would stop the skyrocketing growth of debt
    ·        It would force government to live within its means
    ·        It would end the ability of the Fed (and the government) to control the people through a monopoly on money and credit
    ·        It would stop the Fed from serving the interest of the elite (executives of AIG, Goldman Sachs, etc.) while enacting a sinister tax on the middle class by diluting the value of the dollars they save.
     
    Paul explains how Ben Bernanke and the Fed can print trillions of dollars and distribute them to its cronies with absolute no oversight by Congress. It is not only unconstitutional, it’s immoral.
     
              Paul then gives a very interesting historical perspective on the history of the Federal Reserve and its record: a U.S. dollar today that is worth $0.05 compared to its value when the Federal Reserve was created. The Federal Reserve’s policies are a form of financial socialism for the rich and powerful.
              A discussion follows about Paul’s childhood experiences with money, his main influences (Ludwig von Mises and Murray Rothbard among others) and Austrian economics. Paul explains how the Fed’s ability to print money out of thin air has enabled wars and empire building. If the government had to pay for these wars by taxing its citizens and living within its means, Paul doubts the American people would be so willing to support unnecessary, unproductive, and economically corrosive wars.
              Paul points out that after every major crisis, be it America’s many wars, 9-11, the dot-com bubble, or the meltdown in 2008, the response has always been more monetary expansion and more power to the Federal Reserve. He contends that it is impossible to solve the economic and political problems by turning to the unconstitutional institution that is most responsible for creating all the problems in the first place.
              How ironic it is that a supposedly “free market capitalistic” country like the U.S. has a central bank setting interest rates? Paul contends this is a form of price-fixing and central economic planning. Only the Federal Reserve can create new money out of thin air, inflate the currency, in complete secrecy, and totally without oversight or supervision. Indeed, Karl Marx’s Fifth Plank of the Communist Manifesto states:
     
              “Centralization of credit in the banks of the State, by means of a national bank with state capital and an exclusive monopoly.”
     
    In other words, authoritarian rule is enabled by control of money by an institution like the Federal Reserve. Lenin was reported to have said the best way to destroy capitalism is to debauch the currency. Further, the Federal Reserve corrupts politicians by allowing them to substantiate themselves (and their egos) with unbridled spending, bribery, and immorality. Who can forget December 16, 2008 when Bush rationalized his bailout plan for corporations and their executives by proudly announcing “I have abandoned free market principles to save the free market system.” Paul says this is astounding and preposterous! I say we call it what it is: fascism. And the Federal Reserve enables it and supports it, all in complete secrecy and with no Congressional oversight and no transparency.
              The U.S. Constitution is clear on the matter. Article I, Section 10: “No state shall …. make anything but gold and silver coin a tender in payment of debts.” Paper money is therefore unconstitutional. Period. Further, the Constitution is quiet on the matter of a central bank. However, the Tenth Amendment states: if a power is not “delegated to the United States by the Constitution,” it doesn’t exist. Since the Federal Reserve is not mentioned, logically its existence and power is unconstitutional. Even if it was, it still could not legally repeal the legal mandate for gold and silver coins. There is nothing “Federal” about the “Federal Reserve”, and there is surely nothing in “Reserve”. The term “Federal Reserve” is an oxymoron. Paul also notes how the Supreme Court has consistently bowed to political and corporate pressure by misinterpreting the Constitution on this very straightforward and important issue. Power corrupts. Absolute power corrupts absolutely and the Federal Reserve has absolute power. Is it any wonder that Greenspan and Bernanke are men with extraordinary egos? They are more powerful than the elected President.
     
              Paul explains how and why gold was chosen by men (not governments) to be money because it possessed all the qualities desired to enable commerce and trade. Gold was naturally selected by the people and was used in trade exchange for more than 6,000 years. In 4000 B.C. the Egyptians were using gold bars as money. The Byzantine Empire thrived for six centuries on a gold standard. Then, Nicephorous III Botaniates reduced the amount of gold in then the world’s most used coin in order to fight a war with the Turks. The war was lost and so were the Byzantine Empire and its currency. Historically, fiat currencies (like the paper U.S. dollar) have always failed as money. Gold has always prevailed.
              Paul then presents several cases to support a gold money standard:
    ·        the philosophical case (morality and the moral hazard of the Fed)
    ·        the constitutional case
    ·        the economic case
    ·        the libertarian case (why real money protects freedom and liberty)
     
    Each case alone is very compelling. Taken together, how can one not agree that the Federal Reserve is simply a dysfunctional, unconstitutional, and dangerous entity which merely serves a small group of highly powerful, unsupervised, and very secretive select few at the expense of the middle class?
              Unfortunately, the last chapter of the book, “The Way Out” is too short. To abolish the Federal Reserve in today’s world will be challenging. Since the U.S. dollar is the world’s reserve currency (at least for now…), transitioning to a monetary standard backed by gold and silver will be a delicate maneuver, although it must be done to preserve American liberty and freedom and prevent authoritarian rule. Americans wealth must be fairly preserved during the transition and Paul is light on the details.
              Paul may have also pointed how America’s addiction to foreign oil has exacerbated the problems of the Federal Reserve. The two major financial crises (now and in the late 70’s early 80’s) were preceded by high oil prices that strained the trade deficit and therefore required more money being printed, inflation, and U.S. dollar depreciation.
    I’m also surprised Paul didn’t focus more on the major individual players in this fiat money façade. Paul adequately explains how Greenspan and Bernanke are completely over their heads and incompetent. He also correctly identifies how promoting Geitner to Secretary of the Treasury after Geitner was wrong on everything for the previous15 years proves the system is totally corrupt. However, Paul doesn’t touch on an obvious coincidence: it seems a very small group of people are over represented not only in the making U.S. economic and monetary “policy”, but also appear to be over represented in benefitting greatly from these same policies. Greenspan, Bernanke, Milken, Madoff, Shapiro(head of the SEC and “dear friend” of Madoff), Greenberg(NYSE:AIG), Benmosche (AIG), Lloyd “doing God’s work” Blankfein (CEO, Goldman Sachs), Gensler (CFTC), Feinberg (the so-called “pay czar”), and many others. Is this mere coincidence or is there something more sinister afoot here? How ironic that the fascist policies now dominating the U.S. economic landscape are apparently being developed by people who should be most familiar with Nazi fascism and its dire consequences? It’s very hard to understand.
    In conclusion, Paul makes a clear case that the U.S. must abolish the Federal Reserve and go back to money standards based on gold and silver. For those who agree, you must contact your elected officials and insist they support Paul’s legislation to audit the Federal Reserve. This is a first step toward the transparency so desperately needed: how much money is being created, who gets it, and why? Without this transparency, the great American democratic experience is doomed to failure. The time is ripe for change as the American people are sick and tired of a dysfunctional government, a dysfunctional economy, and seeing their hard earned dollars being devalued and eaten up by inflation. On the other hand, shinning a light on the Federal Reserve’s inner workings will bring about reform and a shift to real hard currency money. Paul and his supporters should work harder on explaining and publishing exactly how this transition should occur in order to insure a smooth transition. It will certainly be a challenge given today’s realities. However, if Paul is going to promote the cause of “Ending the Fed” (which I certainly agree with), he needs to do a better job of outlining and explaining exactly how to go about it without exacerbating the current economic turmoil. Regardless, this is a fascinating and very informative book. I highly suggest any patriotic American read Ron Paul’s End the Fed. He will certainly get my vote the next time he runs for President!

    Update: Audit the Fed – HR 1207 and S 604 has
    317 Co-sponsors in the House
    30 Co-sponsors in the Senate

    This is great news: House and Senate members are (finally) paying attention!


    Disclosure: Long gold.

    Disclosure: Long Gold
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  • Dopamine
    , contributor
    Comments (363) | Send Message
     
    Hello, great your spreading the word of Dr Paul. He is worth the support of every American, and every American Fan.
    Regarding your end, comment asking for an explanation of how to go about Ending the Fed, your request is correct. But as you aware, right now he is a long way from getting what he is ptiching. So he needs to keep his cards, protected, so as his opponents do not send the negative media to attack him. This would be a waste of years of work. His Masterpiece is not yet ready to dry.

     

    I support him for many reasons, but I admire his character more than his words.
    I admire how Dr Paul handles the frequent idiots that interview him, his style and patience leaves me agahst at times, after they have shown him no respect, and yet he shows them no mallace or anger, he answers with grace and humor, he truly is an American Hero.
    4 Dec 2009, 06:46 AM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (9584) | Send Message
     
    Author’s reply » Dopamine: after thinking about it further (my request for more details i mean), i have come to agree with you. first things first - work for an audit of the Fed. once americans (and hopefully even Congress) sees what the Fed has been up to, i think the movement will gain momentum. in the big picture, the change is fairly simple: go back to a gold and silver standard. however, the devil will be in the details, and the first place to start is to simply stop printing more dollars. wrt paul's demeanor, i was particularly impressed with him the time he was questioning bernanke and bernanke was rolling his eyes and snickering as though paul was some kind of buffoon. paul simply kept questioning him and when it was over, any thnking person knew which of the two was really the buffoon. the situation kind of reminds me of what they did to jim garrison (new orleans DA) after he brought a court case up wrt JFK's assassination. the press and government did everything they could to paint garrison as mentally unbalanced and a whacked. but garrison was a true patriot and a defender of real freedom. same with ron paul.
    4 Dec 2009, 09:22 AM Reply Like
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