Ron Paul: Janet Yellen ‘might even end up being Ben Bernanke on steroids’
There was a lot of glee by the markets over President Obama’s nomination of current Federal Reserve Vice Chair, Dr. Janet Yellen, to fill the shoes of outgoing Ben Bernanke, likely because they know that the Fed’s easy money spigot will likely continue under Yellen.
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This is contrasted by the reaction of the possibility of Larry Summers being nominated a while back.
However, as “End the Fed” author and former Texas Congressman Ron Paul noted in this week’s “Texas Straight Talk”, “there wouldn’t have been a dime’s worth of difference between Yellen’s and Summers’ monetary policy.”
Paul continues, “There may be some fiddling around the edges, but any monetary policy changes will be in style only, not in substance.”
Related story: Rand Paul takes aim at the Fed
“Yellen, like Bernanke, Summers, and everyone else within the Fed’s orbit, believes in Keynesian economics. To economists of Yellen’s persuasion, the solution to recession is to stimulate spending by creating more money. Wall Street need not worry about tapering of the Fed’s massive program of quantitative easing under Yellen’s reign. If anything, the Fed’s trillion dollars of yearly money creation may even increase, Paul said.
“Rather than allowing the malinvestments and bad debts caused by its money creation to liquidate, the Fed continually tries to prop them up. It pumps more and more money into the system, piling debt on top of debt on top of debt. Yellen will continue along those lines, and she might even end up being Ben Bernanke on steroids.”
Paul points out in the weekly video blog that the likes of Yellen and others at the Fed don’t get what causes the boom and bust cycles and there is no reason to believe that such flawed policies will continue under the likely Yellen regime.
“As a result, the American people will continue to suffer decreases in the purchasing power of the dollar and a diminished standard of living. The phony recovery we find ourselves in is only due to the Fed’s easy money policies. But the Fed cannot continue to purchase trillions of dollars of assets forever. Quantitative easing must end sometime, and at that point the economy will face the prospect of rising interest rates, mountains of bad debt and malinvested resources, and a Federal Reserve which holds several trillion dollars of worthless bonds.
“The future of the US economy with Chairman Yellen at the helm is grim indeed, which provides all the more reason to end our system of central economic planning by getting rid of the Federal Reserve entirely. Ripping off the bandage may hurt some in the short run, but in the long term everyone will be better off. Anyway, most of this pain will be borne by the politicians, big banks, and other special interests who profit from the current system. Ending this current system of crony capitalism and moving to sound money and free markets is the only way to return to economic prosperity and a vibrant middle class.”
photo donkey hotey
