29 votes

Here's why the Fed is trapped: Ron Paul

Here's why the Fed is trapped: Ron Paul

Ron Paul has a warning for the markets: The Federal Reserve Bank is the source of today's market instability and it will likely get worse.

As the Fed begins its two-day policy meeting on Tuesday, world markets are being rattled by two major issues: credit market instability in China and a further taper of the US monetary stimulus.

Former congressman Ron Paul believes that Ben Bernanke is going to avoid responsibility for additional tapering and foist it on his successor, Janet Yellen. He believes the Fed has its back against the wall – if it tapers any more, emerging markets will spin out of control; if it continues buying bonds at the same monthly pace indefinitely (which is expected to be $75 billion this month), US and world markets could find themselves overvalued and susceptible to a big drop if and when the music stops. The US dollar's role as a reserve currency is part of the reason this could be a global problem, according to Paul.

Read more and with video:

Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Fed is not just buying bonds

Critics of the Fed often talk about its bond buying, but part of QE3 is buying 40 Billion per month of toxic mortgage backed securities from zombie banks, and paying 100 cents on the dollar.

An Investors Business Daily article said "despite the commitment of nearly 20 Trillion in taxpayer funds, lending [in the U.S.] has stalled or shrunk"

But that's only half the story, as indicated by Ron Paul, the Fed's QE has increased lending in emerging markets while the U.S. economy is starved of capital. Communist China is the largest emerging market and Fed policy is designed to grow China's totalitarian economic model. For the whole story, click on the bottom link in the footer and check out the post "Communist China tortures Religious and Free Speech Advocates".

http://www.dailypaul.com/277342 (Rand Paul: One person can make a difference)
http://www.StandUpForYourRights.me/?p=1264 (Fast and Furious hearing)

DJP333's picture

Embed of video

"It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different." ~CW


For Ron Paul!