Retired US Congressman Ron Paul — a bitcoin skeptic turned proponent — reiterated his calls to abolish the Federal Reserve shortly after it raised the baseline interest rate a quarter of a percentage point, to a range of 2.25% to 2.5%.
This is the fourth time that the Fed — the central banking system of the United States — raised interest rates in 2018. The move sparked renewed fears of a US recession that could potentially trigger a global recession in 2019.
Ron Paul said the Federal Reserve should let the free market dictate interest rates instead of artificially manipulating them.
Paul: 'The Fed Distorts the Economy'
"The Fed has NO IDEA what rates should be," Paul tweeted. "The Fed manipulates prices, distorts the economy, and makes decisions by looking at the 'data' of a distorted economy."
Central planning produces a world of economic delusions. America needs to get back to reality. End The Fed!
The Fed has NO IDEA what rates should be.
The Fed manipulates prices, distorts the economy, and makes decisions by looking at the "data" of a distorted economy.
Central planning produces a world of economic delusions.
America needs to get back to reality.
End The Fed! pic.twitter.com/achfl4uIQ8
— Ron Paul (@RonPaul) December 19, 2018
This is not the first time that Ron Paul — the father of current US Senator Rand Paul — has called to abolish the Federal Reserve.
As CCN reported in October 2018, Ron Paul trashed the Fed for manipulating interest rates, saying such artificial machinations could actually cause a recession. This, in turn, could bring about the death of fiat currency, he said.
“It is likely that the next Fed-created recession will come sooner rather than later,” Paul said. “This could be the major catastrophe that leads to the end of fiat currency.”
Paul said the only way to avoid a Fed-created recession is to let people use alternative currencies like bitcoin and to exempt cryptocurrencies from taxes.
Ex-Bitcoin Skeptic Ron Paul Says Crypto Could Prevent Recession https://t.co/1HLxDRwQQ9
— CCN Markets (@CCNMarkets) October 31, 2018
Paul said central banks constantly increase and decrease the money supply to control the economy by manipulating interest rates.
He said the Federal Reserve's cyclical manipulation of interest rates creates an artificial cycle of economic booms and busts.
This can create an illusion of prosperity. Eventually, reality catches up to the Federal Reserve-created fantasies.
When that happens, there is a recession or worse, leading the Fed to start the whole boom-and-bust cycle over again.
Like many in the crypto community, Ron Paul is a libertarian who opposes government intervention in the free market. The virtual currency community generally prefers the crypto ecosystem's decentralized and unregulated market.
Paul said an economy that is not manipulated is better for society. “Not only should we audit the Federal Reserve, we should get rid of it!” he said.
Former Crypto Skeptic Now Embraces Bitcoin
Until very recently, Ron Paul was a staunch advocate of the gold standard who was critical of bitcoin, as CCN reported.
“Bitcoin is very exciting...but [bitcoin investors] don’t have a long-term perspective,” Paul said in December 2017. “What’s it going to be like in 10 years? Nobody knows. But we have a pretty good idea of where gold will be, in a general sense.”
Paul has since changed his outlook on crypto, and now says he believes that bitcoin and a gold-backed currency can co-exist in a free society.
Featured image from Shutterstock.