In his new book, End the Fed, congressman Ron Paul describes in detail “the Fed’s massive role in manipulating money to our economic ruin.” According to Paul, in fact, “the Fed is in the business of generating inflation. It might attempt to stop the effects of inflation, namely, rising prices. But under the old definition of inflation—an artificial increase in the supply of money and credit—the entire reason for the Fed’s existence is to generate more, not less, of it.”

“You will be told how the Fed serves to stabilize the business cycle, control inflation, maintain a solvent banking system, regulate the financial system, and more. Certainly, the Fed’s spokesmen claim that they do all this and do it well.

            I disagree on each point.

            After all is said and done, the Fed has one power that is unique to it alone: it enables the creation of money out of thin air.”

            “Everyone should have an intense interest in what money is and how it’s manipulated by the few at the expense of the many. Money is crucial for survival. It is necessary for maintaining a free society. A healthy economy depends on it. Limiting political power is impossible without it. Sound money is essential for preventing unnecessary wars. Prosperity and peace in the long run are impossible without it.

            To understand money, one absolutely must understand what a central bank is all about. In the United States, the central bank is the Federal Reserve, the instrument by which our money and credit are constantly manipulated for the benefit of a privileged class.”

            “…ending the Fed would be the single greatest step we could take to restoring American prosperity and freedom and guaranteeing that they both have a future.”

            “One might say that this is a populist cause. It is also a libertarian cause, one that would be cheered by Thomas Jefferson, a dedicated opponent of the Fed’s predecessor, the Bank of the United States, and by Thomas Paine, who saw paper money as the enemy of individual liberty on grounds that it always gives rise to despotism.

           Paine, the same writer who inspired the American Revolution with his pamphlet Common Sense, also said this: ‘As to the assumed authority of any assembly in making paper money, or paper of any kind, a legal tender, on in other language, a compulsive payment, it is a most presumptuous attempt at arbitrary power. There can be no such power in a republican government: the people have no freedom—and property no security—where this practice can be [en]acted.’”

“Nobel laureate F.A. Hayek…concluded that ‘money is certainly too dangerous an instrument to leave to the fortuitous expediency of politicians.’”

            “It’s my own view that ending the Fed would address the most vexing problems of politics of our time. It would bring an end to dollar depreciation. It would take away from the government the means to fund its endless wars. It would curb the government’s attacks on the civil liberties of Americans, stop its vast debt accumulation that will be paid by future generations, and arrest its massive expansions of the welfare state that has turned us into a nation of dependents.

            If you solve the money monopoly problem by ending the Fed, you solve many other problems, too. Essentially you take away from the government the capacity to use financial trickery to expand without limit. It is the first step to restoring constitutional government. Without the Fed, the federal government would have to live within its means. It would still be too big and too intrusive, just like all state governments are today, but the outrageous empire at home and abroad would have to come to an end.

            There are other benefits as well, such as stopping the business cycle, ending inflation, building prosperity for all Americans, and putting an end to the corrupt collaboration between government and banks that virtually defines the operations of public policy in the post-meltdown era.

            Ending the Fed would put the American banking system on solid financial footing. The industry would thrive without the moral hazard of banks that are ‘too big to fail.’ Its loan operations would take a more realistic account of risks, and the bank’s capital would not be put at risk in the service of politically driven priorities.

            Customers’ deposits would be safer than they are today, as banks would compete with one another in their most important function of providing a secure means of preserving wealth.

            Ending the Fed would also end the way in which our election cycles have been corrupted by monetary manipulation. No long would presidents be in a position to lean on the central bank to artificially boost the economy before the elections, only to have a recession hit after the party in power is sworn in again.

            The national wealth would no longer be hostage to the whims of a handful of appointed bureaucrats whose interests are equally divided between serving the banking cartel and serving the most powerful politicians in Washington.

            Ending the Fed is the one sure way to restore sanity to economic and political strife in this country. It doesn’t mean that our political disagreements and fights in Congress will go away. Ending the Fed is not a magic pill to usher in Utopia. But it does mean that our disagreements and discussions will occur within the context of reality, not in the illusory world created by the unlimited printing of money.”

            The Fed is using all its power to drive the monetary base to unprecedented heights, creating trillions in new money out of thin air. From April 2008 to April 2009, the adjusted monetary base shot up from $856 billion to an unbelievable $1.740 trillion. Was there any new wealth created? New production? No, this was the Ben Bernanke printing press at work. If you and I did anything similar, we would be called counterfeiters and be sent away for a lifetime in prison. We would be scorned and hated by everyone as scam artists and racketeers. But when the Fed does it—complete with a scientific gloss—it is seen as the perfectly legal and responsible conduct of monetary policy.”

            “Bad economic policy can destroy a civilization—no policy is more dangerous than bad monetary policy. After decades of experiences in grappling with Fed officials in committee meetings and of lunches and private discussions with Fed chairmen, a lifetime of reading serious economic literature, and a profound awareness of the dangers to liberty in our time, I know there is absolutely no hope for the Fed to conduct responsible monetary policy.

            We need to take away the government’s money power. The banking industry needs its welfare check ended. The dollar’s soundness depends on its being untied from the machine that can make an infinite number of copies of dollars and reduce their value to zero.

            The fact that the Fed can create trillions of dollars and distribute them to its cronies without congressional oversight should shock us all. I thought I was immune to being shocked by what our government does, but the actions of the Fed in 2008-2009 went beyond the pale. Not only did the Fed create many trillions of dollars and pass them out, it refused to explain its actions. This shows the arrogance of the members of the Fed and the complete apathy of the Congress in assuming its responsibility to protect the people and follow the law.”

            “Although we face a crisis, we have an excellent opportunity to strike a blow for freedom, which cannot exist without sound money