Wednesday, September 2, 2009

End the Fed by Ron Paul

Here is my Amazon review of Dr. Paul's new book:
I read the book in its entirety last night and couldn't put it down. Ron Paul makes his case on several levels - constitutional, economic, moral, and political. The writing is fresh, vigorous, and accurate. He includes excerpts from his exchanges with Greenspan and Bernanke, and has a chapter devoted to his intellectual journey in arriving at his convictions about central banking and fiat paper money.

My favorite chapter unfortunately was one of the thinnest - Chapter 4: "Central Banks and War." Commenting on the impact of the Fed during World War I, Paul writes (p. 66): "In total, scholars have estimated that only 21 percent of the war was funded through taxation. The remainder was funded by Fed-backed borrowing (56 percent) and outright money creation (23 percent), for a total cost of $33 billion."

For the U.S, the war meant the launching of the imperial presidency and a globalized foreign policy; for Germany, it brought on the hyperinflation of 1923 and Hitler; For Russia, it meant the birth of Communism. "The beast [the Fed] . . . promised all things to all people, made the wishes of all politicians come true . . . [gave] the banking establishment in this country . . . new guarantees against failure, which created a 'moral hazard' for them." Not to mention the rest of us.

Many readers will have already read Tom Woods' Meltdown and Robert Murphy's The P.I.G to the Great Depression and the New Deal. I encourage those people to follow up with Dr. Paul's excellent book. If you haven't read those, order all three and get busy. I promise you will never make a better investment. In my view, the Fed is the most destructive force in the world, in part because it's viewed as our savior rather than our destroyer. It is imperative to understand its history and the role it has played in world events. Read this book and encourage others to do the same.

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