Ron Paul, the former U.S. representative, has blasted the policies of the Federal Reserve and says cryptocurrency transactions should be exempt from taxes.
Ron Paul was known as a very libertarian firebrand during his time in the U.S. House of Representatives. While he is no longer in public service, the 83-year-old is still making waves, and this time, he is singling out the policies of the Federal Reserve. In doing so, he is also promoting the use of cryptocurrencies.
Ron Paul Giving the Federal Reserve Both Barrels
In his latest weekly column, Paul goes into some detail on how he considers the use of interest rates by the Federal Reserve as “crazy.” He notes that people have happily used items like precious metals as money over the years due to their stability. Such stability means that the “true value” of goods and services is accurately conveyed between parties.
Paul points out that the imposition of interest rates on government-issued currency undercuts this “true value.” He notes:
If the interest rate reflects the manipulation of central bankers and not true market conditions, individuals will be unable to properly allocate resources between savings and current consumption.
He goes on to say:
In contrast to market money, government-created fiat currency is anything but stable. Central banks constantly increase and decrease the money supply in an attempt to control the economy by controlling the interest rates. This causes individuals to misread market conditions, leading to a misallocation of resources.
Such acts by the Federal Reserve create an illusion of prosperity, and such an illusion is short-lived. Eventually, market forces will dictate that there will be a pushback in the form of a recession (or depression). The Federal Reserve will then counter this by starting the entire boom-and-bust cycle over again.
Paul explains how this policy of shifting interest rates and market control hurts the little guy, who is unable to make any impact upon the dictates of the central government. Paul says:
When central banks create money, those who first get the new money enjoy an increase in purchasing power before the new money causes a real increase in prices. Those who receive the money first are members of the banking and financial elite. By the time the new money reaches the middle class and working class, inflation has set in, so any gain in purchasing power is more than offset by the increase in inflation. Thus, central banking causes income inequality.
Promoting Cryptocurrency
Ron Paul goes on to argue that the current Federal Reserve system is broken and cannot be fixed. In fact, he labels it as “insanity.” However, he does point out that there are steps to change this broken economic system.
He suggests that the Audit the Fed bill be passed. Part of this bill allows individuals to use alternative forms of currency, such as Bitcoin and other cryptocurrencies. He also stresses that all transactions using precious metals and cryptocurrencies be exempt from capital gains taxes, as well as other forms of taxation.
This view on cryptocurrency dovetails completely with Ron Paul’s libertarian economic views. He has long campaigned for the abolition of the Federal Reserve, cutting back on government spending, never raising taxes, and doing away with the personal income tax. He understands that the decentralized nature of cryptocurrency puts economic power back into the hands of the people and away from the grasping control of governments and banks.
Do you agree with Ron Paul? Let us know in the comments below.
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