Ron Paul: Thank you Mr. Chairman. I want to follow up on the discussion about moral hazard. I think we have a very narrow understanding about what moral hazard really is. Because I think moral hazard begins at the very moment that we create artificially low interest rates, which we constantly do. And this is the reason people we make mistakes. It isn't because human nature causes us to make all these mistakes. But there's a normal reaction when interest rates are low that there will be overinvestment and malinvestment excessive debt and then there are consequences from this. My question is going to be around the subject of how can it ever be morally justifiable to deliberately depreciate the value of our currency? And that is what we do constantly. We are in the midst of a crisis today, and the efforts have been directed towards propping up financial markets and Wall Street. First, the crisis is noticed, there is a panic, we dump in tens of billions of dollars into reserves and that reassures the market. Wall Street feels a little better and it's still not enough. Then we take a discount window and we lower the rates and we don't look at our problem from what caused it but we say does this make it a door and open up and lower the rates and again, Wall Street says, oh this is wonderful. Do the poor people like this? And do they respond? And is this going to help them get houses? When some of them couldn't even afford a house because even with the low interest rates that were available because the costs are going up and costs go up because the dollar goes down. Then even this week, what did we do? Our Federal Reserve lowers the interest rate by 50 points and the poor people and the middle class people say boy, this is wonderful, my cost of living is going to go down and I'm going to get a job. No! Wall Street goes up 350 points. So it looks like everything is directed toward a bailout. Whether it is done deliberately or not, the American people see this as a deliberate bailout of the financial markets. The poor people are losing their houses. Every sincere effort is made to try and correct this, but it's inevitable that it's not going to work because the monetary system and such, that there is so much misinformation. We talk about market discipline. It was indicate as chairman that we didn't have enough market discipline. But there's no possibility to have market discipline when all of the information is erroneous. Today, with this concept and during this testimony we see oil pricings soaring, over $82 dollars a barrel. We see wheat and corn soaring; we see other commodities' pricing soaring-gold, $730, $740 an ounce. There is a great deal of concern out there this is all reflecting the fact that the dollar is going down in value and if we don't deal with that, we can't solve the problem. And we look at this and think, well, we've created all these problems, because we've had this malinvestment, all this credit going into the system and we have all this correction that needs to come about and we think we can solve the problem of inflation with more inflation. But really the bottom line is-what moral justification do we have to deliberately devalue the currency and the dollars that people save? This pushes the cost of living up for the people that don't even have the chance to buy a house. There's a moral consequence of the system that we have today. And I can't see how we can avoid this moral obligation we have. The responsibility of the Congress should be to maintain the value of the currency not deliberately tax the people by creating new money and passing on the high cost of living to the people who can least afford it. Wall Street never suffers from that. And we still of what we know of these things out in the open that the Federal Reserve does but we don't know the details of what the working group and financial markets do to prop up markets, because I'm sure they're very busy and have been very busy in these last several months But is there any moral justification for devaluing the currency?

Ben Bernanke: Thank you Congressman. The value of the currency can also be expressed in terms of what it can buy in domestic goods. That is the domestic federal inflation rate. That is part of the Federal Reserve's mandate, which is to maintain price stability. Which, to my mind, means the value of the dollar. The inflation rate is something we pay close attention, we continue to pay close attention to. But over the last year, it's been a little over 2%. We will continue to pay very close attention to the inflation rate. It's an important part of our mandate and I agree with you, that an economy cannot grow in a healthy stable way when inflation is out of control and we will certainly make sure that that doesn't happen.