Ron Paul: Still an Idiot

Ron Paul's T-Bill Bonfire!

Presidential candidate Ron Paul has been getting a lot of traction recently with his suggestion that the Fed simply destroy the $1.6 trillion worth of bonds it bought up during the recent QE2 buyback.  Of course this sounds like a reasonable proposal, the government owing the government money and all, until you actually look at it.  Then it becomes the usual twisted pile of junk logic Ron Paul has become famous for (gold standard?).

Of course, if the Treasury did do that — it might as well do away with the concept of quantitative easing via asset purchases altogether and let the Fed literally roll the printing presses Zimbabwe style. There would, after all, be no illusion that QE was anything other than money printing from thin air.

The whole point of keeping hold of the Treasuries, after all, is connected to the Fed having the power one day to soak up the additional money supply it has created. Without the bonds, it would be restricted on the tightening measures it can deploy.

Ron Paul: He Looks Sane but He's Really Not...