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The Federal Reserve is a Institution Riddled with Scandals. It’s Time to End It. // Ron Paul
Ron Paul | Trusted Newsmaker
The Scandal-Ridden Federal Reserve: Why Its Credibility Is Crumbling
The Federal Reserve has long been cloaked in secrecy, defended by politicians and bankers alike as an “independent” institution essential for economic stability. Yet beneath that veneer, scandals, insider trading allegations, and political manipulation have piled up. As Dr. Ron Paul and Chris Rossini recently discussed, the Fed is losing credibility fast — and the consequences affect every American’s wallet .
The Myth of Independence
For decades, the Fed’s defenders insisted that independence shielded it from political interference. But as critics point out, “independence” really means secrecy. The public and even Congress are kept in the dark about many of the Fed’s inner workings, from interest rate decisions to backroom deals with Wall Street. This lack of transparency allows corruption to fester while ordinary Americans pay the price through inflation and rising debt .
Gold as a Warning Signal
One of the most telling indicators of the Fed’s failures is the price of gold. In 1971, when President Nixon severed the dollar’s tie to gold, prices stood at just $35 an ounce. Today, gold hovers around $3,500 — a hundredfold increase. That staggering rise reflects not only inflation but also deepening distrust in fiat money and the Fed’s ability to manage it honestly. As long as debt keeps climbing and money printing continues, gold remains a safe haven .
Political Pressure and Rate Manipulation
The Fed’s supposed insulation from politics is a myth. Presidents routinely pressure the Fed to cut interest rates, especially in election years. Former President Trump, for instance, publicly attacked Fed officials like Lisa Cook, hoping to install figures more willing to slash rates. Lower rates may ease government debt payments in the short run, but they also fan the flames of inflation, hitting consumers with higher grocery bills, energy costs, and rent .
Insider Trading and Corruption
Insider trading scandals further erode the Fed’s image. Reports of Fed officials profiting from privileged information are nothing new — even during Paul Volcker’s tenure as Fed chair, whispers of insider trading circulated. While officials claim these issues are “handled internally,” critics argue the fox is guarding the henhouse. If members of Congress enrich themselves from insider deals, why wouldn’t Fed insiders do the same? With trillions of dollars in play, the temptation is enormous .
Counterfeiting by Another Name
Perhaps the Fed’s greatest scandal is its very function: the power to create money out of thin air. This monetary “counterfeiting” enriches the politically connected while eroding the purchasing power of the middle class. Inflation acts as a hidden tax, punishing savers and wage earners while rewarding corporations and elites who benefit from cheap money. As Ron Paul emphasized, the Fed’s manipulation of money supply is the most corrosive insider trade of all .
Failed Sanctions and Foreign Policy Overreach
The Fed’s role doesn’t stop at home. U.S. sanctions against Russia and others, supposedly tools of economic warfare, have backfired spectacularly. Countries like India profited from reselling Russian oil while Washington tried to dictate global trade. These failures expose how monetary policy, foreign policy, and economic coercion are intertwined — with the Fed playing a central enabling role .
Corporatism, Not Free Markets
Critics stress that America’s problems are not products of free-market capitalism but of corporatism — a system where government and big corporations collude to rig the economy. The Fed is at the heart of this arrangement, propping up Wall Street during crises while leaving ordinary taxpayers to shoulder the costs through inflation, taxes, and debt. Austrian economist Ludwig von Mises warned decades ago that corporatism left unchecked could slide into outright fascism — a concern that feels more relevant than ever .
The Federal Reserve’s scandals, secrecy, and manipulation prove that it is neither independent nor trustworthy. Its policies inflate bubbles, erode savings, and empower political and corporate elites at the expense of the middle class. Calls to audit — or even end — the Fed are gaining traction as Americans wake up to the damage. If credibility continues to collapse, the Fed may face the same fate as other failed central banks: public rejection and eventual dismantling .
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