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Thread: Ron Paul: The Neo-Alchemy of the Federal Reserve

  1. #1
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    Ron Paul: The Neo-Alchemy of the Federal Reserve

    Yes I am one of those people that believes that the Federal Reserve is the biggest scam every perpetrated onto a nation in the history of mankind, but for those of you who think your dollars are gonna have any real value in the immediate future, please rethink things.....

    [url]http://www.house.gov/htbin/blog_inc?BLOG,tx14_paul,blog,999,All,Item%20not%20found,ID=081201_2549,TEMPLATE=postingdetail.shtml[/url]


    The Neo-Alchemy of the Federal Reserve

    As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems. Now that we are used to rewarding failure with taxpayer-funded bailouts, we are being told that this is “just a start,” more funds will inevitably be needed for more industries, and that things would be much worse had we done nothing.

    The updated total bailout commitments add up to over $8 trillion now. This translates into a monetary base increase of 75 percent over the last two months. This money does not come from some rainy day fund tucked away in the budget somewhere – it is created from thin air, and devalues every dollar in circulation. Dumping money on an economy, as they have been doing, is not the same as dumping wealth. In fact, it has quite the opposite effect.

    One key attribute that gives money value is scarcity. If something that is used as money becomes too plentiful, it loses value. That is how inflation and hyperinflation happens. Giving a central bank the power to create fiat money out of thin air creates the tremendous risk of eventual hyperinflation. Most of the founding fathers did not want a central bank. Having just experienced the hyperinflation of the Continental dollar, they understood the power and the temptations inherent in that type of system. It gives one entity far too much power to control and destabilize the economy.

    Our central bankers have had a tremendous amount of hubris over the years, believing that they could actually manage a paper money system in such a way as to replicate the behavior and benefits of a gold standard. In fact, back in 2004 then Fed Chairman Alan Greenspan told me as much. People talk about toxic assets, but the real toxicity in our economy comes from the neo-alchemy practiced by the Federal Reserve System. Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today’s bankers are poisoning the economy with accelerated fiat money creation.

    Throughout the ages, gold has stood the test of time as a consistently reliable medium of exchange, and has frequently been referred to as “God’s money”, as only God can make more of it. Seeking superhuman power over money in the way alchemists did in ancient times caused society to shun them as charlatans. In much the same way, free people today should be sending the message that this power and control over our money is no longer acceptable.

    The irony is that even had the ancient practice of alchemy been successful, and gold was suddenly, magically made abundant, alchemists still would have failed to create real wealth. Creating gold from lead would have cheapened its status to that of rhinestones or cubic zirconia. It is unnatural and dangerous for paper to be considered as precious as a precious metal. Our fiat currency system is crumbling and coming to an end, as all fiat currencies eventually do.

    Congress should reject the central bank as a failure for its manipulations of money that have brought our economy to its knees. I am hoping that in the 111th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.

  2. #2
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    Can someone maybe a little less idealistic and a whole lot more knowledgeable then I explain why this is considered crazy talk?

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    I don't the idealism in this, the Fed is issuing money that is not backed by anything, prepare to mega inflation which will severely devalue the dollar and potentially kill it for good

  4. #4
    [QUOTE=CTM;2890745]Can someone maybe a little less idealistic and a whole lot more knowledgeable then I explain why this is considered crazy talk?[/QUOTE]

    Because it won't happen.

    Let me repeat.....because it is unrealistic, and will....not....happen.

    Jousting Windmills with no support may be rightious, and it may be accurate in the facts......but it's still jousting windmills.

    Ron Paul is a Republican. He had a chance to leave, and run on his idealism....he didn't, he stuck with the party, took in as much cash as he could, and who knows where it all went because he sure as hell didn't spend it all (or even most of it). How does that earn trust?

    He has no support on the Hill. His legislation ideas will go nowhere.

    Most of his ideas are crazy, because he's a big fan of abolishing things (not bad in and of itself) but has no plans for how to handle the issues once the abolishment is over (outside of, "eh, market will take care of it") and no plan for how to transition from A to B in a real-world way. Put another way, he is an Economic "Bush", eager to "invade" existing policies with his abolishing, but with no plan and no exit strategy for after teh abolishments.

    He is a extremist and zealot of one angle of Governernment, and zealots are never good. He many be right on some issues, he may have a number of valid points, but he is not the kind of leader to get them done in any form.

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    more proof of why he should only be referred to as The Good Doctor Ron Paul!

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    [QUOTE=Warfish;2890760]Because it won't happen.

    Let me repeat.....because it is unrealistic, and will....not....happen.

    Jousting Windmills with no support may be rightious, and it may be accurate in the facts......but it's still jousting windmills.

    Ron Paul is a Republican. He had a chance to leave, and run on his idealism....he didn't, he stuck with the party, took in as much cash as he could, and who knows where it all went because he sure as hell didn't spend it all (or even most of it). How does that earn trust?

    He has no support on the Hill. His legislation ideas will go nowhere.

    Most of his ideas are crazy, because he's a big fan of abolishing things (not bad in and of itself) but has no plans for how to handle the issues once the abolishment is over (outside of, "eh, market will take care of it") and no plan for how to transition from A to B in a real-world way. Put another way, he is an Economic "Bush", eager to "invade" existing policies with his abolishing, but with no plan and no exit strategy for after teh abolishments.

    He is a extremist and zealot of one angle of Governernment, and zealots are never good. He many be right on some issues, he may have a number of valid points, but he is not the kind of leader to get them done in any form.[/QUOTE]

    This has nothing to do with the question of whether he would be a good leader.

    His stated premise in this specific issue is simple, the Fed is hyperinflating the dollar to extremely dangerous levels and that could harm the economy and country in unimaginable ways.

    Sticking to the issue at hand, he makes totally valid arguments and because he is the ONLY one making these statements, they must be dismissed as extremism and zealotry.

    “If one does not understand a person, one tends to regard him as a fool.”

  7. #7
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    [QUOTE=Warfish;2890760]Because it won't happen.

    Let me repeat.....because it is unrealistic, and will....not....happen.

    Jousting Windmills with no support may be rightious, and it may be accurate in the facts......but it's still jousting windmills.

    Ron Paul is a Republican. He had a chance to leave, and run on his idealism....he didn't, he stuck with the party, took in as much cash as he could, and who knows where it all went because he sure as hell didn't spend it all (or even most of it). How does that earn trust?

    He has no support on the Hill. His legislation ideas will go nowhere.

    Most of his ideas are crazy, because he's a big fan of abolishing things (not bad in and of itself) but has no plans for how to handle the issues once the abolishment is over (outside of, "eh, market will take care of it") and no plan for how to transition from A to B in a real-world way. [B]Put another way, he is an Economic "Bush", eager to "invade" existing policies with his abolishing, but with no plan and no exit strategy for after teh abolishments.
    [/B]
    He is a extremist and zealot of one angle of Governernment, and zealots are never good. He many be right on some issues, he may have a number of valid points, but he is not the kind of leader to get them done in any form.[/QUOTE]
    heh.. I like that..

    So if he did something other then rail about the existing system and actually laid out a coherent transition plan, do you think would garner more support, or are the ideas to radical with to many powerful people opposed to them?

    btw, that really wasn't the answer to my question ;) I was kind of wondering why eliminating the Fed wouldn't be a good idea ignoring the feasibility of getting such a bill through Washington..

  8. #8
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    [QUOTE=CTM;2890778]

    btw, that really wasn't the answer to my question ;) I was kind of wondering why eliminating the Fed wouldn't be a good idea ignoring the feasibility of getting such a bill through Washington..[/QUOTE]

    Because then the Fed can't charge the US government interest on the money [B]it must borrow[/B] from the Fed, which the government has been passing on to the taxpayers in the form of an income tax that only came about in 1913 (coincidentally with the creation of the Fed). So these private bankers (yes the Fed is comprised of private bankers it is not a full on government agency by any means) won't see any profits from "lending" money to the US government which the government is perfectly capable of issueing on it's own...

    But since it's written by Ron Paul, let's defame his character and completely ignore the points he makes in his thesis. Way to solve problems....

  9. #9
    [QUOTE=Vilma;2890738]Yes I am one of those people that believes that the Federal Reserve is the biggest scam every perpetrated onto a nation in the history of mankind, but for those of you who think your dollars are gonna have any real value in the immediate future, please rethink things.....

    [url]http://www.house.gov/htbin/blog_inc?BLOG,tx14_paul,blog,999,All,Item%20not%20found,ID=081201_2549,TEMPLATE=postingdetail.shtml[/url]


    The Neo-Alchemy of the Federal Reserve

    As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems. Now that we are used to rewarding failure with taxpayer-funded bailouts, we are being told that this is “just a start,” more funds will inevitably be needed for more industries, and that things would be much worse had we done nothing.

    The updated total bailout commitments add up to over $8 trillion now. This translates into a monetary base increase of 75 percent over the last two months. This money does not come from some rainy day fund tucked away in the budget somewhere – it is created from thin air, and devalues every dollar in circulation. Dumping money on an economy, as they have been doing, is not the same as dumping wealth. In fact, it has quite the opposite effect.

    One key attribute that gives money value is scarcity. If something that is used as money becomes too plentiful, it loses value. That is how inflation and hyperinflation happens. Giving a central bank the power to create fiat money out of thin air creates the tremendous risk of eventual hyperinflation. Most of the founding fathers did not want a central bank. Having just experienced the hyperinflation of the Continental dollar, they understood the power and the temptations inherent in that type of system. It gives one entity far too much power to control and destabilize the economy.

    Our central bankers have had a tremendous amount of hubris over the years, believing that they could actually manage a paper money system in such a way as to replicate the behavior and benefits of a gold standard. In fact, back in 2004 then Fed Chairman Alan Greenspan told me as much. People talk about toxic assets, but the real toxicity in our economy comes from the neo-alchemy practiced by the Federal Reserve System. Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today’s bankers are poisoning the economy with accelerated fiat money creation.

    Throughout the ages, gold has stood the test of time as a consistently reliable medium of exchange, and has frequently been referred to as “God’s money”, as only God can make more of it. Seeking superhuman power over money in the way alchemists did in ancient times caused society to shun them as charlatans. In much the same way, free people today should be sending the message that this power and control over our money is no longer acceptable.

    The irony is that even had the ancient practice of alchemy been successful, and gold was suddenly, magically made abundant, alchemists still would have failed to create real wealth. Creating gold from lead would have cheapened its status to that of rhinestones or cubic zirconia. It is unnatural and dangerous for paper to be considered as precious as a precious metal. Our fiat currency system is crumbling and coming to an end, as all fiat currencies eventually do.

    Congress should reject the central bank as a failure for its manipulations of money that have brought our economy to its knees. I am hoping that in the 111th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.[/QUOTE]so you're saying that the amount of treasury notes being sold is not keeping up with the amount of money being printed?
    Last edited by 2foolish197; 12-02-2008 at 02:29 PM.

  10. #10
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    [QUOTE=Warfish;2890760]but [he] has no plans for how to handle the issues once the abolishment is over (outside of, "eh, market will take care of it") and no plan for how to transition from A to B in a real-world way...[/QUOTE]

    Not true. If you listened once in a while when he spoke instead of just spouting off about how he is crazy and not lucid, you might have heard.

  11. #11
    [QUOTE=Vilma;2890768]This has nothing to do with the question of whether he would be a good leader.

    His stated premise in this specific issue is simple, the Fed is hyperinflating the dollar to extremely dangerous levels and that could harm the economy and country in unimaginable ways.

    Sticking to the issue at hand, he makes totally valid arguments and because he is the ONLY one making these statements, they must be dismissed as extremism and zealotry.

    “If one does not understand a person, one tends to regard him as a fool.”[/QUOTE]

    Here are several reasons why Ron Paul should hesitate before calling someone else an alchemist

    1) The value of national currency has not been linked to gold, or even to capital in circulation, since the Bretton Woods agreement of (I beleive 1972). That particular reworking of the global financial system more or less acknowledged that the free market is (regardless of oughts) subject to state power, and that currency, as an analog of power, never fends for itself in a vacuum.

    2) Ron Paul's arguments echo the currency crisis of the 1890's which was allegedly going to cripple U.S. wealth. The switch from gold to gold/silver foregrounds the fact that value is not traceable to any concrete source, but is the sum of the relations which produce it.

    3) As Warfish said, its real easy to deal with 'oughts' , its a lot harder to deal with, 'now that we abolished the reserve what do we do'. The reserve has created a ton of the wealth which it is now putatively squandering, and to just say 'failure, get rid of it', denies this historical fact and is really hypocritical.

    4) Organized complexity. The notion of inflation that Ron Paul is using functions on a level of disorganized complexity using the abstraction of a market with no inertia or transaction costs. In actuality the devaluation of currency domestically in the long term is connected with infrastructure, not with money, which merely symbolizes value.

    5) Gold is a medium of exchange throughout time only amongst the rich, and only because it is soft, rust proof, and shiny. Go back to Rome and 'the economy' ran on salt, for most of the history of Bali it ran on water, in China it has run on opium, silk, tea, and rice, at different points of history, and of course, barter accounts for more transactions worldwide than the use of money.

    And in case you want to make up your own mind, read Georg Simmel, Marcel Mauss, Leon Walras, Timothy Mitchell, and, failing that, just wiki bretton woods. Warfish has the Ron Paul experience more or less down, the man is a huge crank.

  12. #12
    [quote=CTM;2890745]Can someone maybe a little less idealistic and a whole lot more knowledgeable then I explain why this is considered crazy talk?[/quote]


    You can start with the fact that gold is every bit as imaginary a source of value as paper.

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    [QUOTE=doggin94it;2890834]You can start with the fact that gold is every bit as imaginary a source of value as paper.[/QUOTE]
    Ok, more about the federal reserve though. Why is it good for us? Why do we want/need it?

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    [QUOTE=CTM;2890839]Ok, more about the federal reserve though. Why is it good for us? Why do we want/need it?[/QUOTE]

    Ahh, that's the question that NO ONE has a legitimate answer for, except that it's the status quo, so how can we do anything about it now, and anyone who tries to is an idiot.

  15. #15
    [QUOTE=Vilma;2890768]“If one does not understand a person, one tends to regard him as a fool.”[/QUOTE]

    Wow, that one's almost as old a chestnut as "If one disagrees in any way, call them stupid and ignorant".:rolleyes:

    Trust me, my disagreement with Ron Paul as any kind of leader for us (which is the issue, he ran for President remember) is not due to any lack of "understanding", but thanks anyway.

  16. #16
    [QUOTE=CTM;2890839]Ok, more about the federal reserve though. [B][U]Why is it good for us?[/U][/B] Why do we want/need it?[/QUOTE]

    well, you know how much I love Wikipedia :D

    [QUOTE=Wikipedia][B][U]Purpose[/U][/B]
    The primary motivation for creating the Federal Reserve System was to address banking panics.[12] Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes."[13] Before the founding of the Federal Reserve, the United States underwent several financial crises. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Fed has broader responsibilities than only ensuring the stability of the financial system.[12]

    Current functions of the Federal Reserve System include:[12][14]

    To address the problem of banking panics
    To serve as the central bank for the United States
    To strike a balance between private interests of banks and the centralized responsibility of government
    To supervise and regulate banking institutions
    To protect the credit rights of consumers
    To manage the nation's money supply through monetary policy to achieve the sometimes conflicting goals of maximum employment stable prices
    moderate long-term interest rates
    To maintain the stability of the financial system and contain systemic risk in financial markets
    To provide financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system
    To facilitate the exchange of payments among regions
    To respond to local liquidity needs
    To strengthen U.S. standing in the world economy [/QUOTE]

    So the question is twofold. Are these important or legitimate things for the Govt. to do? And if so, and we dump the Fed, how will they get done?

  17. #17
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    [QUOTE=Warfish;2890869]Wow, that one's almost as old a chestnut as "If one disagrees in any way, call them stupid and ignorant".:rolleyes:

    Trust me, my disagreement with Ron Paul as any kind of leader for us (which is the issue, he ran for President remember) is not due to any lack of "understanding", but thanks anyway.[/QUOTE]

    Still waiting on an articulated response to the [I]content[/I] of Paul's thesis in this particular article.....not rhetoric about who he is as a person or your perceptions of him.

    You called him a zealot and an extremist because his proposition is outlandish and is poorly thought out, not addressing the intellectual relevance of these conclusions....:zzz::zzz::zzz:

  18. #18
    [QUOTE=Vilma;2890880]Still waiting on an articulated response to the [I]content[/I] of Paul's thesis in this particular article.....not rhetoric about who he is as a person or your perceptions of him.

    You called him a zealot and an extremist because his proposition is outlandish and is poorly thought out, not addressing the intellectual relevance of these conclusions....:zzz::zzz::zzz:[/QUOTE]

    Be happy to....as soon as he explains what his replacement for the Fed is.

    Or did I miss that in the piece you posted? Cause I'm seeing alot of "get rid of teh Fed" and not much "Lets do THIS instead!"

    Which was my point.

  19. #19
    How about running as a independent and get a viable running mate!

  20. #20
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    [QUOTE=Warfish;2890879]well, you know how much I love Wikipedia :D



    So the question is twofold. Are these important or legitimate things for the Govt. to do? And if so, and we dump the Fed, how will they get done?[/QUOTE]
    Is the Fed government?

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