When people crow to the Fed to lower interest rates and make larger sums of money more accessible, argued Paul, they're not really asking for the interest rates to be lowered; they're asking for the government to print more money.All too true, and much the same here in New Zealand where the Reserve Bank has inflated the currency year on year by around fifteen percent -- and this is in a bid to reduce inflation!
"But they never ask you, and I don't hear you say too often, 'The only way I can lower interest rates is I have to create more money. I have to lower the discount rate, I have to make it generous, I have to increase reserves, I have to lower the interest rates and fix the interest rates.'"
Later, Paul called it "a fallacy" that made the dollar "weaker" and "invites inflation."
"It is that not only have we had a subprime market in housing; the whole economic system is sub prime," Paul railed. "We artificially lower interest rates. And it wasn't under your tenure in office; it's been going on for 10 years and longer and now we're bearing the fruits of that policy." Paul argued the government shouldn't be concerning itself with deceptive lending practices but with its deceptive monetary policy.
Paul is the only American politician who understands the economists' injunction that "inflation is always and everywhere a monetary phenomenon. Such a shame he's also a supporter of conspiracy nuts, and a total flake on foreign affairs.