Ron Paul, American author, physician, retired politician, again strongly criticized the Federal Reserve, calling for an immediate audit and subsequent dissolution of the agency. In case the closure of the U.S. dollar is not achieved, Paul predicted that the United States will end up in authoritarianism.

In a column published Monday in the Ron Paul Institute for Peace and Prosperity, the 84-year-old said the U.S. central bank, which is an entity independent of the government and whose shareholders are the world’s leading banks, is responsible for creating growing economic inequality in the country, which will end up leading to the biggest crisis in its history.

The mechanism that benefits only a few

First, Paul describes how the Federal Reserve manipulates the money supply by buying and selling government securities.

“This means that when the Fed decides to pump money into the economy, it does so by putting it in the pockets of wealthy investors,” he explained in his column titled Will the Federal Reserve Cause the Next Riots?

These investors, said Paul, often have close connections to politicians and can spend the new money raised before the issue results in widespread inflation.

The creation of financial bubbles

Likewise, “wealthy individuals,” as Paul describes them, also tend to be among the first to invest in financial bubbles that form when the Federal Reserve distorts interest rates, which is the price of money. This, again, allows them to clearly benefit when the bubble starts to inflate.

“These investors may lose some money when the bubble bursts, but these losses are usually outweighed by their gains,” explained Paul, the former chairman of the Domestic Monetary Policy Subcommittee.

The middle and working classes do not suffer the same fate because, as history has shown, after a bubble bursts, an economic crisis develops that increases unemployment, evictions, and foreclosures, among other social consequences.

And although in these cases the state usually appears with expansive fiscal policies, these sectors “will also not benefit as much as the rich and well-connected.”

Another aspect that is not so visible to the common population is the persistent fall in the standard of living, year after year, as a result of the issue and therefore devaluation of the dollar.

“This is the reason why so many Americans rely on credit cards to cover routine expenses,” Paul said, noting that the magnitude of credit financing is such that total credit card debt in the United States today is nearly $1 trillion.

Politicians also benefit

There is another social sector that, according to Paul, benefits greatly from the trust money system: the political corporation.

When the Fed issues dollars to buy government debt, it allows the political leadership of the day to “massively increase welfare and warfare spending without increasing taxes to politically unacceptable levels.”

“The people pay for the welfare-warfare state via the Fed’s hidden and regressive inflation tax,” explains Paul.

He points out that low interest rates also benefit the political leadership because the closer they get to zero, the less interest the federal government has to pay on issued debt.

The next crisis and… the end of the Federal Reserve?

As an example of this exponential growth in Federal Reserve issuance, Paul highlights what happened in recent months: the money supply increased by about $1 trillion from mid-April to early June.

By comparison, in the whole of 2019 the money supply grew by $921 billion.

Thus, Paul argues that the trust system is coming to an end, and at this point the uncontrolled issuance of money is only devaluing the value of the dollar and worsening the standard of living of ordinary people.

“A coming crisis will likely be triggered by a collapse in the dollar’s value and a rejection of the dollar’s world reserve currency status,” he said, arguing that the “economic collapse” will be worse than the Great Depression.

“This will result in widespread violence along with government crackdowns on liberties, accelerating the U.S. slide into authoritarianism,” Paul warned, noting that there is only one way to avoid such an outcome, “The only way to avoid this is for Congress to make drastic cuts … and to audit then end the Fed.”