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------------------------------------------------------------------------------------Jewish/Israeli media admits to owning the FED, government, media. Jews also promote mass-immigration into all WHITE countries. And Jews are at the push for gun-control and disarmament programs. Jews have been involved in female trade, organ trafficking and large scale drug trafficking too."I have never been so upset by a poll in my life. Only 22% of Americans now believe “the movie and television industries are pretty much run by Jews,” down from nearly 50% in 1964. … It just shows how dumb America has gotten. Jews totally run Hollywood. As a proud Jew, I want America to know about our accomplishment. Yes, we control Hollywood. … I don’t care if Americans think we’re running the news media, Hollywood, Wall Street or the government. I just care that we get to keep running them.""Jews promote diversity because it dilutes the ethnic fabric of nations and allows the tribe to assimilate and exploit more efficiently. They are better able to hide in a confusing racial mix, where people are less likely to notice they are ruthless Asian nomads, who destroy societies because they never really had one of their own that they didn't steal from someone else.""The goal of abolishing the white race is on its face so desirable that some may find it hard to believe that it could incur any opposition other than from committed white supremacists. The key to solving the social problems of our age is to abolish the white race. Make no mistake about it, we intend to keep bashing the dead white males, and the live ones, and the females too, until the social construct known as ‘the white race’ is destroyed, not ‘deconstructed’ but destroyed."http://www.youtube.com/watch?v=d0mkVU5tG7w&feature=youtu.behttp://www.jta.org/2013/04/11/news-opinion/united-states/jewish-groups-urge-senate-to-pass-gun-control-legislationhttp://www.youtube.com/watch?v=rA7Ymki71fMhttp://blogs.timesofisrael.com/jews-do-control-the-media/http://web.archive.org/web/20110617092001/http://www.latimes.com/news/opinion/commentary/la-oe-stein19-2008dec19,0,4676183.columnhttp://www.timesofisrael.com/yellen-gains-more-attention-for-gender-than-faith/http://trutube.tv/video/1016/Why-The-Jews-Are-Hated#http://newobserveronline.com/jews-demand-open-borders-for-usa-but-use-dna-to-keep-israel-racially-pure/http://www.saveyourheritage.com/jewish_control_of_finances.htmhttp://www.youtube.com/watch?v=y3GMDcFOq0ghttp://www.youtube.com/watch?v=wMbw5X_eeJghttp://www.saveyourheritage.com/jewish_control_of_the_media.htmhttp://www.youtube.com/watch?v=DZBI8e5JdGQ------------------------------------------------------------------------------------------ADOLF HITLER, WORLD WAR 2 AND COMMUNISM------------------------------------------------------------------------------------------The Bolshevik leaders here, most of whom are Jews and 90 percent of whom are returned exiles, care little for Russia or any other country but are internationalists and they are trying to start a world-wide social revolution."There is now definite evidence that Bolshevism is an international movement controlled by Jews.Hitler freeing Germany from all Jewish influence, Hitler nearly eradicated unemployment in the country. Under National Socialist economic policies, unemployment went from 30.1% in 1932 to 2.1% in 1938.Secondly, Hitler instituted ingenious economic reforms whereby he established his own State-controlled central bank and currency that was not backed by Jewish-controlled precious metals or foreign exchanges, but German productive labour."Neither gold nor foreign exchange funds, but work alone is the foundation for money! The salvation of our Volk is not a financial problem; it is exclusivel a problem of utilizing and employing the available work force on the one hand and exploiting available soil and mineral resources on the other. The national community (Volksgemeinschaft) does not subsist on the fictitious value of money but on actual production, which gives money its value. This production is the primary cover for a currency, not a bank or a vault full of gold! And when I increase this production, I am actually increasing the income of my fellow citizens; if I decrease production, I decrease income, regardless of what salaries are being paid out."Thirdly, Hitler was not a "eugenicist population reductionist." On the contrary, Hitler’s Party - the NSDAP - strongly encouraged the women of the Third Reich to be homemakers so that they could raise large families. The NSDAP gave financial incentives to couples and newly-weds so that they would have more children."On 5th July 1933 the Law for the Encouragement of Marriage was passed. This act gave all newly wed couples a loan of 1000 marks which was reduced by 25% for each child they had. If the couple went on to have four children the loan was wiped out. …On the birth-date of Hitler’s mother, August 12th, awards of the Motherhood Cross were given to women who had produced the most children. A gold cross was awarded to mothers of 8 or more children, silver to mothers of 6 children and bronze to mothers of four children."Fourthly, Hitler sought to build a healthier, stronger, more unified nation, and spearheaded the growth of the German population, not the reduction of it. It was the American Jew Theodore Kaufman who, in 1941, published a treatise titled “Germany Must Perish!” within which he called for the complete extermination of the entire German race and nation in a "final solution" of sterilisation and territorial dissection. Kaufman proclaimed:"A final solution… Thus we find that there is no middle course; no act of mediation, no compromise to be compounded, no political or economic sharing to be considered. There is, in fine, no other solution except one: That Germany must perish forever from this earth!"The Jewish-owned media, in 1933, also declared a holy and economic war against Hitler because he freed his people from the Jewish control that gripped Germany beforehand. Fifthly, in a speech, sometimes said to have been delivered in 1935, Hitler is supposed to have exclaimed: "This year will go down in history! For the first time, a civilized nation has full gun registration! Our streets will be safer, our police more efficient, and the world will follow our lead into the future!"This quote has been popular with Americans who defend the constitutional right to "keep and bear arms." It's cited to discredit those who support restrictions on firearms ownership and use. It's also cited to support the often-made charge that Hitler and his government curtailed gun ownership in Germany, and confiscated weapons held by private citizens.The truth is rather different. When Hitler and his National Socialist Party took power in early 1933, they inherited a somewhat restrictive firearms law that the liberal-democratic "Weimar" government had enacted five years earlier. In 1938 Hitler's government revised the earlier law by loosening those restrictions, thereby enhancing the rights of Germans to own weapons. The most thorough confiscation of firearms ever imposed on Germans was carried out at the end of the Second World War by the occupation forces of the United States and other victorious Allied powers. Adolf Hitler was a patriotic German nationalist who endeavoured to create a Germany for Germans alone; quite the opposite of a "globalist NWO" type. Secondly, Hitler and his National Socialist movement were staunchly anti-Marxist/Communist/Bolshevik and therefore anti-Internationalist and anti-Globalist. The sinister agenda of Communism, not National Socialism, was internationalism — the overthrow and vanquishment of all existing nation states in order to establish a despotic global communist super-state. The pathological criminal madness known as Communism was, from its inception, an international Jewish conspiracy for the destruction and subjugation of the Gentile world whereupon a tyrannical global Jewish imperium would be established. Communism was nothing more than an expression and manifestation of the hateful, supremacist doctrines of the Jewish Talmud, which states: "Even the best of the Gentiles should be killed." (Minor Tractates. Soferim 15, Rule 10)http://www.nazigassings.com/images/UnemployedBeforeWW2.jpghttp://www.ihr.org/other/weber2011fakequotations.htmlhttp://www.zioncrimefactory.com/wp-content/uploads/2011/10/judea-declares-war-on-germany.jpghttp://ia700301.us.archive.org/25/items/GermanyMustPerish/KaufmanTheodore-GermanyMustPerish194135P..pdfhttp://www.historyonthenet.com/Nazi_Germany/women.htmhttp://winstonsmithministryoftruth.blogspot.com.au/2012/01/hilters-debt-free-curency.html?zx=7c6bfdb26cd2d84dhttp://wakeupfromyourslumber.com/node/6720www.justice4germans.comhttp://zioncrimefactory.com/jew-world-order/http://www.youtube.com/watch?v=Z1yaFVxo8FEhttp://www.saveyourheritage.com/jews_and_communism.htmhttp://www.youtube.com/watch?v=A5sbegfCz7ohttp://www.youtube.com/watch?v=4X1owF0vgnwhttp://www.youtube.com/watch?v=IVgIJSOrKeAhttp://www.youtube.com/watch?v=7-Kl6RHKIQk-----------------------------------------------------------------------------------------ISRAEL INVOLVEMENT IN 9/11, USS LIBERTY AND OTHER TERRORIST ATTACKS-----------------------------------------------------------------------------------------September 11, 2001, was a horrific and tragic day — nearly three thousand people perished in the terrorist attacks that drove a knife straight into the heart of America. Apart from being a brutal blow to the pride and stature of the most powerful nation on earth, the events of 9/11 were also a major wake-up call for many Americans and others around the world. For many reasons, the attacks of 9/11 inspired a great number of people to begin investigating major world events, attempting to ascertain what sinister force lies behind such atrocities. By looking at historical events more deeply and with a more critical eye, many millions of people across the globe have come to know the truth. In patriot circles it is often said that the engine driving the madness that has engulfed our planet since 9/11 is the “New World Order” — a coalition of rich and powerful ‘globalists’ hell-bent on transforming the world into a tyrannical prison society. This popular idea represents only a portion of the truth. This “New World Order” that is so often talked about these days is in reality a “Jew World Order” that is spearheaded by a contingent of psychopathic Jewish supremacists who aim to establish some form of world dominion, as ancient Jewish religious texts had prophesied"The Greek historian Dio Cassius described in detail how the Jews in the eastern provinces of the Roman Empire, in the year 116 A.D., during a rebellion began to murder various races they lived among. Judaists killed both women and children, at times using terrible torture. The most infamous bloodbaths were committed in the city of Cyrene and the province Cyrenaica (in the eastern part of present-day Libya) and on Cyprus and above all in its capital Salamis. The Greek historian Eusebius confirmed this. Mass murders were also perpetrated in Mesopotamia and Palestine. In Cyrenaica alone, the Jews killed 220 000 Romans and Greeks. On in Cyprus, their victims were estimated at 240 000. The Roman Emperor Marcus Ulpius Traianus (53-117 A.D.) sent troops to stop the killing. It took Rome a year to rein in the bloodlust of the Jews. Dio Cassius tells us how the Jews even ate their victims and smeared themselves with their blood. (William Douglas Morrison, “The Jews Under Roman Rule”, London and New York, 1890, pp. 191-193.) The most brutal murders were committed in Egypt. Dio Cassius describes how the Jews even attacked the ships in which fear-stricken people tried to escape.""During and just after World War I, the Young Turks — an organization comprised of crypto-Jews and Freemasons who had seized power in Ottoman Turkey — led and facilitated the butchery of nearly two million Armenian, Greek and Assyrian Christians in a brutal campaign of mass murder in the Ottoman Empire. This largely unknown attempted genocide is brought under a microscope in a book titled The Jewish Genocide of Armenian Christians by Christopher Jon Bjerknes."On July 22, 1946, a group of Jewish terrorists from the Irgun — commanded and led by Menachem Begin who would later become the Prime Minister of Israel — disguised themselves as Arabs and bombed the King David Hotel in Jerusalem, which was serving as the headquarters for the British Military and Administrative Command at the time. The Information Clearing House website provided this brief but potent synopsis of the attack:"The King David Hotel explosion of July 22, 1946 (Palestine), which resulted in the deaths of 92 Britons, Arabs and Jews, and in the wounding of 58, was not just an act of “Jewish extremists,” but a premeditated massacre conducted by the Irgun in agreement with the highest Jewish political authorities in Palestine — the Jewish Agency and its head David-Ben-Gurion. According to Yitshaq Ben-Ami, a Palestinian Jew who spent 30 years in exile after the establishment of Israel investigating the crimes of the “ruthless clique heading the internal Zionist movement,” the Irgun had conceived a plan for the King David attack early in 1946, but the green light was given only on July first. According to Dr. Sneh, the operation was personally approved by Ben-Gurion, from his self-exile in Europe. … The Jewish Agency’s motive was to destroy all evidence the British had gathered proving that the terrorist crime waves in Palestine were not merely the actions of “fringe” groups such as the Irgun and Stern Gang, but were committed in collusion with the Haganah and Palmach groups and under the direction of the highest political body of the Zionist establishment itself, namely the Jewish Agency.""On June 8, 1967, while patrolling in international waters in the Eastern Mediterranean Sea, an American surveillance ship called the USS Liberty (AGTR-5) was heinously attacked by the air and naval forces of Israel. Using unmarked fighter jets and torpedo boats, the Israelis pummelled the Liberty with machine-gun fire, napalm, torpedoes and rockets for over an hour. To ensure that no American aboard the ship escaped alive, the Israeli pilots fired on the life-rafts. The Israelis failed to sink the ship, as they had intended, but managed to cause a considerable amount of damage and harm. When the Israeli terror forces finally ceased attacking the vessel, 34 American sailors were dead and 174 other crewmen were seriously wounded."http://www.youtube.com/watch?v=U8ZavzbeaFEhttp://www.youtube.com/watch?v=7Tg_BCyGTwIhttp://www.jewishracism.com/http://ehpg.wordpress.com/israel-did-911/http://ehpg.files.wordpress.com/2010/03/israel_did_911.pdfhttp://www.youtube.com/watch?v=GD_vwzjdTi4http://www.youtube.com/watch?v=2O7LwySqtr4http://www.gnosticliberationfront.com/jfk_assassination_and_911.htmhttp://www.gnosticliberationfront.com/clearing_the_baffles_for_911.htmhttp://www.gnosticliberationfront.com/September-11-Commission-Report-Revised-December-2008.pdfhttp://www.bollyn.com/solving-9-11-the-bookhttp://zioncrimefactory.com/masters-of-deception/http://www.sharpprintinginc.com/911/index.phphttp://www.gnosticliberationfront.com/key_players_of_911___who_is_Jerome_Hauer.htmhttp://www.gnosticliberationfront.com/911_the_unraveling__of_the_official%20story.htmhttp://www.youtube.com/watch?v=ctRg_MDzhPYhttp://www.gnosticliberationfront.com/how_911_was_done.htmlhttp://www.zioncrimefactory.com/wp-content/uploads/2011/09/Under-The-Sign-of-the-Scorpion.pdfhttp://www.youtube.com/watch?v=vC4nFpWEzNghttp://www.youtube.com/watch?v=f98jxoUUrzg------------------------------------------------------------------------------------------JEW WORLD ORDER------------------------------------------------------------------------------------------THE RULE OF the Talmudic Jew in modern times is nearly one of an absolute monarch of a country. The Jews, through their complete domination of world finance and banking — through their malignant monopoly of the mass media of America, Britain, France, Canada and other Western powers — through their influential and vast network of subversive “lobby groups” — through their dominion over the courts and law profession in general — not to mention their pernicious presence inside the highest levels of government of the most powerful countries — have thus taken full control of the entire planet, as was foretold in ancient Jewish religious texts.As the former Malaysian Prime Minister, Dr. Mahathir Mohamed, explained: “The Jews rule this world by proxy, they get others to fight and die for them… They have now gained control of the most powerful countries … This tiny community have become a world power.” Dr. Mahathir spoke the truth, and the reality of his words couldn’t be clearer; all one has to do is look around you and observe the terrible power of the treacherous Jews.The Jewish-Zionist terrorist leader Ze’ev Jabotinsky (founder of the Jewish terror group Irgun Zevai Leumi) proudly proclaimed: “There is only one power which really counts. The power of political pressure. We Jews are the most powerful people on earth, because we have this power, and we know how to apply it.” (Jewish Daily Bulletin, July 27, 1935) The fact that the vicious crimes of this disgusting criminal’s insidious terrorist organization — such as the King David Hotel bombing and Deir Yassin Massacre — are not mentioned in Western history texts or at all covered in High School and University history classes, is a testament to the veracity of his exultant statement.Jewish power is supremely epitomized by the fact that criticism of Christianity, Islam, or any other major religion or ethnic group is fully permissible in our societies, but criticism of Jews and Judaism, on the other hand, is taboo, off-limits as well as socially and politically dangerous. As the saying goes, if you want to know where the power lies ask whom you cannot criticize.It’s quite interesting to note that the researchers of the “New World Order” who endeavor to deflect attention away from the Jews — such as Alex Jones, Jim Marrs, Alan Watt, Mark Dice, etc — are not silenced or suppressed, but in fact promoted by the Jewish controlled press. These purported critics of the New World Order and Illuminati who employ vague terms like “elites”/”globalists”/”the establishment”/”the military industrial complex”, and who regularly invoke a confusing deluge of elusive entities and kosher poltergeists (everything from Satanists, Occultists, Freemasons, Jesuits, Nazis, Fascists, Knights Templar, WASPs, British Royalists, Reptilians, Space Aliens, etc) are free to promote their theories and ideas on radio, television, the internet and in books, uninhibited. Their radio shows are not being cancelled, their books are not being taken off the shelves or blocked from publication, their videos are not being censored or expunged from video sharing websites, their websites and blogs are not being shut down on a whim, they are not being fined or thrown in prison for “hate speech.” On the contrary, we can find these kosher clowns being highlighted on mainstream Jewish propaganda television networks, like the History Channel, and making appearances on MSM talk shows, like The View. Critics of Jewish power, Zionism and the Jewish criminal network couldn’t even dream of achieving that level of notoriety. I wonder why?"We are owned by propagandists against the Arabs. There’s no question about that. Congress, the White House, and Hollywood, Wall Street, are owned by the Zionists. No question in my opinion. They put their money where their mouth is…We’re being pushed into a wrong direction in every way.""Jews totally run Hollywood. … As a proud Jew, I want America to know about our accomplishment. Yes, we control Hollywood. … I don’t care if Americans think we’re running the news media, Hollywood, Wall Street or the government. I just care that we get to keep running them.""We killed them out of a certain naive hubris. Believing with absolute certitude that now, with the White House, the Senate, and much of the American media in our hands, the lives of others do not count as much as our own….""I've never seen a President — I don’t care who he is — stand up to them [the Israelis]. It just boggles the mind. They always get what they want. The Israelis know what is going on all the time. I got to the point where I wasn't writing anything down. If the American people understood what a grip those people have got on our government, they would rise up in arms. Our citizens certainly don’t have any idea what goes on.""…Israel has a powerful stranglehold on the American government. They [the Jews] control both members of the House, and the Senate. They have us involved in wars in which we have little or no interest. Our children are coming back in body bags. Our nation is bankrupt over these wars. And if you open your mouth, you get targeted. And if they don’t beat you at the poll, they’ll put you in prison. They’re controlling much of our foreign policy. They’re influencing much of our domestic policy. Wolfowitz as under-secretary of defence manipulated President Bush number two back into Iraq. They've pushed definitely, definitely to try to get Bush before he left to move into Iran. We’re conducting the expansionist policy of Israel and everybody’s afraid to say it. They control much of the media, they control much of the commerce of the country, and they control powerfully both bodies of the Congress. They own the Congress.""The Jewish people as a whole will be its own Messiah. It will attain world dominion by the dissolution of other races, by the abolition of frontiers, the annihilation of monarchy, and by the establishment of a world republic in which the Jews will everywhere exercise the privilege of citizenship. In this new world order the Children of Israel will furnish all the leaders without encountering opposition. The Governments of the different peoples forming the world republic will fall without difficulty into the hands of the Jews. It will then be possible for the Jewish rulers to abolish private property, and everywhere to make use of the resources of the state. Thus will the promise of the Talmud be fulfilled, in which is said that when the Messianic time is come the Jews will have all the property of the whole world in their hands.""It is not an accident that Judaism gave birth to Marxism, and it is not an accident that the Jews readily took up Marxism; all this was in perfect accord with the progress of Judaism and the Jews. The Jews should realize that Jehovah no longer dwells in heaven, but he dwells in us right here on earth; we must no longer look up to Jehovah as above us and outside of us, but we must see him right within us""Since the Jews are the highest and most cultured people on earth, the Jews have a right to subordinate to themselves the rest of mankind and to be the masters over the whole earth. Now, indeed, this is the historic destiny of the Jews""Judaism is communism, internationalism, the universal brotherhood of man, the emancipation of the working class and the human society. It is with these spiritual weapons that the Jews will conquer the world and the human race."http://gallica.bnf.fr/ark:/12148/bpt6k176204.zoom.f574.langFRhttp://www.upi.com/Top_News/US/2010/12/04/Wayne-State-ends-Helen-Thomas-Award/UPI-69151291511834/http://zioncrimefactory.com/jew-world-order/http://articles.latimes.com/2008/dec/19/opinion/oe-stein19http://www.sobran.com/columns/2005/050414.shtmlhttp://zioncrimefactory.com/jew-world-order/http://radioislam.org/islam/english/jewishp/usa/traficant-vs-Jewish-lobby.htm------------------------------------------------------------------------------------------JEWS AND THEIR CONTROL OF OUR FINANCIAL SYSTEM------------------------------------------------------------------------------------------"In the new organization of mankind, the children of Israel [the Jews] will spread over the whole surface of the earth and will become everywhere, without opposition, the leading element, especially if they can impose upon workings classes the firm control of some of the them. The governments of the nations forming the Universal Republic will pass without effort into the hands of the Jews under the cover of the victory of the proletariat, private property will then be suppressed by the rulers of Jewish race, who will everywhere control public funds. Thus will be realized the Talmudic promise that, when come the times of the Messiah, Jews will possess the wealth of all peoples of the world"http://www.saveyourheritage.com/jewish_control_of_finances.htmhttp://www.youtube.com/watch?v=mII9NZ8MMVMhttp://www.youtube.com/watch?v=NG31qvdAYEwhttp://www.youtube.com/watch?v=_Ykq8h30dhQhttp://www.youtube.com/watch?v=cWWmXrbJAYwhttp://trutube.tv/video/1016/Why-The-Jews-Are-Hated…
Added by Charles Magus at 7:27am on October 23, 2013
during question & answer sessions, 1997
Editor's Note: With Alan Greenspan's long tenure as chairman of the Federal Reserve seemingly coming to a close, we thought it appropriate to assemble this remarkable and extended dialogue with Representative Dr. Ron Paul for the benefit of our Gilded Opinion readers. Alan Greenspan, one of the most recognizable figures on the American financial scene, does not need a lengthy introduction, nor do I need to restate what so many have already said about his long influence on the markets and the economy as a whole.
Few know, though, of Alan Greenspan's long connection with the gold market. Since the publication of the famous tract, "Gold and Economic Freedom," in 1966, Mr. Greenspan has enjoyed a special, if controversial, status among gold owners and advocates -- one to which Congressman Ron Paul refers frequently in the following exchanges. Dr. Ron Paul, the Texas Congressman, also occupies a special place with gold owners and advocates because of his outspoken and unwavering support of gold ownership as well as a gold-based monetary system.
In putting this page together, I was struck with Dr. Paul's ability to cut through the political gamesmanship that necessarily comes with being chairman of the Fed to Alan Greenspan, the man and political/economic philosopher. What emerges is a powerful figure conflicted between the practical manager charged with operating within the current fiat monetary system and the philosopher-academic with a "nostalgia," as he puts it, for the days of the gold standard. Without Dr. Paul's incisive questioning, I doubt that this aspect of the Greenspan character would have found its way to the public venue and the historical record. Though the relationship appears adversarial at first blush, one also detects a certain amount of mutual respect and interest. Says Dr. Paul of the exchanges: "My questions are always on the same subject. If I don't bring up the issue of hard money vs. fiat money, Greenspan himself does."
It is our hope that the assemblage of this testimony which took place over a nearly nine year period will be useful to those looking for a deeper understanding of the monetary system under which we now operate and of Alan Greenspan's views with respect to it. We also hope it will add spice to the biography of one of the more enigmatic figures to grace the American political stage at the turn of the 21st century.
In closing, I would like to pass along an anecdote reported by SmartMoney's Donald Luskin in a 2002 interview of Ron Paul. Paul told Luskin the story of his owning an original copy of "Gold and Economic Freedom," (which I reference above) and asking Greenspan to sign it. While doing so, Paul asked him if he still believed what he wrote in that essay some 40 years ago. That tract, written during Greenspan's days as a devotee of Ayn Rand, is a strongly worded, no-holds-barred attack on fiat money and the central banks as an engine of the welfare state. It also endorses the gold standard as a deterrent to politicians' penchant for running deficits and printing money. Greenspan -- enigmatic as ever -- responded that he "wouldn't change a single word." -- Michael J. Kosares
____________________
3/5/1997
Mr. PAUL. Thank you, Mr. Chairman.
Mr. Chairman, I want to bring up the subject again about the CPI. We have talked a lot about the CPI and an effort to calculate our cost-of-living in this country, and specifically here, to measure how much we are going to increase the benefits that we are responsible for. But in reality, is not this attempt to measure a CPI or a cost-of-living nothing more than an indirect method or an effort to measure the depreciation of a currency? And that we are looking at prices, but we are also dealing with a currency problem.
When we debase or depreciate a currency we do get higher prices, but we also have malinvestment. We have distorted interest rates. We contribute to deficits. And also, we might not always be looking at the right prices. We have commodity prices, which is the usual conceded figure that everybody talks about as far as measuring inflation. But we might at times have inflated prices in the financial instruments.
So to say that inflation is under control and we are doing very well, I would suggest that we look at these other areas too, if indeed we recognize that we are talking about the depreciation of a currency.
One other thing that I would like to suggest, and it might be of interest to my colleagues, is that one of the characteristics of a currency of a country that depreciates its currency systematically is that the victims are not always equal. Some suffer more than others. Some benefit from inflation of the currency and the debasement of the currency. So indeed, I would expect the complaints that I hear. I would suggest that maybe this is related to monetary policy in a very serious manner.
The consensus now in Washington, all the important people have conceded that we should have a commission. But when we designate a commission, this usually means everybody knows what the results are. I mean, nobody complains that the CPI might under-calculate inflation or the cost-of-living for some individuals, which might be the case. So we have this commission.
But is it conceivable that this is nothing more than a vehicle to raise taxes? the New York Times just this week editorialized in favor of this because it raised taxes, and also it cuts benefits, and they are concerned about cutting benefits. But would it not be much more honest for Congress to deal with tax increases in an above-board fashion, especially if we think the CPI is not calculable? I think it is very difficult.
Also, I think that if it is a currency problem as well, we cannot concentrate only on prices. There have been some famous economists in our history who say, look to the people who talk about prices because they do not want to discuss the root cause of our problem, and that has to do with the inflation of the monetary system or the depreciation of the currency.
Mr. GREENSPAN. Dr. Paul, the concept of price increase is conceptually identical, but the inverse of the depreciation of the value of the currency. The best way to get a judgment of the value of the currency as such, if one could literally do it, is to separate the two components of long-term nominal interest rates into an inflation premium component and a real interest rate component. The former would be the true measure of the expected depreciation in the value of the currency.
We endeavor to capture that in these new index bonds that have been issued in which the Consumer Price Index, for good or ill, is used to approximate that. It does not exactly, and I think that is what I have been arguing with respect to the commission is to take the statistical bias out of the CPI and get a true cost-of-living index.
It is certainly the case that that is a measure of inflation. There are lots of different measures of inflation. I would argue that commodities, per se, steel, copper, aluminum, hides, whatever, used to be a very good indicator of overall inflation in the economy when we were heavily industrialized. Now they represent a very small part of the economy and services are far more relevant to the purchasing power of the currency than at any time, so that broader measures of price, in my judgment, are more relevant to determining what the true rate of inflation is.
Mr. PAUL. Can the inflated prices in the financial instruments not be a reflection of this same problem?
Mr. GREENSPAN. They are. This is a very important question and one which I was implicitly raising: do asset price changes affect the economy? And the answer is clearly, ''yes.'' What you call it, whether it is inflation or not inflation, that is a nomenclature question. But the economics of it clearly means that if one is evaluating the stability of the system, you have to look at product prices, that is, prices of goods and services, and asset prices, meaning prices on items generally which have rates of return associated with them.
Mr. PAUL. Much has been said about your statements regarding the stock market and I wanted to address that for just 1 minute. In December when you stated this, of course, the market went down and this past week there was as sudden drop. The implication being that if you are unhappy with it, they assume that you will purposefully push up interest rates. But really since the first time you made that statement it seems that almost the opposite has occurred. M3 actually has accelerated, to my best estimate in the last 2 months it has gone up at a 10 percent rate. The base actually has perked up a little bit. Prior to this time it was rising at less than a 5 percent rate and now it is rising a little over 8 percent.
But then too we have another factor which is not easy to calculate, and that is what our friends in the foreign central banks do. During this short period of time they bought $23 billion worth of our debt. We do know that Secretary Rubin talks to them and that maybe there is an agreement that they help you out; they buy some of these Treasury bills so you do not have to buy quite so many.
Mr. GREENSPAN. There is no such agreement, Dr. Paul.
Mr. PAUL. You read about that though.
Mr. GREENSPAN. Sometimes what you read is not true.
Mr. PAUL. OK, we will get your comments on that. But anyway, they are accommodating us, whether it is policy or not. Their rate of increase on holding our bills are rising at over 20 percent, and even these 2 months at maybe 22 percent.
My suggestion here and the question is, instead of the sudden policy change where you may increase interest rates, it seems like to me that you may be working to maintain interest rates from not rising. Certainly, you would have a bigger job if we had a perfect balance of trade. I mean, they are accumulating a lot of our dollars and they are helping us out. So if we had a perfect balance of trade or if their policies change, all of a sudden would this not put a tremendous pressure on interest rates?
Mr. GREENSPAN. We have examined the issue to some extent on the question of what foreign holdings of U.S. Treasuries have done to U.S. interest rates. I think the best way of describing it is that you probably have got some small effect in the short run when very large changes in purchases occur. There is no evidence over a long run that interest rates are in any material way affected by purchases.
The reason, incidentally, is that they usually reflect shifts--in other words, some people buy, some people sell. Interest rates will only change if one party or the other is pressuring the market. There is no evidence which we can find which suggests that that is any consistent issue, so that the accumulation of U.S. Treasury assets, for example, is also reflected in the decumulation by other parties. We apparently cannot find any relationship which suggests to us that that particular process is significantly affecting----
Mr. PAUL. For the past 2 years, the accumulation has been much greater.
Mr. GREENSPAN. That is correct, it has been.
Mr. PAUL. Thank you.
7/22/97
Dr. PAUL. Thank you, Mr. Chairman.
I think the Banking Committee must be making progress, because even others now bring up the subject of gold, so I guess conditions are changing. But I might just suggest that the price of gold between 1945 and 1971 being held at $35 an ounce was not much reassurance to many that the future did not bode poorly for inflation. So the price of gold being $325 or $350, ten times what it was a few years back, should not necessarily be reassurance about what the future holds. Unlike my colleague from the other side accusing you of searching for gloom, I might wonder whether or not we might be hiding from some of it? So I thought that the last thing I would suggest is that we lack monetary stimulus and all we need is a little more monetary stimulus, and all of a sudden we are going to take care of the problems. And by the way, the problems that are described are the problems that I am very much concerned about, but I come up with a different conclusion on why we are having those problems.
Earlier, I made the case in my opening statement that quite possibly we are using the wrong definitions and we are looking at the wrong things, and we continue to concentrate and to reassure ourselves that the Consumer Price Index is held in check, and therefore things are OK and there is no inflation. Real interest rates and the long bond remain rather high, so there is a little bit of inflationary expectation still built into the long-term bond. But the consumer prices might be inaccurate, as Sindlinger points out, and they may become less important right now because of the various technical things going on.
And also I made the suggestion that the money-supply calculations that we use today might not be as appropriate as they were in the past, because I do not think there is any doubt that we have all the reserves and all the credit and all the liquidity we need. I mean, it is out there. It might not be doing what we want it to do, but there is evidence that it is there. The marginal debt today was reported at $113 billion, just on our stocks. So there is no problem with getting the liquidity. My argument is that what if we looked at the prices of stocks as your indicator as you would look at the CRB? I mean, we would have a rapidly rising CRB-or any commodity index. It would be going up quite rapidly. For instance, in the past 3 months, we had a stock price rise of 25 percent. If it continued at that rate, we would increase the stock prices 100 percent in one year. If that was occurring in the commodities or Consumer Price Index, I know you would be doing something.
My question and suggestion is maybe we ought to be doing something now, because there is a lot of credit out there doing something else, causing malinvestment, causing deficits and debt to build up, and that there will be a correction. We have not repealed the business cycle. So we have to expect something from this.
I think there are some interesting figures about what has happened to the stock market. In 1989, Japan's stock market had a greater value than our stock market does. Our market now is three times more valuable in terms of dollars than Japan. We have 48 percent of the value of all the stocks in the world, and we put out 27 percent of the output. So, there is a tremendous amount of marking up of prices, a tremendous amount of credit. So, instead of being lacking any credit, I think we have maybe an excess amount. I would like to know if you can reassure us that we have no concerns about this malinvestment, that we do not have excess credit and that these stock prices are not an indicator that might be similar to a Consumer Price Index?
Mr. KENNEDY. What?
Mr. GREENSPAN. Let me first say, Dr. Paul, it is certainly the case that if you look at the structure of long-term nominal Government interest rates, there is still a significant inflation premium left. In the 1950's and the 1960's, we had much lower nominal rates, and the reason was that the inflation premium was clearly quite significantly less. I think we will eventually get back there if we can maintain a stable noninflationary environment. I do not think we can remove the inflation premium immediately, because it takes a number of years for people to have confidence that they are dealing with a monetary policy which is not periodically inflationary.
To follow on the conversation I was having with Congressman Frank, the type of conversation we have at the Federal Open Market Committee is indeed the type of conversation that is coming from both of you. In other words, we are trying to look at all of these various forces and recognize where the stable relationships are and those which tell us about what is very likely to occur in the months, the quarters, and hopefully, in the years ahead.
It is a very intensive evaluation process, especially during a period when there seem to be changes in the longer-term structure which we do not yet know are significant or overwhelming. But we are experiencing changes which lead us to spend a considerable amount of time trying to evaluate what is going on. But we would be foolish to assume that all of history has somehow been wiped from the slate and that all of the old relationships, all of the problems that we have had in the past, have somehow in a period of a relatively few years, disappeared. The truth of the matter is that we suspect that there are things that are going on. We do not know yet how important they are. But we are keeping a very close evaluation of the types of events that are occurring, so that we can create what we believe to be the most appropriate monetary policy to keep this economic expansion going in a noninflationary way, because that is what is required to keep growth going.
Dr. PAUL. So, you are saying the stock price index is of a lot less value than the commodity price index or the Consumer Price Index?
Mr. GREENSPAN. I would say our fundamental purpose is to keep inflation, meaning basically the underlying general price index, stable, because that is the most likely factor which will create financial stability overall. As I have said in previous commentary and discussions before this subcommittee, we of necessity look at the whole financial system, but it has always been our conclusion that the central focus is on the stability of product prices as the crucial determinant in the system, which if you solve that one, you are likely to solve the others as well.
Dr. PAUL. Thank you, Mr. Chairman. I have two brief points to make, then I have a couple of questions.
First, your comment about the deficit is very important in keeping interest rates high. It seems to me that the level of Government spending has to be even more important, because if you have a $2 trillion budget, and you tax that money out of the system, that is very detrimental, just as detrimental as if you borrowed out of the economy. So I think the level of spending is probably more important.
And as a follow-up to the question from the gentleman from Washington on the currency, we certainly do export a lot of our currencies. More than 60 percent ends up in foreign hands. And it serves a great benefit to us because it is like a free loan. It is not in our own country, it does not bid up prices, So we get to export our inflation. At the same time, they are willing to hold our debt; central banks are holding $600 billion worth of our debt. So again, we get to export our inflation, and the detriment is the consequence of what we are seeing in Southeast Asia.
But the real problem, though, is not the benefits that we receive temporarily, but the problem is when those dollars come home, like in 1979 and 1980, and then we have to deal with it because it is out of your hands, this money has been created. So I think we should not ignore that.
But my first question has to do with Mexico. It is bragged that we had this wonderful bailout of Mexico three years ago, and yet Mexico still has some of its same problems. They have tremendous bank loans occurring right now. The peso has weakened. Last month it went down 5 percent. Since the conditions are essentially the same, my question to you is when do you anticipate the next currency crisis in the Mexican peso?
And then another question that I would like to get in as well has to do with a follow-up with the gentleman from Massachusetts dealing with the inequity in the distribution of income. And in your statement you come across almost hostile or fearful that wages might go up. And I understand why you might be concerned about that, because you may eventually see the consequence of monetary inflation, and it will be reflected in higher wages. But where has the concern been about the escalation of value of stocks? People are expecting them to go up 30 percent a year. They are benefiting, but labor comes along and they want to get a little benefit. They want to raise their salaries 5 or 10 percent. Unlike the other side, I think the worst thing to do is interfere in the voluntary contract and mandate an increase in wages and give them minimum wage rates. That is not the answer.
But to understand the problem I think is very important. This is a natural consequence. They want to share as well, and this is a natural consequence of monetary inflation is that there is an equal distribution of income.
I would like you to address that and tell me if there is any merit to this argument and why you seem to have much greater concern about somebody making a few bucks more per hour versus the lack of concern of a stock market that is soaring at 30 percent increases per year.
Mr. GREENSPAN. Let me say that when I believe that there are trends within the financial system or in the economy generally which look to me and to my colleagues to be unsustainable and potentially destructive of the economic growth, we get concerned.
I am not aware of the fact that if I see things which I perceive to be running out of line, that I have not expressed myself. At least some people have asserted that I have expressed myself more often than I should. And I have commented on innumerable occasions, as I have, in fact, done today, that there are certain values in the system which by historical standards, are going to be difficult to sustain. And I am concerned about that, because it potentially is an issue which relates to the long-term values within the economy.
I have no concern whatever about the issue of wages going up. On the contrary, the more the better. It is only when they are real wages, whether they are wages which are tied to productivity or related to productivity gains. But wages which are moving up more than the rate of inflation, for example, I think are highly undesirable, and indeed to the extent that we do not get real wage increases, we do not get increases in standards of living. So I am strongly in favor of any increase in real wages and not strongly in favor at all of wages that go up and are wiped out by inflation.
Dr. PAUL. But the real wage is down compared to 1971. You have a little flip here or so, but since 1971 it is down.
Mr. GREENSPAN. Part of that issue, Congressman, is a statistical problem. I do not believe the real wage is truly down since 1971.
Dr. PAUL. But we cannot convince our workers of that. At least in my district they are not convinced by some statistic.
Mr. GREENSPAN. Let me put it this way: Productivity after the early 1970's flattened out fairly dramatically, and that slowed real wage increases very dramatically as well. And to the extent that the sense in which earlier generations experienced significant increases in standards of living during the 1950's and 1960's and the early post-World War II period, of course productivity was advancing rapidly. That came to a dramatic end in the early 1970's and persisted until very recently. And if people were concerned about that, they should be, and they should have been, and we should have been, as I think we were.
Dr. PAUL. Do you have a comment on when the next Mexico crisis is going to occur?
Mr. GREENSPAN. Yes. I am not concerned about a crisis in Mexico at this particular stage. I think they are doing reasonably well. The peso at this particular stage is floating appropriately. I do not see any immediate crisis at the moment. And while I do not deny that, as in any country, things can go askew, they have come out of the 1995 crisis frankly, somewhat better than I expected they would.
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