Tom Coburn: "We're Gonna Lose This Currency"

Weigel
Reporting on Politics and Policy.
May 22 2012 12:44 PM

Tom Coburn: "We're Gonna Lose This Currency"

Sen. Tom Coburn, R-Okla., stopped by the Heritage Foundation/Breitbart.com blogger's briefing today for a solid, 35-minute talk about Congress's screw-ups. I didn't hear much news, but I was intrigued by the book Coburn recommended to conservative activists -- Currency Wars, by James Rickards.

"We're gonna lose this currency, the way we're running," explained Coburn, referring to the Fed's inflationary money strategy of the past two years. "The greatest problem with what the Federal Reserve is doing is the financial repression that will come about, because it's going to be impossible for them to sterilize this money supply. And they're pushing on a string, the more money they put into M!, M2, the slower the velocity is. When it finally comes, they won't be able to reverse it."

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It's a common conservative concern, expressed well here. Inflation isn't actually a problem right now. The current rate, below 3 percent, is within the range it's been for the past decade. But Rickards, Ron Paul, and... well, and Coburn, endorse the view that the fiat money bomb will eventually explode, egged on by rival economies declaring trade wars on the U.S.

"By engaging in quantitative easing," writes Rickards, "the Fed has effectively declared currency war on the world."

David Weigel is a reporter for Bloomberg Politics

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