Ron Paul vs. Ben Bernanke at JEC Hearing 4/14/10

http://house.gov/paul
http://CampaignForLiberty.com

Congressman Ron Paul questions Federal Reserve Chairman Ben Bernanke at the Joint Economic Committee hearing "The Economic Outlook," April 14, 2010.

Category:

News & Politics

Tags:

• congressman
• ron
• paul
• ben
• bernanke
• fed
• federal
• reserve
• chairman
• jec
• joint
• economic
• committee
• hearing
• outlook
• inflation
• printing
• press
• bailout
• tarp
• stimulus
• economy
• meltdown
• crisis
• recession
• depression
• dollar
• monetary
• policy
• debt
• greece
• imf

[GaganSinghBal]

im from the uk and i can see that ron paul HAS to be voted in as the next president. RON PAUL 2012

[Thorneization]

Ron Paul and Jesse Ventura 2012

[DreadheadDicaprio]

He's lying to many huh's... and umms... and looking down to the left... Mr bernanke when will you apologize for destroying our economy ? smh '.

[jaimepanama]

@celer1ty2 You are correct about this. As long as there is demand for government bonds in the USA, The Fed can still print more money and keep interest rates at 0% without an increase in consumer prices. The whole European issue is actually benefiting the US economy, but I think its just going to be a short term gain, because a 15 trillion debt is not sustainable in the long run..

[jaimepanama]

@celer1ty2 Thanks for your explanation

[celer1ty2]

@jaimepanama Fed doesn't print money out of thin air! They create money in exchange for assets, usually government bonds (issued by the Treasury). As long as there's demand for US bonds Fed can print money without causing inflation. And the reason why there's demand for bonds right now is because they are considered a safe investment. Investors, such as banks, get a certain return from the bonds which is partially the interest rate on your bank account.

[jaimepanama]

@celer1ty2 I thought that in order to keep interest rates super low, the FED needed to expand their money supply and "print" more money out of thin air which is not the same as real savings... But it's interesting to see what you are explaining though. do you mean that when the fed expands money and created dollars, every dollar is backed by bonds and then sold in FOMC operations? it would be great to hear a debate on business cycle between an Austrian Economist and a Federal Reserve economist

[celer1ty2]

@jaimepanama I'm afraid that's not correct. The funds are backed by bonds which are in turn sold in an open market operation. The very reason why interest rates on bonds are record low is because savings has increased during the recession.

[jaimepanama]

@celer1ty2 Alan Greenspan keep interest rates at 1% for too long and that exacerbated borrowing that lead to the housing bubble. Central Bankers would only tighten on credit and raise interest rates if there is another speculative bubble being created and/or consumer/producer prices start soaring.. The reason entrepreneurs become confused when there is an artificial expansion of credit, according to ABCT is because the funds injected by central banks are not backed by real savings in accounts.

[celer1ty2]

@jaimepanama I'm certain bankers are well aware low interest rates won't last forever. How exactly would they become confused? What does that even mean? Also, the economy has been at the zero lower bound for quite some time now. Inflation haven't increased.

[jaimepanama]

@celer1ty2 Austrian Business Cycle Theory which explains the business cycle or the boom and bust that economies experience through the artificial creation of credit by either fractional reserve banks or by modern central banks such as the fed. The Artificial credit creation at very low interest rates is only created through inflation, this is injected to the economy through the banking system, and is confused by entrepreneurs by thinking is real lendig funds(savings).

[jaimepanama]

@hsalib the loss of taxpayers who would have to pay it back either through more inflation or taxation.......