By Ron Paul
This week, President Obama and Vice President Biden held a hastily arranged secret meeting with Federal Reserve Chairman Janet Yellen. According to the one paragraph statement released by the White House following the meeting, Yellen, Obama, and Biden simply “exchanged notes” about the economy and the progress of financial reform. Because the meeting was held behind closed doors, the American people have no way of knowing what else the three might have discussed.
Yellen’s secret meeting at the White House followed an emergency secret Federal Reserve Board meeting. The Fed then held another secret meeting to discuss bank reform. These secret meetings come on the heels of the Federal Reserve Bank of Atlanta’s estimate that first quarter GDP growth was .01 percent, dangerously close to the official definition of recession.
Thus the real reason for all these secret meetings could be a panic that the Fed’s eight year explosion of money creation has not just failed to revive the economy, but is about to cause another major market meltdown.
Establishment politicians and economists find the Fed’s failures puzzling. According to the Keynesian paradigm that still dominates the thinking of most policymakers, the Fed’s money creation should have produced such robust growth that today the Fed would be raising interest rates to prevent the economy from “overheating.”
The Fed’s response to its failures is to find new ways to pump money into the economy. Hence the Fed is actually considering implementing “negative interest rates.” Negative interest rates are a hidden tax on savings. Negative interest rates may create the short-term illusion of growth, but, by discouraging savings, they will cause tremendous long-term economic damage.
Even as Yellen admits that the Fed "has not taken negative interest rates off the table," she and other Fed officials are still promising to raise rates this year. The Federal Reserve needs to promise future rate increases in order to stop nervous investors from fleeing US markets and challenging the dollar’s reserve currency status.
The Fed can only keep the wolves at bay with promises of future rate increases for so long before its polices cause a major dollar crisis. However, raising rates could also cause major economic problems. Higher interest rates will hurt the millions of Americans struggling with student loan, credit card, and other forms of debt. Already over 40 percent of Americans who owe student loan debt are defaulting on their payments. If Federal Reserve policies increase the burden of student loan debt, the number of defaults will dramatically increase leading to a bursting of the student loan bubble.
By increasing the federal government's cost of borrowing, an interest rate increase will also make it harder for the federal government to manage its debt. Increased costs of debt financing will place increased burden on the American people and could be the last straw that finally pushes the federal government into a Greek-style financial crisis.
The no-win situation the Fed finds itself in is a sign that we are reaching the inevitable collapse of the fiat currency system. Unless immediate steps are taken to manage the transition, this collapse could usher in an economic catastrophe dwarfing the Great Depression. Therefore, those of us who know the truth must redouble our efforts to spread the ideas of liberty.
If we are successful we may be able to force Congress to properly manage the transition by cutting spending in all areas and auditing, then ending, the Federal Reserve. We may also be able to ensure the current crisis ends not just the Fed but the entire welfare-warfare state.
By Robert Wenzel
Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks, reports NYT.
According to NYT, Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom’s message personally last month during a trip to Washington, telling lawmakers that Saudi Arabia would be forced to sell up to $750 billion in treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.
The administration, which argues that the legislation would put Americans at legal risk overseas, has been lobbying so intently against the bill that some lawmakers and families of Sept. 11 victims are infuriated. In their view, the Obama administration has consistently sided with the kingdom and has thwarted their efforts to learn what they believe to be the truth about the role some Saudi officials played in the terrorist plot.
President Obama will arrive in Riyadh on Wednesday for meetings with King Salman and other Saudi officials. It is unclear whether the dispute over the Sept. 11 legislation will be on the agenda for the talks.
Reprinted with permission from EconomicPolicyJournal.com
By Ron Paul
Four years ago, when the rules were changed against my presidential campaign, we begged and pleaded for attention from the media. Americans needed to see what was going on. We were met with the sound of crickets. Now, four years later, the "Ron Paul Rule" is mentioned quite often and I'm asked to speak about it almost every day. I describe what went on back in 2012 on Fox Business below:
By Ron Paul
I agree with Donald Trump that elections are rigged, but for very different reasons. I believe that they're rigged to make sure that only establishment candidates win, which is always the result. The establishment will change the rules midstream if necessary. But Trump has a problem with the delegate system itself. If he wins the popular vote, he should win the state. Well, Al Gore won the popular vote against George W. Bush. Should he have been President instead? The issue isn't so much the rules in place, or delegates or the electoral college. The problem is that the establishment will change the rules in the middle of the election to get the results that they want. I discuss on Fox News:
By Ron Paul
Philosophically, there is not difference between the Republican and Democratic parties. This election has proved how rigged the political process really is. I also never bought into the notion of voting for the "lesser evil". Why throw your vote away on one of the two parties? Make it count, and vote for someone else if you're disgusted. I talk about this and more with Maria Bartiromo below:
By Ron Paul
The Fed has been scrambling around of late, with several secret meetings. One of those meetings was Fed Chair Janet Yellen heading over to see President Obama. Since the Fed is not political, Yellen probably just had a chat with the president about family things, right?
All kidding aside, what's the motivation behind these secret meetings? After all, the statistics that are being presented to the American people portray everything as being OK. But do these secret meetings hint to the possibility that the Fed is a lot more concerned than we're supposed to believe?
Do you think free markets and sound money were discussed in these meetings? Will the NSA provide us with recordings of the conversations? Don't bet on either!
The Fed was created to act as a backstop for the big banks as well as the financier of big government and it will continue to play that role. In the meantime, the rest of us must go through one artificial economic bubble after another.
The last few decades have been especially tumultuous. We've gone through the Nasdaq bubble, followed by the housing bubble, and now we have a major bond bubble that has propped up all different kinds of bad debt.
The whole system is a bubble when you get down to brass tacks.
Ultimately, central planners lose control of the situation. It's inevitable. There is no way that price-fixers can know what interest rates should be. Only the market can properly determine interest rates and the market always wins in the end. If there's one thing that you should never forget, it's that the market always defeats governments (or their central banks).
Are we on the precipice of The Fed losing control? Maybe, or maybe not. But it appears that they are scrambling.
Whether or not the day is near or far, the Fed will at some point reach into their hat only to find out that there are no rabbits left.
By Chris Rossini
There are a lot of fairy tales being told in this election cycle, which is par for the course. We're hearing about "corporate greed," "billionaires" and "the billionaire class". In other words, if you're struggling, you're free to use people with money as a scapegoat. How did they get their money? Doesn't matter. It's very simplistic and very easy. Hence, a major reason why politicians resort to class warfare.
Politicians are a major part of the cronyism problem that this country faces. Ironically, people look to politicians for answers, and of course, the answers never come. But if wealthy cronies are buying off politicians, are not the politicians themselves taking the money? Aren't they just the other side of the coin?
Ahh...but you're supposed to ignore the "greed" of politicians. Your focus should only be on the greed of those who are buying them off. Politicians are the "public servants". Isn't that what the government schoolbooks say?
Let's ask a few important questions with regards to cronyism. First, why do wealthy cronies buy off the politicians? Why not the poor ones? Well, if you have little or no money, you're not bribing anyone. That's why politicians don't have their hands out in front of people with no money. If you're going to be bought off, you put your empty hand in front of the guy with the bucks! The people without the bucks are only good for votes, and you can say just about anything you want to garner votes. Just promise free stuff. That usually does the trick.
Next, since the wealthy cronies are the ones doing the bribing, what do they gain? We have to assume that they're not just throwing away money for no reason. Well, there are several answers to this one. Some pay off politicians simply so that the politicians will leave them alone. The U.S. government is the largest government in the world you know. American politicians believe that everything under the sun is under their jurisdiction. The wealthy are in a position to buy their freedom.
Now, if you're poor, you can't pay off the government to leave you alone. The government will continually try to micromanage your life until your every move is under their thumb. You have no capital with which to keep them at bay.
Wealthy cronies also bribe politicians for special treatment. There are monopoly privileges that are bought. Welfare and taxpayer bailouts are purchased as well.
There are exclusive contracts, subsidies, and laws to protect yourself from upstart competition. Licensing laws fall into that category. Have you noticed that you need a license for almost everything in the "land of the free"? Those are not there "to protect the consumer" as the government schoolbooks say. They're there to protect entrenched and crony corporations from competition.
So we see two big incentives for buying off politicians: (A) to get them off your back, and (B) to get special treatment.
There is a cure for the cronyism disease, and it's one that you'll never (ever) hear from the likes of Bernie Sanders. Are you ready for it? Here it comes in bold letters:
Remove the non-constitutional powers that politicians wield.
We are so far away from the U.S. Constitution....So very far. But even a single step back in that direction is better than nothing. Right now just about every step is away from it. It's been that way for at least a hundred years.
But the bigger and more powerful the government, the larger the price tag in influencing it.
Billionaires would not lobby a politician that will (A) leave him alone, and (B) do nothing special for him. What would there be to bribe? Such a politician is useless for cronyism, but invaluable to freedom and liberty.
This simple solution is just too much for many people to handle because they've been conditioned to fear freedom. Those government schoolbooks really did a number on people.
But stripping politicians of their non-constitutional powers is the only solution that can work.
A politician without the powers to harass, or "help", is a politician that's not worth bribing.