Interesting commentary from Ron Paul on recent Obama-Yellen meeting

Last week, United States President Barack Obama sat down with Federal Reserve Chair Janet Yellen. What did they talk about? Was there more talk of the central bank imposing policies that favor the current administration or the Democrats?

It was reported that the most powerful people in the U.S. today mostly talked about the outlook of the nation’s economy, but not about interest rates. According to an official statement, Obama, Yellen and Vice President Joe Biden “exchanged notes.” The president did that he was pleased with Yellen’s Fed thus far.

Former Texas Republican Congressman and three-time presidential candidate Ron Paul did provide some very interesting commentary on the meeting. Here is a very intriguing excerpt from Dr. Paul’s analysis on the Obama-Yellen pow wow:

“The Fed can only keep the wolves at bay with promises of future rate increases for so long before its polices cause a major dollar crisis. However, raising rates could also cause major economic problems. Higher interest rates will hurt the millions of Americans struggling with student loan, credit card, and other forms of debt. Already over 40 percent of Americans who owe student loan debt are defaulting on their payments. If Federal Reserve policies increase the burden of student loan debt, the number of defaults will dramatically increase leading to a bursting of the student loan bubble.”

The bestselling author of “The Revolution: A Manifesto” and “End the Fed” further explained that the Fed Chair has not taken negative interest rates off the table, adding that it would be extremely difficult for the central bank to raise rates considering the current situation the entire country has put itself in.

Ultimately, the Fed, as Paul says, is in a no-win situation. The Fed has to raise interest rates to combat accelerating price inflation, but if it raises rates then debt levels will skyrocket.

The current consensus right now is that the central bank will increase interest rates two more times this year. However, the level of confidence has waned in recent weeks, according to the polls.

-AM