Once again the champion of the Constitution, Ron Paul, takes on the Federal Reserve Chairman Ben Bernanke as the Feds prepare to drop rates once again.

You could set off a fire with a match in the room. On one side of the room the Federal Reserve's Chairman and on the other, the defender of the Constitution and the people. Tensions were high as Ben Bernanke braced himself for the expected dose of common sense once again coming from Congressman and Dr. Ron Paul.

Ben Bernanke was stuck between a rock and a hard place when asked about the value of the dollar, and he responded that it was the Treasury's responsibility. But Paul wasn't about to let him slide on just passing off the blame for our dollar's crisis. Paul responded, "And here I find the chairman of the Federal Reserve in charge of the dollar, in charge of the money, in charge of what the money supply is going to be, but (you) don't deal with the value of the dollar."

(Article continues below)

Then as Bernanke smugly nodded, Paul proceeded to call Bernanke's bluff, "But you do admit you have a responsibility for the prices. But how can you separate the two? Prices are a mere reflection of the value of the dollar. If you want to control prices, then you have to know the value of the dollar. But if you're going to avoid talking about (the value of ) the dollar then all you can do is deal with central economic planning."

Then Paul went on to educate Bernanke on the reasons why central economic planning, even and especially when dealing with the money supply, never works.

"Everybody refers to inflation as rising prices, instead of saying inflation comes from the unwise increase in the supply of credit."

Then Paul put the icing on the cake with, "Their standard of living is going down,... the middle class is being wiped out, and nobody's understanding that it has to do with the value of money: prices are going up. So how are you able to defend this policy of deliberate depreciation of our money?"

Bernanke attempted to compose himself and with quivering voice said, "The Federal Reserve Act tells me that I have to look to price stability, price stability,... and that's what we aim to do. You're correct that there are relationships, obviously, with the dollar and domestic inflation and relationships between the money supply and domestic inflation, but those are not perfect relationships, they're not exact relationships, and, given a choice, we have to look at the domestic inflation rate." Then he went on to say that Congress has the responsibility of abolishing the Federal Reserve and returning back to a gold standard.

Paul, responding to his first statement, saying, "But your (lack of) achievement; we now have PPI going up at 12%... that doesn't get a very good grade for price stability. Wouldn't you agree?"

Then Bernanke grudgingly concurred, "I agree."

However, Federal Reserve Chairman, Ben Bernanke, apparently wasn't paying attention. He then deferred that if oil prices continued to rise, then inflation would continue to rise as well. However, Ron Paul made it very clear that the price of oil wasn't rising relative to other commodities, but that it was the value of the dollar that is falling, which he also made clear that the value of the dollar was in control of the Federal Reserve‘s decisions.

Apparently Paul's pleas for the people did not penetrate Bernanke as he continued to announce that rates would be lowered once again. This means that more money will be created out of thin air, which will translate into more inflation of oil as well as other commodities.