Will the British Ron Paul please stand up...

I've been watching Ron Paul's recent comments at the University of Michigan on 9^th October 2007 regarding centralized, state-run banking. You can see Ron's comments here:

http://www.youtube.com/watch?v=RuiZRzu7khw&NR=1

Ron points out that printing more money is always an act of counterfeiting and theft. It takes buying power away from existing savers and puts it in the hands of the first politically connected bankers to get their mitts (or perhaps romneys?) on the new money... preferably before anyone else even knows the stuff has been created!

This gives the politicians' favourite bankers the chance to buy at today's prices with tomorrow's money. And why would banks buy stuff outright which they don't much need or understand (e.g. houses, businesses, collectables) when they can simply lend the money out at a premium for years on end to other people?

Mortgages are a special favourite of the banks for several reasons: most of the money borrowed never needs to physically exist, lots of people can qualify, the debt usually runs for years on end, the loan is secured against a (hopefully) resaleable asset in the event of the borrower defaulting, and economically illiterate politicians can easily be sold on the idea that lending is almost always “socially responsible” and “empowering”.

Did I mention the voters love it because it's also one of the last ways left for British taxpayers to make large, comparatively tax-light capital gains? The problem is that as more fiat money moves through the economy, money holders (inc. borrowers) bid up prices for the goods and services they want - hence the housing bubble(s).

So what's Ron's solution? Scrap the central bank, ditch the income tax, drop the US Empire to balance the books, and bring back the gold standard. Then ,the Federal government could no longer just print its way out of debt... no income tax would mean no automatic deductions at source in many cases (and a frank admission by government that money really belongs to those who earn it rather than those who merely print it). Finally, the gold standard would also act as a good brake on inflation because really big strikes are very few and far between.

Now compare the good doctor's prescription to the UK's old hat media on sub-prime mortgages, debt instruments and a “liquidity crisis” (e.g. not enough in the petty cash at Northern Rock). Here, all the chattering classes can do is gab about whether Mervyn King should've inflated the British Pound away faster and further.

Since when was a lending crisis solved by more lending?

If there's a British Ron Paul in the audience, please stand up – the UK needs you so badly!

- Houseman