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Ron Paul vs. Ben Bernanke

Bernanke’s worst nightmare: Ron Paul

NEW YORK (CNNMoney.com) — Ben Bernanke has had his hands full since his first day on the job as Federal Reserve chairman nearly five years ago. It’s about to get even tougher.

His harshest critic on Capitol Hill, Rep. Ron Paul of Texas, is about to become one of his overseers.

With the Republicans coming to power, Paul, who would like to abolish the Fed and the nation’s current monetary system, will become the chairman of the House Subcommittee on Domestic Monetary Policy.

If you’ve never heard of the committee before, you’re not alone. But Paul promises you’ll be hearing a lot more from it.

“It’s basically been a committee that’s dealt with commemorative coins. I’m going to deal with monetary policy,” he said.

Paul doesn’t think he’ll be able to move his proposal to eliminate the Fed, or to allow Americans to use gold instead of paper money as currency. But he said he does intend to use his new position as “a mini-bully pulpit” to criticize Fed policy and call more attention to what he sees as its negative consequences. And he’s confident that American voters are ready to delve into those monetary policy questions.

“Five years ago they wouldn’t have listened. Now they will,” he said. “We’ve gained a lot of credibility in making the Federal Reserve an issue since the market collapse.”

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1 comment to Ron Paul vs. Ben Bernanke

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    The following is the text of an open letter to Federal Reserve Chairman Ben Bernanke signed by several economists, along with investors and political strategists, most of them close to Republicans:

    We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.

    We subscribe to your statement in the Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.

    We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.

    The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.

    http://blogs.wsj.com/economics/2010/11/15/open-letter-to-ben-bernanke/

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