Ron Paul says Bernanke ducks the issue

Rep. Ron Paul, the Federal Reserve’s most powerful critic, reacts to Ben Bernanke’s press conference. Here’s a lightly edited transcript of his remarks to the MarketWatch Radio Network. Paul is the chairman of the House monetary policy subcommittee, and is thinking of running for president again in 2012.

WASHINGTON (MarketWatch) — I found the press conference to be enlightening in the fact that we heard one, and he held one, and that’s a sign that the Fed knows that they have to be a little more responding to the demand for transparency. When I listened to what had to be said, I wasn’t too enthralled. I’ve heard it all before. Read more on Bernanke's press conference.

It’s smooth talking, to make current policy sound reasonable, and let it go at that. Because they never admit anything. When it comes to prices, it’s never their fault. I mean, how many different things did he mention about why prices go up, why we have inflation? He never admits it’s the inflation of the money supply that’s the problem.
When he was asked about the dollar, he said, “Well you know, the person in charge for the value of the dollar is the secretary of the Treasury.” Well, Bernanke can triple the money supply, and then he wants to duck the issue that he’s responsible.
He says, “Our position is a strong dollar” ... with constant devaluation, even while he spoke it was devaluing. Against gold, it went down 1.5%. It doesn’t make any sense.

It was more justification for a policy that doesn’t work. There was no explanation on how he’s going to get out of this. He did recognize, though, that price increases are significant and could be a problem in the future. It could be a significant problem for unemployment. He said it softly, but there were some words in there that convinced me that he knows that when inflation is admitted – I think it’s already here – but when he really admits it’s here, he’s really in a box. Because what he’ll have to do is raise interest rates, cut back on all the monetization of all this debt, buying all these securities, and then, in a weak economy, he’s in a mess
He works on the Keynesian assumption that prices go up for other reasons than the monetary reasons.
“It’s the supply and demand...Well, third-world nations are starting to buy more oil, that’s why the price of oil goes up.” And it has nothing to do with the inflation of the monetary system.
So, I think he does a good job for what he has to do, and that is try desperately to make a very, very failed system sound plausible. But from my viewpoint, it isn’t plausible, it’s not workable.
And I so strongly oppose centralized economic planning through monetary policy, especially in a small little group that can manipulate interest rates and the money supply and bail out privileged companies that are too big to fail at the same time the little people suffer. They lose their jobs and their mortgages and their houses.
So, to me, we have to have major monetary reform, and a bit of transparency. A pretense of transparency won’t suffice.