Ron Paul Liberty Report - Weekly Update --- Destroy the Economy, Win a Nobel Prize
Aired: 2022-10-18
Duration: 04:34


=== Bernanke's Nobel: Fueling Inflation (04:31) ===

[00:00:03]  Hello everybody and thank you for tuning in to the weekly report, Destroy the Economy, Win a Nobel Prize.
[00:00:12]  Former Federal Reserve Chairman Ben Bernanke is a 2022 recipient of the Nobel Prize in Economics for his writings on how government should respond to bank failure.
[00:00:26]  Honoring Bernanke for his advice on what governments should do when banks fail is like giving a fire safety award to an arsonist.
[00:00:35]  Bernanke was Fed chairman when the housing bubble created by his predecessor Alan Greenspan in the wake of the bursting of the Greenspan's tech bubble and the 9-11 attacks exploded.
[00:00:50]  When the housing market collapsed, Bernanke worked with Congress and the Bush administration to bail out big games and Wall Street firms.
[00:01:00]  In the years following the meltdown, the Bernanke-led Fed tried to stimulate the economy via massive money creation, near-zero interest rates, and quantitative easing, where the Fed inject liquidity into the market via purchase of financial assets, including Treasury bonds.
[00:01:22]  The Fed's post-meltdown policies produced sluggish growth in the Fest, while laying the groundwork for the next bust.
[00:01:31]  A sign that the next crash was around a corner came in September 2019 when the Federal Reserve began pumping billions of dollars a day into the repurchasing market which banks used to make overnight loans to each other in order to keep that market's interest rates from rising above the Fed's target rate.
[00:01:53]  The COVID lockdowns then gave the Fed an excuse to push interest rates to zero and massively expand quantitative easing.
[00:02:02]  The Fed's actions are the prime culprit behind the price inflation plaguing America's economy.
[00:02:09]  The Fed has responded to the price inflation by increasing interest rates, although rates remain much lower than they would be in a free market.
[00:02:20]  The fact that even these relatively small increases help push the fragile economy into recession shows the instability of our debt-based economic system.
[00:02:33]  Bernanke and Congress should have responded to the meltdown by letting the recession that followed the meltdown run its course.
[00:02:43]  This is the only way the economy can adjust to the market distortions caused when the Fed increases the money supply and lowers interest rates.
[00:02:53]  Those who worry that this don't do something, just stand there approach would inflict long-term economic pain on the American people should consider the economic depression of the 1920s.
[00:03:07]  During this depression, the Fed refrained from trying to stimulate the economy and Congress actually cut spending.
[00:03:16]  The result was the downturn was quickly over.
[00:03:20]  Sadly, the lessons of 1920 are largely ignored by mainstream economic historians.
[00:03:27]  In response to my questioning at a Financial Service Committee hearing, then Federal Chairman Ben Bernanke admitted he did not consider gold to be money.
[00:03:39]  Of course, gold and other precious metals are money because individuals have selected them whenever they had the freedom to choose a currency.
[00:03:50]  One reason for this is that precious metals are uniquely suited to serve as a stable unit of account.
[00:03:58]  In contrast, government rulers have favored fiat money precisely because it can never serve as an honest unit of account due to its value being constantly manipulated by central bankers.
[00:04:13]  This is often done at the behest of power-hungry politicians.
[00:04:19]  Therefore, under a fiat monetary system, we cannot know the true value of goods and services.
[00:04:26]  This is why, to create a sound economy that provides prosperity, we should audit the Fed and then end the Fed.