I sent "Ron Paul schools Ben Bernake" to a friend

[pooflinger1488]

I sent this video to a friend who knows alot about economics and this is the response I got. I was hoping to win over support, but it didn't work. Can anyone help me reply to his response. Thanks alot!

Pretty impressive by Paul actually. He seems to know more than most congressmen about economic issues. The thing to take from this clip though is that the Federal Reserve can only do so much about inflation and its underlying causes. Paul states that fixing the prices is not the answer and Bernanke replies that the Federal Reserve is following the mandate given to them by congress. That means that Bernanke is doing the only thing he is allowed to do. He can't fix the issues of the sub prime markets because the law states what the Federal Reserve can do, and doing anything besides fixing prices would be against the law. Paul tells Bernanke that increasing the money supply won't work and Bernanke can't do anything about that because all the Federal Reserve does is deal with interest rates. You may have seen President Bush address this issue earlier this year by making an order to help people with their sub prime mortgages. This is where the underlying issue of inflation is corrected, through the executive and legislative branch of government. Paul didn't necessary school Bernanke but rather try to place complete economic responsibility onto the federal reserve, which does not have full discretion over this issue.

[MooCowzRock]

So it seems like he doesnt exactly disagree with the concept that the federal reserve shouldnt exist.

However, looking into that discussion, Bern. is in his position within the federal reserve because he supports its actions. If its actions are fiscally irresponsible, then they wouldnt act....but they do. So while I'd be willing to discuss the technicality of the "schooling" it didnt really seem like he was for or against the idea of the federal reserve...he didnt really talk about the actualissue, just made a technical point about the argument.

[hawkeyenick]

I sent this video to a friend who knows alot about economics and this is the response I got. I was hoping to win over support, but it didn't work. Can anyone help me reply to his response. Thanks alot!

Pretty impressive by Paul actually. He seems to know more than most congressmen about economic issues. The thing to take from this clip though is that the Federal Reserve can only do so much about inflation and its underlying causes. Paul states that fixing the prices is not the answer and Bernanke replies that the Federal Reserve is following the mandate given to them by congress. That means that Bernanke is doing the only thing he is allowed to do. He can't fix the issues of the sub prime markets because the law states what the Federal Reserve can do, and doing anything besides fixing prices would be against the law. Paul tells Bernanke that increasing the money supply won't work and Bernanke can't do anything about that because all the Federal Reserve does is deal with interest rates. You may have seen President Bush address this issue earlier this year by making an order to help people with their sub prime mortgages. This is where the underlying issue of inflation is corrected, through the executive and legislative branch of government. Paul didn't necessary school Bernanke but rather try to place complete economic responsibility onto the federal reserve, which does not have full discretion over this issue.

Bullshit it doesn't, that's what the MZM is for.

Just tell him if the Federal Reserve didn't remove the gold standard, we wouldn't even have to deal with inflation and deflation.
They lower interest (print money), they fuck us, they raise it (thus lowering investment), they fuck us, they leave it (value keeps going down), they fuck us.

A gold or silver standard fixes all of that.

[apc3161]

Setting interests rates = controlling money supply.

Here is a simple explanation. When the fed "lowers interest rates" you have to ask, how do they do that? Well, they buy up treasury securities on the private market with newly created MONEY. Thus the total amount of money in the economy increases and money supply increases.

When they want to raise interest rates, they sell treasury securities and take money out of the economy, thus lowering the money supply.

So when your friend said this Paul tells Bernanke that increasing the money supply won't work and Bernanke can't do anything about that because all the Federal Reserve does is deal with interest rates. He was wrong, the Fed's purpose is to control the money supply by controlling interest rates.

You can read all about it here.

http://www.federalreserveeducation.org/fed101/policy/money.htm

direct from their website, that is a very simple explanation.