The United States finances wars through inflation: Former US Congressman and political analyst Ron Paul

Former US Congressman Ron Paul

The United States finances wars through inflation and that “most wars are fought on inflated money,” according to former US Congressman and political analyst Ron Paul.

Dr. Paul, a three-time American presidential candidate and the founder of the Ron Paul Institute for Peace and Prosperity, made the remarks in an interview on Friday while discussing US monetary policy and the need for a better system centered on sound money.

The senior American statesman said that from diluting gold in coins and clipping coins “in the old days” to using a computer to create new US dollars today, “financing war through inflation is traditional.”

“If the people had to pay for the war as we went along, it wouldn’t happen. You don’t get enough taxes, you don’t get enough borrowing to fight these wars,” he stated.

“And we have the license to steal because we issue the reserve currency of the world. And most of the countries still accept our dollar, even though we’re currently witnessing, in the last few days, a pretty steady attack on the dollar which I think is going to continue, and of course might get much worse,” Dr. Paul said.    

“The money issue is a freedom issue, because if you don’t like the welfare state you have to understand about money, if you don’t like the warfare state, you have to understand that about money,” he added.

“If you care about individual, personal liberty you would have to be a supporter of a commodity...currency, of course, the history shows has always been gold along with silver -- the most preferable type of money,” he observed.  

The Fed, the source of trouble

The US Federal Reserve System serves as a central bank and monitors banking practices.

Dr. Paul has maintained strong positions against the military-industrial complex and the Federal Reserve, each of which he considers responsible for many of the ills afflicting the United States.

The basic source of the economic trouble is America’s central banking system, known as the Federal Reserve or the Fed, which cannot function in a real market economy, he once said.  

“In a true free market economy you have to have people work, use what they need to live on and then save money, and that dictates interest rates and tells businessmen what they should do. Well, that isn’t the way it works anymore,” the veteran former politician said in an interview in 2015, and warned that the biggest economic crash ever would hit the American economy.

“The so-called capital comes from the Fed and they create it out of thin air. So everything is a mistake and everything is going to be volatile,” he observed.