THIS BLOG IS MY BLOG. THIS BLOG IS MY BLOG. Welcome to the Home of Hyperopia.: RON PAUL "BAILOUT" VOTE VIDEO + HOUSING CRISIS PREDICTION (FROM 2003)

Monday, September 29, 2008

RON PAUL "BAILOUT" VOTE VIDEO + HOUSING CRISIS PREDICTION (FROM 2003)

ON THE BAILOUT:

Video below of Ron Paul's comments outside Capitol Hill shortly after the "NO" vote on the bailout ...




MY KEY TAKEAWAY #1 ... the Federal Reserve and the government will continue to inflate towards the destruction of the U.S. dollar (this is the principal threat to the standard of living of ordinary Americans). Note, for example, that even while the $700 billion bailout bill was getting voted down in Congress, the Federal Reserve was busy pumping another US$630 billion of "liquidity" (new "money" freshly created out of thin air by the feds) into the "global financial system." For a report on Bloomberg about this item, click here.

MY KEY TAKEAWAY #2 ... do not believe the reports you will hear from Establishment politicians and journalists that the "free market" failed Americans. Our capital markets are not free (see, e.g., the Federal Reserve) and the amount of government intervention into commerce is staggering (see, e.g., the rest of this note below about Ron Paul predicting the Housing Crisis because of some prior legislation he understood) ...



ON THE HOUSING CRISIS ...

The next time you hear Bernanke or Paulson or some other government or finance big wig say that the financial crisis came out of nowhere and is such a huge surprise, know this:

Ron Paul knew the federal government was creating a bubble in the housing market because of monetary inflation and because of its support for Fannie Mae and Freddie Mac.

And, because he understands Austrian economics, Ron Paul also knew that the bubble would eventually pop, and that when it popped, it would result in losses of home equity to people who bought houses during the (artificial) boom and losses to companies that extended mortgage debt to to those people during the (artificial) boom.



It is important - I think - to keep this in mind when today high-ranking members of the executive and legislative branches are busily running around saying surprised they are at the occurrence of the financial crisis for which the Bush administration says it now needs $700 billion (in addition to the other hundreds of billions already devoured).

The Austrians are not surprised. Only the Keynesians/Friedmanites (monetarists) are surprised. Ron Paul has been sounding the alarm on this issue for most of this decade (and probably longer).

How do I know this? How can I say those things with such certainty?

Because in 2002, Ron Paul introduced a bill to the U.S. House of Representatives called the Free Market Housing Enhancement Act. And when he introduced this bill ... all the way back in 2002, he gave a speech explaining exactly what was going to happen (artificial housing boom, inevitable housing crash, financial losses/crisis).

Here's the transcript of his remarks to the U.S. House of Representatives:

Government Mortgage Schemes Distort the Housing Market

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