The Federal Reserve System, the Fed, is the most important financial institution in the nation. Yet few Americans understand the Fed’s real purpose for existence and the dangers it presents to our nation’s financial well-being. However, Congressman Ron Paul’s book End the Fed, a New York Times bestseller, is changing that.
Simply, the Fed is a central bank, which has the legal authority to “create money out of thin air.” As Congressman Paul notes, as have other critics of the Fed have noted, it is an inflation machine. Rising prices across the board are not—and have never been—the fault of OPEC, unions or greedy corporations. Inflation is a monetary phenomenon that lies primarily at the door of the Fed. Fractional reserve banking deserves its share of the blame for inflation, but fractional reserve banking is exacerbated by the very existence of the Fed.
First elected to Congress in 1976, Ron Paul became a thorn in the side of the Fed, annually introducing a bill to dismantle the Fed. In no year could the Congressman find even one cosponsor to his bill. The Fed is held with such esteem by members of Congress that no one will stand alongside Dr. Paul on this issue. He was a voice crying in the wilderness, and I don’t doubt but that many members of Congress ridiculed him for his position on the Fed. Now, Ron Paul may be David, about to slay Goliath.
When the Fed created literally trillions of dollars to bailout large financial institutions and Ben Bernanke, Fed Head, had the audacity to tell Congress that he was not going to reveal who got the money much less how much they got, there was an uproar across the country. For perhaps the first time ever, the Fed was the focal point of public criticism, and Ron Paul called for a real audit of the Fed with HR 1207.
So intense have been the attacks on the Fed that for the first time it hired a lobbyist to defend its position on Capitol Hill.
Paul’s Audit the Fed bill has 55 cosponsors and passed out of the House Financial Services Committee by a vote of 43 – 26. The Senate companion bill, S 604, has 31 cosponsors. Suddenly, Congressmen and Senators climbed on board the Ron Paul wagon. Undoubtedly, cosponsors climbed aboard not because they suddenly saw the evils of the Fed but because they saw the handwriting on the wall.
For nearly a hundred years, the Fed pretty much successfully concealed that it was the beast that its critics had said it was. To this day, most Americans do not know that the Fed, with its loose money policies of the 1920s, was the cause of the Great Depression of the 1930s.
In the 1970s, when prices rose at double digits rates, only Austrian economists correctly saw the Fed as responsible. The media, which by then had become fairly much the Fed’s lapdogs, blamed the “oil shock.”
Other times, rising price levels were attributed to “cost-push inflation,” a spurious theory that blamed businesses. When the CPI and GPI rose “only” 2%-3%, Americans were told “a little inflation is good.” Now, though, Ron Paul has told the truth.
The Fed is not a beneficent organization established for the good of mankind but exists solely for the benefit of big banking.
End the Fedis Ron Paul’s assessment of an institution whose machinations he has sought to expose since before becoming a member of Congress. He relates how he came to realize the immorality of the Fed and the inflation it creates. And, he tells of his conversations with Fed Heads Greenspan and Bernanke when they appeared before House committees.
Paul pulls no punches. He lays the blame for the financial crisis of 2008 and the housing crisis squarely at the feet of Alan Greenspan. “History will show that Greenspan, during his years as Fed chairman (1987-2006), planted all the seeds of the financial calamity that erupted in 2007 and 2008.”
Further, Paul declares Obama’s “solution” to the problem not a solution at all. “. . . the inflation and debt accumulation of the Obama years will not inflate our way out of it. This depression will likely last and last. (Note that Paul calls our present economic woes a depression, not a recession.) If the depression lasts a decade or more, its length cannot be blamed solely on Greenspan. That blame will be placed on the current Federal Reserve Board, Congress, the President, the Treasury, but above all on Keynesian economic policy, the same philosophy that gave us the Great Depression of the 1930s.”
Many persons familiar with Ron Paul’s assessments of our problems are quick to point out that he is a doctor, “not an economist.” To that, I would remind them that Ron Paul has studied economics his entire adult life. Further, he has hobnobbed with some of the foremost economic thinkers of the Austrian economic school, such greats as Murray Rothbard, Hans Sennholz, F. A. Hayek and the master himself, Ludwig von Mises.
Additionally, Ron Paul has authored at least ten books on economics and political thinking. The Revolution, a Manifesto, like End the Fed, became a New York Times bestseller. With Lewis Lehrman, Paul coauthored The Case for Gold, which was a minority report to the 1981 U.S. Gold Commission, a Ronald Reagan initiative to study the role that gold should play in our monetary system. (The commission was stacked with anti-gold members and the minority report was one of only two benefits to come from the commission’s work. The American Eagle bullion coin program was the other.)
Ron Paul’s grasp of economics and understanding of the political process make him eminently qualified to write about economics and to make economic forecasts. Sadly, Paul is not optimistic about the immediate outlook for our economy.
End the Fed is only 210 pages, divided into fifteen chapters. Although Paul’s explanation why this depression likely will “last and last” is scary, his Chapter 4, Central Banks and War, is a shocker. Simply put, central banks facilitate war and give politicians fewer reasons to seek political solutions to differences with other nations. “It is no coincidence that the century of total war coincided with the century of central banking.” Before the days of central banks (European as well as our Fed), wars resulted in higher taxes and shortages as resources were diverted from the domestic economy to the war effort.
When politicians have to tell the people that the wars they are about to embark upon will raise taxes and create shortages, political solutions become viable alternatives. When the costs of the wars can be hidden through the creation of new money via central banks, political solutions are less likely. Sadly, many investment banking houses actually agitate for war as they stand to make billions of dollars issuing and trading in the bonds and securities that are sold as a nation gears for war.
Ron Paul’s End the Fed is must reading for anyone seeking to survive today’s financial turmoil. Understanding the problem is the first step toward solving it.
I agree with Ron Paul and have for many years. Very few Americans want to know the truth for change to them is trouble. Only the few with eyes to see know that change like ending the FED will in time be a blessing. No more banks with the ability to create money out of thin air and then charge us high intrest to pay it back. A buck is a buck and redeamable in gold and silver.
Another book that supports your view is “Web of Debt.”
The Fed needs to be audited and paid off witht the same “made-up money” they loan to us. It is time to END the FED.
This is all wonderful information. Its great to know what has happened and what we can do about it. But – are YOU doing anything about it? Have you demanded that your reps and senators co-sponsor the bills to audit the Fed? Or to eliminate it? Have you sent emails to your friends asking them to do the same? Will we be the best educated citizens when it all falls down around us? What happens if we never “fire the shot (in this case putting real pressure on our elected reps) heard round the world”? If we only educate ourselves and just talk with each other, then we will lose our freedoms – all of them! So, just what kind of action are YOU taking?
Johnny Banana is right. It is not enough just to know how the Fed works and that it’s an immoral institution. We have to put pressure on our representatives in Congress to get them to do something. Right now, a great “something” would be to support Ron Paul’s HR 1407, which would audit the Fed, a good start. S 604 is the Senate companion bill. But what makes Ron Paul’s End the Fed such a great book is that in enables the average American to know more about the Fed than his representatives in Washington know.
Another excellent book exposing the immorality of the Fed and fractional reserve banking is Murray Rothbard’s The Mystery of Banking. A review soon to follow on this blog. Meanwhile, read Joseph Salerno’s foreword to the recently re-released edition here. Better yet, buy The Mystery of Banking and put yourself on the path to knowing more about banking than your banker ever thought of knowing.
The two books make great companion reading. End the Fed deals with today’s political battle with the Fed, while The Mystery of Banking explains the “mystery of banking” and explains how banking evolved (devolved?) to where it is today. Both are short books, written not for economists but for non-economists, you and me.
By chance has anyone here ever read the book “The Creature from Jekyll Island”? I ask because that exact book is the complete long-range plan for the obsolescence of “The Fed” and everything appears to be exactly on schedule. This plan was made way back in 1910, on Jekyll Island, Georgia by renowned millionaires of that era…you’ll recognize the names…today their families hold controlling interest in all the major banks in the USA and elsewhere.
Trust me, Ron Paul has read it and used it as a reference many times. This same group of people in 1910 also established what later became the 16th Amendment to the U S Constitution that allowed the federal government to directly tax both individuals and businesses (It was the basis for today’s Internal Revenue Service and the current U.S. Tax Code. which, by the way, was changed over 500 times during 2009).
If you have not read The Creature from Jekyll Island then you must look it up on the Internet, read it, and then begin stocking up on U. S. circulated silver coins (often called “survival silver” and/or “junk silver” because it is (1) English language based, (2) is a currency in itself as a precious metal, and (3) because almost all unknowing Americans everyone else believes the “fiat” money issued by the Federal Reserve and hold all their wealth in Federal Reserve notes that could become utterly worthless at any from now until the second coming of Jesus Christ.
Okay, so I sound like a nut case…but I have -0- faith in our federal government, the Fed, and Wall Street…if it gets done, I’m going to pretty much do it myself (protect my family from financial ruin, that is).
God knows I hope I’m wrong…but your Bible itself predicts this will happen. At least food for thought, is it not?
Yhomas Avery Blair, EA