A former member of the US House of Representatives has expressed his stance on the current financial crisis, and sees the Fed as the cause behind it.
BitcoinNews reported that, Ron Paul was of the opinion that the policies taken by the US central bank had triggered a financial crisis for his country.
“Today’s financial difficulties stem from decades of the Fed’s near zero percent rate and quantitative easing (QE). This created a decade of uneconomical investment. Every bad idea imaginable receives funding,” said Paul.
Causes of the US Financial Crisis
According to Paul, bad debt was created with credit by the Fed, which went into unprofitable investments and this situation is now becoming unsustainable for a tightening of economic conditions.
He also mentioned the steps taken by the Fed to defend the welfare state while fighting inflation is false prosperity, which will eventually be hit by the realities in the economic sector.
Paul, himself a longtime critic of the validity of the existence of central banks, has praised the move to raise interest rates to fight inflation. However, it has actually affected the country’s banking system.
“Rising interest rates under Powell is the cure and the way back to some form of economic sanity. The Fed shouldn’t exist. It is unconstitutional and immoral. But rising interest rates are not the source of our problems. The big mistakes are 0 percent tariffs and QE,” he added.
Not only that, Paul has also increased his attention to the de-dollarization actions that are currently being carried out by BRICS members and several other countries, such as Iran and Saudi Arabia.
According to Paul, action dedollarization could undermine the US dollar’s status as a global reserve currency, which is being accelerated by the efforts of BRICS members.
In fact, one expert sees that the popularity and adoption of the Chinese yuan could further increase in global trade if Saudi Arabia officially becomes a member of the BRICS.
On the other hand, BitcoinNews reports that financial expert Dave Ramsey sees no threat to US dollar dominance from the action of the BRICS, adoption of the Chinese yuan and Russian ruble.
According to Dave, the three of them do not have enough power to shift the status of the US dollar which is so strong in global trade. [st]