Patriot,

The Federal Reserve is giving the economy a shot in the arm - a
short-term boost just in time for the election - by cutting
interest rates for the first time in four and a-half years, and a
large cut at that.

But as I warn in my latest column - read it below - doing this
will worsen the inevitable correction and could cause
hyperinflation and "stagflation" - where rampant price inflation
coexists with high unemployment.

As I argue in the column, it's reasonable to believe the Federal
Reserve did this specifically to meddle in the 2024 election.

This is why it's so critical we Audit the Fed and bring
transparency to the Fed's decision-making.

Whether you've done so in the past or not, now's a good time to
tell your lawmakers to support Audit the Fed.
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And if you support Campaign for Liberty's effort to finally rein
in the out-of-control Fed, please support C4L with a
contribution.
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For Liberty,

Ron Paul



Fed's Rate Cut Helps Candidate Harris but Will Hurt President
Harris (or Trump)

Many investors, businesses, and consumers cheered the Federal
Reserve's first interest rate cut since March of 2020. The Fed's
50 basis points interest rate reduction was larger than many Fed
watchers anticipated and was followed by suggestions that there
are more rate cuts on the way.

A drop in borrowing costs following the Fed's rate reduction can
help make people more optimistic about the general economy and
their own financial situation. The uptick in consumer sentiment
could help Democratic presidential nominee Vice President Kamala
Harris who has lagged behind Republican nominee former President
Donald Trump on the matter of which candidate is seen as better
on economic issues.

Even before the Fed's rate cut, President Trump and pro-Trump
commentators were suggesting that a rate cut would be a
"September surprise" designed to boost Vice President Harris.

This claim was dismissed by the "mainstream" media as a baseless
"conspiracy theory." However, anyone familiar with the Federal
Reserve's history of tailoring monetary policy to advance
political goals would not have any trouble believing that the Fed
would cut interest rates to help its preferred candidate.

Federal Reserve Chairman Jerome Powell has an incentive to
prevent a Trump return to the Oval Office. While in the White
House, President Trump regularly criticized Powell for not
further lowering already historically low interest rates.

President Trump has also indicated that, if he wins, he will push
Congress to give the president a direct role in monetary policy.
Vice President Harris, in contrast, has promised to not interfere
with the Fed's conduct of monetary policy. It is easy to see why
Powell and his Fed colleagues might want to help Harris.

Anyone who has been to a grocery store knows the Fed has not
"defeated" price inflation. However, even official government
data shows "softness" in the labor market. This Fed rate cut
likely had more to do with concerns about increasing unemployment
than the Fed's claim that inflation will soon reach the Fed's two
percent target.

The Fed is between a rock and a hard place. If it does not lower
rates, there is concern that unemployment will increase as the
economy falls into a recession.

On the other hand, keeping rates low runs the risk of
hyperinflation and a collapse of the dollar's value. The most
likely scenario is a return of "stagflation" where rampant price
inflation coexists with high unemployment.

Interest payments on the national debt will exceed one trillion
dollars this year, putting more pressure on the Federal Reserve
to monetize the debt, thus creating more inflation.

The Fed's interest rate reduction may have increased Kamala
Harris's chances to win the presidency. However, the rate cut
also increases the odds that the next president will face a major
economic crisis. The crisis will either be caused by or result in
a rejection of the dollar's world reserve currency status.

The best thing politicians can do in the crisis is to avoid the
temptation to "stimulate" the economy. Instead, they should let
the recession run its course and begin dismantling the
welfare-warfare state and the fiat money system.


Audit the Fed:
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Donate:
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If you would like to make a donation by mail, please send your
check to Campaign for Liberty, PO Box 104, Lake Jackson TX 77566
or you can call 703-865-7162.

The mission of Campaign for Liberty is to promote and defend the
great American principles of individual liberty, constitutional
government, sound money, free markets, and a constitutional
foreign policy, by means of education, issue advocacy, and
grassroots mobilization.

© Campaign for Liberty, 2012. Paid for by Campaign for Liberty
and not authorized by any candidate or candidate's committee.

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contributions are not tax deductible as charitable contributions
(IRC § 170) or as business deductions (IRC §
162(e)(1)).

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