Comments on: Inflation: Ron Paul Explains How We Got Into This Mess

By: Rob

Rob — Tue, 14 Oct 2008 09:36:51 +0000

Reply to Unpopular Truth;
While I am an avid fan of Democracy, I believe that with the right dictator, dictatorship can absolutely work. Unfortunately, the right dictator is very very rare. Its a pity, because of the way we could instantly heal the situation, the only problem is complaining people who don't want to change.

By: Noman

Noman — Fri, 11 Jul 2008 01:27:22 +0000

We here in the U.S. are going the way of Germany before WWII.

By: Dimi Basking Ridge NJ

Dimi Basking Ridge NJ — Fri, 11 Jul 2008 00:40:07 +0000

Unfortunately,
1. 70% of Americans live from paycheck to paycheck and have no time to listen.
2. Those who do listen get distracted from the media and the pundits who discredit him.
3. From the 30% of Americans that understand him, half (15%) don't want change, the other half (15%) do not have enough power. Note that this is the approx. % that he received in the primaries.

What we need is for the US to default in all of its obligations and start from scratch. Total catharsis. Utopian no?

By: Stuart Davies

Stuart Davies — Thu, 10 Jul 2008 16:50:53 +0000

I've been wanting to write a response to several of your recent articles to try to get you to take a look at the root causes of this dire mess we find ourselves in, so I was very happy to see this article finally getting to the heart of the matter.
Yes, indeed, it is the long standing collusion of the central banks, with each other and with their captive politicians in governments around the world, that has led us to this pass. The creation of the Fed - which most people do not realize IS NOT part of the American government, but is actually an international banking cartel whose purpose is to eliminate competition between the major European and American (and more recently Japanese) Banks, and allow them to share the benefits of a collective monopoly on their wonderfully profitable scam to fabricate money out of thin air - was certainly one of the key milestones on this mad journey. Check out "the Creature from Jekyle Island" for the fascinating background of how, and by whom, the Fed was created.
And Yes, the Bretton woods agreement was another key milestone along the way. This was the Agreement after world war two in which the victorious allies foisted the dollar upon an unsuspecting world as the currency designated for international trade. This was how the US achieved the unique status of being able to run up massive federal deficits without paying the price of immediate overwhelming monetary and price inflation that any other nation would pay.... because so many of those dollars would be held by other countries as reserves and kept out of circulation. Of course there has been significant inflation since the creation of the Fed and Bretton Woods, but the most severe effects have ben delayed. The end result has always been inevitable, however, and now the time has come to pay the bill.
A very informative little documentary on money and the banking system that I highly reccommend is called "money as debt". ( this can be viewed online, free) This gives some crucial historical background on the advent of the modern banking system and the mechanism of money creation that most people have no inkling of. Most people have a vague notion that money is created by national governments. This is true of actual physical currency of course, but then most people do not realize that most money exists only in a digital form, and that this digital money is created by banks out of thin air when a loan is made. This sounds incredible but it is true, and it is a mechanism well known to ( and casually accepted by) economists.
No doubt many readers of the Daily Reckoning are already aware of these facts. But there is a more obscure and essential corollary that fewer people understand.... and that is that there is never enough money in existence in the world at any given point in time to pay the aggregate sum of the total principal and interest on all the world's debt. Try to wrap your head around that one. This explains the need for continual growth in the economy, the grow or die argument talked about the other day. Money is created by debt. Yet there is never enough money in existence to pay back the current debt. So the money supply must continue expanding, exponentially, to pay back previously accrued debt. How does that money supply expand, exponentially? Through the creation of new debt, exponentially! There it is folks, the bare bones of the insane and inherently unsustainable treadmill we find ourselves upon.
This mechanism is the motive force behind everything that is wrong with the way we are living, the engine driving our collective binge of self destructive greed and over-consumption, the insidious disease that has corrupted our governments and social institutions, the secret weapon, in plain view, wielded by the few to enslave the many. I guess one obvious question might be.... what, if anything, can we do about it?

By: Smack MacDougal

Smack MacDougal — Thu, 10 Jul 2008 15:11:25 +0000

It's Currency Accretion (Growing Money in Circulation) NOT "inflating the money supply" nor "inflating the monetary supply".

It's Loss of Buying Power or Currency Debasement NOT "price inflation".

Until men get the names right, the names they use to label concepts, they shall never fix themselves upon a right course of action.

Inflation is a deliberate process undertaken by a Central Bank when that Central Bank controls the Price of Legal Tender Decreed Money.

Everytime a Central Bank lowers the Price of Money by declaring a Lower Rate of Interest, the Central Bank engages in Inflation.

The Purpose of Inflation is Economic Expansion through attempting to increase the Efficiency of Money -- higher ratio of Commercial Credit to Money in Circulation.

By: Mireille

Mireille — Thu, 10 Jul 2008 13:28:10 +0000

Love it. Especially the part where Alan Greenspan is to take the blame for his role.

By: william pix

william pix — Thu, 10 Jul 2008 11:06:19 +0000

Dr No is so good for the soul. I love reading his commentry and watching his interviews and lament that he is largely ignored. Hes so bleeding logical yet people dont get it..AAARRRRHHH

By: Unpopular Truth

Unpopular Truth — Thu, 10 Jul 2008 05:57:02 +0000

It's a shame he's so unelectable for Americans He actually sounds like he understands the root cause of the problems at the moment with the money supply.

His biggest problem would be that the plans he'd try and put in place would effectively require a dictatorship to implement, as he would never get the bipartisan support necessary to fix the situation.

That or a military coup.