Ron Paul Decries 'Frightened' Fed

NEW YORK ( TheStreet) -- Everybody's favorite vocal Fed-basher, Rep. Ron Paul (R., Texas), expressed on Wednesday Congress' need for enhanced power to audit the Federal Reserve after it coordinated efforts with foreign central banks to increase liquidity to "ease strains in financial markets."

Paul said in a statement that the arrangements indicated how "frightened" foreign governments are about a European financial crisis and that the Fed's move would harm American consumers.
Rep. Ron Paul (R., Texas)

"Central banks are grasping at straws, hoping that flooding the world with money created out of thin air will somehow resolve a crisis caused by uncontrolled government spending and irresponsible debt issuance," Paul said.

Paul said Wednesday on CNBC that the Fed's action provided a temporary reprieve to the financial markets, but that it created a form of worldwide quantitative easing.

Paul also said that the responsibility of failed European financial institutions shouldn't be dumped on American taxpayers.

"Greece should have defaulted two years ago; they should have gone into bankruptcy," Paul said on CNBC. "They the Fed keep propping up the debt -- that's why economic growth is not likely to come for a long, long time.

Paul has strongly opposed the existence of the Federal Reserve for most of his political life, and, as part of his presidential platform has promised to end the "dishonest, immoral and unconstitutional" Federal Reserve.

"Fiat money caused this European crisis and the financial crisis before it. More fiat money is not the cure," Paul said in his statement.

-- Written by Joe Deaux in New York.

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