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Ron Paul In Charge Of Monetary Committee

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Ron Paul vows renewed Fed audit push next year

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(Reuters) - Republican Representative Ron Paul on Thursday said he will push to examine the Federal Reserve's monetary policy decisions if he takes control of the congressional subcommittee that oversees the central bank as expected in January.

"I think they're way too independent. They just shouldn't have this power," Paul, a longtime Fed critic, said in an interview with Reuters. "Up until recently it has been modest but now it's totally out of control."

Paul is currently the top Republican on the House of Representatives subcommittee that oversees domestic monetary policy, and is likely to head the panel when Republicans take control of the chamber in January.

That could create a giant headache for the Fed, which earlier this year fended off an effort headed by Paul to open up its internal deliberations on interest rates and monetary easing to congressional scrutiny.

Paul, who has written a book called "End the Fed," has been a fierce critic of the central bank's efforts to boost the economy through monetary policy.

"It's an outrage, what is happening, and the Congress more or less has not said much about it," he said.

Paul said his subcommittee would also push to examine the country's gold reserves and highlight the views of economists who believe that economic downturns are caused by bad monetary policy, not the vagaries of the free market.

Global organizations like the International Monetary Fund also will come under scrutiny, he said.

"Eventually we're going to have monetary reform. I do not believe the dollar can be the reserve standard of the world," said Paul, who has called for returning the United States to a currency backed by gold or silver.

Many economists say that the Fed's decisive actions during the 2008 financial crisis prevented the deep recession that followed from turning into a depression. But grassroots outrage over the bank bailouts and other Fed actions helped propel many Republican candidates to victory in Tuesday's congressional elections -- including Paul's son, Rand Paul, who will represent Kentucky in the Senate.

"With a lot of new members coming and the problems getting worse rather better, there's going to be a lot more people who are going to be looking for answers," Paul said.

http://www.reuters.com/article/idUSTRE6A35QB20101104

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Ron Paul vows renewed Fed audit push next year

..

. "Up until recently it has been modest but now it's totally out of control."

IMO the Fed are 100% responsible for the crisis. Holding rates far too low for far too long (2000 0 to 2007) with such predictably catastrophic results.

Why would you ask someone who caused the crisis to try to fix it? btw it's pretty much unfixable now anyway.

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Lets hope he sticks to his guns. He's been consistent over decades, in spite of it probably making him something of an outcast, and is not a young man chasing post politics non-exec positions in the banks, so maybe he is 'the one'

Or he'll get offed like JFK. Or a plane crash, or something less blatant.

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IMO the Fed are 100% responsible for the crisis. Holding rates far too low for far too long (2000 0 to 2007) with such predictably catastrophic results.

Why would you ask someone who caused the crisis to try to fix it? btw it's pretty much unfixable now anyway.

I disagree, the Fed's rate was higher than the ECB's until the middle of 01. Between that point and 05 they were about 100 basis points lower, then from 05 to the start of 08 they were consistently higher again.

If you average them out rates were probably about even during the period 2000-2007 for Germany and U.S, yet Germany didn't experience a housing fuelled debt boom.

Interest rates aren't to blame.

interest-rate-policy_2.jpg

Edited by Chef

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IMO the Fed are 100% responsible for the crisis. Holding rates far too low for far too long (2000 0 to 2007) with such predictably catastrophic results.

Why would you ask someone who caused the crisis to try to fix it? btw it's pretty much unfixable now anyway.

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Krugman, 2002

http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

That worked out well.

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I disagree, the Fed's rate was higher than the ECB's until the middle of 01. Between that point and 05 they were about 100 basis points lower, then from 05 to the start of 08 they were consistently higher again.
And the low rates set by the ECB caused a catastrophic boom in Ireland, Spain, Greece etc. What's your point?

(Low rates may have suited Germany which joined the Euro at a rate that made them less competitive initially)

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I disagree, the Fed's rate was higher than the ECB's until the middle of 01. Between that point and 05 they were about 100 basis points lower, then from 05 to the start of 08 they were consistently higher again.

If you average them out rates were probably about even during the period 2000-2007 for Germany and U.S, yet Germany didn't experience a housing fuelled debt boom.

Interest rates aren't to blame.

interest-rate-policy_2.jpg

Cant it be that different things are to blame in different economies?

Rates in one economy, regulations in the other, culture in another.

More than one way to skin a cat and all that...

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Ask yourself, if rates were set at 10% would there have been huge credit and property boom?

If interest rates are to blame both Germany and Ireland would have suffered from humungous real estate inflation, but this wasn't the case. The real world has tested your hypothesis and proven it to be flawed, but it doesn't stop you chasing a monetary solution.

Back in the late 90's producers were desperate for an interest rate cut because the strong £ was pricing their goods out of the market, high interest rates bring their own problems.

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To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Krugman, 2002

Great quote! :) I'll use in the future.

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Cant it be that different things are to blame in different economies?

Rates in one economy, regulations in the other, culture in another.

More than one way to skin a cat and all that...

That sounds reasonable, so you agree it's something other than interest rate policy that caused the collapse?

Edited by Chef

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If interest rates are to blame both Germany and Ireland would have suffered from humungous real estate inflation, but this wasn't the case. The real world has tested your hypothesis and proven it to be flawed, but it doesn't stop you chasing a monetary solution.

Back in the late 90's producers were desperate for an interest rate cut because the strong £ was pricing their goods out of the market, high interest rates bring their own problems.

Interest rates don't matter.

Zero capital banking was the culprit. Monetising promissory notes was the culprit. bankster fraud could have occured at any interest level.

When you have no money, just a basic appearance of it you don't care what the interest rate is.

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That sounds reasonable, so you agree it's something other than interest rate policy that caused the collapse?

Happened because all banking is fraud.

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To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Krugman, 2002

http://www.nytimes.c...double-dip.html

That worked out well.

Bernanke REALLY beleives that lack of credit is the reason for stagnant economies.

Understand this, and you understand WHERE this is all going.

this means among other things, UNLIMITED bank bailouts, UNLIMITED PRINTING....OH YES, GDP will grow, but wealth creation wont and inflation will.

By the way, the GDP deflator for last report in the US was 2.2%, yet Bernanke said that most measures showed inflation was under control...The Freak used to say his favourite indicator was the GDP deflator.

He is a deluded and LYING bag of Puss.

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If interest rates are to blame both Germany and Ireland would have suffered from humungous real estate inflation, but this wasn't the case. The real world has tested your hypothesis and proven it to be flawed, but it doesn't stop you chasing a monetary solution.

I'm not chasing any solution. I think we're f**ked. There's very little we can do now, monetary or fiscal.

So Ireland suffered from humungous real estate inflation, and Germany didn't, correct. But bubbles feed on themselves. If real estate in Germany has been flat for decades the bubble doesn't get going. Why invest in Germany if you don't expect huge returns? If Ireland has risen 20% in the last 12 months, invest there. Credit bubbles are dangerous and unpredictable physiological phenomena, but they need cheap money to get truly out of control and devastate economies.

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Interest rates don't matter.

Zero capital banking was the culprit. Monetising promissory notes was the culprit. bankster fraud could have occured at any interest level.

When you have no money, just a basic appearance of it you don't care what the interest rate is.

So both the lack and the abundance of central bank promissory notes are to blame?

Doesn't make any sense.

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So both the lack and the abundance of central bank promissory notes are to blame?

Doesn't make any sense.

Sure it does.

Commercial banks pretend to have central bank notes. They do this to sucker peopel into unpayable debt.

if they really had the money they claimed, that would be fine, the debt would be repayable (it would still be shit ofc because central banking is a compklicated sort of slavery and evil.)

If they didn't pretend to lend money that they don't havem that would also be fine.

Alas, all banking is fraud and so we are here. Really, the bankers and everyone who helped them do this should all be in prison, bar maybe some counter staff who didn't understand what they were doing* and all "debts" and "savings" wiped out. Never going to happen, also alas.

*Ofc any contract they signed is instantly null and void due to no meeting of minds.

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low interest rates send signals and that's why the bubbles occur, whether it's stock bubble or real estate bubble

You could also say that if the big banks know the government/taxpayers will bail them and their fractional deposits out they make wreckless decisions and aren't held accountable in a truly free market i.e Northern Rock should be out on its **** but they survive because of a bailout. In a true free market - and in any other industry - they would have been flushed out and punished

Interest rates cannot possibly be set by a panel of central planners, like they have some special knowledge and are the masters of the universe, it should be set by the market. The Fed and the BoE intervening through printing and artificially low rates causes the bubbles and rips off the ordinary working man through inflation over time, eroding purchasing power and savings

In short, the central banks and their interventions cause enormous problems for the economy

Edited by punter

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low interest rates send signals and that's why the bubbles occur, whether it's stock bubble or real estate bubble

You could also say that if the big banks know the government/taxpayers will bail them and their fractional deposits out they make wreckless decisions and aren't held accountable in a truly free market i.e Northern Rock should be out on its **** but they survive because of a bailout. In a true free market - and in any other industry - they would have been flushed out and punished

Interest rates cannot possibly be set by a panel of central planners, like they have some special knowledge and are the masters of the universe, it should be set by the market. The Fed and the BoE intervening through printing and artificially low rates causes the bubbles and rips off the ordinary working man through inflation over time, eroding purchasing power and savings

Interest rates only really matter with a fixed amount of money where further additions to that money supply have a production costs.

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Ron Paul is the quintessential country doctor, a much loved figure in American culture. He still operates a surgery and still delivers babies in his home district in Texas.

But to follow up on monetary policy, I believe that the velocity of money has been on the decline in the US since 2002 or so. This means that, as far as the US is concerned, FED policy is useless.

However, when I travel overseas, I continue to be astounded at the level of development in the Middle and Far East since 2003. It is clear to me that the policy of the FED since the dot com burst has stoked huge economic development in emerging markets, but has done nothing for the US.

It seems now that FED is determined to force so much money through the global system that eventually it overflows the rest of the world and comes back to the USA. That's a very very dangerous gamble, imv. Kind of like bungi jumping without a bungi.

Edited by Toto deVeer

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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