The Neo-Alchemy of the Federal Reserve

By Ron Paul
Texas Straight Talk

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 111^th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.

Follow Up: Combat troops on our own soil

As a follow up on the US stationing combat brigades on our own soil and the legality of such an act:

The United States has had a long tradition of frowning on the use of the military for domestic law enforcement purposes, and that finds expression most vividly in what's known as the Posse Comitatus Act, passed in the late 1800s, which, generally speaking, makes it a crime to use the military for domestic law enforcement unless Congress has expressly authorized an exception to that prohibition. The most gaping hole created in the act was the provision sponsored by Senator John Warner, called the National Defense Authorization Act for Fiscal Year 2007. And it basically said Congress hereby creates an exception for Posse Comatatus any time that the president says there's a terrorist incident, a natural disaster, and then this open-ended loophole: "or other other conditions" that makes him conclude that state authorities are not sufficient to suppress insurrection, domestic violence, rebellion, or otherwise. So that statute now basically endows the president with authority, in his own unilateral discretion, to decide that he will use the military any time he wishes for domestic law enforcement purposes, and this brigade or this combat unit is certainly prepared to do such implementation at the president's beck and call.

In essence, the threat of a terrorist attack is expected to cause us to shake in fear and give up our rights, all in the name of "security."

"National Security Team"

When did the President's Cabinet become known as his "National Security Team?"

Did I miss the memo?

Like a crackhead in detox...

...Many Americans may soon be cut off from their addictions.

http://www.cnbc.com/id/27993643

It looks like the jig is up with consumer credit cards. Many predict that this bubble will be more severe than the housing bubble, and with good reason. Some are already stretched thin with current credit limits, while others rely on them to survive in an economy where jobs are few and far between. What will a nationwide credit limit decrease do to the economy? It's hard telling, but it isn't likely to be pretty.

Looks like the folks who found those Black Friday deals too irresistible may be regretting their purchases come January.

Rep. Louie Gohmert wants an end to the income tax

Rep. Louie Gohmert of Texas wants to suspend the income tax in 2009. You don't hear these kinds of proposals often, so it's definitely refreshing. Will it happen? Chances are slim to none, considering every cent of the income tax goes to paying the interest alone on our national debt. With the printing presses working overtime and the national debt balloning by trillions of dollars per month, it's not likely that Congress will have a sudden change of heart.

The income tax is, of course, unconstitutional, since the Constitution forbids the Federal government from taxing our labor, but apparently that issue is irrelevant.

Coming to a town near you...military police patrols

Pentagon to Detail Troops to Bolster Domestic Security
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/30/AR2008113002217_pf.html

If you aren't aware, the Pentagon has been rounding up uniformed military personnel from around the world to conduct "training exercises" on our own soil under the NORTHCOM command. They have even diverted troops from Iraq. The exercises include "homeland security tactics" that will be used in the event of a domestic terrorist attack. Besides being downright scary, it violates the Posse Comitatus Act, which prohibits the use of military forces for police patrol.

After scrutiny from several groups such as the ACLU, it appears that Secretary of Defense Gates will be forced to round up a new batch of propaganda to justify this mysterious act. However, he'll just have to rely on the ol' "War on Terror" fear mongering to convince the American people that it's in their best interest.

It is hard to deny that the government is preparing for something beyond the threat of domestic terrorism. Given the fact that Congress has already been threatened with martial law, the economy is on the brink, and Americans are growing increasingly frustrated with endless bailouts, the deployment of these troops could signal something much larger.

So why isn't this being reported in the main stream media? You tell me....

Poor Citi

http://www.cnbc.com/id/27992848

They are hurting so bad that they just spent 10 billion dollars to buy a random Spanish highway company. Where did that money come from? Hmm....I wonder.