The Federal Reserve is No Magisterium

Nicholas von Hoffman writes in The Nation:

Paul is the contender who seems to understand that the Federal Reserve Board is not the Vatican and that its chairman, Ben Bernanke, is not the pope. It's a fixed practice by our politicians to treat whoever is the chairman of the Fed as though he were endowed with infallible powers.

On Wall Street, the sharper ones know better. They understand that lowering interest rates every time the stock market swoons will eventually, or even a lot sooner, bring a world of pain down on us. As it is, thanks to the Fed, interest rates are lower than the rate of inflation. This anomalous condition is called "negative interest," and for savers it means that their money is disappearing even as it rests safely tucked away in certificates of deposit.

Our country's pervasive monetary ignorance is finally yielding to the wise instruction of Ron Paul and the bitter lessons of current experience. Inflation has been a problem in this country for many years, primarily from the fractional reserve banking practices of the Federal Reserve system. To Catholics who are interested in the moral problems behind economic phenomena, I urge a reading of this great essay by Professor Jorg Guido Hulsmann called "The Cultural and Spiritual Legacy of Fiat Inflation":

The spiritual dimension of these inflation-induced habits seems to be obvious. Money and financial questions come to play an exaggerated role in the life of man. Inflation makes society materialistic. More and more people strive for money income at the expense of personal happiness. Inflation-induced geographical mobility artificially weakens family bonds and patriotic loyalty. Many of those who tend to be greedy, envious, and niggardly anyway fall prey to sin. Even those who are not so inclined by their natures will be exposed to temptations they would not otherwise have felt. And because the vagaries of the financial markets also provide a ready excuse for an excessively parsimonious use of one’s money, donations for charitable institutions will decline.