After listening to Ron Paul speak at the Congressional hearings today (2/27/08) about the deleterious effects of printing money on the value of the dollar, and subsequently on all prices, Ben Bernanke paused in reflection and then spoke about his ‘mandated’ responsibility to deal with domestic consumer prices.
Ron Paul cited the reported level of inflation and suggested that surely that level was not acceptable. Then he spoke about the importance of protecting the dollar from debasement as the best way to stop inflation. He cited the price of oil in terms of dollars and how that has tripled over the last five years whereas the price of oil in terms of gold has remained the same. This was a clear proof of the importance of having a sound money.
Bernanke then said that it is Congress who makes the decision about whether the dollar should be fiat or tied to gold. This is an open door for Bernanke. The Congress sits eagerly each time the Federal Reserve Chairman addresses them, awaiting his recommendations.
Is it possible that Ben Bernanke will do the right thing? If he does the right thing Bernanke will ask Congress to reinstate the gold standard.
If he does the wrong thing and continues in the same direction he will cause great destruction and he probably will sink into an overwhelming and consuming mental depression.
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