Federal Reserve Chairman Ben Bernanke testified this week that our nation’s long term economic outlook has improved and that consumer inflation is a modest one percent. Chairman Bernanke is grossly misleading the American people when he calls inflation ‘subdued.’
Just yesterday, it was reported that the median home price in Houston is at an all-time high, having risen 14.5 percent in the last year alone. Americans are struggling with soaring food and energy prices that the federal government conveniently chooses to ignore in its measure of inflation in order to hide the true effects of its policies from the American people.
The real measure of inflation is the increase in the monetary supply, and the Federal Reserve has increased the Federal Reserve credit by 17.4 percent in the last year alone. The reality is, the Federal Reserve’s policy of monetary expansion through the buying of up to $100 billion of securities each month may help the big-spenders in Congress and their cronies in the banking sector, but it is harming the rest of America.
Make no mistake, despite Chairman Bernanke’s claims; the Federal Reserve’s unprecedented monetary expansion has created a significant amount of pent-up inflation that, when released, will cause prices to rise even higher and the average American’s standard of living to decline.
Until our leaders understand that we cannot print our way to prosperity, the American people will continue to suffer the disastrous effects of higher prices, higher unemployment, and lower standards of living and qualities of life for years to come.
Ron Paul is a former U.S. Congressman from Texas and leader of the pro-free market movement in the United States.