July 20, 2007

Here's CNBC video of Ron Paul questioning Ben Bernanke - "How long can we fool the world?"

Here's the video link

Housing Crash

Ron Paul

Ben Bernanke


US Dollar

Boy, has it all come together HP'ers or what?

Play the full 9 minute video, RP starts half way in

RP brings up out of control credit, the monetary system, living off of credit creation, the destruction of the manufacturing sector, the dollar downfall, inflation, war spending, borrowing from China, and asks an annoyed Bernanke "How long can we fool the world?" and asks him if he has his fingers crossed.

Ben tells RP that he's right - we're living off of borrowing from foreigners and that that is not a sustainable situation.

I'd guess less than 1/10000th of 1% of people in the world watched this today. So consider yourself informed.


Anonymous said...

Ron Paul is 7 years too late. Running now is like the buzzard picking over the road kill by the side of the road.

Anonymous said...


Us fooling the world is an interesting question...

Where's all the money coming from which is lifting foreign stock markets to record highs? The Yen carry trade? How much of it is hedge funds from the U.S. using leverage at 5 to 1 or 10 to 1? Afterall, why should said hedge funds play in the U.S. markets when the government's "strong dollar policy" has devalued the greenback considerably in the past few years? What happens when these hedge funds & their leverage pull out of foreign markets? It isn't just going to be the U.S. lamenting over a wild night of Mexican while atop the pot...

Anonymous said...

The Constitution?!? Didn't Geo Bush have that abolished yet? Well, he ain't quartering the British army in my home! But I bet he's gonna bring back the debtor's prison, as we have to have cheap labor to compete with the Chinese.

Daniel said...

I saw Ron Paul last weekend in Mountain View CA. He was fantastic--almost too good to be true. Possibly the only honest and sane politician I've seen in my nearly 40 years. But I fear for his life. Do you think the Demoblicans and Republicrats would let him continue his campaign if they thought he had any chance of winning? He could blow the lid off their whole scam. People might realize that the choice between parties is a false choice designed to distract them from the reality, which is that either of the major parties is equivalent. As long as they choose between these Siamese twins, their choice in the elections won't matter, just like it doesn't matter who wins American Idol, or the Superbowl, or the Academy Awards. They are like the red cape waved in the face of a bull in a bullfight--an effective and fatal distraction.

It is the role of the sheeple to be manipulated and milked, like so many domesticated animals. And, to tell the truth, that's really all they want. They are content chewing their cud of crass consumerism, cable TV, and professional sports teams. They wouldn't know what to do with true freedom. It would be too frightening a prospect for them. They might have to start thinking for themselves.

RJ said...

Wow, where do you start?
1. Corporate savings - true, corporate reinvestment in capital is on a tear, but much of that reflects overseas growth. This might be good for shareholders but not for U.S. workers whose negative household savings rate means a long term reduction in spending.
2.Construction work - If anyone knows, is the shift from residential to commercial construction part of the birth/death adjustment or is this confirmed by solid data?
3. GDP - GDP is running positive if you assume a 2-3% inflation rate. If John Williams at Shadow Gov. Stats is correct putting real inflation at a little over 10%, then GDP is running in the negative.
4. Sustainability of financing the U.S. - The question is what China will do with $1 trillion in reserves. They're not buying up treasuries with it. As the dollar continues its managed devaluation, will foreigners continue to invest in dollar denominated securities? Over the long term, Bernanke doesn't seem to think so. But its not clear how we're supposed to reduce our trade deficit while encouraging domestic savings without reestablishing production in the U.S. instead of moving more production overseas.
5. Bernanke stated that our financial markets are very deep and very liquid. Yet without a clear understanding of the extent and value of the derivatives market how can anyone know how truly liquid the markets are? It seems the markets will remain deep and liquid as long as everyone continues to believe they are deep and liquid. But when the faith is lost?

RP asked intelligent questions and demonstrated an economic literacy missing in many members of congress. Notice that his assertion that inflation is a monetary phenomenon went unchallenged by Bernanke.

Right now oil is at 76.06. Core inflation doesn't cut it any more.

shtove said...

Thanks for that.

Bernanke's curt answer at the end said a lot.

Anonymous said...

link is broke

Anonymous said...

Great post.

Until I saw that I sort of felt sorry for Bernanke having to clean up the garbage left by Greenspan.

My thougts have now changed - he may be built out of the same cloth as his predecessor.

I watched some of the hearings on a TV next to my monitor so I could see clearly Mr. Bernanke's eyes. I thought I saw fear and I had a gut feeling he might know how bad things are.

But after your post (which I had not seen) I no longer feel sorry for him.

That other guy said...

You gotta love RP, he knows how to make people squirm in their seats. I like his final comments about Bernanke having his fingers crossed. Just a subtle way of saying "I know your full of sh*t".


BobbyG said...

Thanks you for providing keeping us informed with this type of data. Unless your unemployed and can sit around around C-span all day, you would never get this stuff from the MSM.

After hearing Dr. Paul's excellent cross examination of Helicopter Ben, can it be any more clear that hyperinflation is the only way forward? Bernanke believes that the $800 B current account deficit is indefinitely sustainable due to the US' "deep and liquid capital markets". That means that he will allow the dollar to fall and will probably cut rates and exercise the Benanke Put in order to save the US economy from a housing bust induced recession. He will do this because he believe that the US will continue to attract foreign capital even if yields go lower.

This cannot only mean that asset prices will be supported, the dollar will crater and gold will skyrocket. It appears that commodities including PMs, foreign currencies and foreign stocks are the only way to go to store wealth. I cannot see that keeping money in a 6% mmt account is a safe strategy going forward.

Mike Elliott said...

Ron Paul is truly awesome. It's too bad more people didn't watch this.

Anonymous said...

Constitution - Thats *SO 1980's!*

Anonymous said...

Sustainability of financing the U.S. - The question is what China will do with $1 trillion in reserves.

Ha, well it isn't really 1 trillion anymore, is it? probably about 30% less. How much more devalueing will china accept? I don't see that they have much of a choice. We are in this circle jerk together.

Anonymous said...

I actually watched that as it was happening live,

Two things i noticed,

1) does Bernanke have any expression at all or even a pulse?

2) R.P. did well at stickn-it to the man, but it's too bad his stage presence isn't stronger. He looks alittle frail and mousy.

james dean said...

My favorite part:

Paul: "I find it rather ironic that the Federal Reserve has complete control of the money supply, and yet it's the Treasury that's supposed to protect the value of the dollar. It seems like you have a little bit of responsibility for the value of the dollar as well."


Charles said...

Who's the twit from New York?!?

It's morons like that that get us in to trouble. Let's keep inflation going ("When are interest rates coming down? When are prices going to go up?) so he can create a few smitty jobs for his constituents while that good paying job means squat in a land of $5 gas, $600,000 POS shacks, and $10 hamburgers!

I truly believe you could take a few hundred people off the street with Ron Paul as Speaker and have an exponentially better House than the one we're stuck with!!!

Anonymous said...

Am I the only one who has empathy for Bernanke? It's not his fault we're in this mess. It's Greenspan's. Bernanke is the fixer. And he's stuck in a difficult place.

Raise the rates too fast and we get more defaults and foreclosures resulting in a depression. Don't raise the rates enough and the asset bubble manias continue almost guaranteeing a depression in the future.

Can you imagine how Wall Street would have acted if Bernanke answered, "You're absolutely correct Mr. Paul. The Fed got our country in a mess and there's likely to be big troubles ahead."?? Talk about a house of cards crashing down.

Bernanke is doing the only thing he can do. Slowly deflate these asset bubbles until normalcy has returned. In the meantime, try not to create a panic.

Anonymous said...

I sent the MAXIMUM amount to Ron Paul's campaign today.

Go Ron Paul !

RJ said...

anon said
Am I the only one who has empathy for Bernanke? It's not his fault we're in this mess. It's Greenspan's. Bernanke is the fixer. And he's stuck in a difficult place.

Don't feel too bad. Bernanke knew the score when he took the job. He is not a stupid individual. And he will be well compensated for his work. Furthermore, he is not sitting at the FED fretting over your financial future. Any heat he is feeling is coming from the financial and political elite who expect the brain trust at the FED to continue to engineer a profitable investing environment.

unlawflcombatnt said...

Thanks for the link to the Ron Paul video.

As usual, Paul is excellent and makes perfect sense on monetary policy. In discussing job loss, he makes note of how a lot of the problem with outsourcing-related job loss comes from American consumer ability to keep spending through debt/credit financing, despite stagnant or declining incomes. The aggregate consumer income and spending power loss from outsourcing has been obscured by increased "debt-financed" consumr spending. Thus consumer spending has continued to increase, despite the fact that real wages have not been increasing.

As Ron Paul notes, we've been creating money out of thin air (and financing spending with this money created out of thin air.)

It seems Ron Paul is the only Presidential candidate who has even a clue about how to run the economy.

Economic Populist Forum

Anonymous said...

I thought we had done away with that silly document?

Anonymous said...

king george and emperor cheney dont like ron paul,or the american middle class for that matter

Anonymous said...

great video - thanks for the link

I liked that part about how jobs are being mopped up by commercial building.

Commercial followed residential up, up, up... and it will follow them down as well.

Even though corporations have been stockpiling money, they likely won't be building new comm. property when it doesn't make sense.

And that is one of the many reasons that they now have most of the wealth that should be in the accounts of families.

Jerj said...

NO EMPATHY FOR BERNANKE. This corrupt bastard is trying to tell us housing is just a "regional problem". F*CK HIM AND HIS ILK.

Anonymous said...

Yeah, RP's little monologue is really going to sway the hearts and minds of single women. In case you didn't know, they are the voting block that will decide the next President. RP is a smart guy with good ideas, but he doesn't dampen any panties in that all important demographic.

Hillary or Obama, or maybe both, is what we've got to plan for. This election may well be the last one for quite some time.

Anonymous said...

Anon said:"1) does Bernanke have any expression at all or even a pulse"?

Laura Vella said: Prozac?

Karl said...

My wife and I are going to see Dr. Paul in just about 12 hours! Spartanburg SC, going to spread the word to SC who hasn't fully awoken to the man yet. Time to get some sleep...

DCjohn said...

Keith thanks for posting my link. I thougth more people should see this buried video on cnbc.