Hank Paulson in End the Fed, by Rep. Ron Paul (R, TX)

On Budget & Economy: 2008 downturn in housing market caused crisis & recession

In mid-2008 Secretary of the Treasury Henry Paulson simplified by saying that the downturn in the housing market has caused all the trouble. He and others concluded that the government should stimulate new housing and do whatever possible to keep the prices of houses from falling. They contended that since house values were dropping, the mortgages and the many derivatives associated with securitization had become liquid, and bailing out this market would reverse the deflationary process.

But--and this is crucial--focusing on the housing market alone was just the last in a parade of claims about the root problem. There are other sectors that have suffered, in finance, car manufacturing, services, retails, and stocks. These are all merely symptoms of a deeper problem: the Fed and its role in sustaining an unsustainable paper-money system.

I was intrigued to see that even the Treasury secretary senses that, at some level, the crisis is connected to central banking.

Source: End the Fed, by Rep. Ron Paul, p.124 Sep 29, 2010

The above quotations are from End the Fed, by Rep. Ron Paul. Click here for main summary page. Click here for a profile of Hank Paulson. Click here for Hank Paulson on all issues.
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