Originally Posted by
AzStillers1989
Ron Paul has garnered support from many different races across this country... these newsletters are a thing of the past and should stay there. I am not racist and nor do I believe Ron is a racist... The real question should be why is the MSM all of a sudden making a huge deal about this? When Ron himself has stated he did not write these letters... If you don't believe that many races endorse Ron Paul for president than do a quick google or youtube search for this subject... here I will get us started with a good rant from a black man concerning the issue [url]http://www.youtube.com/watch?v=8rsXoeSm2X0[/url]
While i am no economist, I did a little research and found a good explaination and example concerning the buissness cycles pre Federal Reserve...
"A central bank isn't required for there to be business cycles according to the Austrian theory. The crucial ingredient to a business cycle, central bank or no, is inflation of the money supply (i.e. the printing of paper money that isn't backed by gold or silver). The way to do this with or without the help of a central bank is through fractional reserve banking. Under a fractional reserve system, a bank will loan out gold that was deposited in the bank as demand deposits. The problem with this system is that because the original depositors have claims to their deposited gold on demand, as do the receivers of the loans, there is an increase in the money supply, though no increase in the gold specie.
The reason central banks came into existence is because inflation of the money supply by a single bank is self-limiting. As Rothbard explains in "What Has the Government Done to Our Money", the money loaned out in the form of paper money will make its way into the hands of people who have accounts in separate banks, and they will deposit the paper money into their banks. Their banks will quickly call on the original bank to redeem gold, and the original bank will quickly find its vaults running out of gold.
A good example of this happening is the Panic of 1819. In order to fund the War of 1812, the US government turned to banks to lend them money, but unfortunately the New England banks, which were normally the government's go-to banks for loans, were against the war and refused to loan to the government. Therefore the government got loans from less established banks from out of the region, and these smaller banks heavily inflated the money supply way beyond what they could back in gold. Soon the bank money made its way to New England to pay for military equipment, and just as in the previous example, the money was deposited into the more well-established New England banks, and just as expected, they called on the smaller banks to redeem their gold. Had it not been for government intervention in the form of suspension of specie payment, these banks would have gone under in a second, but they were allowed to continue business though they were entirely bankrupt. It is this shaky foundation, aggravated by government intervention, that is responsible for the Panic of 1819, all achieved with no help from a central bank."
This came from the blog [url]http://mises.org/Community/forums/t/10542.aspx[/url]
Ron Paul is a step in the right direction and that is getting the country out of debt and maintaining a foreign policy that is backed by the United States Constitution. And I believe it is only a matter of time befor every American realizes the true cost of these wars and the bad economic practice going on in this country....
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