Nonsense. Go the mises.org and read some of Ron Paul's writings in the 80s and 90s. He's the only one in Congress who's qualified to expose HeliBen's crackpot monetary theories.
Right, so why don't we just dispense w/ democracy and go w/ a dictatorship? Btw, I think Hillary would make a fine dictator -- among the psychotics running for election, she has the smarts and cunnings to be a very good and ruthless central planner.
ben's allegiance to the banks is crystal clear. he serves the existing oligarchy, not the american people, and definitely not the american dream (unless you define that as compulsory debt)
This is one very cool thing about the USA - I really can't imagine something like this happening in any other country in the world. If Ron Paul gets elected then I am going to marry a yank chick (with an ironclad prenup ofc) and emigrate!
For someone without economic training, I thought his grasp of the issues was fairly good. It is certainly better than 98% of Congress. He got some details wrong but on the core issues he is correct: i) artificially low interest rates do cause bubbles. ii) fiat money regimes are inherently inflationary. Both economic theory, and the results in practise have shown this. iii) a weak currency is bad for a country. Continual devaluation over the long-term has never resulted in prosperity for any country. iv) inflation is an effective stealth tax on people who do not own inflation hedges like stocks and real estate i.e. mostly poor and working class people On all these issues, his position is basically supported by economic theory and empirical evidence. Which big issue do you think he has he got wrong? The only oversights I heard were saying that a 10% currency fall is a 10% wealth fall (not true, unless it is caused by 10% inflation. Only the tradeable sector of the economy gets 10% more expensive, as Bernanke pointed out.); and not mentioning that the Fed is simply following Congressional mandate in pursuing "growth-friendly" policies rather than keeping a sound currency and low inflation above all other goals.
Also considering this, nothing comes for free. If there is no effect with 10% currency fall, then there is no effect with 10% currecy rise neither. Then, why are we trying so hard to devalue US dollar to shrink trade deficit. What are we trying to do here? Why everyone care at all? We are trading inflation/earning power with lowering deficit. It might not be 10% currecy fall for 10% inflation, but we are definitely going to have higher inflation. Unless import price are disproportionally affected by commodity, the reason for low inflation in US also apply to imports, and if they are the same, deficit will shrink the same rate as inflation. my 0.02
You guys criticizing Ron Paul that 10% devaluation is not 10% inflation, should pick up any International Economics book and go to the chapter entitled "Purchasing Power Parity (PPP)". This theory says that, in principle, 10% devaluation is 10% inflation. Now, in reality maybe it's not 10% vs 10% exactly but very very close. There is at least an 80% correlation b/w inflation and devaluation. It's better to be approximately correct than exactly wrong.
The theory says that a continously higher inflation rate in one country vs another country will lead to the first country's currency becoming depreciated in the long run (decades), empirically PPP doesn't hold in the short run (2-3 years). That is, above average-inflation in the long term leads to currency depreciation. I'm not so sure the theory runs the other way. For currency depreciation to lead to an equal amount of inflation you would need zero value to be added by American companies to final goods, which is obviously not the case. If anything the slide in the dollar the last 2 years has more to do with deficits than inflation rates since these only hold in the long term. The depreciation is a natural economic adjustment mechanism to the over-importing, over-consuming behaviour of the US as a whole. A weaker dollar is what is needed for the US to start exporting more and consuming less imports.
PPP does NOT suggest any causality direction, it's an identity that should hold everything else constant "in equilibrium". Academic empirical tests of the PPP use "official" inflation statistics, AFAIK, that's why it apparently performs poorly and with a lag. It performs much better for market measures of inflation like commodity prices. You mention productivity, etc. and yes, there lots of other things that PPP does not consider, but they are minor and they do not explain a brutal 20% devaluation in just a couple of years. The effects on the trade balance are still uncertain, and cannot be guaranteed they're going to be good, if this devaluation turns out to be inflationary. I suggest you to combine PPP with the Quantity Theory of Money and you will see the relationship b/w money printing and dollar devaluation. Bernanke's pal Nouriel Roubini gives his students this handout, linking PPP and the QTM http://www.stern.nyu.edu/~nroubini/NOTES/Hand7.htm Now, that's why I am saying that it is incomprehensible that Bernanke said what he said.