Tuesday, February 18, 2020

Former U.S. Congressman Says Recession Can be Avoided If Cryptocurrency is Adopted

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Grace Joseph
Freelance Writer, Blogger, and Crypto Enthusiast. Studied Computer Science in University and Undergoing a Masters Degree Programme in Computer Engineering Contact@ reigngracia@gmail.com

Ron Paul, a former US congressman is not happy with the recent increase in interest rate by the US Federal Reserve, the central bank of the country. He has made remarks to that effect, and one of such is that the Fed will produce a delusional economy. But this can be prevented if the free market determines interest rates and cryptocurrency is adopted without taxes levied on it.

Fed Increases Interest Rate For the Fourth Time in 2018

An interest rate is an amount a borrower pays to the bank for a loan or the money a bank pays its customers to encourage them to deposit money. For the fourth time this year, the Fed increased the interest rate which was around 0.25%, to a range of 2.25 to 2.5%. The increase in this rate is usually the Fed’s move to control the amount of money that is in circulation at a given point in time.

In Paul’s opinion, this gives people the wrong impression that the economy is flourishing when in actuality, it isn’t. The politician also says that this is an artificial manipulation that distorts the economy and may lead the US into recession.  Also, other countries may be dragged into it due to the fact that the country controls a fair share of the global market.

Politician Says the Federal Reserve Should be Abolished

The politician pointed out on Twitter that the Fed needs to be abolished, a case he has been hammering on since the year began. He also added that this central planning agency is confused on what the actual rates should be. Therefore, they should be put to an end before they create a delusional economy that is not realistic.

If all goes as he has suggested, there will be no central control to manipulate these rates and as such the economy will not be in chaos. Here, he suggested that a free market where rates are only determined by the level of competition should be used to determine this interest rates and not the Fed.

Cryptocurrency’s Adoption Will Keep National Bankruptcy at Bay

Also, Paul believes that if digital currencies such as Bitcoin are adopted, then it can keep national bankruptcy at bay. Not just the digital asset’s adoption, but an economy where taxes are not levied on companies that trade these digital assets.

Paul’s view may be in line with Warrenson Davidson, US congressman Ohio’s 8th District. Davidson is drafting a bill that will stop cryptocurrencies from being classified as securities. The Securities and Exchange Commission (SEC) will also have less control when it comes to issues relating to the crypto industry.

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