Wednesday on CNBC’s “Squawk Box,” Texas Republican Rep. Ron Paul warned that recent global unrest can be traced back to inflation-related price jumps for for food and other goods everywhere. He cited conflicts in the Middle East and North Africa and austerity measures in now in place in European nations with generous social welfare systems.
Rep. Paul warned that these crises could easily become more widespread.
His take on the Standard & Poor’s downgrade was that if a single ratings agency could cause markets to drop, perhaps the Dow’s tumble would have happened regardless.
“In some ways I think it’s relevant,” Paul said. “You know, the markets are much more powerful. They’ll downgrade whatever they need to. But for the moment, and for traders, you know, this can be a big deal. And politically it can be a big deal.
“But if one announcement like that from somebody like Standard & Poor’s, who didn’t have any idea what was going on with Fannie Mae and Freddie Mac, could change things — so, if that announcement pushes the dollar down and causes chaos in the stock market, they’re destined to do that anyway. So those are just excuses.
“So I don’t think an announcement — although in a short time in a day-to-day trading [it] has a significance — that doesn’t change things.”
Paul continued to promote a return to the gold standard and his doubts that the “super committee” established by last week’s debt ceiling deal will find sufficient government budget savings.
“I cannot believe people would have high rating for any of this paper money and paper bonds, long-term when it earns no interest,” he continued. “It’s so distorted. And then they decide that, you know, all we have to do is set up a committee of twelve and we’re going to come up with so-called cuts, which aren’t cuts. There are no cuts that anybody’s proposing. So, no wonder why people are negative.”
Paul’s most ominous message concerned the potential for global unrest when currencies fall in value.
“[W]hat I worry about the most is the consequence of currency destruction and violence,” Paul said. “And, boy, every day there’s more and more violence whether it’s in London, a demonstration in Israel, all around the world, revolutions going on. And this is all related to sometimes prices of food going up. This is all related to the fictitious notion about what money is and what it should be.”