Posted on 09/21/2007 1:25:12 AM PDT by oblomov
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?
You will not be surprised to know that B-52 Ben didn’t answer the question. He couldn’t answer the question (at least truthfully). Was he going to say that the Federal Reserve is a quasi-private institution whose prime directive is to cartelize and protect the profits of the banking industry? Was he going to say that the only policy the Fed knows is based on the flawed Keynesian logic that wealth can be created out of thin air via printing presses? Of course not.
(Excerpt) Read more at minyanville.com ...
Yeah, but the guy I respnded to said that, as president, Mr. Paul would do the moral thing and raise rates. Pretty ridiculous argument, if what you say is true.
well said
Well, nil out of three is . . . uh . . . not a good score.
Good grief, the man is a blabbering idiot.
Only if he were King. He's not running for King, and we have no office called King.
How praytell does a president raise interest rates?
If Walter Williams were my God, I would be swayed.
But, alas, he is not.
Wow - a love letter from the biggest Ron Paul hater of them all. I’m honored. Time for me to sip some Wyler’s while you go back under your bridge to harass billy goats.
You are incoherent as usual.
You could not have been referring to me. I do not hate L.Ron Paul.
Likewise, the rest of your blather refers to someone else, not me (unless you are lying).
Are you speaking of post #70?
I agree with him that our leaders have a moral responsibility to be good stewards of our finances, which would include a stable dollar.
The Federal Reserve has been covering governmental overspending by creating more money, which makes more money available to at low rates. This makes borrowers happy, but it also discourages saving, causes inflation, and lowers confidence in the dollar. There are so many dollars in the hands of foreigners (about $5 trillion) that, if they lost confidence, the dollar would be worth squat.
RP could not actually raise interest rates, but with more conservative management of the dollar (not increasing the money supply by double digits every year), rates would no doubt increase. This is preferable to an actual crash of the dollar, IMO.
thanks for that video
Also the Fed has become increasingly politicized to the point that a Bernanky will drop rates when the heat is on.
A Volcker would not bow to politics.
BUMP
Also, he really ought to be on alert for any lone gunman, who may or may not have been photographed at the Soviet Embassy in Mexico City.
The thing that most confuses and perplexes me, besides Petro’s sublimely clever thorazine spamming, is the patently false allegation by the AntiPaul’s that his foreign policy doesn’t pass ‘true conservative’ muster.
Ron Paul, per the Constitution, would make war where the congress declares it, and refrain where the congress does not, even if the war is against an adjectival noun and not a uniformed enemy army.
Maybe once the good Doctor is elected, congress could declare a ‘War on Badness’, thereby eliminating the needless pleonasms of the war on terror, drugs, poverty, etc, the open border Republicrats so glibly spawn to more facilely herd the sheeple.
Be realistic.
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