Former Texas Congressman and staunch critic of the policies of the Federal Reserve, Ron Paul, previously criticized the news that came out of the Federal Open Market Committee (FOMC) meeting last week saying he was disappointed, but not surprised.

On Monday, Dr. Paul continued his examination of failed Fed policies to be continued and the present and possible future results in his latest “Texas Straight Talk”.

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Paul reiterates the Fed plan to continue it’s buyback of  mortgage-backed securities and treasuries, “the Fed has already been buying more than the announced $85 billion per month. Between February and March, the Fed’s securities holdings increased $95 billion. From March to April, they increased $100 billion. In all, the Fed has pumped more than a half trillion dollars into the economy since announcing its latest round of “quantitative easing” (QE3) in September 2012.

“Although many were up in arms when the Fed said it would buy $600 billion in government debt outright for the previous round, QE2, all seems quiet about the magnitude of QE3 because it doesn’t come with huge up-front total price tag. But by year’s end the Fed’s balance sheet could hit $4 trillion.”

He then warns of the bubbles being produced by the Fed policy. “With no recovery in sight, where’s all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt.”

He also has dire warnings for the record-breaking stock market, calling it a “house of cards”, “The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed’s easy money. After all, as long as the Fed keeps the spigot open, nominal profits are there for the taking. But this is a house of cards. Eventually, just like in 2008-2009, the market will discipline the bad actions of the Fed and seek to find the real normal.”

Who’s making out on Fed monetary policy?

You and I? Naw. If you guessed Wall Street and the government, you’d be correct.

Paul states, “While Wall Street and the government take advantage of access to the Fed’s new “free” money, the Fed claims there is no inflation. But who hasn’t paid higher prices at the grocery store, the gas pump, for tuition, for insurance? It’s bad enough that household incomes have stagnated, but real purchasing power has declined so much that one in seven Americans, 47.3 million people, are on food stamps. Five million are collecting unemployment insurance with 21.5 million afflicted by unemployment according to the government’s own figures. That’s 13.9 percent — close to double the 7.5 percent unemployment number reported last week.”

Are we in a recovery? Again, naw.

“We are certainly not in a recovery. We don’t see the long unemployment and soup kitchen lines like in the Great Depression, but that’s just because the lines are electronic now”, Paul said.

Ron Paul reminds Americans what the solution is– the free marketplace.

• Allow entrepreneurs the chance to create instead of stifling innovation with arbitrary regulations.
• Allow interest rates to rise to equal the risks in the economy.
• Allow bad debts to be liquidated so we can build on a firm foundation.
• Stop printing money to benefit the government and big banks.
• Restore sound money to the economy and the American people.

Will they ever listen?

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This is a house of cards. That’s the thrust of Ron Paul’s new article for The Free Foundation. If you thought Ron Paul would just go quietly into the night after his failed but trendsetting presidential bid, you would be mistaken. With the Fed announcing it was going to continue QE and possibly even increase it, Paul was quick to bemoan the decision but said it was expected as the Fed has lost the ability to exit gracefully from the markets.

He goes further in the letter talking about the stealth of QE3 due to its low headline figure. QE 2 came with a $600 billion price tag. Yet the unlimited monthly purchases do not garner the headlines, yet the constant monthly purchases will quickly eclipse QE2. By year’s end, the Fed balance sheet could surpass $4 trillion. With no real recovery in sight, the Fed is essentially creating new asset bubbles. Housing prices are skyrocketing in certain areas as investors look to get back into the house flipping game. Government debt is still on a unsustainable trajectory. And Dow 15k and the S&P at all time highs just goes to show that the Fed’s unlimited cash injection has created a market that is not based in reality.

Paul focuses on the pain inflicted by Wall Street and Fed on the everyday family. One in seven Americans are on food stamps. Five million are collecting unemployment with 21.5 million affected by unemployment. That’s 13.9% of the workforce either unemployed or underemployed.

He points out that the reason for the lack of sup lines from the Great Depression is because everything is electronic now. EBT cards have replaced the lines so there is not the headline making photos of the food kitchens etc.

The solution put forward by Paul? Let the market work. Remove regulations placed on entrepreneurs. Allow interest rates to rise and reflect risk. Get the bad debt liquidated so the financial system can essentially reset. And he brings back the literal golden oldie. Restore sound money to the populace. He says that it is the bedrock to any successful economy and is a check against corruption and crony capitalism.

Observers probably will not have to wait long before the chants of Paul 2016 begin anew.