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Editor's note: Ron Paul is a Republican congressman from Texas who ran for his party's nomination for president this year. He is a doctor who specializes in obstetrics/gynecology and says he has delivered more than 4,000 babies. He served in Congress in the late 1970s and early 1980s and was elected again to Congress in 1996. Rep. Paul serves on the House Financial Services Committee.

Rep. Ron Paul says the government's solution to the crisis is the same as the cause of it -- too much government.

(CNN) -- Many Americans today are asking themselves how the economy got to be in such a bad spot.

For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.

Unfortunately, the government's preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.

Ever since the 1930s, the federal government has involved itself deeply in housing policy and developed numerous programs to encourage homebuilding and homeownership.

Government-sponsored enterprises Fannie Mae and Freddie Mac were able to obtain a monopoly position in the mortgage market, especially the mortgage-backed securities market, because of the advantages bestowed upon them by the federal government.

Laws passed by Congress such as the Community Reinvestment Act required banks to make loans to previously underserved segments of their communities, thus forcing banks to lend to people who normally would be rejected as bad credit risks.

These governmental measures, combined with the Federal Reserve's loose monetary policy, led to an unsustainable housing boom. The key measure by which the Fed caused this boom was through the manipulation of interest rates, and the open market operations that accompany this lowering.

• Obama blames lobbyists, politicians for crisis
• Commentary: McCain, Obama botching response to crisis
• Commentary: How to prevent the next Wall St. crisis
• In Depth: Commentaries

When interest rates are lowered to below what the market rate would normally be, as the Federal Reserve has done numerous times throughout this decade, it becomes much cheaper to borrow money. Longer-term and more capital-intensive projects, projects that would be unprofitable at a high interest rate, suddenly become profitable.

Because the boom comes about from an increase in the supply of money and not from demand from consumers, the result is malinvestment, a misallocation of resources into sectors in which there is insufficient demand.

In this case, this manifested itself in overbuilding in real estate. When builders realize they have overbuilt and have too many houses to sell, too many apartments to rent, or too much commercial real estate to lease, they seek to recoup as much of their money as possible, even if it means lowering prices drastically.

This lowering of prices brings the economy back into balance, equalizing supply and demand. This economic adjustment means, however that there are some winners -- in this case, those who can again find affordable housing without the need for creative mortgage products, and some losers -- builders and other sectors connected to real estate that suffer setbacks.

The government doesn't like this, however, and undertakes measures to keep prices artificially inflated. This was why the Great Depression was as long and drawn out in this country as it was.

I am afraid that policymakers today have not learned the lesson that prices must adjust to economic reality. The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay.

Additionally, the government's actions encourage moral hazard of the worst sort. Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets.

Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.

The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.

It is time this process is put to an end. But the government cannot just sit back idly and let the bust occur. It must actively roll back stifling laws and regulations that allowed the boom to form in the first place.

The government must divorce itself of the albatross of Fannie and Freddie, balance and drastically decrease the size of the federal budget, and reduce onerous regulations on banks and credit unions that lead to structural rigidity in the financial sector.

Until the big-government apologists realize the error of their ways, and until vocal free-market advocates act in a manner which buttresses their rhetoric, I am afraid we are headed for a rough ride.

The opinions expressed in this commentary are solely those of the writer.

All About U.S. Federal Reserve • Real Estate • Fannie Mae • Freddie Mac Holdings

Sam Lowry
Updated: 8/7/2008

Effort Promotes Constitutional Government

On August 11, 2008, a group of "latter day Paul Reveres" will step forward and take a "Message of Freedom" directly to the people of Wisconsin and Minnesota. Displaying undaunted commitment to the restoration of Constitutional government in America, these self-described "patriots of the 2nd American Revolution" will traverse 280 miles in 21 days to arrive in Minneapolis for Congressman Ron Paul's "Rally for the Republic" on September 2nd.

The group feels that the fundamental principles of the Constitution are no longer being followed in America today. "We have lost our way. We have a government of men, not a government of law. We're talking about the restoration of Constitutional government and the rule of law", says John Zwengel, one of the group's organizers and a computer graphics artist from rural Illinois.

Educate and Organize
The organizers are quick to point out that The Great American Walk for Freedom is not a protest or a demonstration. "This is a campaign of outreach, education and organization", says Los Angeles resident Steven Vincent. "In each town we pass through, with every American we meet, at every farmhouse and every crossroads, we will educate the people about the condition of the country and the solution to its troubles: the principles of Liberty and the Constitution. "

A fleet of rented RV's will serve as mobile dormitories, mess halls, bathrooms and supply vehicles. The RV's will be decorated to advertise our message as they travel and will serve as housing in Minneapolis as well.

Taking the "Case for Freedom" to the People
The group plans on distributing thousands of copies of the U.S. Constitution and "USA Tomorrow" newspapers and will hold Town Hall Meetings in some 24 locations along the route. "We will cut a swath across two States and leave a trail of Freedom in our path" says Michael Maresco, who hails from Hawaii. "Samuel Adams spoke of "setting brushfires of Liberty in the minds of men. That's what we aim to do."

At these meetings the group will give a presentation entitled: "The Case for Freedom: The Constitution is the Way Forward for America". Jim Azzola, an online bookseller from New Hampshire said, "We will also encourage dialogue about the Constitutional issues raised by the presentation. We intend to spark thought and discussion giving voice to the People on the most pressing matters facing the nation today."

Vincent feels that "Americans are ready to hear the message of Freedom" and notes that "the response from the people of Wisconsin has been tremendous. We have Town Hall Meetings scheduled at High Schools, Public Libraries, American Legion Posts and Churches. The responsive participation we are receiving is exemplified by the leader of a Boy Scouts troop who, upon learning of the upcoming meeting, offered to distribute flyers to all the parents and scouts at their next gathering. He also volunteered to place the flyer on public bulletin boards around town and place an ad in the town newspaper."

The organizers say that several returning Iraq War veterans will be joining their Walk for Freedom and that Wisconsin veterans organizations have been among the most interested in hearing their message. Harry, an 81 year old WWII and Korean War veteran from rural Illinois, contacting VFW and American Legion Posts about the Great American Walk for Freedom. Harry feels that something has gone wrong with the country and feels compelled to act. "I can't believe what this country is becoming. It's sure not what I went to fight for".

We The People
The organizers emphasize that it is a non-partisan effort. The Freedom Walkers are an odd assortment of Republicans, Democrats, Libertarians, Independents and others whose basic agreement is that the Founding Fathers gave America a governing rule book to follow and that it is no longer being followed. "I always say, if you don't have rules, then you're going have rulers." says Steven Vincent. "Someone is going to decide. If it's not the unbiased law, then it's going to be men with a self interested agenda".

The Great American Walk for Freedom will have a big "Kick Off" from Lambeau Field in Green Bay on Monday, August 11th at the Packers home opening game. Their first stop from there will be Pulaski, Wisconsin.

To find the complete schedule of stops and Town Hall meetings, visit www.Walk4Freedom.com. To participate in the Walk for Freedom, set up a Town Hall Meeting, make a donation or otherwise support this effort, contact: freedommessage @ sbcglobal.net or leave a message at 414-256-1307.

Exclusive Intelligence Examiner Report

Texe Marrs

—

Never before have the American people been in such terrible danger as they are now. On every side, the elite have created fire-breathing dragons that are steadily advancing and threatening to destroy us.

First, there is the hocus-pocus, contrived energy  The planet is awash in oil, but the elite have fabricated lies of "scarcity" to drive prices skyward to astronomical levels. crisis. The establishment story is that we are fast running out of oil. The earth's petroleum stores are almost depleted—supplies are peaking and now economic and human tragedy is at our doorstep. Predictably, the price of gasoline has rocketed into the stratosphere, leaving the ordinary working public terribly depleted of income and financially up against the wall.

Are we really running out of oil? No! Of course not. In fact, the planet is awash with the gooey black stuff. Earth is truly Planet Petroleum. Recent drilling successes in Brazilian waters, in the Gulf of Mexico, in the Bakken oil region of North and South Dakota, in Canada and Alaska, and around the globe prove that mankind will never run out of oil. Never!—Never!—Never!

The unscientific theories of "fossil" fuel depletion and hoax of "Peak Oil" are absurd nonsense, lies designed by oil corporation hucksters and their paid shills to justify their highway robbery of the American and world consumer.

The contrived crises of "Global Warming" and "Climate Change" are similar scams. The entire environmentalist movement was founded—and funded—by the huge multinational oil corporations: Exxon, Mobil, Shell, etc. They want the Mother Earth crazies to act-up. It gives the greedy oil potentates an excuse to shelve most of the world's oil that is discovered and cap-off tens of thousands of producing oil wells. It also provides the elite an excuse for their failure to build new gasoline refineries and pipelines.

Remember: It was President Richard Nixon, a supposedly "conservative" Republican, who created Big Brother's energy bureaucracy in Washington that today is in bed with the oil companies. It was Nixon who gave us the unconstitutional Endangered Species Act and Environmental Protection Act with their goal of taking away the citizen's private property rights. And it was during Nixon's ill-fated presidency that we had our first taste of long lines of autos waiting desperately at gas station pumps for "limited" and expensive gasoline for their tanks.

Regrettably, we now have con-artists like former Vice President Al Gore out on the hustings, pimping for the oil companies with his pretentious, undocumented and preposterous claims of "Global Warming." The Gore family—Al, Jr. and his corrupt father before him, Albert Gore, Sr.—were and are shills for Occidental Petroleum, owned by Communist/Capitalist (I know it sounds like an oxymoron, but it's the truth!) greedster, Armand Hammer. Gore's ambition is to become a billionaire and he doesn't intend to let a little thing like "truth" hold him back from achieving that aim.

There is now also the new "scare"—the global shortage of food and the outrageous runup in the prices of  Agribusiness corporations now own over 90% of farm capacity. To gouge consumers, they lie and contend that food is scarce. Thus, prices are escalating fast. commodities such as corn, wheat, rice, and other staples. Again, this is a contrived crisis designed to line the pocketbooks of corporate Mafia. Yes, the food riots by angry and hungry mobs of starving people in countries like Somalia, Ethiopia, Haiti, Bangladesh, and Indonesia are real. And the pictures of hungry emaciated children in Africa are, too. There is a food crisis—but it's an artificial crisis. The fact is, new technologies in agriculture have increased production potential 100-fold in the past quarter of a century. Like the oil situation, the planet is awash in food. Thus, while the poverty-stricken masses overseas are begging for crumbs and some shortages are beginning to rear up even in the U.S.A. and developed nations, the distribution warehouses of the agribusiness corporations are bursting at the seams with surplus grains and other foodstocks. No one, anywhere, should be going hungry.

So, why the crisis? Look, at what has been happening on the commodity markets in Chicago and you'll find the answer. The well-fed Illuminati billionaires have bid up the "futures" prices for soybeans, wheat, rice, corn, cattle and every other product to ridiculously high levels. Now, to get their market manipulation to pay off, they must engineer global food shortages to drive prices through the roof. The fat cats are getting more and more wealthy off the misery of the hungry, fear-filled masses.

Water is also an area where the rich are scamming the citizenry. There is a reason why Maurice Strong, former head of the UN's Environmental Program, owns most of the underground water reservoirs in Colorado and New Mexico, and has water interests in Canada, and why billionaires like T. Boone Pickens are investors in water supplies. Water is going to join oil and food as scarce resources so that, once again, the average person is scalped. I predict that within a few short years the price of water will escalate so much and shortages will be so severe that convenience stores won't even have bottled water to sell and restaurants will start charging customers $2, $3, or more for a small glass of H₂O!

And when the water crunch comes, don't even think about watering your lawn or using scarce water supplies to grow your home garden. Satellites overhead will be monitoring backyards to catch "violators" of new water regulations that are already on the drawing boards.

In the State of Texas, they've been working on a plan to tax citizens according to the amount of rain that annually falls on a person's property. That's right, if it is a wet year and you own even a postage stamp-sized suburban home, you could get socked with a new "rain use" tax of hundreds or thousands of dollars. That'll teach you to have the audacity to build your home in a place where it rains.

Taxing for the rain that falls on a person's property is only one of countless sinister methods being cooked up by the elite to plunder individual citizens of their hard-earned income and drive the masses into abject screaming poverty.

The United Nations has a scheme to charge every person who  This huge complex is the Rome, Italy headquarters of the United Nations’ World Food Authority, formally known as the "Food and Agriculture Organization of the United Nations" (FAO). Its Latin motto, fiat panis, means "Let there be bread!" operates a tractor, a lawn mower, auto, power tool, or any other energy-using device a "carbon tax." A punishing tax will also hit homeowners and businesses that have air conditioning systems. Meanwhile, a global pollution tax will be placed on every gallon of gas you buy for vehicles.

The contrived food crisis gives the elite many golden opportunities to rip us off financially and consolidate their Big Brother police state control of the people.

The UN has erected a gigantic building in Europe to house its new globalist agency, the World Agriculture and Food Organization. From this gargantuan complex, bureaucrats will tell farmers in the U.S.A. and around the world what and when to plant. No one will be able to buy or sell food not approved by the global organization. This is the reason why the U.S. Department of Agriculture is demanding that every farm animal—horses, cows, sheep, goats—be microchipped and tagged and that ranchers and farmers maintain exhaustive records of the birth, death, and life of each and every animal. Soon, you will not be able to own livestock or any other farm animal without obtaining a government permit. Not even a single cow.

This is similar to what the oil industry is doing to keep mavericks and independents from drilling for and producing oil. Anyone who tries finds that they must first obtain a thousand permits from the "authorities" and face a blizzard of environmental and energy regulations. Only the multinationals—the Exxons and Mobils—are allowed to make money by bilking the public.

The Illuminati elite are processing and pushing humanity psychologically into a New Reality. Their goal is to force us all to accept this New Reality and to willingly enter their artificially created, new Age of Scarcity. Naturally, they, the High Priests, claim to have the solutions necessary to fix each and every crisis. If, however, we do not accept their prefabricated solutions, we will be crushed—the whole world will grind to a halt due to lack of oil, and we will all starve and thirst to death. What monstrous beasts and liars these elitist human devils are!

TEXE MARRS

Infowars
May 26, 2008

Editor’s Note: The following video is a prime example of hysterical “Peak Oil” scaremongering. In fact, there is no shortage of oil — the reserves are increasing, not decreasing. Consider the following examples: In 2006, Chevron announced a huge oil discovery in the the Lower Tertiary zone of the Gulf of Mexico, described as “one of the nation’s biggest oil discoveries in decades,” and Brazil discovered giant new offshore oil fields in 2005 (expected to produce 773 million barrels of oil by 2025). Add to this BP’s discovery of new oil fields near the Shetland Islands, recent discoveries in the Timor Sea, Yemen, Tunisia, Libya, offshore Trinidad, in Pakistan, Angola, in the Ordovician Red River Strata of southeastern Saskatchewan, and elsewhere. Earlier this month, the Kurds of northern Iraq announced a major oil find, estimated at about 2 billion barrels. In the last 20 years, known reserves have doubled. Currently there are somewhere in the neighborhood of 680 billion barrels of Middle East reserve oil alone.

Add to this an “intriguing theory now permeating oil company research staffs suggests that crude oil may actually be a natural inorganic product, not a stepchild of unfathomable time and organic degradation. The theory suggests there may be huge, yet-to-be-discovered reserves of oil at depths that dwarf current world estimates,” writes Chris Bennett (see Lindsey Williams interview below). “Deeply entrenched in our culture is the belief that at some point in the relatively near future we will see the last working pump on the last functioning oil well screech and rattle, and that will be that. The end of the Age of Oil. And unless we find another source of cheap energy, the world will rapidly become a much darker and dangerous place.” It is a meticulously nurtured myth.

Peak Oil takes a page from publicly available CFR and Club of Rome strategy manuals that say global government needs to control the world population through neo-feudalism by creating artificial scarcity that will result in massive social unrest, widespread famine, and endless war. $15 a gallon gas will most certainly help this agenda along.

Watch the videos.

From David Edwards and Raw Story, May 24:

Robert Hirsch, senior advisor for Science Applications International Corporation, sat down with MSNBC’s Alex Witt to discuss the possibility of an upcoming oil crisis. Hirsch says that gas could reach $15/gallon within a few years because it is “essentially certain” the world has reached the maximum levels of oil production.

“The problem is that there’s not that much oil left in the ground,” Hirsch says. “What we’ve done is been very fortunate to have oil production increase as our economies have developed over the past decades. And now we’re reaching a point where we’re about to get, or we may be, at the maximum world oil production. After that, oil production will then decline and prices, of course, will continue to do what they’ve been doing recently. So what we’ve got today may be the ‘good old days.’”

Hirsch addressed the timeframe in which the US could see $15/gallon gas: “It could happen within a matter of months. It could happen within a matter of a few years. But it’s essentially certain that we are at the maximum of world oil production. And after that, we’ll go into decline, and when there’s much less oil available, then, of course, the price of oil is going to increase dramatically.”

Fuels, heating oil, and consumer products that rely on petroleum will all be impacted by the decline in world oil production. Hirsch estimates the world GDP declining at the same rate as oil production.

Raw Story video from MSNBC’s News Live, broadcast May 24, 2008.

Peak Oil is a Corrupt Globalist Scam

Infowars Network | October 04 2005
By Steve Watson, Alex Jones & Paul Watson

They make the profits on creating artificial scarcity.

“Peak oil” is pure military-industrial-complex propaganda.

Publicly available CFR and Club of Rome strategy manuals from 30 years ago say that a global government needs to control the world population through neo-feudalism by creating artificial scarcity. Now that the social architects have de-industrialized the United States, they are going to blame our economic disintegration on lack of energy supplies.

Globalization is all about consolidation. Now that the world economy has become so centralized through the Globalists operations, they are going to continue to consolidate and blame it on the West’s “evil” overconsumption of fossil fuels, while at the same time blocking the development and integration of renewable clean technologies.

In other words, Peak oil is a scam to create artificial scarcity and drive prices up. Meanwhile, alternative fuel technologies which have been around for decades are intentionally suppressed.

This year in particular we have seen a strong hike in oil prices and are being told to simply get used to it because this is the way it is going to be. In the wake of Hurricanes Katrina and Rita gas prices have shot up amid claims of vast energy shortages. Americans are being asked to turn off lights, change thermostat settings, drive slower, insulate homes and take other steps. Meanwhile the oil companies continue to make record profits.

Even The New York Times pointed out that the recent “energy crisis” seems to be purely tactical:

“To Mr. Bush’s critics, the call for conservation smacked of showmanship, or of shutting the garage door after the S.U.V. had been stolen. After all, the president has spent the past weeks dropping into the hurricane region from the fuel-guzzling Air Force One, which the Air Force estimates costs $40,000 an hour to fly.”

Flying in the face of the so called peak oil crisis are the facts. If we are running out of oil so quickly then why are reserves being continually increased and production skyrocketing?

in the 1980s OPEC decided to switch to a quota production system based on the size of reserves. The larger the reserves a country said it had the more it could pump.

Earlier this year Saudi Arabia reportedly increased its crude reserves by around 200 billion barrels. Saudi Oil Is Secure and Plentiful, Say Officials.

“These huge reserves enable the Kingdom to remain a major oil producer for between 70 and 100 years, even if it raises its production capacity to 15 million barrels per day, which may well happen during the next 15 years,”

Is this the normal course of behaviour if we are currently at the peak for oil production? The answer is no, it’s the normal course of action for increasing production.

There have also been reports that Russia has vastly increased its reserves even beyond those of Saudi Arabia. Why would they do this if they believed there would be no more oil to get hold of? It seems clear that Russia is ready for unlimited future production of oil.

There is a clear contradiction between the peak oil theory and the continual increase in oil reserves and production.

New untapped oil sources are being discovered everywhere on earth. The notion that there are somehow only a few sources that the West is trying to monopolize is a complete myth, promulgated by those raking in the massive profits. After all how do you make huge profits from something available in abundance?

A Wall Street Journal Article by Peter Huber and Mark Mills describes how the price of oil remains high because the cost of oil remains so low. We are not dependent on the middle east for oil because the world’s supplies are diminishing, it is because it is more profitable to tap middle east supplies. Thus the myth of peak oil is needed in order to silence the call for tapping the planet’s other plentiful reserves.

Richard Branson has even stated his intention to set up his own refinery because the price of oil is artificially being kept high whilst new sources are not being explored and new refineries not being built.

“Opec is effectively an illegal cartel that can meet happily, nobody takes them to court,” Branson has said. “They collude to keep prices high.”

So if more refineries were built and different resources tapped, the oil prices would come down and the illegal cartel OPEC would see profits diminish. It is no wonder then that the argument for peak oil is so appealing to OPEC. If no one invests to build refineries because they don’t believe there is enough oil, then who benefits? OPEC and the oil elites of course.

It seems that every time there is some kind of energy crisis, OPEC INCREASES production. The remarkable thing about this is that they always state that they are doing it to ease prices, yet prices always shoot up because they promulgate the myth that they are putting some of their last reserves into the market. Analysts seem confused and always state that they don’t believe upping production will cut prices.

In a recent report the International Monetary Fund projected that global demand for oil by 2030 would reach 139 million barrels a day, a 65 percent increase.

“We should expect to live with high and volatile oil prices,” said Raghuram Rajan, the IMF’s chief economist. “In short, it’s going to be a rocky road going forward.”

Yet independent analysts and even some within OPEC seem to believe that the demand for oil is diminishing. Why the contradiction?

The peak oil and demand myth is peddled by the establishment-run fake left activist groups, OPEC and globalist arms such as the IMF.

Rolling Stone magazine even carried an article in its April issue heavily biased towards making people believe the peak oil lie.

The Scientific evidence also flies in the face of the peak oil theory. Scientific research dating back over a hundred years, more recently updated in a Scientific Paper Published In ‘Energia’ suggests that oil is abiotic, not the product of long decayed biological matter. Oil, for better or for worse, is not a non-renewable resource. It, like coal, and natural gas, replenishes from sources within the mantle of earth.

No coincidence then that the Russians, who pioneered this research have pumped expenditure into deep underground oil excavation.

We have previously scientifically exposed the scam behind peak oil. Here is a 1 hour+ audio clip featuring Alex Jones’ comments on peak oil and then the analysis of respected scientific commentator Dr. Nick Begich who presents evidence to suggest the idea of Peak oil is artificial.

A dangerous fallout precedent being set is that people on both the left and right believe wars are being fought in order to tap the last reserves of oil on the planet. The “coalition of the willing”, whoever they may be for any given war, will not pay particular attention to refuting this claim because it allows them a reason to start and continue said war.

Even though many will see it as immoral, many will subconsciously attach it as a reason for the war. In reality the war is purely for profit, power and control, oil can be a part of that, but only if the peak oil claim is upheld.

If we continue to let the corrupt elite tell us we are wholly dependent on oil, we may reach a twisted situation whereby they can justify starvation and mass global poverty, perhaps even depopulation, even within the western world due to the fact that our energy supplies are finished.

Peak oil is just another weapon the globalists have in their arsenal to move towards a new world order where the elite get richer and everyone else falls into line.