The Fed’s Reckless Monetary Policy Caused Cryptocurrencies to Swell: Ron Paul
Former Congressman and Republican presidential candidate Ron Paul (but he is really a Libertarian who does not even believe we should fight terrorism and we should ignore WMD being used in the world – but he is still closer to the mark than Nancy Pelosi and Bernie Sanders but this is another story) has now said that the unprecedented rise in the prices of cryptocurrencies such as bitcoin has been fueled by the faulty monetary policies of the US government.
Paul remarked in a recent interview with CNBC (which is known for putting out fake news – perhaps not as bad as CNN though) that in his opinion the cryptocurrency phenomenon is a reflection on the disastrous monetary dollar system in the country.
Paul pointed out the massive amount of credit that has been created in the system through the Quantitative Easing (QE) process (Alan Greenspan is infamous for this and Greenspan was a massive contributor to the 2008 financial crisis). An aggressive credit creation through QE to enable central banks to purchase government debt as well as other financial assess in a bid to boost lending and strengthen the market is at least partly responsible for the boom in cryptocurrencies, according to Paul.
Paul further asserted his belief that if the government had not recklessly used the QE route, cryptocurrencies would probably still exist. But certainly they would not have turned into an exponential bubble that is currently visible. In Paul’s view the cryptocurrency craze is an incidental effect of the multiple quantitative easing of the central banks to cope with the perils of the last financial crisis.
According to Paul, the fundamental economic issues the country faces are enormous. People are desperately looking everywhere for avenues to invest. Otherwise why people would invest in bonds that are paying negative rates of interest and why they would purchase stocks in the hope that ‘this time it is different.’
Paul’s argument is that the gigantic bubble in cryptocurrencies is more dangerous because it is extremely difficult to calculate its true value. The largest of all cryptocurrencies, bitcoin has seen its value multiply at an exponential rate.
While Paul has been unable to put his finger on when exactly a plunge in cryptocurrencies or in the stock market could occur, he feels that the danger is for real. Both the bubbles are huge in the sense that they have arisen due to excessive credit in the market. However, in Paul’s opinion, the price curves indicate that the cryptocurrency curve is currently more threatening.
Nothing is more threatening though than America’s debt and America’s entitlement programs but this is another subject.
These comments of the former US representative are, in fact, not so surprising, considering that he has largely favored cryptocurrencies at various points in the past. Paul had said in October that although he does not consider bitcoin as some kind of real money, but he does believe that the US government must relook at how it regulates its activities involving technology. He further said at the time that if people choose to use cryptocurrencies, the government ought to stay out of it.
The former Congressman had also recently launched a Twitter poll asking people that if given a choice of receiving a gift of $10,000 value they were required to hold on for a certain time period, would they choose dollars, gold, or bitcoin. More than half the respondents in that poll chose bitcoin.
Interestingly, Ron Paul has also recently operated as a commercial endorser of Coin IRA, a bitcoin based retirement instrument. In his endorsement for this cryptocurrency company, which belongs to the Goldco group, Paul asked Americans to see the advantages of entrusting their savings to this bitcoin based retirement account firm.
Ron Paul has been well known in the past for promoting the ideology of libertarianism, particularly during the time of his multiple runs for the president’s office. Paul has almost always held a different worldview of things and voiced different opinions than many of his fellow politicians. He has shown his inclination in the past for alt currencies and has been unrelenting in his criticism of how large and unwieldy the US government has grown.
Furthermore, Paul has frequently spoken against the systems of central banking in the US, and believes that gold (and in recent times, cryptocurrencies), can be the instruments to defeat the government’s monopoly on money.
As Paul said in his acclaimed book ‘End the Fed’, it is not a coincidence that the century of war has also been the century of central banking. Well, every century has been a century of war really.