In what is increasingly shaping up to be a showdown of epic proportions, the brand new chair of the Monetary Policy Subcommittee, Ron Paul, whose sole purpose in life for the past 20 years has been putting the Federal Reserve out to pasture, and returning to the gold standard, will soon spar with none other, than his, and every middle-class American's nemesis, the Chairman. And it could soon get even messier. In an interview with Fortune magazine's Nin-Hai Tseng, not only does the Texas doctor make it all too clear that he once again has presidential ambitions, but when asked whether he wants to end the Fed, gives the following brilliant reply: "Well, I don't expect to. The Fed's going to end itself when they destroy the system. So yes I would end the Fed but I would do it gradually and have a transition." Good luck Ron. However, there will be no gradual transition. If anything, it will be protracted, very much involuntary, and quite likely violent, as it would mark the end of a century-long scheme to transfer countless ounces (no pun intended) of tangible wealth to the ruling oligarchy in exchange for worthless and infinitely dilutable linen.
Some of the other choice soundbites:
Will you run for president in 2012? “Sure, there's always a chance. Probably depends on my mood come next January or February. I have not made up my mind. I have a lot of people supporters who are very anxious for me to do it. Right now I'm totally undecided.”
Do you want to end the Fed? “Well, I don't expect to. The Fed's going to end itself when they destroy the system. So yes I would end the Fed but I would do it gradually and have a transition.”
But some would consider ending the Fed is a bit extreme, don't you think? “No, I think printing money is extreme and crazy. I think the obscenity is allowing the Federal Reserve to print $3.3 trillion and we don't even know where it went. That to me is what's so extreme. And that's what the American people are waking up to. Government is extremely out of control. That is what I think everybody agrees on in the Tea Party movement.”
Do you really think America could adopt the gold standard? How can this practically happen? “Look at how many people have money in exchange-traded funds for gold. Billions and billions of dollars. I've always considered myself being on the gold standard.”
More from Fortune:
The erstwhile presidential candidate and soon to be head of Congressional oversight of the Federal Reserve talks gold, jobs and the presidency with Fortune.
If there's anything to be said about U.S. Congressman Ron Paul, he
sure is persistent. And lately, that inner flame that's helped him gain
the reputation for sometimes being the "G.O.P. loner" appears to be
The soft-spoken obstetrician has represented the 14th
District of Texas on and off since 1977, spending much of his political
career arguing that the Federal Reserve is evil for America and far too
secretive. He doesn't see why there's so much faith in paper money,
including the U.S. dollar. If Paul had it his way, there'd be a return
to the gold standard. He even laid out his case in his book, End the Fed.
What's more, Paul is a big believer in Austrian economic thought –
the idea that government has no role in regulating the economy. And for
years, he's supported keeping Congress from any action not explicitly
authorized in the Constitution, or that he sees as wasteful spending,
including – as a recent New York Times article highlighted – on issues as ceremonial as honoring Mother Teresa with the Congressional Gold Medal.
No doubt Paul's views fall outside the mainstream. At times, his
thoughts are arguably off-putting and easy to brush off as extremist
political rhetoric. Even Libertarians don't always see eye-to-eye with
the Texas politico.
Lately though Paul's views are garnering the attention that he and
supporters have long been waiting for. Earlier this month, Paul was
picked to head the House subcommittee on domestic monetary policy. That
means he will help oversee the body he's opposed to -- the Federal
Reserve -- as well as currency and the dollar's value.
If anything, it appears the timing somehow worked out for beliefs
that Paul has held for decades. The congressman's backing has grown
considerably with the rise of the Tea Party, whose frustrations with
government bailouts of big banks and corporations following the
financial crisis seem to fall in line with Paul's views.
I caught up with Paul this week to talk about his new role, the Fed,
how the world could possibly return to the gold standard and the 2012
presidential election. The following is a lightly edited transcript of
What are the Federal Reserve's shortcomings?
They're doing a job that's impossible to do. So it's not a single
person's fault. It's not just former Chairman Alan Greenspan or just
current Chairman Ben Bernanke. It's the assumption that anybody knows
what interest rates should be, or the assumption that they know what
money supply should be, or the assumption that they can have stable
prices or the assumption that they could deal with unemployment.
Do you think we're better off without a Central Bank?
Sure, it's better off that we don't have depressions and inflations
and financial chaos and the problems that we face. We of course wouldn't
have this backdoor financing of big government fighting wars overseas
and getting people to depend on the welfare state. None of that can
happen without a Federal Reserve.
What do you think of the Fed's latest move to start pumping
$600 billion into the economy in hopes to boost the recovery through
huge purchases of long-term bonds?
I think it's terrible. They got us into trouble because there was too
much quantitative easing. I mean it was a continuous inflation and
artificially low interest rates that Bernanke gave us – he gave us all
the bubbles so you can't solve all the problems of quantitative easing
with more of it. So we had one, we're on number two. But actually we had
it under Bernanke. They didn't call it that but it was essentially the
same thing – massive monetary inflation with interest rates way lower
than the market.
So what do you think the economy would look like without the Fed?
We'd probably have a much healthier economy – it wouldn't be so
fragile. Nobody would be worrying about currency exchange rates and
people wouldn't be in and out of currencies and spending all their
energy doing what they're doing. Also, we wouldn't have a situation
where the Fed creates money and hands it out for free and let's the
banks make billions of dollars. And the poor people who are retired and
have CDs get nothing and because of the downturn in the cycle, which the
Fed creates, people lose their jobs and lose their houses. You wouldn't
have any of that.
This was all very clearly predicted by Austrian economic theory and
it's come about and it's very disturbing to the Fed because they're
going to have to recognize that their theories are completely wrong and
they're not about to do that gracefully.
As chairman of the House subcommittee on domestic monetary
policy, which among other things oversees the Federal Reserve, you've
mentioned you will renew your push for a full audit of the Fed. What do
you hope this will do?
It would tell us who the beneficiaries are. They've released
recently some information but they really didn't tell us exactly about
everything and where the money has gone and what kind of collateral they
have. The people in this country deserve to know who are the
beneficiaries and their budget and what they hand out is bigger than the
Congress, which is pretty amazing. They're off budget. They're not
responsible to anybody.
Who do you think the beneficiaries are?
We don't know exactly but obviously banks and big corporations and foreign central banks and foreign governments.