Ron Paul Criticizes The Federal Reserve
The coronavirus pandemic, otherwise known as COVID-19, has disrupted the entire world in the past two months after it left China. It caused an economic crash and a financial crisis, with huge losses in numerous industries and countries around the world.
In the United States, the Federal Reserve slashed interest rates in an attempt to slow the bleeding. These measure affected all major markets across the world, including the cryptocurrency market.
Meanwhile, methods of preventing the virus from advancing, such as social distancing, quarantine and the like, caused a lot of damage to businesses. Many of them had to lay off their employees, although some were still able to keep working remotely.
While the complete affects of the ‘lockdown’ is not yet know, there is a growing group of people, especially in the US, who are protesting these restrictions and demanding they be lifted and get their communities back to work.
Yet, fear still grips many across the country. This has been seen in panic shopping, huge lines at the local stores, as well as the lack of some essential products.
The Fed’s ‘Fake Economy Has Burst’
In the midst of the chaos, the US central bank, in conjunction with Congressional leaders, decided to provide short-term relief in the form of a stimulus package dubbed the Paycheck Protection Program (PPP). In short, the PPP authorizes the issuance of stimulus money to be sent to every person in the US as well as loand for small businesses suffering from the closure due to COVID-19.
For those who care about fiscal matters, the question is… where is this money coming from?
Basically, the Fed is ‘printing’ money, pretty much out of thin air. These actions coupled with Congresses almost unending attempts to spend their way out of the crisis and transitioning the US from a capitalist society to a socialist society has many Americans questioning the future of the US economy.
Now, several weeks later, the Fed’s move is strongly criticized by the US public, as well as many of the former officials.
One example is Ron Paul, the former presidential candidate.
He announced that the Fed’s ‘fake economy has burst.’ His criticism comes alongside the announcement that the money printing took the balance sheet to $6.6 Trillion.
The retired politician says that it is too late for anything to hide or fix the Fed’s actions. That includes the coronavirus and even the recent brief growth of the stock market. In fact, Paul went as far as to say that the Fed’s decision regarding money-printing is ‘un-American.’
He said that “The un-American ideas of government micromanagement and Fed central planning of the economy have failed, and will continue to fail as long as they’re clung to. The time to rebuild with the American ideas of liberty and sound money has arrived.”
Another Great Depression On The Horizon
While Paul is the latest critic of the Fed and its actions, he is still far from being the only one. Many were quite vocal regarding their thoughts, including Global Macro Investor, Raoul Pal.
Pal wrote an entire 120-page report, discussing how severe the economic damage caused by the government will be.
Meanwhile, the report also makes Bitcoin the savior. In his report, he claims that Bitcoin will be $1 Million by 2025.
Pal is not alone, there have been numerous others who have predicted, what at the time, seemed like almost outrageous price predictions for the worlds first cryptocurrency.
Some of these predictions have included, venture capitalist James Altucher who back in June 2019 predicted that Bitcoin would hit $1 Million.
In November 2019, Charles Hoskinson predicted Bitcoin would hit $100K.
Another notable analysis of the current situation came from the trader Peter Brandt, who predicted Bitcoin’s $20,000 ATH. Brandt started pointing out similarities between the stock markets of this year and that from 1930.
The similarities are many and they are quite striking. Of course, this should be extremely concerning, seen as the last time the stock market performed like this, the Great Depression followed quite soon.
Brandt also noted that the apparent stock recovery happened in 1930 as well. In other words, this new positive performance does not mean that the worst has passed.
The criticisms of the Fed for their money-printing policies and activities have followed the US central bank for nearly a century.
Every time when such a bailout was attempted, as well as the many years of Quantatative Easing (QE), the long-term consequences continue to be quite severe. There is no reason to think that this time will be any different.
Unfortunately, the true damage to the economy caused by the coronavirus will be felt long after the virus disappears. But for smart investors, the opportunity still exists for all of us to continue to invest in Bitcoin and many other cryptocurrencies.