This is an article from Ron Paul published in Slate today that articulates the point about inflation and indebtedness that Zeitgeist made me think about. Especially scary is this paragraph:
"The monetary base jumping by such a large margin is an indicator that the Federal Reserve has not learned from its mistakes and is hoping to get out of this economic downturn by creating even more credit out of thin air. With such large increases in the monetary base and with banks legally able to hold zero reserves, the vaunted money multiplier effect could theoretically reach infinity."
I think if the Republicans had had the sense to nominate Ron Paul, this election would've been harder for me to decide. Read the whole thing here:
"The monetary base jumping by such a large margin is an indicator that the Federal Reserve has not learned from its mistakes and is hoping to get out of this economic downturn by creating even more credit out of thin air. With such large increases in the monetary base and with banks legally able to hold zero reserves, the vaunted money multiplier effect could theoretically reach infinity."
I think if the Republicans had had the sense to nominate Ron Paul, this election would've been harder for me to decide. Read the whole thing here:
3 comments:
Hi Cakers! Miss ya.
"...with banks legally able to hold zero reserves..."
This is, unfortunately, yet another example of Ron Paul's complete failure to understand the basics of law. Banks are required to hold reserves in all cases--there is no area where they cannot hold reserves.
And his "thin air" theory of credit creation is another misunderstanding. Credit is created from reserves. So, as he acknowledges, that credit is being created "from thin air", he must acknowledge that this credit is being created from bank reserves.
But hey, at least he refers to Obama as an "Uncle Tom"...
You know I love arguing these little points with you. It's all done with love.
Oops. The Uncle Tom comment about Obama came from Nader, not Ron Paul. I understandably confuse them, both physically, and in terms of their ideas.
Yeah, I get what you're saying, it's more complicated than he makes out. The essential point is sound though, we can't keep living so far beyond our liquid means.
I was only recently informed that Ron Paul used to write for a white supremacist mag. He disavows the principles of the paper now, but someone who knows more about it than I do told me it was a political move, not exactly reflecting his heart. Sigh.
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