Congressman Ron Paul has issued a stinging address concerning
the financial crisis in which he outlines how the current economic
problems, created via malinvestment and shift to a debt based
economy, are now being mismanaged by private interests in secret.
What's more he says he is not sure the Federal Reserve
has any idea what to do next and that the Congress is totally
oblivious to the whole sorry state of affairs - a cocktail of
elements he warns puts the middle class of America in serious
"Today we had a lot of financial fireworks
in the markets, a lot of things are going on, and I think we are
in the middle of something very big." the Congressman stated.
Speaking on the recent collapse and government bailout
of several big financial institutions he warned:
"We're talking about big bucks, we're not
talking about hundreds of millions or even hundreds of billions,
we're talking about trillions of dollars, the obligation is immeasurable."
"The interesting thing is that they (the financial
institutions) don't come to the Congress, I mean the Federal Reserve
buys them out, they own it. We as tax payers now own Fannie Mae
and Freddie Mac and know one knows how much that will cost. They
don't come to the Congress, we don't have appropriations, it's
done by secret government, private individuals behind the scenes
maneuvering and manipulating and trying to patch things up. While
in the meantime, I'm sure there's a few people making a couple
of bucks out of this whole thing."
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The Congressman highlighted how an economy structured
on debt and credit and a financial system based on interventionism
and self serving moral
hazard has led to gross devaluation of the dollar
and ultimately lies at the root of the current financial meltdown.
"Our problems come first of all from the Federal
Reserve. It is a monopoly and it controls interest rates artificially
low, causes people to make mistakes, that's the basic source.
But then on top of that in the Housing market we had the community
reinvestment act which told investors that they had to loan to
risky borrowers, and that was a risky complication. HUD contributes
to this, FDIC contributes, it's called moral hazard, everything
that we have done over here creates moral hazard, that is we assure
people or assume that we will take care of everybody, just go
out and create the risk, it is the opposite of the market place."
"You can't create money like we're doing in
order to support the dollar, because ultimately it hurts the dollar
and everything we do in Washington today whether its on the appropriations
side, whether it's what the Fed is doing, buying up America, it's
all putting pressure on the dollar. One of these days we're just
going to have to wake up and say that we need to liquidate debt.
This is malinvestment." he urged.
The Congressman then slammed those who have blamed
the crisis on failures of the free market:
"And then they have people come along and say
'see, this is the failure of capitalism', this has nothing to
do with capitalism, this is something that started off as interventionism
and us being too involved in the economy for the benefit of special
interests. But now it is being socialized out in the open."
"The end of this comes when people reject the
dollar and I think we're getting awfully close to this."
Paul stated echoing comments from leading investors such as Jim
Rogers, who predicted
Monday that the dollar would soon lose its world
"When you see the movement in the markets that
we have today, you know that there are serious problems out there
and Congress basically are oblivious, they have no idea what's
going on." Paul continued.
"As a matter of fact I'm not even sure the
Federal Reserve has any idea what to do about this. They've been
manipulating and maneuvering for their own benefit over the years
but eventually the market wins out."
The Congressman's comments were echoed today by
indicating that the Congress cannot agree on any form of action
and is likely to simply adjourn and "get out of the way".
Senate Majority Leader Harry Reid told reporters
that "no one knows what to do''.
In a stark warning, Ron Paul stressed that the longer
the value of the dollar is allowed to depreciate, the greater
the risk becomes for the majority of Americans:
"The reason this is so important is that if
you care about people in a humanitarian sense, what you want to
do is protect the value of the money. Just think of the third
world nations when they have total run away inflation, the middle
class gets wiped out. And what we are seeing today is the middle
class being jeopardized by this type of system that we have, unlimited
spending, unlimited debt, unlimited creation of new credit."
"So it's time that we wake up... The answers
are in the free market, sound money and our Constitution."