Ron Paul Takes on the Fed, Paper Money, and the Treasury Market on Squawk Box
Ron Paul resents suggestions that his continuing presidential campaign is now largely to influence the political conversation rather than following a realistic change of a candidacy in the general election.
“Why can't it be both?” the famed Texas congressman known for pulling no punches said as he co-hosted CNBC's Squawk Box on Monday. He pointed the fact that he was getting growing support, both financial and otherwise. “People wrote me off running for Congress,” Paul noted. "Theoretically it is possible for me to get delegates, though not likely. But what would be unrealistic is for us to quit while the race still goes on." he continues.
"Money is coming in, support keeps growing, we are making inroads" he said, pointing to a recent eight-thousand-strong student crowd on one of his recent events at a college campus despite severely inclement weather.
Regardless of Paul's genuine assessment of his chances of facing Obama in November - he offers no meaningful rebuttal to the fact he has not won any state contests yet - he continues to be counted on to press the pain points of today's political debate. Extreme as his views may appear to the mainstream - on the Fed, gold, etc - they bring an uncomfortable clarity to the current situation.
He has been particularly vocal on the debts and the deficit, as well as the Federal Reserve, which he slams for over-inflating Treasuries and feeding Washington's appetite for a fiscal policy that he sees has deepened the abyss future generations will have to pay.
Probed on the fact that the Gold Standard he advocates would handicap the Fed from lowering interest rates in a recession. “Paper money is the moral hazard today. It enables people to take a lot of risky investments, malinvestments, that have repeatedly resulted in trouble,” noted Paul.
As CNBC's Steve Liesman countered with the example of the Great Depression, which was arguably caused by the Gold Standard, Paul countered: “What you have to do is find out why we had a [Great] Depression. It was because overinflated in the 1920s.”
Congressman Paul points out that he does not have the numbers on what unemployment would have been without Fed intervention, but he knows the immoral impact it has had on the taxpayers. He believes the artificial lowering of rates is not the characteristic of a market economy, and it penalizes people who saved, by paying them a lot less on their CDs. Housing prices should have been allowed to fall, according to Dr. Paul, so that people who saved could buy affordable houses.
Paul's stance on the Fed, however, appeared to have moderated for a passing moment when he said, “Don't get me wrong, I would not move to abolish the Fed when I get in office. Not right away, anyway.”
Does this mean the office Bernanke shows up for work nowadays would continue to remain in business for all of a Paul presidency?
Not quite. At least that is what videogame creator Daniel Williams is banking on. His creation “Ron Paul: The Road to REVOLution,” featuring a Ron Paul character on a “one-man 50-state campaign to take down the Federal Reserve, counts on Paul's unabated Anti-Fed zeal for years to come.
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