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ECONOMIC SLOWDOWN

Was Ron Paul right about the Fed?

Bonds purchase meant to stimulate growth

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by David Mark

Editor-in-Chief t +

Image: AP.

This ought to drive Ron Paul crazy on his way out the door from Congress. The Federal Reserve says it plans to keep its key short-term interest rate near zero at least until the unemployment rate drops below 6.5 percent and inflation rises to 2.5 percent, reports The Associated Press.

That plan adds detail to what the Fed had said before: that it expects to keep the rate low until at least mid-2015. In a statement Wednesday after its final policy meeting of the year, the Fed also said it will keep spending $85 billion a month on bond purchases to drive down long-term borrowing costs and stimulate economic growth.

Not everybody's so pleased at the moves, which they argue amounts to "money printing". "PETITION: Change The Name Of The Federal Reserve To The Magical Magic Factory," tweeted journalist James Poulos (@jamespoulos).

And Rich Riker (@richriker), a former New York Stock Exchange member, tweeted, "oh, so the Federal Reserve treasury purchase also has more than one speed, guessing fast and faster but has no off switch".

Via The Associated Press.

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Do you agree with the Fed's moves?

63 Comments (view in Forum)

  • Sonny
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    @bsking Nope...sorry but John Boehner is just as responsible for not being able to control his caucas...and really not much of a leader at all...You can try to ignore his lack of ability to get things done...But me and the rest of the country sure as hell won't....
  • Libertyiskey
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    @Sonny Do you realize your blaming one person for all that's wrong the same as he is saying its only Obama? How about everyone take a little responsibility instead of playing the blame game? The Feds policies certainly aren't helping and both sides are pointing fingers not getting shit done. Both sides are wrong for not taking control over monetary policy like the constitution calls for both sides are at fault for allowing the 5th plank of the communist manifesto(a central bank) to be in control of our monetary policy. Both sides are not getting shit done and it's crazy for anyone to blame only one person for this when the ineptitude of just about everyone in our congress is high, including but not limited to John Boner.
  • Sonny
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    @Libertyiskey No, I can see that you must not have read my posts here... I mentioned that if Bernanke & Obama are to blame---then so is Beohner...I don't know how you managed to miss that---but I am happy to clarify.

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  • PoliticalSpice
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    Impractical as itseems, i believe we should stick with the constitution. Money should be made from, or backed by, gold and silver. It may be an arbitrary standard, but it is a real way to ensure value if our currency. One stipulation, no foreign country could redeem for such from the u.s. backed does not mean redeemable...
  • jessejaymes
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    @PoliticalSpice Here's the problem as I see it. We don't have enough money in the hands of govt to buy up enough gold to go back to the gold standard.
  • PoliticalSpice
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    @jessejaymes correct. Gold is very high right now. Heres how we start. Get rid of dollar bills, replace em with the metal coins, not gold or silver, but dry up the paper supplies of dollar bills. Introduce the $2 bills. Don't back em, i just like the bills :). The change starts with 50 and hunderd dollar bills. Start releasing them at todays good prices. ($100 backed by about 2 grams gold) but do not allow for redemtion except at specific periods, when prices fall, so anyone redeeming is getting less gold back then the bill is worth on day of redemtion. For bills turned in in this manner, two non gold bills get destroyed. Maybe more depending to how low price falls. Most money will be backed not by gold, but silver...idea is that when inflation kicks in they start taking the non-backed bills out of circulation and releasing on the bills backed by the metal, drying up supply until there are few non- backed bills left. Haven't thought it out completely, but this I know. If we restore value to the money it will stabalize prices and keep govt spending in check if they can not just print money...now provisions need be made for a crisis and spending related thereto, but i beleive this shoild be done. Of course, I believe a lot of crazy things. Just read what I post on this site...

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  • Libertyiskey
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    No. I do not agree with their actions. He just said himself "The central bank cannot control unemployment in the long run." But their goal is to lower unemployment by spending money they are electronically creating. I do not believe in a central bank period so I am unlikely to agree with anything they do.
  • UnCommonBoston
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    No matter what the FED does somebody isn't go to like it --- most likely for good reasons. There are different theories on how to improve the economy. Raising the age for Medicare and eliminating tax loop holes for charities and schools are other winning solutions.
  • UnCommonBoston
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    @marine1 Duh, I got it now, silly me.

    True story: In Fairfax County Virignia, there are secret intelligence agency offices scattered through out the county. If there is signage, it is wrong. A super secret agency, whose name I forget, had a Raytheon sign in front of the building. The county demanded they pay property taxes. Someone tryed to explain that the government owned the building and land, but the county said if it is government owned, they must change the sign. All of this was in the local papers!
  • Yank
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    The Federal Reserve Bank is often just called the Fed. It is also a quasi-government entity with its board of governors appointed by the President. They also handle both the nation’s money supply and monetary policy which is definitely a federal function.

    P.S. Ron Paul’s end the fed movement is referring to the Federal Reserve Bank.
  • Sharpshooter
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    $172 BILLION deficit, Over 12 MILLION unemployed, a Shrinking Work Force and the answer is to print more money...

    Makes perfect sense to me as long as they send me a shoe box filled with $100s so I can do my share to stimulate my economy....

    Not really a problem for the current Regime, they'll strut out Der Fuhrer who will tell us how it's George Bush's fault and all will be right with the world.

    I believe there's legislation coming up for a vote fresh from Harry Reid's vest pocket to change the national bird from the Bald Eagle to the Ostrich.
  • Fishbone345
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    @PoliticalSpice I definitely would have. As it was, Gary Johnson got my vote. I was happy to see him on the ballot here. I kinda thought he wouldn't be. Utah was very Pro-Romney.
  • PoliticalSpice
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    @Fishbone345 Ah, well I voted O. Not a libertarian, just like the liberty adgenda part. You must love this site. How many times you get accused of being liberal and repub a day?
  • Fishbone345
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    @PoliticalSpice Lets put it this way, if I were to gain monetary compensation for each time? I wouldn't be typing here that much, I'd be on a beach sipping a drink with an umbrella in it. ;)
    The worst is when the same people do it, after I tell them where I fall on the spectrum.
    Overall, I fall into a Socially Liberal and Fiscally Conservative area.
  • jessejaymes
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    What I wonder is how so many average Americans with so much time on their hands that spend hours each day on this thread and know everything there is to know, aren't the CEO's of some Wall Street Firm at the very least. Or perhaps President. I myself, think I've done pretty well financially over the course of my lifetime but I realize I don't have the first clue about how to run an economy since it didn't work under any President of my lifetime except for Clinton. One out of 10 presidents and one had a good economy without jacking up the debt. Reagan jacked up the debt, both Bush jacked it up, Obama jacks it up. Nobody other than Clinton has even come close to having a good economy without creating it artificially. YET we have so many experts on Politix I'm just surprised we're in the shape we're in. Seems to me someone would be reading these threads and recruiting for Goldman Sachs or to run for high office. Just freakin' amazing.
  • DogLady_1
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    I am truly grateful that Ron Paul was able to get the bill passed this summer to finally audit the fed...

    “The Fed creates trillions of dollars out of nothing and gives it to banks, Congress is in the dark. The Fed sets the stage for the subprime meltdown, Congress is in the dark. The Fed takes a dive on Libor, Congress is in the dark. The Fed doesn’t tell regulators what is going on, Congress is in the dark.”-Ron Paul
  • HPthinker
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    keynesian economics dictates you print money and fire it into the market for a short burst of bull, real economics say you leave it alone and balance your budget and at the end of the decade you will see real solid growth.
  • SmedleyButler
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    Ron Paul was our last hope IMHO before an all out rebellion. We were a great nation because of the constitution. Great Ideas that put a check on unbridled power are enemy #1 to the oligarchs (both left and right).
  • IMAQT
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    AS time goes by, history is a friend to Ron Paul. He has been right about a lot of things. Yet many people try and label him a kook. To that I say we need more kooks in Washington.
  • SmedleyButler
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    I have friends who were from the former Soviet Union and what happened when the state too all their money? They stopped working. That's coming here soon. Devalued money, oppressive taxes, lack of competition, bailing out special interests. What's left? f*@k it!!
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