In response the Opinion piece “(w)Ron(g) Paul’s Free Market Fairytale,” I’d like to clarify a few things. First, that huge leverage was an artifact of the fractional reserve system of money that the world has been using since the end of the gold standard. This allows for the creation of leverage. The problem here is that our fiat money system only works in a constantly expanding economy. When the economy slows, contracts and starts heading in the wrong direction, shit can hit the fan fast because it doesn’t take much for banks to become under-capitalized. Calling out Ron Paul here is backward and totally wrong since he’s such a huge proponent of the gold standard. Something like this could not happen under a gold standard even if you had less regulation.
Second, the executives at MF Global co-mingled funds from their own trades and their customers, which is illegal. People are going to end up in jail for this. All this you neglected to mention.
Next time please look at both sides of the situation, not just the bits that best fit your views. It’s time we get some real change and fresh ideas. Ron Paul and others like him know what’s wrong here and have been trying to warn the country that this economic crisis was going to happen years before. Nobody in power did; instead, they perpetuated it and the media openly laughed at them. You can keep trying the same old thing in 2012, but I know who I’ll be voting for come next year, even if I have to write his name in.
Ryan Martin is a fourth-year physics major.
10 years of lies and disinformation
From the criminal controlled media.
Congressman Paul and a few others did indeed predict the real estate crash and following recession. This is reality and not any kind of “fairytale.”
The individuals who were not operating in accordance with economic reality were those who believe in central planning and the Federal Reserve System.
Note the stark differences shown by the video clips available through the following three links.
A) Congressman Paul’s accurate predictions years before the crash: http://www.youtube.com/watch?v=IHNp1wf1T_k
B) Federal Reserve Chairman Bernanke’s erroneous opinons: http://www.youtube.com/watch?v=HQ79Pt2GNJo
C) Chairman Bernanke’s innacurate predictions: http://www.youtube.com/watch?v=GbOWiJ94Xvg
I’d also like to point out the ineptness of pretending to be anti war while simultaneously being opposed to a gold or commodity backed currency….a brief look at history reveals that nearly all wars are fought with currency manipulation….a commodity backed dollar prevents politicians from manipulating currency to satisfy their blood lust.
All you Ron Paul fans make it sound like there was some magical era of gold standard greatness that was immediately destroyed by the creation of the federal reserve. The fed’s been around since 1913 and there were the First and Second central banks of the US at different times before it. Ron Paul is always pretty vague himself, and even on his website, about what exactly he means by sound money. Is he talking about a gold specie standard where coins’ value is actually determined by their weight in precious medals, or a fixed rate currency like Bretton Woods… Read more »
“don’t” typo, looks like i’m saying “don’t Reply” lol
The Feds actions are driving speculation for 3 reasons: 1. When interest rates are kept artificially low capital flows into riskier assets to get a return. 2. When Money supply expands more cash chases the same amount of goods driving up prices. Keynes himself said “inflation is always a monetary phenomenon.” 3. The FOMC aka the Plunge protection team, aka The Bernanke “Put”. The Fed is directly intervening in the Equity and bond markets propping up prices when their is thin trading volume or excess selling. So whether its people chasing shares or commodities (speculating) to try and get income… Read more »
I mean I’m totally with you on the interest rates, It’s not good that we push it so low so that it almost discourages household savings, and you are right, I can see how there would be an increased incentive to go after short term boom or bust investments (and the lower capital gains tax also encourages this) when dividends from long term investments are lower. I don’t see how inflation or the FOMC directly drive speculation though. However your doomsday scenario about the bond vigilantes is hyperbole. US T-bills are seen as the safest investment around these days; I’m… Read more »
Indeed the great depression happened when we were on a gold standard, but you can’t blame the gold standard for the great depression. “Ben Bernanke, the current Chairman of the Federal Reserve, agreed with Friedman in blaming the Federal Reserve for its role in the Great Depression, and stated on Nov. 8, 2002: “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it… Read more »
OK, your article seemed to mostly be an attack on Paul’s free market views and blaming lack of regulation for MF Global. What MF Global did wrong wasn’t speculation, it was co-mingling funds. Had they not broken the law there, their customers would still have their money. How would you propose to end the speculation that goes on? We’re not trying to say that it’s gonna be as easy as getting Paul in office and deregulating like crazy. Of course it’s not that simple. The US Dollar being the world’s reserve currency only means that if something goes wrong, it… Read more »