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.And it wasn t under your tenure in office; it s been going on for ten years and longer andnow we re bearing the fruits of that policy.I mean, a 1 percent interest rate, overnight rates and that s not a distortion? Instead of looking at these the consumer prices, whichnobody in this country really believes, we need to talk about the distortion, the malinvestment, the misdirection, the bad information that isgotten from artificially low interest rates.In many ways, some people refer to you as a price fixer, you know, because you fix interest rates.The market is powerful, and usually overwhelms and does come into play, but when the Fed fixes an interest rate at 1 percent, that isprice-fixing.At the end of your testimony, you suggested that we should address this housing crisis, and we should have rules that would addressdeceptive lending practices.And I just think that is not the answer at all.The real deception is when we distort the value of money, when we create money out of thin air.We have no savings.Yet there s so-calledcapital.There s money available.But it comes from what you have to do and the pressures put on you.So I think we have to get back to thevery fundamentals of where this problem comes from.And the bubbles occur when we have this malinvestment and the creation of new money.So my question boils down to this.How in the world can we expect to solve the problems of inflation, that is, the increase in the supply ofmoney, with more inflation?BEN BERNANKE: Well, Congressman, first, just a small technical point.On the growth in money, money growth has been pretty moderate over thelast few years.The increase in MZM is probably related to the financial turmoil.People have been taking their savings out of, you know, riskyassets, putting them into the bank, and that makes the money data show faster growth.So I m not sure that s indicative of policy, necessarily.What we re trying to do is follow the mandate that Congress gave us.And the mandate that Congress gave us is to look at employmentand inflation as measured by domestic price growth.And as I talked about today, and I think you would agree that we do see risks to inflation and we are taking those into account and we wantto make sure that prices remain as stable as possible in the United States.RON PAUL: How can you do this and pursue this the policy that you have without further weakening the dollar? There s a dollar crisis outthere and people s money is being stolen; people who have saved, they re being robbed.I mean, if you have a devaluation of the dollar at 10percent, people have been robbed of 10 percent.But how can you pursue this policy without addressing the subject that somebody s losingtheir wealth because of a weaker dollar? And it s going to lead to higher interest rates and a weaker economy.BEN BERNANKE: If somebody has their wealth in dollars and they re going to buy consumer goods in dollars it s a typical American then thedecline in the dollar, the only effect it has on their buying powers, it makes imported goods more expensive.RON PAUL: Yes, but not if you re retired and elderly and you have CDs and their cost of living is going up no matter what your CPI says.Theircost of living is going up and they are hurting.And that s why the people in this country are very upset.Now, that was the last time we had an exchange before the meltdown.Bernanke was more evasive than ever before.He didn t address any ofthe specifics.Moreover, he displayed not the slightest concern about an impending problem.I suspect that I could have questioned him all day andreceived only more bromides in response.What he knew in his heart is another matter.That day he was in full propaganda mode.An exchange on March 24, 2009, long after the crisis began, ran as follows.RON PAUL: Do you operate with the idea that capitalism failed and they need us more than ever before to solve these problems? Or do yousay,  No, there is some truth to this.As a matter of fact, a lot of truth to it is that we brought this upon ourselves, that we had too muchgovernment, too much interference in interest rates, too much risk, moral risk, built into the system.Because if you come from the viewpoint that says that the market does not work, I can understand everything you do.But if I see that youtotally rejected the market, and that we have to do something about it, I can understand why we in the Congress, and you in Treasury, and youin the Fed continue to do this.So where do you put the blame, on the market or on crony capitalism that we ve been living with probably for three decades?BEN BERNANKE: Congressman, I certainly do not reject capitalism.I don t think this is a failure of capitalism per se, and I also think that freemarkets should be the primary mechanism for allocating capital [ Pobierz całość w formacie PDF ]