Excellent! $3.3 Trillion!!: ~”Congressman Ron Paul, can the Federal Reserve be given some credit for having shored up the financial system at a time of crisis?” “Sure, I think they prevented a deep recession for the people who deserved it, the big money people.”

Bloomberg host: “Congressman Paul, what would you have had the Federal Reserve do at that time? Can they be given some credit for having shored up the financial system at a time of crisis?”

Congressman Ron Paul:“Sure, I think they prevented a deep recession for the people who deserved it, the big money people who made all the billions when they were blowing up the bubble…the Goldman Sachs of the world.”

Transcribed by Jeff Fenske

[youtube=http://www.youtube.com/watch?v=rTPa1hGtpJs]Bloomberg Dec 1 2010

CongressmanRonPaul | December 01, 2010 | 146 likes, 0 dislikes

Congressman Paul discusses the Fed and bailouts with Pimm Fox

Andre Eggelletion: The Only Bullets the ‘Fed’ Has Left is PRINT, PRINT, PRINT, PRINT!

Transcribed by Jeff Fenske from Andre Eggelletion on US Talk Network, 12/18/08

“Now that they’ve [the ‘Fed’] cut interest rates down to zero, they’re going to continue to print money. That’s the only game, those are the only bullets they have left — just print money: print, print, print, print. …your paycheck will be worthless in a few years.”

– Andre Eggelletion, author, Thieves in the Temple: America Under the Federal Reserve System

Jerome Corsi: The shocking truth about INFLATION

From: WorldNetDaily

Why is it that the federal government says the U.S. has virtually no inflation – less that 2 percent – but everything keeps getting more expensive, especially food and gasoline? …

Solving this riddle – that is, why everything costs so much when the government tells us inflation rates are low – is simple:

The Bureau of Labor Statistics lies.

Inflation numbers are intentionally manipulated to keep cost-of-living numbers low.

If the average chief executive officer cooked balance sheet numbers the way the U.S. Bureau of Labor Statistics calculates the Consumer Price Index, the CEO would be in jail, even without Sarbanes-Oxley reporting standards.

Why does the federal government lie about inflation?

Read Entire Article

Bob Chapman: Retiring During Double-Digit Inflation—Calculation ‘Fun’

From: Bob Chapman’s International Forecaster, 4/26/08

Sociopathic Economics, Denial, and the Weakening Dollar

They claim inflation is 4%, when it is over 12%. They claim unemployment is 5% when it is 14%. They claim we lost 80,000 jobs last month when most likely we lost over 300,000. They claim our economy is turning around as consumer confidence drops to the lows of the early 1980’s and in light of the fact that 70% of our tanking economy is driven by consumer spending. They make it look like the big banks and financial institutions are being bailed out by the Fed when it is really the taxpayers doing the bailing through HUD, FHLB, Fannie, Freddie and hyperinflation. They say banks are starting to show signs of recovery even as their insolvency deepens due to the ongoing destruction of a mountain of quivering derivatives as foreclosures accelerate, as real estate prices plummet, as maniacal bets are unwound and as the bear market in bonds gets underway because rate cuts appear to be subsiding for a short while, at least until the next debacle hits. The old “we’re in it for the long term” is being bandied about again by the media morons (aka commentators) to keep the dupes in so the Illuminati can bail out at the top through their dark pools of liquidity while everyone else is left holding the bag.

Our government officials as well as banking and corporate leaders have created a culture permeated with pathological liars and sociopaths. They subscribe to the same situational ethics, which they are teaching to our children so they can grow up to be miscreants like them. Some of them may even believe their own lies, being unable to separate truth from fiction anymore because the lying has been so rampant and pervasive. Some have probably even forgotten what the real truth is, having not entertained it or even thought about it for decades. And who can blame the ones who have, for the real truth is nothing less than terrifying. Their plans call for the depopulation of five billion people by starvation, disease and who knows what else, the destruction of western economies and the beggaring and serfdom of the citizens of the US, Canada and Western Europe, all with the whimsical hope that we can all dance around the One World maypole together some day before they haul us all off to internment camps.

The disconnect that has occurred between what we are told and what we actually experience must be leaving uninformed non-subscribers [to The International Forecaster] in a surreal state, where they can no longer reconcile what their eyes see with what their ears hear. You have two choices. You can become a subscriber to the IF, or you can enter “The Twilight Zone.”

We thought we would have a little calculation fun in this issue to show you the devastating effects of inflation along with the deflation of real estate. If these calculations do not get you motivated to institute some change, nothing will.

Let’s say you’re a millionaire in the year 2000 when you decide to retire. You have exactly 1 million dollars set aside for your retirement. Assume that on average you invest it conservatively outside of precious metals and commodities at a very generous 5% return after taxes from the beginning of 2000 to the end of 2011. According to Shadowstats, inflation has averaged around 9% from 2000 to 2007, and we expect it to average about 15% for the period 2008 to 2011, which is extremely conservative considering that actual GDP, as opposed to official GDP, is a negative 2% to 3% or so, while M3 is running between 17% and 18%, giving us an inflation spread of about 20% that will soon manifest itself in 2009 and beyond. Even current inflation is already over 12%. So let’s see how much money you have left in dollars based on the dollar’s buying power in the year 2000 when you get to the year 2011. Some simple math shows that in the year 2011 you would have $1,795,856 in 2011 dollars, but the buying power equivalent in year 2000 dollars would only be a very disappointing $515,309. You’re no longer a millionaire by year 2000 standards. In fact, your buying power has been cut in half! And if inflation is not stopped at some point, it will only get worse! Had you only managed a 2% after tax return instead of 5%, you would have $1,268,242 dollars in 2011 dollars, but your buying power in year 2000 dollars is reduced to a stinking $363,913, or about a third of what you started with! Now let’s throw in the withdrawals you had to make and the taxes you had to pay along the way, and any thoughts you might have concerning your upcoming retirement get downright depressing. Then try to imagine how you would feel if your original kitty was only $200,000, or $100,000 or, like most people, a measly $50,000 or less. Then you get pauperized!

Read Entire Article

Inflation: U.S. Government Understating the CPI By a Full 7.6%!

From: The Market Oracle

Until now, the discrepancy between actual inflation and the government’s Consumer Price Index (CPI) was largely an academic debate few people paid much attention to.

Now, however, with real-world consumer prices jumping right before our eyes … while the government’s distorted CPI still lingers near the 4% area, the gap between the two is about to burst onto the scene as a scandalous cover-up.

According to John Williams’ Shadow Statistics , the premier source of unadulterated U.S. economic indicators …

    • While the March year-over-year change in the official CPI was only 3.98% …
    • The true CPI, based on the same standards as those that prevailed before the Clinton administration, is now 11.58%!

This means that the gap between the official CPI and the alternate CPI is now a whopping 7.6 percentage points.

In other words, the U.S. government could now be understating the CPI by a full 7.6%!

Moreover, over the years, this gap has widened dramatically. Until January 1982, there was no gap whatsoever; and until November 1986, the gap was usually less than 1%. But then, it started widening like mad, and has been getting bigger ever since.

See entire article with charts

Congress Wants Steel Pennies As In WWII

From: CNN

Further evidence that times are tough: It now costs more than a penny to make a penny. And the cost of a nickel is more than 7½ cents.

Surging prices for copper, zinc and nickel have some in Congress trying to bring back the steel-made pennies of World War II and maybe using steel for nickels, as well. …

The proposals are alternatives to what many consider a more pragmatic, but politically impossible solution to the penny problem: getting rid of the penny altogether.

“People still want pennies, which is why we’re still making them,” Moy said.

Read Entire Article

Shadow Government Statistics: Honest Charts on M3, Inflation, GDP

From: Shadow Government Statistics

Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting.

Click for the Graphs

In the first graph, the red line turns to blue because that’s when the “Federal” Reserve stopped publishing the M3 (money in circulation) figures.

Ron Paul Greatest Speech? Before 4000 at U of MN, 2/4/08

In this very auditorium, Northrup, I saw two significant events as a student at the University of Minnesota, before moving to Alaska in 1980, following the “Carefree Highway”:

  • Gordon Lightfoot, who meant so much to me as I sought answers to what plagued America
  • And amazing hate off the charts as creationist, Duane Gish debated a U of M professor on creationism verses evolution. I walked away perplexed, because to me, it was a no-contest win by Gish. From my perspective, all the U of M professor could do was get really angry while trying to keep face, unable to refute even one of Gish’s long list of facts. But then I saw that not all of the students were so convinced. Didn’t they hear what Duane Gish had to say?

Well, these 4000 students, etc. got to see Ron Paul, and amazingly, everyone seems to be on the same page!!!

[This video probably shows the enthusiasm even better, but I didn’t post this series, because it abruptly ends halfway through the speech, just a Paul is making his key point on inflation that I transcribe below.]





“Not only does the Constitution not give us the authority to do it.
It’s immoral to use force to…make other people live like we do.”



“The elderly, the middle class, and those who are dependent on fixed incomes are getting poorer every year. The inflation rate is much higher than the government will admit. The inflation rate for most individuals, when you add up the cost of energy and medical care and education could be 10 or 15%. It’s never the same for everybody. But what did Social Security recipients get last year? They got a 2% raise. So they’re losing 8 or 10% a year.” Continue reading “Ron Paul Greatest Speech? Before 4000 at U of MN, 2/4/08”

Ron Paul is the Only Candidate Who Can Avert a Depression

In the face of this week’s market meltdown—which has been called the worst financial crisis since WWII—the current crop of U.S. presidential candidates are preaching a hodgepodge of trite economic boosterism and disastrous governmental intervention. Unsurprisingly, the elephant in the room is Ron Paul, the political leper of anointed establishment politics, who just happens to have a massive, growing, devoted following capable of breaking fundraising records in support of him, and who has real plans to avert the global depression which is almost certainly on the way.

Romney has praised the Federal Reserve’s panic cut in the federal funds rate by 75 basis points. The cut, however, has earned round condemnation from most delegates to the World Economic Forum, who fear the move is prolonging the inevitable correction of an over-inflated marketplace.

Obama believes the severe economic woes—the symptom of hundreds of trillions of dollars of under-regulated high-risk financial instruments known as derivatives, a fiat currency, and the staggering debt and deficit the federal government is creating in foreign adventurism—can be solved by “saying to banks that they have to invest in their communities.”

McCain has been shamelessly trumpeting the old political hogwash that despite the crashing market, spiraling currency and signs of crisis in some of the largest institutional lenders in the country, “the fundamental underpinnings of our economy are strong.”

All agree that Bush’s harebrained scheme to increase inflation by printing money and handing it out in rebate cheques—a scheme with questionable short-term benefits and no long-term benefits—is a great idea.

All, that is, except for Paul. Paul has spoken and written at length about the inflation tax, ….

Click for Story

Gold hits record high after Bernanke announced rate cuts that will increase inflation

NEW YORK (AP) – Gold soared to a record high Thursday after Federal Reserve Chairman Ben Bernanke pledged to cut interest rates, undermining the dollar and boosting demand for the metal as a safe investment.

Other precious metals traded mixed, and agricultural futures fell.

Bernanke said the central bank was ready to act aggressively to prevent the economy, weakened by turmoil in the housing and credit markets, from sliding into a recession.

Some economists predict the Fed will slash its key interest rate by a half percentage point it meets Jan. 29-30. Others expect a more modest quarter percentage point cut, in light of high energy prices and inflation worries.

An ounce of gold for February delivery on the New York Mercantile Exchange jumped to $897.30, a fresh high, before easing back to $892.80, up $11.10.

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Ron Paul @ Comma Coffee — Carson City, NV 1/14/08


[youtube=http://www.youtube.com/watch?v=XCgwvf1lz_Y]Part 2 of 3

“Today, everybody is screaming:
‘the Fed has to act…and lower interest rates,
and save the economy!’ …
How do they lower interest rates?
They print money.
That’s how they lower interest rates.
So you can’t solve the problem of inflation
with more inflation.”


[youtube=http://www.youtube.com/watch?v=vA_pukc2cV8]Part 3 of 3

“Inflation is 10% & you’re getting a 2% raise”


Part 1 is here

Ron Paul Grilled (yet SHINES) on “Meet the Press” 12/23/07

Russert’s Disgusting Affront To Ron Paul, by Jim Kirwan

Watched Ron Paul’s interview this morning on Meet The ‘Press’…

That was ‘interesting’ – I’ve never seen the bullfrog (Russert) quite so determined to destroy anything.

He did not refer to Paul as a ‘dark horse’ or even a ‘long shot’ – but he did try to use Paul’s very long record of public service to try and destroy Paul’s credibility.

Russert didn’t smile, didn’t look into the camera, just read his little digs into the interview in rapid fire-succession. Mostly, Paul was not allowed to even finish his own sentences – the exact opposite of Russert’s interviews with insiders…where Russert finishes their sentences for them with a huge grin.

Still, Ron held his own, and then some. … Russet went back to the 1980’s for “background” on Paul’s positions (fully half of which were either outright lies or bruising half-truths) – something no other candidate will ever be threatened with, much less have to explain. …


Excerpts from:

‘Meet the Press’ transcript for Dec. 23, 2007

MR. TIM RUSSERT: Our issues this Sunday: Our Meet the Candidates 2008 series continues, an exclusive interview with Republican Ron Paul. He has served in the U.S. House of Representatives for 18 years. In 1988 he was the Libertarian Party candidate for president. Since October he has raised nearly $19 million. That is more than any other Republican candidate for president. Our guest, Dr. Ron Paul.




Continue reading “Ron Paul Grilled (yet SHINES) on “Meet the Press” 12/23/07″

Skousen in 2006: Big Inflation Coming––M3 No Longer Being Reported!

World Affairs Brief March 31, 2006 Copyright Joel Skousen. Partial quotations with attribution permitted. Cite source as Joel Skousen’s World Affairs Brief

BIG INFLATION COMING Freemarketnews.com reported this week that, “the federal reserve ordered two trillion dollars to be printed! … Three separate sources in the U.S. Treasury have told me that this week, the federal reserve ordered TWO TRILLION dollars to be printed! The US Treasury is allegedly running printing presses 24/7 to accommodate that order. Treasury employees were specifically ordered not to talk about this to anyone because it could cause economic collapse.” That’s a bit inflammatory. Press officials are never supposed to tell how much money is being printed. Even another $2 trillion isn’t going to cause a collapse, though it would and will eventually impact the value of the dollar. I’ve always said that the US has not yet used up all its power to inflate. I guess the PTB are starting in earnest. It is important to note that in response to growing dollar weakness, silver is at a ten year high and gold is nearing a 25 year high.

Robert HcHugh lets us in on what M3 was doing recently – and it was very inflationary. “M-3 has been launched into outer space, up another $56.3 billion last week, up $92.4 billion over the past two. This is some real horsepower. Over six weeks, the meaningless figure, ahem, is up $177.8 billion. These annualized growth rates are 28.7 percent, 23.6 percent, and 15.3 percent respectively. Those are the seasonally adjusted figures. The raw, non-seasonally adjusted, figure is up $293.3 billion over the past 12 weeks, on a pace to add 1.2 trillion in money to the economy … That’s right folks – soon to be discontinued money supply data ALREADY showing annualized growth rates in excess of 28% – and the Fed would have us all believe that this is a non-event.”

The staff at Free Market News tried to imply a direct relationship between the decision to not report M3 money supply figures and this new print move. “The M3 was the amount of cash the government printed to put into circulation, propping-up the U.S. economy.” This is not true, specifically. M1 is the sum of currency that is held outside banks, travelers checks, checking accounts (but not demand deposits), minus the amount of money in the Federal Reserve float. M2 is sum of M1 plus savings deposits (this would include money market accounts from which no checks can be written), small denomination time deposits (less than $100,000), and retirement accounts. M3 (discontinued) is M1 plus M2 plus the large time deposits (more than $100,000), Eurodollar deposits, dollars held at foreign offices of U.S. banks, and institutional money market funds. Cash eventually shows up in all of these, but the significance of removing M3 has more to do with hiding the numbers of dollars outside the US where most inflation goes so as to deny currency traders a key piece of the data which helps evaluate the dollar versus other currencies. They have alternates, of course, but losing M3 was important. Congressman Ron Paul (R-TX) has introduced legislation to require the Fed to resume reporting the M3 statistic. Urge your Congressmen to support The Sunshine in Monetary Policy Act.

Ron Paul on Inflation: Every time new dollars are printed…your income & savings are worth less

Every time new dollars are printed and the money supply increases,
your income and savings are worth less.
Even as you save for retirement, the Fed is working against you.

Inflation is nothing more than
government counterfeiting by the Fed printing presses.

– U.S. Congressman Ron Paul

What do Rising Gold Prices Mean?

December 5, 2005

The market price for an ounce of gold rose to over $500 last week, a significant milestone for economists watching precious metals and commodities markets. The last time gold topped $500 was December 1987, in the wake of the “Black Monday” stock market collapse earlier that fall.

Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from inflation. It’s interesting to note that while the U.S. dollar has regained some of its value relative to other paper currencies like the Euro, it continues to lose value relative to gold and other hard assets. This shows the folly of using one fiat currency to value another.

Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air. Governments by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. Expansion costs money, and politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now manage all of the world’s major currencies.

Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold. Even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception.

President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Federal Reserve and U.S. Treasury have employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The “value” of each newly minted dollar is determined by the faith of the public, the money supply, and the financial markets. In other words, fiat dollars have no intrinsic value.

What does this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses.

Inflation and War Finance, by Congressman Ron Paul

From: House.gov/paul

Inflation and War Finance

Congressman Ron Paul

January 29, 2007

The Pentagon recently reported that it now spends roughly $8.4 billion per month waging the war in Iraq, while the additional cost of our engagement in Afghanistan brings the monthly total to a staggering $10 billion. Since 2001, Congress has spent more than $500 billion on specific appropriations for Iraq. This sum is not reflected in official budget and deficit figures. Congress has funded the war by passing a series of so-called “supplemental” spending bills, which are passed outside of the normal appropriations process and thus deemed off-budget.

This is fundamentally dishonest: if we’re going to have a war, let’s face the costs– both human and economic– squarely. Congress has no business hiding the costs of war through accounting tricks.

As the war in Iraq surges forward, and the administration ponders military action against Iran, it’s important to ask ourselves an overlooked question: Can we really afford it? If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I’m quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted.

Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve system is a creation of Congress.

The result of this arrangement is inflation. And inflation finances war.

Economist Lawrence Parks has explained how the creation of the Federal Reserve Bank in 1913 made possible our involvement in World War I. Without the ability to create new money, the federal government never could have afforded the enormous mobilization of men and material. Prior to that, American wars were financed through taxes and borrowing, both of which have limits. But government printing presses, at least in theory, have no limits. That’s why the money supply has nearly tripled just since 1990.

For perspective, consider our ongoing military commitment in Korea. In Korea alone, U.S. taxpayers have spent $1 trillion in today’s dollars over 55 years. What do we have to show for it? North Korea is a belligerent adversary armed with nuclear weapons, while South Korea is at best ambivalent about our role as their protector. The stalemate stretches on with no end in sight, as the grandchildren and great-grandchildren of the men who fought in Korea give little thought to what was gained or lost. The Korean conflict should serve as a cautionary tale against the open-ended military occupation of any region.

The $500 billion we’ve officially spent in Iraq is an enormous sum, but the real total is much higher, hidden within the Defense Department and foreign aid budgets. As we build permanent military bases and a $1 billion embassy in Iraq, we need to keep asking whether it’s really worth it. Congress should at least fund the war in an honest way so the American people can judge for themselves.

Skousen: Masking the Inflationary Economy

World Affairs Brief June 16, 2006 Copyright Joel Skousen. Partial quotations with attribution permitted. Cite source as Joel Skousen’s World Affairs Brief


According to Bloomberg, “U.S. consumer prices excluding food and energy rose more than forecast for a third consecutive month, increasing speculation the Federal Reserve will keep raising interest rates beyond this month. The 0.3 percent jump in the so-called core consumer price index reported by the Labor Department in Washington today exceeded the median forecast of a 0.2 percent increase by economists in a Bloomberg News survey. Core inflation over the last three months was the highest since 1995. Including food and fuel, prices climbed 0.4 percent.”

But as George Ure of Urban Survival comments, “What’s more interesting to me than the numbers themselves, is how the mainstream media has swallowed with virtually no disclosure the fact that the inflation reports in 2006 are not the same thing that we were looking at in 2005 … The Labor Department announced in 2005 that they were ‘changing weights’ of various components: Effective with release of data for January 2006, the Bureau of Labor Statistics (BLS) will update the consumption expenditure weights in the Consumer Price Index for All Urban Consumers (CPI-U) and Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the 2003-04 period.”

This is not the first time the BLS has tampered with the CPI. It’s a constant process of removing highly inflated prices from the “typical basket of goods” Americans buy in order to manipulate the numbers downward. The BLS creates lots of different categories, as well, in order to mask inflation. They have created what they call a “core inflation rate” which, strangely, does not include food and fuel! How can these two basic necessities not be included in the core inflation category? They do it because they have a political mandate to hide the chronic effects of government monetary creation. Continue reading “Skousen: Masking the Inflationary Economy”

Borrowing, Spending, Counterfeiting: Ron Paul in 2005 on the ‘Fed’ Inflating the Dollar

Borrowing, Spending, Counterfeiting
By Congressman Ron Paul

August 22, 2005

Few Americans truly understand how our Federal Reserve system enables Congress to spend far beyond its means, but the cycle of spending and printing money affects all of us. Simply put, the more money our Treasury prints, the less every dollar is worth. Our pure fiat money system, in place since the last vestiges of a gold standard were eliminated in the early 1970s, has reduced the value of your savings by 80%. Disregard the government’s Consumer Price Index, which substantially underreports price inflation. Monetary inflation is true inflation, and we only need to look at the cost of homes, cars, energy, and medical care to recognize that a dollar buys far less today than ever.

Economist Mark Thornton of the Ludwig von Mises Institute lays out a sobering case against the long-term health of the U.S. dollar. He identifies several facts and trends that bode ill for millions of Americans counting on dollar-denominated assets to fund their retirements.

First, federal debt continues to grow exponentially and shows no sign of abating. Americans were shocked at the notion of a $1 trillion federal debt in 1980; just 25 years later the total approaches $8 trillion. The Bush administration and the current Congress have increased spending at rates unseen since the New Deal and Great Society eras, and single-year deficits now exceed $500 billion. There is zero political will in Washington to curb spending, as evidenced by the shameful transportation bill recently passed by Congress.

Second, federal entitlement programs like Social Security and Medicare will not be “fixed” by politicians who are unwilling to made hard choices and admit mistakes. Demographic trends will force tax increases and greater deficit spending to maintain benefits for millions of older Americans who are dependent on the federal government. Faced with uncomfortable financial realities, Congress will seek to avoid the day of reckoning by the most expedient means available— and the Federal Reserve undoubtedly will accommodate Washington by printing more dollars to pay the bills.

Third, future administrations are unlikely to challenge a foreign policy orthodoxy that views America as the world’s savior. We are hemorrhaging billions of dollars every month in Iraq, and we waste billions more every year through foreign aid and overseas meddling. A foreign policy based on nation-building and the imposition of “democracy” abroad, in direct contravention of our founders’ admonitions, is not economically sustainable. In Korea alone, U.S. taxpayers have spent nearly one trillion in today’s dollars over 55 years. A permanent military presence in Iraq and the wider Middle East will cost enormous amounts of money.

Finally, we face a reordering of the entire world economy. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks are increasingly reluctant to hold more U.S. dollars, understanding that American leaders do not have the discipline to maintain a stable currency. When the rest of the world finally abandons the dollar as the global reserve currency, both Congress and American consumers will find borrowing money a more expensive proposition.

All of these factors make it likely that the U.S. dollar will continue to decline in value, perhaps precipitously, in the coming decade. Will it take an economic depression before the American public finally holds the political class accountable for its reckless borrowing, spending, and counterfeiting?

The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch– Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference– that threatens to impoverish us by further destroying the value of our dollars.

Real-World Inflation Illustration: Sports Cars

By Jeff Fenske

In 1971, the (Nissan) Datsun 240Z sold new for $3,500.
In 2005, the base-priced Nissan 350Z sells for $26,700.
This amounts to a 760% real-world inflation increase since 1971.

In 1971, the Chevrolet Corvette sold new for $5,000.
In 2005, the base-priced Corvette sells for $43,710.
This amounts to a 870% real-world inflation rate since 1971.

Another real-world inflation illustration:
The Ford Mustang

• Original sticker price of the 1964 Ford Mustang: $2,368

• 2005 sticker prices: $20,000 V6 – $27,000 GT

So real-world inflation since 1964 for the Mustang is approximately 1000%

1960’s & 1970’s Data from:
“Mustang and Corvette Reborn,” The Travel Channel
“Full Throttle: 1971 Datsun 240Z”—The History Channel

Ron Paul LAST YEAR: Monetary Inflation is the Problem

December 5, 2006:

“Politicians often manage to fool voters and the media, but they rarely fool the financial markets over time. …”

“This decline in the value of the dollar is simple to explain. The dollar loses value as the direct result of the Federal Reserve and U.S. Treasury increasing the money supply. Inflation, as the late Milton Friedman explained, is always a monetary phenomenon. The federal government consistently wants to spend more than it can tax and borrow, so Congress turns to the Fed for help in covering the difference. The result is more dollars, both real and electronic – which means the value of every existing dollar goes down.”

Click for Story