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This is Ron Paul with your weekly update for November 14th. The global economic situation
is becoming more dire every day. Approximately half of all US banks have significant exposure
to the debt crisis in Europe. Much more dangerous for the US taxpayer is the dollar's status
as reserve currency for the world, and the US Federal Reserve's status as the lender
of last resort. As we've learned in recent disclosures, this has not only benefitted
companies like AIG, the auto industry and various US banks, but multiple foreign central
banks as they have run into trouble. Nothing has been solved, however, by offering up the
productivity of Americans as a sacrificial lamb. Greece is set to be the first domino
to fall in the string of European economies at risk. Rather than learning from Greece's
terrible example of an over-consuming public sector and drowning private sector, what is
more likely from our politicians is an eventual bailout of European investors. The US has
a relatively small exposure to overwhelmed Greek banks, but much larger economies in
Europe are set to follow and that will have serious implications for US banks. Greece
is technically small enough to bail out. Italy is not. Germany is not. France is not. It
is estimated that US banks have over a trillion dollars tied up in at-risk German and French
banks. Because the urge to paper over the debt with more credit is so strong, the collapse
of the Euro is imminent. Will the Fed be held responsible if the Euro brings the US dollar
down with it? The most disingenuous aspect of the narrative about the European sovereign
debt crisis is that entire economies will collapse if more resources are not bilked
from productive people around the world. This is untrue. Tough times are coming for the
banks, to be sure, but free people always find a way back to prosperity if the politicians
leave them alone. Communities within Greece are coming together and forming barter systems
because they know the Euro is becoming unstable. Greeks are learning how to engage in commerce
with each other, without the use of fiat currency controlled by central banks. In other words,
they are rediscovering what money really is, and they are trading with each other in ways
that cannot be controlled, manipulated, squandered, inflated away and generally ruined by corrupt
bankers and the politicians that enable them. Farmers will still grow food, mechanics will
still fix cars, people will still make things and exchange them with each other. No banker,
no politician can stop that by destroying one medium of exchange. People will find or
create another medium of exchange. Unfortunately when politicians try to monopolize currency
with legal tender laws, the people find it harder and harder to survive the inflation
and taxation to which they are subjected. Bankers should take their dreaded haircut
rather than making innocent people pay for their mistakes. The losses should be limited
and liquidated, rather than perpetuated and rewarded. This is the only way we can recover.
Government debt is often considered rock solid because it is backed by a government's ability
to forcibly extract interest payments out of the public. The public is increasingly
unwilling to be bilked to make bankers whole. The riots and the violence in Greece should
tell us something about the sustainability of this system. If we continue to bail out
banks and bankers so they can continue to lose money, if we cavalierly put this burden
on the taxpayer, it is all too predictable what will happen here. Thanks for calling
this update. A new update is placed on this number, 888-322-1414 every Monday morning.
The written text can be found on my website www.house.gov/paul under the heading "Texas
Straight Talk". Thanks for calling.