[DEBATE] : Paul takes Bernanke to school about inflation

[Riaz K Tayob]

Paul takes Bernanke to school about inflation

Submitted by cpowell on 09:39PM ET Thursday, February 28, 2008. Section: 
Daily Dispatches

9:30p ET Thursday, February 28, 2008

Dear Friend of GATA and Gold:

U.S. Rep. Ron Paul, R-Texas, got the better of Federal Reserve Chairman 
Ben Bernanke in an exchange yesterday during a hearing of the House 
Financial Services Committee.

Paul observed that inflation is an increase in the money supply, and he 
quoted estimates that the U.S. money supply has been exploding lately -- 
estimates Bernanke did not attempt to contradict. This explosion in the 
money supply, Paul said, is currency debasement that expropriates 
savers. He asked Bernanke how it could be justified.

Bernanke replied that the Fed's statutory mandate is price stability 
rather than money supply.

Whereupon Paul cited the sharply rising Producer Price Index.

Bernanke answered that he prefers to go by the Consumer Price Index. 
(Maybe because it is more aggressively manipulated by the government?)

Paul countered that even the CPI has turned up sharply lately.

The best Bernanke could do was to acknowledge that the Fed is concerned 
about that -- concern that seems likely to manifest itself shortly in a 
strange way, with more reductions by the Fed in official interest rates, 
pushing them even farther below official inflation and expropriating 
savers even more to rescue the banks and financial houses that lately 
defrauded the world with the Fed's connivance.

You can watch the Paul-Bernanke exchange at GoldSeek here:

http://news.goldseek.com/GoldSeek/1204213214.php

CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.

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