Ron Paul Has Incredible Reaction to Fed Rate Decision

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In the post-meltdown world, the Federal Reserve is irresponsible, ineffective, and ultimately useless. At least, that’s the opinion of former congressman Ron Paul.

Last week, the Federal Open Market Committee announced its decision to hold interest rates steady. Since then, analysts have been pouring over the details. What does this mean for the economy? What will be the impact on the stock market? What does this say about the U.S. economic recovery?

Ron Paul, however, barely considered the business implications. In a video posted on YouTube shortly before the Fed’s announcement, the long-time libertarian advocate took a step back to highlight just how absurd it is to have a central bank. Economic planning, he argues, is an intellectually bankrupt institution. (Source: The Fed’s Interest Rate Dilemma – Ron’s Take, Ron Paul Liberty Report, September 16, 2015.)

Here’s a snippet of Paul’s commentary below. It has been lightly edited for clarity.

Here we have 12 unelected officials in a secret room and they’re pretending to know what the interest rate ought to be. Seven are permanent members of the Fed. The New York Fed President, he’s a permanent member. There are four regional banks. They get together in secret and they have this pretense that they know, ‘What should we do.’

The real problem is that they believe they’re smart enough to figure out. My argument is, they don’t have the vaguest idea what the interest rate should be because nobody in the world knows what interest rates should be. Just as all prices should be set in the marketplace, it takes hundreds, thousands, millions of people buying and selling, borrowing and lending and saving to make these determinations. The officials in central banking actually deceive themselves.

Paul’s contempt for the Federal Reserve didn’t end there. He goes on to point out the corrupt relationship between central bankers and Wall Street.

Some believe in a philosophic sense that this is good and proper and they’re doing the Lord’s work. Others are very much aware of the power that can be wielded through central banking. That’s why you don’t see average people becoming members of the central banks. [The central banks], they usually have a strong relationship with Wall Street and the banking industry, both domestically and internationally. That’s a driving force.

But I admit, there are central bank board members who really believe in this, almost like a religious belief, that the world would be totally chaotic if you didn’t have smart people doing central economic planning by manipulating interest rates and monetary policies. Well, I’m a strong disbeliever in that. I don’t believe it is possible.”

This system, Paul concludes, is unsustainable. The Federal Reserve has transformed the U.S. economy from a system based on saving to one dependent on easy credit. Eventually, this will result in the end of the U.S. dollar and an economic collapse.

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