INTERNATIONAL. Ron Paul, the libertarian-minded Republican congressman from Texas, well-known for railing against the Federal Reserve for decades and who ran a failed presidential campaign in 2008 said the US government has created an unsustainable economic system through the excess printing of money.

In an interview with The New York Time's DealBook on Thursday, Paul, the author of 'End the Fed" said: " Right now we don’t have a free market in interest rates, so it is basically price controls.

If there was no Fed, "interest rates would be set by savers. Capital would come from savings, which is what happens in a free market. So if there were a lot of savings then interest rates would go down. This would give information to the marketplace, which is the most important thing that has to be corrected without a central bank," Paul said.

Earlier this year Paul introduced legislation that would require the US Government Accountability Office to audit how the Federal Reserve implements monetary policy and examines every aspect of the Fed.

The Financial Services Committee held a hearing on the bill on September 25th. Paul said on his congressional website: [It] was a major step forward in getting the bill passed." The bill currently has 295 cosponsors and there is also strong support for the companion bill in the Senate.

"The one thing the Fed is really fighting is to keep us from auditing any of the international agreements they have with other central banks and the international financial institutions — who knows who’s involved. The key issue is transparency, and I don’t think you will know the full extent until we have a true audit," he said.
 
Answering a question about increased regulatory oversight of Wall Street by Congress and whether this would help alleviate the severity of the financial boom and bust cycles, Paul said:  "It wouldn’t do a thing because it is a distraction. The real problem is the inflationary monetary policy of the Fed — you have to deal with the problem in order to correct it".

"In a market economy with a gold standard you do have market regulations. Bad businesses and bad banks – they go out of business," Paul added.

Addressing his long-held views about the gold standard and whether it would be practical, Paul said the current system is in the process of causing us a lot of trouble.

"We had the biggest financial bubble in the world just burst and the dollar reserve standard has literally come to an end, so I would say everything we’ve had, especially since 1971, has been very, very impractical and has not worked anyway," he added.

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