Exclusive: Ron Paul Talks Federal Reserve, QE3 & Gold Standard
In an exclusive interview I had with Texas Congressman Ron Paul last week, I was able to ask him about some of the things happening in regards to the new leg of Quantitative Easing (QE) that the Federal Reserve has just unleashed and its implications. I also was able to get his comments in regards to the gold standard and the language that was given towards that at the Republican National Convention.
I first asked if he might explain exactly what QE is, the latest version of it and how it would affect the people of the U.S.
Congressman Paul answered,
“QE is a relatively new term, started off since the crisis hit. All it means is that they (the Federal Reserve) are going to be doing more of what they’ve been doing all along. The Federal Reserve, their business is creating new money, believing they can regulate the economy and the business cycle through the manipulation of money and interest rates. They do manipulate it, but always to the negative. They’ve always claimed they could solved the problems and they would never admit they create the problems.
Once we got into the very bad recession of ’08 Bernanke wanted to test his theory that he has been preaching for many decades, and he did his thesis on it. Whenever you get into trouble you print money faster and faster…whatever is necessary. You take interest rates down as low as you can and that will solve the problem. So it’s massive monetary inflation is what they do.
So they come out with this term QE. They did it at the beginning, then they had another round of it a couple of years later and that was QE2 and now with this recent announcement,…. since to me it should have been very, very negative on the markets, because what they were saying was that “we are in such trouble now that we are going to….as bad as what we’ve done with QE1 and QE2, we’re going to massively, more so than ever increase money and credit and it’s going to be endless until it works.
To me it was a very, very negative signal for our dollar, for price inflation, for the economy because it hasn’t worked, but we’re just starting now and he (Bernanke) says it’ll go on until it solves the problem, but the problem really is that it will eventually make the economy worse. It’s not going to do any good and they’ll be forced to reassess matters.
I followed up by asking Dr. Paul about the language of the gold standard and how that tied to what the Federal Reserve is doing. I specifically asked him if he thought Republicans would get behind a gold standard or was all of that just rhetoric.”
“They’re not going to really do it,” Paul said. “They didn’t say they would be behind the gold standard. They were willing to say that we could re-establish a gold commission like we had in the early 1980′s to study the possibility.”
“I think that was just an attempt to mollify some of the Ron Paul supporters who want something like that done,” he continued. “But they did take a position that we should have an audit of the Federal Reserve.”
Paul said he thinks it was more politics than strong belief. In fact, he doubts whether or not either party is really willing to get on a gold standard or have a full audit of the Federal Reserve.
Paul was quick to point out “that doesn’t mean the numbers of people who are supporting this aren’t growing and one of the reasons Republicans had to answer to this is I believe our campaign go the grassroots stirred up and a lot of people understanding now, so the political pressure has caused them to do that.”
“Some people might say ‘Well that’s not worth anything because they haven’t really changed their beliefs,’” Paul continued. “But their beliefs are to do whatever they have to do to satisfy the people so that they don’t lose their office. So in a way, it’s a very strong indication that we are winning this fight, but we’re not on the verge of the true audit of the Fed and we’re not on the verge of a gold standard, but as conditions get much worse, I think we’ll go much closer to that point and this is the reason that I think it’s very good that we are at least talking about this so that we’ll have an option when the time comes.”
Noting that with the Fed cranking up the latest leg of QE and that it would result in the devaluing of the dollar and inflation, I asked how a gold standard would actually work if implemented and how it would affect people, as far as their money goes.
Paul said that we don’t want to announce tomorrow that there is a gold standard. It would just create “chaos” on top of the chaos we already have. However, he did speak to attacking the issue “sensibly.” What he meant by that was stopping the need to print money, which means stopping deficit spending, which neither side seems willing to do.
“If you’re on a gold standard, it helps the people because the paper money system helps the banks and corporations and the politicians who want to spend money and not be responsible. Then they can pass the money on in welfare benefits or continue fighting wars that they shouldn’t be fighting,” Paul said. “So the people under sound money, the average person, benefits a lot because his savings aren’t confiscated.”
“Even today, they claim there’s no inflation, but there’s enough inflation to make it very difficult to live on a fixed income,” the Congressman continued. “So the people always suffer.”
Paul went on to talk about the transition to a gold standard. He said, “Even I don’t advocate tomorrow just going to the gold standard and dropping the Federal Reserve. We have enough chaos right now. If we continue doing what we are doing, the monetary system will default and we’ll have to do something. So I’m advising a transition and work our way back.”
“The best example of knowing how to do this would be to look at the Resumption Act of 1875,” Paul said. This Act set in motion our country returning to the gold standard after the War of Northern Aggression. Of course Paul pointed out the differences between then and now and admitted that we are engaged in things like wars over seas and the printing of money that will require handling things differently.
In order to start down the road of a gold system, Paul said we would have to end the foreign wars and deal honestly concerning the entitlement system in America. This is part of the reason why the congressman promotes citizens being able to use gold and silver as legal tender and not making it a criminal act and putting people in prison for it. After all the Constitution states that is what is to be used in the first place.
I also was able to ask several more question of Dr. Paul relating to how the law of God works in the civil government, his retirement plans and the future of the liberty movement. To listen to the entire interview, click below: