"Bernanke Stumped by Representative Ron Paul"

Scott Reamer:

In today’s testimony before the house, Fed Chairman Bernanke was questioned by Representative Ron Paul in what was a remarkable exchange. Remarkable for how straightforward, lucid, and anti-statist the question was. In his questioning, Ron Paul stated:

"I want to follow up on the discussion about moral hazard. I think we have a very narrow understanding about what moral hazard really is. Because I think moral hazard begins at the very moment that we create artificially low interest rates which we constantly do. And this is the reason people make mistakes. It isn’t because human nature causes us to make all these mistakes, but there is a normal reaction when interest rates are low that there will be overinvestment and malinvestment, excessive debt, and then there are consequences from this. My question is going to be around the subject of how can it ever be morally justifiable to deliberately depreciate the value of our currency?”

His statements continued (about how much oil, gold, wheat, corn, etc. has gone up since the rate decrease) but the heart of his question was the following moral question: ...consciously depreciating the value of the USD has winners and losers (Wall Street/banks/the rich and everyone else), Mr. Bernanke. How do you constantly choose Wall Street over the rest of America?

I'd highly encourage CFRP viewers to read the rest here.

Ron Paul & Alan Greenspan

Alan Greenspan recently published a book in which he "accused Bush of racking up big budget deficits, saying the president and Congress' former Republican leaders abandoned the party's conservative principles favoring small government" and also writes that he regreted each time when President Bush did not use his presidential veto power to address "out-of-control spending." (source: AP)

Today the Free Market News Network highlights three exchanges that took place between Alan Greenspan during his time as chairmen of the federal reserve and Dr. Ron Paul which demonstrate Ron Paul's long track-record for demanding fiscally-sound and sane federal monetary policies which defend freedom and avoid exploitation. A sample:

2/11/2004 — DIALOGUE TWO

(In which Ron Paul gets Greenspan to admit the Fed has ‘inordinate power.’)

Dr. PAUL: "Maybe there is too much power in the hands of those who control monetary policy, the power to create the financial bubbles, the power to maybe bring the bubble about, the power to change the value of the stock market within minutes? That to me is just an ominous power and challenges the whole concept of freedom and liberty sound money."

Dr. GREENSPAN: "Congressman, as I have said to you before, the problem you are alluding to is the conversion of a commodity standard to fiat money. We have statutorily gone onto a fiat money standard, and as a consequence of that it is inevitable that the authority, which is the producer of the money supply, will have inordinate power."