Ron Paul – Trying to Reinflate Economic Bubbles Will Fail

The one man in Washington who understands and knows that trying to reinflate economic bubbles and to sustain the unsustainable will fail is Ron Paul. When Rep. Paul says that we are at the end of an era and a new system of finance must be created he is right on the money. Alas, he is talking to a room full of politicians and government bureaucrats so he might as well be taking to a barnyard full of jackasses. And in a way Ron Paul is.

We are in deep, deep trouble. With the entire developed financial world coming apart due largely to taking on too much debt and by making horrible make believe investments in derivatives most countries, large and small, are in deep do-do. In unison, like the UK and the USA, they are adding massive amounts of debt to their balance sheets and calling it economic stimulus. Creating massive amounts of new debt to solve a problem of having too much debt is not going to cut it. The Long Crisis will continue.

Governments are still encouraging their citizens to go out and go shopping on credit to support consumer economies already deathly ill due to too much debt carried by consumers, businesses, and all levels of government. Rather than encourage people to work hard and save, thereby creating capital that could be used to build productive enterprises, the citizens of the world are being asked to spend, spend, spend.

The outlook is not pleasant. No one, except for perhaps Ron Paul and a handful of followers, are willing to experience a little pain now in order to avoid a lot of pain later. Please keep on talking Rep. Paul, even though I fear no one in Washington, D.C. is listening. You have one of the few voices of reason in a city of zombies.

If trillions keep being added to the US debt burden unthinkable events of just a few years ago may become realities. The US may find it very difficult to borrow the money it needs at anywhere near reasonable rates or even experience a default of US treasury obligations.

Oh yes, one more thing, congressman Paul. Tell your thick headed associates that they had better be a bit more kind to the Chinese government. It is not wise to anger one of your biggest creditors.