[Peace-discuss] The World Shorts the Dollar - Ron Paul

[E. Wayne Johnson]

A remarkable confluence of recent events has brought unprecedented but 
very welcome attention to both U.S. monetary policy and the global 
political economy in general.

First, Federal Reserve Board Chairman Ben Bernanke recently announced 
that the Fed would embark upon another round of monetary easing by 
purchasing $600 billion worth of U.S. Treasury debt. This amounts to an 
admission that markets have run out of patience with our profligacy, and 
therefore our own central bank literally must serve as the buyer of last 
resort for Treasury debt.

Second, World Bank president Robert Zoellick openly suggested that gold 
could play a helpful role in the global monetary system by serving as 
reference against more volatile fiat currencies. This is almost heresy 
coming from a neoconservative globalist like Mr. Zoellick. It hints at 
an obvious but unspoken truth that is anathema to politicians and 
central bankers alike: namely, that gold could be viewed as…. money!

Finally, Mr. Obama attended the G20 summit in South Korea last week and 
found a very chilly reception for his vision of American economic 
policy. Mr. Obama argued for continued worldwide stimulus, via continued 
debasing of the U.S. dollar, to bolster American exports. Several 
powerful European and Asian finance ministers, however, rejected this 
approach out of hand as nothing short of a currency war. They are 
committed to austerity measures at home, and don’t want to let the U.S. 
simply monetize its past sins at their expense.

All of these events culminated in a tremendous amount of political and 
media scrutiny aimed the Fed. Ordinary Americans are demanding answers 
and accountability, and they are putting heat on their political 
representatives in Washington to end the cozy “independence” from 
congressional oversight the Fed has enjoyed for so long.

In the 35 years I have been studying, speaking, and writing about 
monetary policy I have never before seen Congress or the financial press 
pay much attention to the Fed. Monetary policy has always been 
considered boring on Capitol Hill, something left to remote policy wonks 
far away from the din of presidential or congressional politics. 
Congress always has been eager to leave Fed governors well alone, with 
no oversight or accountability, as long as they played along and papered 
over the growing budget deficits.

But it’s amazing what a global economic meltdown will do to the 
political and media landscape. In just two short years, the Fed has 
become the hot topic and a lightning rod for criticism. While it is 
gratifying to see so many formerly uninterested politicians, economists, 
talk show hosts, and pundits suddenly rally to attack the Fed, one can 
only wonder whether they truly understand that central banking is 
inherently incompatible with our Constitution and a free market economy.

In other words, it’s not enough to show outrage at the latest Fed action 
or argue about the relative merits of Mr. Bernanke compared to his 
predecessors. To reclaim our dollar and our economy, Americans must 
oppose central banking per se. Fiat currencies cannot be “reformed” or 
“managed.” They are fundamentally subject to ruinous debasement courtesy 
of the political and economic ruling class. History shows that this is 
true in all nations at all times.