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The Casone Exchange
  • September 24, 2008 03:44 PM UTC by Cheryl Casone

    Ron Paul Sees Great Depression

    Today, we had Representative Ron Paul on the Noon show. He serves on the Joint Economic Committee where Ben Bernanke testified this morning. He had an interesting discussion with Helicopter Ben this morning, and I asked him about it. What I find interesting is that Ron Paul fears we are heading toward another Great Depression, and Ben Bernanke is a student of the Great Depression. You would think the two men agree on certain issues, but during our interview Ron Paul did not disappoint, and told us EXACTLY what he thinks of the Federal Reserve:

    CC

Bill Kirby

The comment in "Leave a Reply," earlier by Tom Elliot hit the nail on the head. As a tax consultant I do not do financial planning. Many of my clinets in recent decades reporting loan fees and high interest on their homes as deductions on tax returns prepared by me indicated that they had got advice to take the equity out of their home to invest in an array of "make money" opportunities from the stock market to limited partnerships - all, where others managed their money? Besides, they were told, "the interest and loan fees are good tax deductions." And, often, the losses on these investments became tax deductions, also! Additionally, some pulled money out to send their children to College, pay medical and dental bills, buy rental properties, and, yes, buy boats and fine cars, too. Most who did well with their home equity loans managed their own money, investing it in real estate income property. Often, investment advice was given by "fee driven" advisors and "fast" lending institutions, both being the "Pied Pipers" inducing individuals to reinvest (or use) their home equity "because values and salaries would continue to climb (forever?)." As for me, I paid off my home. In ending, I think Ron Paul recognizes the self serving evils of the bail out, and if any measures are taken with Federal Government insurance, it would be to make sure that domestic depositors are covered so individuals can live and domestic businesses can continue to make payroll.

September 25, 2008 at 3:35 pm

Greg

Ron Paul is right on the mark. I fail to see how anything that is being done in TARP legislation is going to help banks in the near term and the euphoria in the market is a mystery to me...just step back and think. Bank managers with Class III assets are going to be forced to the table and they are going to take some major hits and yes, they are going to get liquidity but they are going to have to deploy it quickly because they have too much infrastructure for a liquid balance sheet. How is Paulson going to get them to the table? He's going to get on a podium and say "Any banker with Class III assets that wants to participate will get protection (no short list after 10-3-08) and anyone who doesn't want to participate...best of luck we'll deal with your bank when the market is done with you.

September 25, 2008 at 2:16 pm

Paul H

Jefferson said over 200 years ago: "If the American people ever let a private bank(Federal Reserve) and the corporations that grow up around them control our money supply, first by inflation and then by deflation, they will deprive it's citizens of their property(foreclosure) until one day their children will wake up homeless on the continent their fathers' conquered."

September 25, 2008 at 1:24 pm

Brian Riehle

Does anyone understand or can anyone explain how Paulson plans on pulling off this magic trick even if he gets his Bill through Congress ? Start with the $700 billion. We're told that about 5% of the paper in the mortgaged backed securities are toxic and those are the ones that Paulson wants to cull out and purchase for later resale. I guess this means the total amount of mortgaged backed securities in the hands of the banks totals $14 trillion and mixed in among them are the $700 billion (5% of $14 trillion) worth of bad loans. Presumably if a bank bought one of these securities, the paperwork that accompanied it didn't specify how many of the mortgages backing it up were good or bad and the overlying assumption is that each security was backed by a mix of mortgages some of which are now in default making the security "toxic" and it's real value uncertain. Given all of that it seems to me that Paulson has an impossible task ahead of him if he thinks he can sort out the sheep from the goats and resell the goats at a later date. Can anyone explain how this is going to work ?

September 25, 2008 at 1:05 pm

R. Atkins

I am completely against this bill.

September 25, 2008 at 1:03 pm

Mike G.

you know it is a shame that nothing gets done in this country until a huge percentage of the public is in pain. well bring it on congress. no one recovers from a illness without purging the disease. Congressional approval is single digits, so why don't the majority of Americans act on their feelings. it confuses me why people keep on voting for unconstitutional "leaders".

September 25, 2008 at 12:56 pm

Bob Eidson

The bailout means we are throwing good money after bad!. After this money is consumed by this same group we will be back in the same boat!!!

September 25, 2008 at 12:53 pm

Jacob Lee

I Called by Congressman today and told him he votes for any bailout and he won't get my vote come November 3rd. Call them and let them know folks! Jacob Lee

September 25, 2008 at 12:29 pm

chuck

When I watch Rep Ron Paul on Glen Beck a few weeks ago he got off the record comments on how right he was from his fellow congressmen. Of course the leadership didn't acknowledge that he was right on the money abou the crisis. But in Beck interveiw he pointed out the fact that our currency had once been backed by gold and when the Federal Reserve was created in early 1900s that's when the US Currency was taken off the gold. He further pointed out the fact that the Federal Reserve was a violation of our constutuion.

September 25, 2008 at 10:17 am

Susan B.

Kind of hard to gain the people's trust after you've screwed them over so many times. Nice sales pitch Bush gave last night, but I'm still not buying! Ron Paul is the only one with any common sense.

September 25, 2008 at 10:14 am

dave

I couldn't agree more. This bailout plan will not work. I expect more losses by these financial institutions to be in the trillions. This Depression/inflationary period will last years, and there's no way out. The banks have been leveraging 30 to 1. Even one trillion loss in housing mortgages can result to 30 trillion dollar loss. This 700 billion bailout is nowhere near the amount needed to solve this problem. The feds know it. Several months from now, they'll come back with another "grave situation" and they'll ask for billions more. Then they'll ask again and again. This won't stop. We're better off cutting it off credit now and facing the problem head on.

September 24, 2008 at 11:50 pm

Ralph Harrison

I remain appalled by this plan after hearing the President speak tonight followed by an interview with Ron Paul on FBN. There are many options to solve this problem using market solutions. The dire threats being proposed do not consider the rush of liquidity that would occur if price levels took a sudden dive. I would expect this liquidity would come from all over the world since it would effectively be buying into the greatest economy ever created at bargain prices. Such market activity would appropriately distribute the losses and provide economic opportunity for the responsible. A real novel idea. If the outrage of the citizenry can continue for another two weeks, maybe just maybe some leadership could surface. Certainly Ron Paul could be instrumental in this trend. Let's keep up the outrage and hope for Congressional gridlock.

September 24, 2008 at 11:09 pm

Tom Elliott

The hearings show us how ignorant Congress is about the financial markets and how much 'guesstimation' goes into the thinking of our Fed Reserve Chair and his puppetmaster Paulson. America is angry at Bush, at an inept Congress, at irresponsible regulators, corrupt investment bankers and hedge funds, incompetent rating agencies, fraudulent mortgage bankers...on and on. I've never seen so much anger on an issue in my life. Congress should take a pass and go on recess. Let's call Paulson's bluff. More than half of this country has lived through recession, job losses, gas crisis, war, etc. We'll survive, with $1 Trillion less debt. Vote out any member of Congress who casts a vote for this disgraceful sham.

September 24, 2008 at 10:52 pm

B Scott

Better be careful!!!History would seem to indicate that when societies experience a serious economical disaster,they,ll usually vote someone into power that will promise them things like a volkswagen in every driveway,a person that loves speaking in great stadiums,a person with great personal ambition.Be very careful when you vote.

September 24, 2008 at 9:45 pm

al m.

Great interview Cheryl--Thanks for bringing it to us! "If congress doesn't help us on this, heaven help us.".....Warren Buffett He's betting 5 billion on the bail out bill being passed. And with his influence, especially with the dems, I suspect it'll be passed. Ron Paul is the real deal..Good man!

September 24, 2008 at 8:06 pm

Ray

I could not agree more with everyone. I keep hearing all of the politicians, Paulson, Bernanke and the CNBC/FBN ex-GS employee bimbos/bimboettes scream about tightening credit if the bailout plan doesn’t pass. Oh No! Say it isn’t so. Loose credit is what got us here in the first place. We have people maxed out on credit cards, six months behind on house payments, driving their Beemer convertible and their Escalade with a boat in the driveway that they can’t afford. Is it really a bad thing if the bank says NO MORE CREDIT until you pay off what you owe? This country is so far in debt to other countries because the corporations and citizens of this country can’t live within their means. The middle class is being taxed out of existence. The US savings rate is the worst in the world and we are handing the next generation so much debt they will never be able to pay for it. The next programs to go are SS and Medicare because we can’t afford them. But I bet those Holiday bonuses on Wall Street are going to be sweet this year! Go Ron Paul!

September 24, 2008 at 8:01 pm

Linda O.

1. Paulson is leaving as Treasury Secretary Jan. 2009, but wants unprecented power given to him and the executive branch, which already has "imperial" self-instigated powers (and I WAS a republican!). 2. His new post will be overseeing the Resolution Trust which is heading the "transitional management" that will maintain the $700B (all of which he wants upfront). 3. Bernanke is to be on the board of this new trust. 4. They have modified their tune from yesterday to today in that of "bailout" to an "asset acquisition." These assets (WHICH THEY CANNOT EVEN DETAIL) are to be bought (FORCED was a word Paulson reiterated many times) from banking institutions at a low price (firesale price) and hold/manage/sell at a time when these assets mature--when the value is supposed to increase to a whole price. 5. At first, WE THE PEOPLE were to be the investors with no chance of dividends, but now Paulson has changed his tune to somewhat agree in placing protections. HOWEVER, he refuses to accept changes in the legislation that would require him to repay monies at the time of a sale--he will be allowed to reinvest that money into other assets rather than repay it back to the loan/American people. BASICALLY, the American Taxpayer will NOT, NOT, EVER see that money again. 6. No executive in the trust wants to take less than $1 Million dollars in salary. This alone should shame Paulson! 7. It should be noted that this is more than likely a regulatory change in our banking system, and your local bank may no longer be under state regulation but would change to "federal" regulation -- BTW--federal doesn't mean our government -- it refers to the federal reserve--our "central bank" over our hemispheric territory that reports back to the International Monetary Fund/World Bank. 8. It is more likely than not that we taxpayers will never be able to repay the interest on this loan to the Federal Reserve -- which is NOT ANY PART OF THE US GOVERNMENT -- even when the assets mature -- the difference likely won't be enough to offset. 9. These are just some of the highlights -- I could write about 20 more pages to synopse the 44-page democratic lead redesigned plan... 10. If you are not for the plan, expect ridicule because many in Congress think you're stupid. 11. If the plan does not pass, our credit system will spiral downward. If you don't have a lot of credit and can pay it off, you're in pretty good shape. If you are deep in debt, expect to be poor and poor very quickly. These results are necessary because people are living well over their means. AS RON PAUL SAID TODAY (paraphrased and as heard on Fox Business News following the House Financial Services Cte. Meeting) Let the free market work itself out. Stay strong America -- keep calling your Congressmen/Senators and even the White House -- TELL THEM NO, NO, NO! Although a "mini-depression" may be necessary, you'll still be FREE instead of servant to the Federal Reserve!

September 24, 2008 at 7:06 pm

ryan

suffer now for 8 months with rp's plan and we'll be fine, or be ok for 8 months, let the inside job controlled demolition happen and we won't be fine.

September 24, 2008 at 6:33 pm

John

Ron Paul is right on!! This interview should be shown on all the local channels ASAP! Since it won't be - send this link to all your friends and relatives and tell them to pass it on!

September 24, 2008 at 6:31 pm

Steven C.

While I did not support Congressman Paul during the primarys, and I am now a McCain/Palin supporter, the Congressman is the only person I have listened to for the past several days that is making any sence. I am sure he is hearing from his district that this plan is not wanted. I am invested heavily in equities, and I am very concerned about what may happen to the markets, but this plan from the Treasury and Fed concerns me even more. I do not beleive that we, as a people and government, should bailout and reward dishonorable conduct. Those responcible should be held to account, and the assets in question should be allowed to fail and be aquired at a market price; whatever that may be. We must stop this "womb to the tomb", socialistic approach to government.

September 24, 2008 at 5:55 pm

Linda

An old saying comes to mind....The best way to get yourself out of a hole - quit digging. We need to take our lumps. Greed got us here now prudence needs to get us out. We bought a home we could afford to live in.....fixed it up and built equity while so many over-bought a home with a variable rate and gambled. Why enable poor financial decisions when we have an opportunity to teach. Why should responsible citizens pay for poor decisions made by others. Bailing anyone out is always a bad deal. Everyone pays except the person who took the actual risk and then there is no lesson learned. Hang on to your socks because my guess is it will pass and we will just be digging ourselves even deeper....!!

September 24, 2008 at 5:12 pm

Drew

Go get em Ron!

September 24, 2008 at 4:45 pm

Drew

Go get then Ron!

September 24, 2008 at 4:45 pm

Justin

Long commodities, short financials!!! This is a secular trend that isn't going anywhere anytime soon. Not only is supply tight for all sorts of commodities, but our government seems to think that printing money is the answer to our economic woes. I can't believe the people that fell for the head fake dollar rally. We still may see oil go below $100 in the near term, but anything much below that is out of the question. And Ron Paul is dead on. You may not like all of his views, but this is/was the only presidential candidate with a firm understanding of the economy. And would it really hurt our "national" security is we stopped subsidizing American embassies and a military presense in God knows how many countries around the world? And yes, we can still fight the war on terror effectively on a budget.

September 24, 2008 at 4:43 pm

Kevin

Senator Paul is one of the few who makes any sense in this financial mess we are in. Without correcting the fundamental flaws of this economy and the federal reserve system, this is another band-aid that will cause more problems down the road. Lets take the short recession, lets these greedy companies fail, and rebuild a sound economy based on pure market forces not more regualtion. Kevin

September 24, 2008 at 4:41 pm

louis tong

Dr. Ron Paul is right, we would all be better off if we return to our founding principles of goverment and sound money.

September 24, 2008 at 4:41 pm

ron villella

Unfortunately, Ron Paul is written off by most of these people without really listening to him. he is generally right and much more credible than Paulson, Bernanke,Dodd, Pelosi,Reid,Obama and his fannie and freddi sidekicks, the senators from NY and Massuchusetts, et cetera. But the press is so overwhelmingly crooked and mislead by liberals that the narrative is all screwed up and those of the public too gullible to seek out other venues to get somewhat more reliable news. Even Fox is too sensitive to really bring out the other issues - instead they are passed over so lightly and presented to only some of the public, that they often are meaningless, and this includes O'reilly. rlv

September 24, 2008 at 4:36 pm

KT

Suddenly... Ron Paul does not seem so "crazy:.

September 24, 2008 at 4:22 pm

about this blog

  • Cheryl Casone joined FOX Business Network (FBN) in September 2007 as an anchor. Prior to FBN, Casone served as a correspondent for FOX News Channel’s (FNC) business unit and was a regular guest on FNC’s Your World with Neil Cavuto. Casone brings years of experience covering finance, business, and consumer news to FBN.

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