[Congressional Record Volume 146, Number 65 (Tuesday, May 23, 2000)]
[House]
[Page H3530]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          INTERNATIONAL TRADE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from Texas (Mr. Paul) is recognized 
during morning hour debates for 5 minutes.
  Mr. PAUL. Mr. Speaker, this week there will be a lot of talk on the 
House floor about international trade. One side will talk about pseudo 
free trade, the other about fair trade. Unfortunately, true free trade 
will not be discussed.
  Both sides generally agree to subsidies and international management 
of trade. The pseudo free trader will not challenge the WTO's authority 
to force us to change our tax, labor, and environmental laws to conform 
to WTO rules, nor will they object to the WTO authorizing economic 
sanctions on us if we are slow in following WTO's directives.
  What is permitted is a low-level continuous trade war, not free 
trade. The current debate over Chinese trade status totally ignores a 
much bigger trade problem the world faces, an ocean of fluctuating fiat 
currencies.
  For the past decade, with sharp adjustments in currency values such 
as occurred during the Asian financial crisis, the dollar and the U.S. 
consumers benefitted. But these benefits will prove short-lived, since 
the unprecedented prosperity and consumption has been achieved with 
money that we borrow from abroad.
  Our trade imbalances and our skyrocketing current account deficit 
once again hit a new record in March. Our distinction as the world's 
greatest debtor remains unchallenged. But that will all end when 
foreign holders of dollars become disenchanted with financing our grand 
prosperity at their expense. One day, foreign holders of our dollars 
will realize that our chief export has been our inflation.
  The Federal Reserve believes that prosperity causes high prices and 
rising wages, thus causing it to declare war on a symptom of its own 
inflationary policy, deliberately forcing an economic slowdown, a sad 
and silly policy, indeed. The Fed also hopes that higher interest rates 
will curtail the burgeoning trade deficit and prevent the serious 
currency crisis that usually results from currency-induced trade 
imbalances. And of course, the Fed hopes to do all this without a 
recession or depression.
  That is a dream. Not only is the dollar due for a downturn, the 
Chinese currency is, as well. When these adjustments occur and 
recession sets in, with rising prices in consumer and producer goods, 
there will be those who will argue that it happened because of, or the 
lack thereof, of low tariffs and free trade with China.
  But instead, I suggest we look more carefully for the cause of the 
coming currency crisis. We should study the nature of all the world 
currencies and the mischief that fiat money causes, and resist the 
temptation to rely on the WTO, the IMF, the World Bank, pseudo free 
trade, to solve the problems that only serious currency reform can 
address.

                          ____________________