The following statement is written by Congressman Paul about the
pending financial disaster. He will introduce this statement as a
special order and insert it into the Congressional Record next week.
Fortunately, we have the opportunity to debut it first on the Campaign
for Liberty blog. It reads as follows:

I have, for the past 35 years, expressed my grave concern for the
future of America. The course we have taken over the past century has
threatened our liberties, security and prosperity. In spite of these
long-held concerns, I have days—growing more frequent all the time—when
I’m convinced the time is now upon us that some Big Events are about to
occur. These fast-approaching events will not go unnoticed. They will
affect all of us. They will not be limited to just some areas of our
country. The world economy and political system will share in the chaos
about to be unleashed.

Though the world has long suffered from the senselessness of wars
that should have been avoided, my greatest fear is that the course on
which we find ourselves will bring even greater conflict and economic
suffering to the innocent people of the world—unless we quickly change
our ways.

America, with her traditions of free markets and property rights,
led the way toward great wealth and progress throughout the world as
well as at home. Since we have lost our confidence in the principles of
liberty, self reliance, hard work and frugality, and instead took on
empire building, financed through inflation and debt, all this has
changed. This is indeed frightening and an historic event.

The problem we face is not new in
history. Authoritarianism has been around a long time. For centuries,
inflation and debt have been used by tyrants to hold power, promote
aggression, and provide “bread and circuses” for the people. The notion
that a country can afford “guns and butter” with no significant penalty
existed even before the 1960s when it became a popular slogan. It was
then, though, we were told the Vietnam War and a massive expansion of
the welfare state were not problems. The seventies proved that
assumption wrong.

Today things are different from even ancient times or the 1970s.
There is something to the argument that we are now a global economy.
The world has more people and is more integrated due to modern
technology, communications, and travel. If modern technology had been
used to promote the ideas of liberty, free markets, sound money and
trade, it would have ushered in a new golden age—a globalism we could
accept.

Instead, the wealth and freedom we now enjoy are shrinking and rest
upon a fragile philosophic infrastructure. It is not unlike the levies
and bridges in our own country that our system of war and welfare has
caused us to ignore.

I’m fearful that my concerns have been legitimate and may even be
worse than I first thought. They are now at our doorstep. Time is short
for making a course correction before this grand experiment in liberty
goes into deep hibernation.

There are reasons to believe this coming crisis is different and
bigger than the world has ever experienced. Instead of using globalism
in a positive fashion, it’s been used to globalize all of the mistakes
of the politicians, bureaucrats and central bankers.

Being an unchallenged sole superpower was never accepted by us with
a sense of humility and respect. Our arrogance and aggressiveness have
been used to promote a world empire backed by the most powerful army of
history. This type of globalist intervention creates problems for all
citizens of the world and fails to contribute to the well-being of the
world’s populations. Just think how our personal liberties have been
trashed here at home in the last decade.

The financial crisis, still in its early stages, is apparent to
everyone: gasoline prices over $4 a gallon; skyrocketing education and
medical-care costs; the collapse of the housing bubble; the bursting of
the NASDAQ bubble; stockmarkets plunging; unemployment rising;, massive
underemployment; excessive government debt; and unmanageable personal
debt. Little doubt exists as to whether we’ll get stagflation. The
question that will soon be asked is: When will the stagflation become
an inflationary depression?

There are various reasons that the world economy has been globalized
and the problems we face are worldwide. We cannot understand what we’re
facing without understanding fiat money and the long-developing dollar
bubble.

There were several stages. From the inception of the Federal Reserve
System in 1913 to 1933, the Central Bank established itself as the
official dollar manager. By 1933, Americans could no longer own gold,
thus removing restraint on the Federal Reserve to inflate for war and
welfare.

By 1945, further restraints were removed by creating the
Bretton-Woods Monetary System making the dollar the reserve currency of
the world. This system lasted up until 1971. During the period between
1945 and 1971, some restraints on the Fed remained in place.
Foreigners, but not Americans, could convert dollars to gold at $35 an
ounce. Due to the excessive dollars being created, that system came to
an end in 1971.

It’s the post Bretton-Woods system that was responsible for
globalizing inflation and markets and for generating a gigantic
worldwide dollar bubble. That bubble is now bursting, and we’re seeing
what it’s like to suffer the consequences of the many previous economic
errors.

Ironically in these past 35 years, we have benefited from this very
flawed system. Because the world accepted dollars as if they were gold,
we only had to counterfeit more dollars, spend them overseas
(indirectly encouraging our jobs to go overseas as well) and enjoy
unearned prosperity. Those who took our dollars and gave us goods and
services were only too anxious to loan those dollars back to us. This
allowed us to export our inflation and delay the consequences we now
are starting to see.

But it was never destined to last, and now we have to pay the piper.
Our huge foreign debt must be paid or liquidated. Our entitlements are
coming due just as the world has become more reluctant to hold dollars.
The consequence of that decision is price inflation in this country—and
that’s what we are witnessing today. Already price inflation overseas
is even higher than here at home as a consequence of foreign central
bank’s willingness to monetize our debt.

Printing dollars over long periods of time may not immediately push
prices up–yet in time it always does. Now we’re seeing catch-up for
past inflating of the monetary supply. As bad as it is today with $4 a
gallon gasoline, this is just the beginning. It’s a gross distraction
to hound away at “drill, drill, drill” as a solution to the dollar
crisis and high gasoline prices. Its okay to let the market increase
supplies and drill, but that issue is a gross distraction from the sins
of deficits and Federal Reserve monetary shenanigans.

This bubble is different and bigger for another reason. The central
banks of the world secretly collude to centrally plan the world
economy. I’m convinced that agreements among central banks to
“monetize” U.S. debt these past 15 years have existed, although
secretly and out of the reach of any oversight of anyone—especially the
U.S. Congress that doesn’t care, or just flat doesn’t understand. As
this “gift” to us comes to an end, our problems worsen. The central
banks and the various governments are very powerful, but eventually the
markets overwhelm when the people who get stuck holding the bag (of bad
dollars) catch on and spend the dollars into the economy with emotional
zeal, thus igniting inflationary fever.

This time—since there are so many dollars and so many countries
involved—the Fed has been able to “paper” over every approaching crisis
for the past 15 years, especially with Alan Greenspan as Chairman of
the Federal Reserve Board, which has allowed the bubble to become
history’s greatest.

The mistakes made with excessive credit at artificially low rates
are huge, and the market is demanding a correction. This involves
excessive debt, misdirected investments, over-investments, and all the
other problems caused by the government when spending the money they
should never have had. Foreign militarism, welfare handouts and $80
trillion entitlement promises are all coming to an end. We don’t have
the money or the wealth-creating capacity to catch up and care for all
the needs that now exist because we rejected the market economy, sound
money, self reliance and the principles of liberty.

Since the correction of all this misallocation of resources is
necessary and must come, one can look for some good that may come as
this “Big Even” unfolds.

There are two choices that people can make. The one choice that is
unavailable to us is to limp along with the status quo and prop up the
system with more debt, inflation and lies. That won’t happen.

One of the two choices, and the one chosen so often by government in
the past is that of rejecting the principles of liberty and resorting
to even bigger and more authoritarian government. Some argue that
giving dictatorial powers to the President, just as we have allowed him
to run the American empire, is what we should do. That’s the great
danger, and in this post-911 atmosphere, too many Americans are seeking
safety over freedom. We have already lost too many of our personal
liberties already. Real fear of economic collapse could prompt central
planners to act to such a degree that the New Deal of the 30’s might
look like Jefferson’s Declaration of Independence.

The more the government is allowed to do in taking over and running
the economy, the deeper the depression gets and the longer it lasts.
That was the story of the 30ss and the early 40s, and the same mistakes
are likely to be made again if we do not wake up.

But the good news is that it need not be so bad if we do the right
thing. I saw “Something Big” happening in the past 18 months on the
campaign trail. I was encouraged that we are capable of waking up and
doing the right thing. I have literally met thousands of high school
and college kids who are quite willing to accept the challenge and
responsibility of a free society and reject the cradle-to-grave welfare
that is promised them by so many do-good politicians.

If more hear the message of liberty, more will join in this effort.
The failure of our foreign policy, welfare system, and monetary
policies and virtually all government solutions are so readily
apparent, it doesn’t take that much convincing. But the positive
message of how freedom works and why it’s possible is what is urgently
needed.

One of the best parts of accepting self reliance in a free society
is that true personal satisfaction with one’s own life can be achieved.
This doesn’t happen when the government assumes the role of guardian,
parent or provider, because it eliminates a sense of pride. But the
real problem is the government can’t provide the safety and economic
security that it claims. The so-called good that government claims it
can deliver is always achieved at the expense of someone else’s
freedom. It’s a failed system and the young people know it.

Restoring a free society doesn’t eliminate the need to get our house
in order and to pay for the extravagant spending. But the pain would
not be long-lasting if we did the right things, and best of all the
empire would have to end for financial reasons. Our wars would stop,
the attack on civil liberties would cease, and prosperity would return.
The choices are clear: it shouldn’t be difficult, but the big event now
unfolding gives us a great opportunity to reverse the tide and resume
the truly great American Revolution started in 1776. Opportunity knocks
in spite of the urgency and the dangers we face.

Let’s make “Something Big is Happening” be the discovery that
freedom works and is popular and the big economic and political event
we’re witnessing is a blessing in disguise.