It is a shame Ron's hearing on fractional reserve banking was the same day as the Holder vote and the Obamacare ruling. However, they weren't reporting his hearings the way they should have been, on the best of days.Sure, the Supreme Court made some news, but that shouldn’t overshadow the inflationary dangers lurking in the banking system, Rep. Ron Paul (R., Texas) said Thursday.
“I find today a very interesting day in our history because there’s lots in the news today,” Mr. Paul remarked Thursday, opening an afternoon hearing of the House Financial Services Committee’s panel on domestic monetary policy, which he chairs.
Mr. Paul acknowledged that the House was scheduled to vote Thursday afterno0n to hold Attorney General Eric Holder in contempt, and yes, “there was a major Supreme Court ruling today.” But that shouldn’t render everything else irrelevant, he said, particularly the panel’s hearing on on banks’ standard practice of holding a fraction of their deposits in cash.
“I would like to suggest that the hearing we’re holding today is not to be dismissed as insignificant,” he said. “We’re dealing with a subject that’s rarely thought about, but has a major impact on our economy.”
Pace University economics professor Joseph Salerno argued that the practice known as “fractional-reserve” banking is “inherently inflationary” because banks expand the money supply when they lend out their clients’ deposits.
No Democratic lawmakers attended the hearing.