Bad monetary policies are responsible for the exponential rise in cryptocurrencies, former Congressman from Texas and Presidential candidate Ron Paul said. He particularly points the finger at quantitative easing which had the effect of creating a lot of credit in the market. The process of quantitative easing (QE) involves buying debt and other financial assets by central banks for the government to expand lending.
“I think cryptocurrency is a reflection of the disaster of the monetary dollar system,” he said in a CNBC interview.
He has expressed his support for cryptocurrencies in the past although he does not believe it is real money. He has, however, said the government should not interfere with the sector as it comes out of people’s need to use it. He even created a twitter poll in which many participants expressed overwhelming support for cryptocurrencies. The libertarian candidate has launched several failed presidential bids.
A wealthy person wants to gift you $10,000. You get to choose in which form you’ll take the gift. But there’s a catch: You must keep the gift in the form that you choose, and you can’t touch it for 10 years.
In which form would you take the gift?
— Ron Paul (@RonPaul) December 5, 2017
“I think if you had not had the QEs, and the massive amount of inflation, and places looking for the easing dollars to go, you might still have the cryptocurrencies. But I don’t think you would have this exponential bubble that is going on.” Ron Paul is a notable critic of the federal government fiscal policies, the war on drugs and the military-industrial complex. His support for cryptocurrencies is not surprising given his libertarian leanings.
When applied in the real world, the idea of libertarianism means unfettered market access and minimal state interference. This can mean that there cannot be any intervention for example to ensure common good or to provide a safety net for the vulnerable in society.
The libertarian view of markets holds that letting people engage in voluntary exchanges upholds their freedoms. On the flipside, laws that restrict free market go against individual liberties. On whether cryptocurrencies are a bubble about to burst Ron Paul says “I think it’s going to continue to do exactly what it’s doing. It’s going higher, and it’s going lower.”
He likens the phenomenon to that being seen in the stock markets. “I look at the problems we face. I think they’re gigantic and people are desperate and looking everywhere. Why would they buy bonds that pay negative interest rates? Why would they buy stocks, and say well this time it’s different? “