1/25/10 Ron Paul’s Texas Straight Talk: Legalize Competing Currencies
http://house.gov/paul
http://CampaignForLiberty.com
Much has been made recently about the supposed economic recovery. A few blips in a few statistics and many believe our troubles are all over. Of course, they have to redefine recovery as jobless to account for the lack of improvement on Main Street. But the banks have money, Wall Street is chugging along, and the administration would like to get on with other agendae.
They have even set up a commission to investigate the crisis as if it were all in the past.
The truth is that Americans are still losing jobs, the Fed is still inflating, and more regulations are in the works that will prevent jobs and productivity from coming back. We are on this trajectory for the long haul. The claim has been made many times that this administration has only had a year to clean up the mess of the last administration. I wish they would at least get started! Instead of reversing course, they are maintaining Bushs policies full speed ahead. They are even keeping the Bush-appointee in charge of the Federal Reserve! They are not even making token efforts at change in economic policy. And for all the talk of transparency, we hear that some powerful senators will do all they can to block a simple audit of the powerful and secretive Federal Reserve.
We have been on a disastrous course for a long time. The money supply has doubled in the last year, our debt is unsustainable, the value of the dollar is going to continue its drop, and those Americans who understand where we are headed feel helpless and held hostage by foolish policy makers in Washington. When the bills finally come due and the dollar stops working we are in for some real social, economic and political chaos. That is, unless we take some major steps now to allow for a peaceful transition in the future. These steps are laid out in my legislation to legalize competing currencies.
First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money.
The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power.
Duration : 0:3:33
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Quick and simple …
Quick and simple answer: Certain governments much like some Kingdoms of old wish to fund government projects and wars that would otherwise require taxation. Taxations often lead to revolts of course. That and/or the fact the taxations imposed on the people would not sufficiently fund their programs. The solution? Get the old ‘credit card’ out and print money that the government does not have. Make the rich richer and poor poorer.
Economically …
Economically speaking, good faith isn’t a sufficient backing of currency. Accepting something that’s universally acknowledged as valuable encourages honest and stable wealth distribution controlled by the invisible hand which governs the free market.
That’s because we …
That’s because we are under a fiat system. In a fiat system, the wealth always goes to the rich first and then becomes less valuable once the money gets to the middle class and poor. Interestingly enough, many of our rich don’t have the money that’s more closely backed with something of real value. A dollar crisis would make some of the wealthy impoverished. We saw a similar phenomenon during the depression.
People are hoarding …
People are hoarding gold due to inflation. We saw a similar phenomenon during the Great Depression. The inflation of the Federal Fractional Reserve Dollar lead to the deflation of gold. I mentioned in my response other commodities. That’s important not to have a monopoly of currency in order to keep deflation and inflation in check. That’s one reason why Dr. Paul promote and the Founding Fathers promoted competing currencies. Silver and other commodity backed currencies would balance.
Also, I was being …
Also, I was being specious about launching gold in space. I am well aware that we use small amounts of gold for satellites and other space equipment. I was making reference to hypothetically launching. BTW the dollar is already backed by a small amount of gold and we are already seeing the consequences of that.
Cmdr, you speak as …
Cmdr, you speak as if that’s impossible to have enough gold for everybody to use. If that’s the case, we should expect not to see 14K Jewelry in retail stores and often even that’s worth $10-$30 in value. Every nation that has a monetary collapse has used gold. That includes Russia and Zimbabwe. Now Russia has slowly been returning as a world power.
Also, the example …
Also, the example over the Swiss. Well, they are a different case entirely. No one is working to overthrow their system of gov’t or money, as they are with the US. The Swiss are a clearing house for laundered money the world over, and the international bankers are their biggest customer. It is a friendly relationship that no one wants to collapse. Ever wonder why the Pope has a Swiss Guard?The threat to these people from the US is the const’ion and the people’s belief in freedom and sovereignty.
One last thing: …
One last thing: look for “The Money Masters” on Google video. Should be two parts, almost 4 hours of video.
It is an excellent documentary going into great detail the history of money and the importance of monetary sovereignty.
our money system …
our money system over again. This is always how it has been done. It is being done to us NOW, it has been done to us several times int he past, and it has been done to nations throughout history by the people who want to own your money.
SOVEREIGN currency, with OUT fractional reserve lending, printed by a responsible gov’t, is backed by the physical economic and productive output and related standard of living of the people of the nation using it. The USA would kick under this, as it has b4.
cycle back again, …
cycle back again, and they’ll have fleeced us in either direction. The reason why previous fiat systems have failed is due to manipulation by hostile forces. The fact is the international bankers went to war with the US because the US was using sovereign, non-manipulable currency. That is KEY! We need SOVEREIGN currency, not controlled by foreign powers, and we must defend it physically, and not allow the monetary empire to lead us into fake wars in order to weaken us, and eventually take (more)
You have to …
You have to understand that things are different today. No longer is the gold supply distributed widely and hence non-manipulable. It is now mainly owned and controlled by the same people behind the Fed and other international banking institutions. It IS now manipulable. Why do you think US went to paper? Because the bank people told us gold was unstable. Now you want to go back to gold, an they’ll sell it to you, because paper is unstable. Wait another 4 generations and it will (more…)
I think we agree …
I think we agree overall, I actually was a proponent of Gold for a while until I examined why it had been abandoned. You must see see this paradox if its so good, why has it been universally dropped? Maybe you could explain half the countries not using it, but all of them?
Fiat, is not …
Fiat, is not completely unbacked its backed by the will of the people and the real work of the country. Backing with commodities tends to be triumphed by groups who own a lot of that commodity.
It also allows currency to be controlled and subverted by private powers.
One of the needs to …
One of the needs to print money is the way the economy is conducted. What is considered ‘growth’ The bottom 50% of people own under 1% of wealth. The dollar supply is not grown for them. Its for people like Rush limbough and Oprah people who merely talk can take own a small economy in income. That’s why the printing occurs.
I would 1# for a fiat currency with a government Central bank and banned fractional reserve lending.
2# Energy backed currency.
3,5 need some thought.
There is nothing …
There is nothing stopping private people from storing wealth in gold atm. The US population had 180m people in 1960 right now its at about 308m.
That means there would be now ~40% less gold to per head to go around, regardless of all other considerations. That’s why such currencies came up against problems since the human race started to vastly expand in the 1800s.
*pulls hair* out.
…
*pulls hair* out.
But most of it has been launched abroad rather than in space. There simply is not that much gold.
One of the following MUST happen. The US uses what gold it has and can reasonably get and essentially equates all the fiat money to it. Massive inflation of GOLD price.
The gold prices doesn’t inflate, but rather the US dollar reduces to fit the gold price. (very unlikely)
The dollar becomes backed by a tiny fraction of gold 5-10%? maybe worse. Nothing would change long term.
Agreed. However, …
Agreed. However, even without a central bank, fiat paper money has always been shown to be very inflationary. This could be seen in China where paper money was started, with the US Contentinental, and Civil War era Green backs. US actually had about a 5% growth prior to the Federal Reserve with the Gold standard. Inflation increased almost exponentially since the dollar got of the Bretton Woods agreement. Getting off a commodity backed currency has always been disastrous.
Addendum: I mean …
Addendum: I mean the deflation of Gold would be very minimal with an increase of population. The value of Gold is measured by ounces. A person could have a coin laid with 30 Karats that would be less than a gold bar weighing a few ounces for instance. Don’t forget Silver, Platnium and maybe even food are universally recognized as commodities.
Doesn’t look like I …
Doesn’t look like I misunderstood anything so far. This goes back to what I said in regards to supply vs. demand. That’s impossible for Gold to deflate simply because the supply will remain steady. In order for deflation to happen, demand has to increase more than supply. The supply of gold has never decreased in supply in history and that would be impossible to do unless we launched a rocket full of Gold into space.
There is a big …
There is a big difference between constraint and simply ruining the system for starting up new enterprise. Gone are the days when a man could start a company from his tool shed… new business require capital.
I don’t agree to be honest with central banks and quantitative easing turning the economy into a ponzi scheme where some people personally amass billions. But simply using gold is missing the heart of the problem and has massive problems in of itself which are detailed in history.
Yes I understand, …
Yes I understand, its hard to know what you are driving at.
No no no. You miss …
No no no. You miss understand. There is a lot more dollars than in wealth than gold at the moment. Yes gold is high against the dollar but overall there are more dollars in wealth. So if you convert to gold something HAS to give.
Do you see that?
Gold a backed currency WILL deflate. More and more people just on birth rate alone will be competing for goods.
If the amount of possible wealth was fixed by wealth in gold then expect a Gold promise currency to deflate
Also, that’s the …
Also, that’s the point of a gold standard. We want to produce capital and not credit. The less people are constrained to borrow, the less debt and obligations they are under. The Gold standard encourages savings and prosperity where fiat money encourages debt and poverty. We want borrowing and credit to be limited to restrain government and encourage fiscal responsibility. I am going to have to look for a resource that mentions the swiss went of the gold standard.
You should know …
You should know what Fractional Currency is if you are going to debate an Austrian or if you are going to attempt to defend the Federal Reserve Standard. Fractional reserve banking is where only a fraction of currency is kept. In the case of the Federal Reserve, they print money or dollar certificates that are worth only a fraction of the original value of the true currency. Right now, the dollar is worth only 3% of its original value in 1913-14.
That’s the point. …
That’s the point. Gold is rare and stable. That’s almost impossible to inflate or deflate gold like you can with fiat currency. The price of gold has been going up because the dollar has been loosing value. Not necessarily because Gold has somehow been becoming more valuable. The law of demand and supply always works. The more of X you have, the less valuable X becomes. Because the amount of Gold remains stable and because more fiat money has been printed, the more valuable Gold becomes