WASHINGTON — Yes, Federal Reserve Board Chairman Ben Bernanke knows the price of milk, bread and eggs.
A slight relief to the Republican presidential candidate Rep. Ron Paul of Texas, who took a break from the campaign trail to attend the House Financial Services Committee with Bernanke, who was there to discuss the state of the U.S. economy.
"Mr. Bernanke, if you don't mind, would you tell me whether or not you do your own shopping at the grocery store?" Paul asked.
To which Bernanke replied, "Yes, I do."
"OK, so you are aware of the prices," Paul said. "People on fixed incomes, they are really hurting. The middle class is really hurting because their inflation rate is very much higher than the government tries to tell them."
The boost in prices is one of the negative consequences of inflation because of the increase in the money supply, Paul contended.
Paul, who brought an ounce of silver to the hearing, pressed Bernanke once again on his definition of money and why the central bank won't consider gold or silver as a parallel currency.
Back in 2006 this ounce of silver could buy more than four gallons of gasoline, Paul said. Today, it could buy eleven gallons.
"I say the Fed's going to self-destruct eventually anyway when the money's gone," Paul said. "But why wouldn't we legalize competing currencies? Why couldn't people save, put this in a mattress and get four or five times much of the value in a few years?"
Paul, who is a long-time advocate for abolishing the Fed, has always taken similar turns with Bernanke at such public hearings — and the chairman has always taken the criticism in stride.
"First of all, good to see you again, Congressman Paul," Bernanke said causing the hearing room to erupt in laughter.
"On alternative currencies, nobody prevents you from holding silver or gold if you want to," said Bernanke. "It's perfectly legal to do that. It's also perfectly fine to hold other currencies, euros or yen or whatever else."
But that wasn't enough to quell Paul's concerns.
"But, Mr. Chairman, that's not money," Paul said.
He suggested to Bernanke that the U.S. may want to follow in the footsteps of the Mexican government, which is trying to have competing currencies by allowing its citizens to save in silver.
"I hope we move along in that direction because there shouldn't be any, you know, overwhelming changes all of a sudden that there could be a transition," Paul said.
"People could vote on it. Maybe they'll give up on the Federal Reserve note and vote for real money."
But Bernanke didn't bite, only replying politely, "I'd be very happy to talk to you about it."
