Ron Paul: "This Is A House Of Cards"

Tyler Durden's picture

Authored by Ron Paul, via The Free Foundation,

Federal Reserve Blows More Bubbles

Last week at its regular policy-setting meeting, the Federal Reserve announced it would double down on the policies that have failed to produce anything but a stagnant economy. It was a disappointing, but not surprising, move.

The Fed affirmed that it is prepared to increase its monthly purchases of Treasuries and mortgage-backed securities if things don’t start looking up. But actually the Fed has already been buying more than the announced $85 billion per month. Between February and March, the Fed’s securities holdings increased $95 billion. From March to April, they increased $100 billion. In all, the Fed has pumped more than a half trillion dollars into the economy since announcing its latest round of “quantitative easing” (QE3) in September 2012.

Although many were up in arms when the Fed said it would buy $600 billion in government debt outright for the previous round, QE2, all seems quiet about the magnitude of QE3 because it doesn’t come with huge up-front total price tag. But by year’s end the Fed’s balance sheet could hit $4 trillion.

With no recovery in sight, where’s all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt. The national debt is fast approaching $17 trillion, with the Fed monetizing most of the newly issued debt. The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed’s easy money. After all, as long as the Fed keeps the spigot open, nominal profits are there for the taking. But this is a house of cards. Eventually, just like in 2008-2009, the market will discipline the bad actions of the Fed and seek to find the real normal.

In the meantime, real families are suffering. While Wall Street and the government take advantage of access to the Fed’s new “free” money, the Fed claims there is no inflation. But who hasn’t paid higher prices at the grocery store, the gas pump, for tuition, for insurance? It’s bad enough that household incomes have stagnated, but real purchasing power has declined so much that one in seven Americans, 47.3 million people, are on food stamps. Five million are collecting unemployment insurance with 21.5 million afflicted by unemployment according to the government’s own figures. That’s 13.9 percent -- close to double the 7.5 percent unemployment number reported last week.

We are certainly not in a recovery. We don’t see the long unemployment and soup kitchen lines like in the Great Depression, but that’s just because the lines are electronic now.

It is not surprising the Fed has decided to hand the American people more of the same failed policies. But it is disappointing. We know what the real solution is: allow the marketplace to work. Allow entrepreneurs the chance to create instead of stifling innovation with arbitrary regulations. Allow interest rates to rise to equal the risks in the economy. Allow bad debts to be liquidated so we can build on a firm foundation. Stop printing money to benefit the government and big banks. Restore sound money to the economy and the American people. Sound money is the bedrock for prosperity and the best check on big government and crony capitalism.

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zorba THE GREEK's picture

It is more like a house of toilet paper

Manthong's picture

yes.. not a lot of stiffness and substance..

Except for those who embrace delusion

Shocker's picture

The average person lives this economy everyday. Reports can say this or that, but mean nothing when you get to the street level.

SMG's picture

I like to think of it as a house of gasoline-soaked toilet paper.

american eyedol's picture

i'm watching otm with Maria B right now on C N BULL SHIT she just announced 7.5 jobless rate,,,,,LOWEST since 2008,,,,,,,,,WHOOT WHOOT

flacon's picture

The only CNBC I watch is selected segments posted on Peter Schiff's youtube account.

american eyedol's picture

to tell u the truth i had only flipped it on looking for another hockey game, if u do watch it during the day the room starts to smell like a basement toilet and you can figure some things out by their how much sjit is being spewed thru their translations

EnslavethechildrenforBen's picture

Global Economic Stocklolm Syndrome.

markmotive's picture

When the banking SHTF, the authoritarian infrastructure is already in place to keep the sheep contained.

The Pigs already rule the farm. George Orwell is rolling over in his grave.

Kid Calls Out Cop for Parking on Sidewalk...asks for badge number and denied

krispkritter's picture

Ron Paul exits and we're still left with a pile o'shit stacked 6' high called Chucky Schumer.  Now he wants to ban 3D printers:

Too bad it doesn't outlaw Ben's...

James_Cole's picture

Nice to see RP restating the same wholly ineffective talking points that were his bread and butter in congress now that he's outside of the congress. 

What is lost in this 'analysis' is the idea that the 'bubbles' created by printing endless money are *NOT* an unexpected / unintended consequence. Nor is it some giant surprise that printing trillions of dollars creates inflation. 

How about calling it what it is? The rich stealing from the middle / poor just like they always have, the federal reserve and the congress helping them do it (just like they always have). 

These are not failed policies, they have been EXTREMELY successful - but only for a very specific audience. Coincidentally the same audience that buys the congress. 

Boris Alatovkrap's picture

Boris is compare success of asset bubble - eat plenty of sausage and perogy for evening meal and by bath time, it is for certain, successful in make of bubble. Maybe family and visitor is not enjoy bubble, but Boris is successful in appointed endeavor.

onthesquare's picture

if I borrow a bunch of this new cash and it becomes worthless then do I owly have to pay back its worthless new value?

Borrow, buy gold metal (not paper gold?), then when the shit hits the fan sell my very expensive gold and pay back what I borrowed.  I keep the gold and move to ...?

10mm's picture

Seen the ban 3 D shit coming,no way you and i are printing,that's Bens job.

Prometheus418's picture

Any of my kids do that, and they're granted immunity from grounding and/or any other form of punishment for as long as they live in my household- because they will have proven that they have learned what I most care about teaching them.

Thanks for sharing.

Boris Alatovkrap's picture

Maybe, but in police state, badge number maybe is .38.

Shoot first, answer question later.

gonetogalt's picture

Paid my mandatory automobile liability insurance last week, $45 USD for a year.  2013 license (3/4 ford pickup) up this month, gonna be $55 USD.  Drinking pretty good rum tonight, $3.20 per 750 ml.  Gold dredge working, make a little, lose a little, hope for better price.  Life is good.

goldstandard's picture

Actually CNBC's Weed Country is pretty good. To bad they haven't invented smelevision yet...:)

fonzannoon's picture

Oh my god you watch that shit on the weekend? I'd kill myself.

knukles's picture

Guy is in need of serious professional help accompanied by a veritable plethora of psychotropic drugs.
Man, I mean its tough just having the pic on with no volume to see the numbers or wait for Santelli, FFS....

kliguy38's picture

ditto.....even Santelli isn't worth turning the mute off anymore

Manthong's picture

i'm having a hard time reconciling myself to the fact that the best econ info is on RT

Tango in the Blight's picture

There's a new finance show on RT called Prime Interest.



NoDebt's picture

Evening, all.  Just got back from the kids' Cub Scout camping trip.  What's new?

Oh, Israel starting WW III in Syria, Ron Paul doing his thing, Europe.... still busted-ass broke, USA..... still not admitting we're busted ass broke.

Think I'll grab a beer, break out the Dutch Oven and make another peach dump cake while I set up the tent in my back yard.  Might just sleep out there tonight.  Life was simpler being out of G4 cell range for a couple days!

Can't tell if I'm de-compressing or re-compressing by logging on tonight.

MsCreant's picture

Never heard of that cake, I may try it! Need to look for a gluetin free version. Thanks.

fockewulf190's picture

The Great Reset is coming and it is going to be scary as hell for many, and deadly for the rest. There will be blood, there will be blame, and it's all just a black swan or two away. It is truly incredible how humanity is being governed to absolute ruin. What really gets me is that there are still so many people who actually don't know just how fucked up everything is.

I have friends and relatives, as I'm sure many of you ZH readers also have, who truly are working their asses off, not fucking slouches, providing for themselves and their families, paying off their houses every month, paying mega property taxes ($10 grand+ per year on Long Island) saving fiat for old age, doing all the shit that hard working, self reliant, and responsible Americans are supposed to be doing, but they still won't wake up and stack some phyzz. It's like trying to convince an atheist that God does exist. Trying to explain that the fiat price is irrelevant does nothing but cause instant glaze over syndrom, and if they do start to follow the price, they see the smashdowns and lose all interest.

It really is going to suck seeing these people having their lives ripped apart. They don't derserve it, but life just isn't fucking fair now is it.

Sandmann's picture

Did Bernie Madoff respect those people he ripped off ? Did they trust him because he was one of them ? Do they feel better that he was one of them and still ripped them off ?

Sandmann's picture

Did Bernie Madoff respect those people he ripped off ? Did they trust him because he was one of them ? Do they feel better that he was one of them and still ripped them off ?

samcontrol's picture

time frame on your reset , one black swan away..?
Yu have no clue do you?
12 month or twelve years...?

I have so many plan B s from waiting it is ridiculous, i think i should patent my self sustaining fields in Uruguay..

JimBowie1958's picture

Waiting for TSHTF to happen is like a wooden shed filled with newspapers and gasoline sitting next to a welders work place. You cant say exactly when, but unless someone fixes the situation, there is going to be a bad moment.

So lack of a precise time frame proves nothing when we are tallking about an acumulation of negative factors that could very likely result in an economic implosion.

That it hasnt happened yet disproves nothing either. Bad situations can last for a very very long time before blowing up, but it still justifies removing the negative factors to make things safe. In this case just to make the markets sane again would be nearly impossible it seems here without a major reset across the globe.

xtop23's picture

Right? It makes me nauseous. 50 gd million people on food stamps and more than 100 million working age Americans on state support in one form or another. They call that a recovery? 

We get too much more recovered we're going to need a stretcher and a priest.

On a side note; Obama gave a commencement speech the other day and spent a few moments trying to reinforce into them that they should trust government. Perhaps he isn't aware that he's no longer the cool kid that's going to bring change. These youngsters know better bud. They've been choking on your recovery for years. They see the sham that government is, and they're none too fucking pleased by it.

Maybe a few more sheep waking up? I can hope, right?

torak's picture

There are Lies.
Damn Lies.
Goddamn Lies.
Goddamn Fucking Lies.
Goddamn Motherfucking Lies.
Goddamn Motherfucking Money-shot-to-the-face Lies.
And Government Statistics.

I'm thinking Maria B. goes for the last two imho.

SafelyGraze's picture

one way to protect your assets in the face of bubble-blowing is to go ahead and deed them to themselves

the beginning of the sovereign-tree movement

spoiler: the video is, in fact, about a sovereign tree that, in fact, owns itself

zorba THE GREEK's picture

SMG +1...And when it burns, it will be gone in seconds. There will be no chance to exit

unless you do so before the spark.

Pope Clement's picture

For the posts Just below - Not good guys for making a point to use analogies from mainstream astronomy a branch of science that is almost as well known for its frauds and incompetence as the economics sphere... Stars are not fired by a nuclear furnace.

TheFourthStooge-ing's picture

It's a house of marked cards.

andrewp111's picture

I think of it like a supermassive star that has burned up most its nuclear fuel and is now in the neon or silicon burning stage. And we are just spectators on one of the doomed star's own planets. When that sucker goes, no one escapes.

Kirk2NCC1701's picture

In that case, if the sucker starts to burn 'Fe' (iron), you'd better be far, far away, cause she's gonna go Super-Nova.

kchrisc's picture

Great article, thanks.

Unfortunately it is inaccurate in one regard and which is that it is really a "SKYSCRAPER of cards." I base that on the rehypothecation goings on that I learned about at,        hujel

knukles's picture

It's just ever so sad.
The American people had the "realest" choice in decades with Ron Paul and were essentially torpedoed by the Leviathan; both parties, the MSM and their financial enablers.
He may have been the last best choice of my lifetime. 

God save us all for we are incapable of doing so ourselves.

DavidC's picture

Spot on knukles.


ronaldawg's picture

Thanks Mr. Paul for serving in the Congress for 23 YEARS and accomplishing NOTHING1.  He talks a good game but ALWAYS did not get anything accomplished.

1 I guess he did accomplish his obtaining a lifetime pension and free healthcare paid on the tax payer dime. 

SUCK OFF the taxpayer teat just like the rest of the welfare scum


AssFire's picture

He spoke out more than any other, for longer than any other and will be remembered as a great founding father one day, asshole.

He went back to work as a gynecologist and refused and government subsidy when the parents could not pay during those 23 years as well, asshole.

BigJim's picture

Don't you understand??? He was in Congress for 23 years and failed to single-handedly achieve a majority vote!!!

AND... he didn't cure cancer! Or eliminate the common cold! 

*sigh* I suppose right about now I'd better put /sarc for the ironically challenged 

ronaldawg's picture

RON PAUL went along with the whole fricken thing.  He went along with all the monetization of the debt, and the destruction of the Dollar.  He was in the congress the entire time. 

Does anyone take responsibility for their actions anymore?

Please somebody tell me that he is a real "stand up guy" and is not living off some government pension right now.... Anyone?  crickets....  I want to see references that he has done this.

A real hero would have sacrificed himself for the betterment of the country.  It says ALOT that our hero RON PAUL did not do this.

But there is more - RON PAUL couldn't convince anyone that his ideas espoused above were with merit and could not convince the Republican majority to pass at least ONE of his bills? WEAK.

POLITICIAN - just like the others.



fonzannoon's picture

Can you please elaborate on how he "went along" and more interestingly how he should have "sacraficed himself"?

Should he have poured gasoline on himself at a congressional hearing and lit himself on fire?

Please elaborate. I gotta hear this.

Bay of Pigs's picture

fonz, this guy is apparently clueless on Ron Paul's voting record or else he's just a stupid fucking ignorant asshole.

Maybe both?

fonzannoon's picture

What is amazing is he was smart enough to find this site and dumb enough to shoot out that comment. Probably another pay per post douche who I just helped make a nickel.

kito's picture

Fonz you mean that I can get paid to post my rants on here??!!! Please share!!!!