“Nothing good can come from the Federal Reserve. It is the biggest taxer of them all. Diluting the value of the dollar by increasing its supply is a vicious, sinister tax on the poor and middle class." — Ron Paul, End the Fed

You know Dr. Paul as the only clearheaded guy now running for president.

Which is why the mainstream media calls him insane.

Ron Paul tells the emperor that he is wandering around naked and gets lambasted by the mainstream (both Left and Right) because of it.

Paul would like you to know that the Fed is responsible for the ongoing and everlasting economic crisis we are living through.

The Fed has a long history of bad policies that supply cheap credit to insiders and of printing money that destroys the value of the dollar.

"Prosperity can never be achieved by cheap credit," Paul explains.

"If that were so, no one would have to work for a living. Inflated prices only deceive one into believing that real wealth has been created."

In his book, End the Fed, Paul goes on to say: "The worse the economy gets, the more power Congress is willing to grant to the Federal Reserve. Trillions of dollars created and distributed by the Fed with no requirement to submit to any oversight."

We Are All Austrians Now

In a recent stump speech, Paul declared: “We are all Austrians now.”

Of course, there was little coverage of what he meant by that other than a sad, wistful shaking of the head by the Botoxed anchors on TV.

The vast hordes of dufus-Americanus couldn't — or wouldn't — understand...

The Austrians believe stimulus and government intervention of the type we've seen for the past fifteen years allocates funds to where they aren't needed, and allows those who created the crisis (read: those who failed) to live on as zombie banks and car companies.

These colossi of failure are connected to insiders, get special deals, limit competition, reduce growth, and live to fail another day.

This is what has been going on in Japan since 1990.

Money likes to go where it is treated best. And since the Fed was created in 1913, it has wanted to leave the U.S. dollar.

Paul writes:

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 $1.749 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. But, when the Fed does it — complete with a scientific gloss — it is seen as the perfectly legal and responsible conduct of monetary policy...

Manipulating the money supply and interest rates rejects all the principles of the free market, and so it cannot be said that too free a market caused this mess.

The market was not free at all. It was manipulated and distorted.

On the inflation front, Paul adds:

It's as if we still believe that money can be grown on trees, and we don't stop to realize that if it did grow on trees, it would take on the value of leaves in the fall, to be either mulched or bagged and put in a landfill. That is to say, it would be worthless...

When we unplug the Fed, the dollar will stop its long depreciating trend, international currency values will stop fluctuating wildly, banking will no longer be a dice game, and financial power will cease to gravitate toward a small circle of government-connected insiders.

Well said.

Paul's Investments

Ron Paul is the type of guy who buys his own order book.

According to a Wall Street Journal report last month:

The presidential candidate has 64% of his portfolio allocated to gold and silver commodity-related investments. What’s more, he has no love lost for bonds (0% of his portfolio) and a dismal outlook on the stock market.

Only .1% of Representative Paul’s portfolio is allocated to stock funds, and all of those funds are bearish — inversely correlated to the performance of the market.

Among the 26 gold and silver mining companies held by Rep. Paul are large companies — Barrick Gold, Goldcorp and Newmont Mining — as well as a slate of small-cap miners. His non-mining portfolio holdings also include 14% cash and 21% real estate investments.

Paul’s portfolio is worth something roughly between $2.5 and $5.5 million.

All the best,

Christian DeHaemer

@TheDailyHammer on Twitter

Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Crisis & Opportunity and Managing Director of Wealth Daily. He is also a contributor for Energy & Capital. For more on Christian, see his editor's page.

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