A deadly liaison
Ron Paul, one of a few American
politicians with conscience and dignity in the US
Government, (same can probably be said about China's
State Council, lol), stood up one day in September
in 1998, when Hell broke loose in much of the Asia as a
financial crisis created by the American investment banks erupted,
speaking against an attempt to build a world reserve bank
based on U.S. model to extend 1% capitalists' rule over
the entire human race at the expense of the ultimate interest
of the States and the humanity.
Below is part of the transcript
of Ron Paul's speech in 1998:
Today it was recorded in our newspapers and it was a consequence
of a meeting held last night having to do with a company
that went bankrupt, Long-Term Capital Management. I believe
this has a lot of significance and is something that we in
the Congress should not ignore.
This is a hedge fund. Their capitalization is less than
$100 billion, but, through the derivatives markets, they
were able to buy and speculate in over $1 trillion worth
of securities, part of the financial bubble that I have expressed
concern about over the past several months.
But last night an emergency meeting was called by the Federal
Reserve Bank of New York. It was not called by the banks
and the security firms that were standing to lose the money,
but the Federal Reserve Bank of New York called an emergency
meeting late last night. Some of the members of this meeting,
the attendees, came back from Europe just to attend this
meeting because it was of such a serious nature. They put
together a package of $3.5 billion to bail out this company.
Yesterday also Greenspan announced that he would lower interest
rates. I do not think this was an accident or not coincidental.
It was coincidental that at this very same time they were
meeting this crisis, Greenspan had to announce that, yes
indeed, he would inflate our currency, he would expand the
money supply, he would increase the credit, he would lower
interest rates. At least that is what the markets interpreted
his statement to mean. And the stock market responded favorably
by going up 257 points.
On September 18th, the New York Times, and this is the third
time that that has come about in the last several weeks,
the New York Times editorialized about why we needed a worldwide
Federal Reserve system to bail out the countries involved
in this financial crisis.
Yesterday, on the very same day, there was another op-ed
piece in the New York Times by Jeffrey Garten, calling again
for a worldwide central bank, that is, a worldwide Federal
Reserve system to bail out the ailing economies of the world.
The argument might go, yes, indeed, the financial condition
of the world is rather severe and we should do something.
But the financial condition of the world is in trouble because
we have allowed our Federal Reserve System, in deep secrecy,
to create credit out of thin air and contribute to the bubble
that exists. Where else could the credit come from for a
company like Long-Term Capital Management? Where could they
get this credit, other than having it created and encouraged
by a monetary system engineered by our own Federal Reserve
We will have to do something about what is happening in
the world today, but the danger that I see is that the movement
is toward this worldwide Federal Reserve System or worldwide
central bank. It is more of the same problem. If we have
a fiat monetary system, not only in the United States but
throughout the world, which has created the financial bubble,
what makes anybody think that creating more credit out of
thin air will solve these problems? It will make the problems
We need to have a revamping of the monetary system, but
certainly it cannot be saved, it cannot be improved, by more
paper money out of thin air, and that is what the Federal
Reserve System is doing.
I would like to remind my colleagues that when the Federal
Reserve talks about lowering interest rates, like Mr. Greenspan
announced yesterday, or alluded to, this means that the Federal
Reserve will create new credit. Where do they get new credit
and new money? They get it out of thin air. This, of course,
will lower interest rates in the short run and this will
give a boost to a few people in trouble and it will bail
out certain individuals.
When we create credit to bail out other currencies or other
economies, yes, this tends to help. But the burden eventually
falls on the American taxpayer, and it will fall on the value
of the dollar. Already we have seen some signs that the dollar
is not quite as strong as it should be if we are the haven
of last resort as foreign capital comes into the United States.
The dollar in relationship to the Swiss frank has been down
10 percent in the last two months. In a basket of currencies,
15 currencies by J.P. Morgan, it is down 5 percent in one
So when we go this next step of saying, yes, we must bail
out the system by creating new dollars, it means that we
are attacking the value of the money. When we do this, we
steal the value of the money from the people who already
If we have an international Federal Reserve System that
is permitted to do this without legislation and out of the
realms of the legislative bodies around the world, it means
that they can steal the value of the strong currencies. So
literally an international central bank could undermine the
value of the dollar without permission by the U.S. Congress,
without an appropriation, but the penalty will fall on the
American people by having a devalued dollar.
This is a very dangerous way to go, but the movement is
on. As I mentioned, it has already been written up in the
New York Times. George Soros not too long ago, last week,
came before the Committee on Banking and Financial Services
making the same argument. What does he happen to be? A hedge
fund operator, the same business as Long-Term Capital Management,
coming to us and saying, “Oh, what you better do is protect
Well, I do not think the American people can afford it.
We do have a financial bubble, but financial bubbles are
caused by the creation of new credit from central banks.
Under a sound monetary system you have a commodity standard
of money where politicians lose total control. Politicians
do not have control and they do not instill trust into the
paper money system.
But we go one step further. The Congress has reneged on
its responsibility and has not maintained the responsibility
of maintaining value in the dollar. It has turned it over
to a very secretive body, the Federal Reserve System, that
has no responsibility to the U.S. Congress. So I argue for
the case of watching out for the dollar and argue for sound
money, and not to allow this to progress any further.
Now you can check what China's
State Council is busying itself at the moment and find
out which side Chinese
premier Wen is standing by and working for. What he
and his council are doing now not only goes against the
interest of Chinese people but the 99% in the US and around