Ron Paul on LIBOR “Isn’t this essentially what the Fed does?”

July 25, 2012 C-SPAN

Representative from Texas Dr. Ron Paul questions Timothy Geithner about the LIBOR SCANDAL, the Fed, interest rates, and American taxpayers paying elite bond traders to serve (and become very wealthy) as intermediaries between the Treasury and the Fed.

Hearing Mr. Geithner dodge and dissemble is difficult and frustrating – but just a little informative and very amusing. When former Presidential candidate Ron Paul compares the LIBOR – where a key interest rate is set by a group of bankers in London – to the Fed – where a key interest rate is set by a group of bankers and bureaucrats in Washington and New York – Mr. Geithner almost falls over himself pointing out that what the Fed does is protected by statute. This, of course, comes after Dr. Paul was very careful to specifically say that he recognizes that what the Fed does is legal, but that it is in its essence identical to what everyone is SHOCKED is going on in London.

If the State prints money, we all know that that is bad. If the State moves the printing press down the street and pays someone to print the money, somehow that’s better. But if the State allows third-parties to profit from obfuscating intermediaries, that’s perfect! Well, maybe not so. Dr. Paul goes on to ask Mr. Geithner why the American taxpayers should be on the hook to finance what is at best a ruse – the idea that the Federal government doesn’t just print up all the funny money it needs at whim. Mr. Geithner, true to form, goes on and on about the need for Fed “independence” and offers up some comical scenarios, concluding with: “I don’t think that’s what you’re  implying, of course, I know you wouldn’t support that at all, so maybe I should talk to you in more detail about your specific questions about the market function issue…” – just as Representative Paul’s time expires. PHEW!

Related Articles – Central Banking, Fiscal Policy, Monetary Policy, Sound Money Project