Ron Paul on the Federal Reserve System:
It’s not so much that gold is perfect, it’s that paper is insane. To give politicians and bureaucrats and secret bankers the license to counterfeit money and create money out of thin air is destined to fail, and it has. That’s why we’ve had this financial bubble develop since the linkage to gold has been severed in 1971…
Now they’re trying desperately to print and spend, but the bubble was overwhelming and the bursting of this bubble is something they can’t contain. It would never happen under a gold standard because there would be no legal right for our central bank to spend money and create money out of thin air. The arrogance of it all is unbelievable.
Ron Paul on Obama's Health Care:
He has no money. Where is he going to get the money?
He has no intention of bringing our troops home. He’s talked a little about Iraq, but we’re maintaining a world empire to the tune of a trillion dollars a year. He wants more troops in Afghanistan … You have to save some money someplace.
So if you want to help some people who are sick, we’ll have to change our foreign policy and bring our troops home.
...
Instead of coming back to a balanced budget and living within our means, to propose national health care, and not attack our empire, is just foolhardy and will seal our fate.
What I like about what Ron Paul is saying in these quotes is that its not that the gold standard is perfect or that he thinks the government shouldn't be providing health care (of course, he does think that they shouldn't be), its that the foreign policy and federal reserve system of the United States is complete lunacy.
10 comments:
"So if you want to help some people who are sick, we’ll have to change our foreign policy and bring our troops home.
...
Instead of coming back to a balanced budget and living within our means, to propose national health care, and not attack our empire, is just foolhardy and will seal our fate."
This, I agree with. Obama is not talking the talk of someone who want national health care or someone who wants to end a war of greed.
Paul needs to get more specific about the problems of gold. They are not small.
If it ever becomes a serious consideration, all of the negatives would have to be evaluated. Whenever I've heard of him speak on the gold standard, it always sounds like he may not have been a fan of the way it has been done in the past . . . its something I'd like to understand more.
Nothing is ever perfect.
I`ll start taking Obama seriously when I see the troops in Japan and Korea come home.
If the US Government goes bankrupt, it`ll be interesting to see what happens to all of their bases world wide and how these hundreds of thousands of troops will get home.
"If it ever becomes a serious consideration, all of the negatives would have to be evaluated. Whenever I've heard of him speak on the gold standard, it always sounds like he may not have been a fan of the way it has been done in the past . . . its something I'd like to understand more.
Nothing is ever perfect."
Why should I trust Ron Paul on the gold standard when I can poke huge holes in it?
"Why should I trust Ron Paul on the gold standard when I can poke huge holes in it?"
I'm not prepared to make that argument. But it makes perfect logic that our currency should be commodity based so that it represents true wealth.
Fiat currencies can be printed into oblivion, as we saw in the Weimar Republic in Germany, in Zimbabwe, in Mexico, the Continental Dollar, etc. And when this happens it completely devalues the currency in relation to the rest of world and it wipes out the middle class. No individual or even a group of people should have this power. Its too large, its larger than the presidency.
There's an interesting graph on mises.org that shows the national debt of the US prior to Nixon taking the country off of the gold standard and after. The national debt was steady until 1971 and then the national debt soared, and has consistently soared since, except for an exception in the late 90s. Some argue this is simply due to inflated tax revenues from the tech bubble Greenspan pumped up that eventually burst.
The price of money and the value of money should be in the hands of the market like any other commodity, product or service.
"I'm not prepared to make that argument."
I know you are not prepared. And that's the fundamental problem, eh? People are not willing to educate themselves about politics. But one day, when they're only making 5 bucks an our, they'll wonder...
"But it makes perfect logic that our currency should be commodity based so that it represents true wealth."
How can it represent truth wealth when the very act of using gold as a currency would increase the price of gold to such an extent that it would increase the real value of products as well!
"Fiat currencies can be printed into oblivion, as we saw in the Weimar Republic in Germany, in Zimbabwe, in Mexico, the Continental Dollar, etc. And when this happens it completely devalues the currency in relation to the rest of world and it wipes out the middle class. No individual or even a group of people should have this power. Its too large, its larger than the presidency."
Can be does not equal must be.
The Wiemar and Zimbabwe were broken economies well before any fiat manipulation. You might as well conclude that the United States should have imploded four years after Nixon got rid of the gold standard, because that's how long it took Germany to imploded under crushing war reparations. Oh, but wait! Let's forget about that stuff! It's the fiat that is to blame!
"The price of money and the value of money should be in the hands of the market like any other commodity, product or service."
Ah, yes, the market. 2 dollar an hour in Mexico. What a great market!
"The Wiemar and Zimbabwe were broken economies well before any fiat manipulation. You might as well conclude that the United States should have imploded four years after Nixon got rid of the gold standard, because that's how long it took Germany to imploded under crushing war reparations. Oh, but wait! Let's forget about that stuff! It's the fiat that is to blame!"
The difference with the US is that they have the benefit of having the reserve currency of the world. Since 1971, countries have been buying dollars as if they were buying something valuable. This has propped up the dollar for a very long time; the dollar will be the last bubble to burst.
"How can it represent truth wealth when the very act of using gold as a currency would increase the price of gold to such an extent that it would increase the real value of products as well!"
I said COMMODITY based, not specifically gold. Anyhow, how could the price of gold increase if the dollar was tied to it? Wouldn't the price of gold stay the same and the prices of other commodities change in relation to gold?
"Ah, yes, the market. 2 dollar an hour in Mexico. What a great market!"
Mexico has a fiat currency, not a free market.
"The difference with the US is that they have the benefit of having the reserve currency of the world. Since 1971, countries have been buying dollars as if they were buying something valuable. This has propped up the dollar for a very long time; the dollar will be the last bubble to burst."
Funny thing is, THEY ARE STILL BUYING IT! Because it is just not a currency, but THE currency, as you said. Why? Because they know that it is THE fiat currency. Currency traders are expecting the bailouts and that new regulatory laws will be enacted.
"I said COMMODITY based, not specifically gold."
Which other commodity would suffice, Josh? Most metals traditionally used as currencies are limited in supply and used extensively in the modern economy (for example copper).
"Anyhow, how could the price of gold increase if the dollar was tied to it?"
Um, because the supply of gold is severly limited and because there is a demand of a global economy number 6 billion people? You know, when demand outstrips supply, prices increase?
"Wouldn't the price of gold stay the same and the prices of other commodities change in relation to gold?"
Not if the demand for gold is going up and down or if the price of other commodities and products is lower than the demand for gold. That's why paper is better. It has very little value.
"Mexico has a fiat currency, not a free market."
Production does not start with the currency. Production starts in the factory. Wages in the factory are the result of the size of the labor pool, which is huge in Mexico. Many Mexicans = low wages.
"Funny thing is, THEY ARE STILL BUYING IT!"
Japan has stopped buying US treasury bonds, its only a matter of time.
"Which other commodity would suffice, Josh? Most metals traditionally used as currencies are limited in supply and used extensively in the modern economy (for example copper)."
Nothing is perfect. I was reading briefly the other day of a paper currency backed by lands. It was interesting. The point, in the end, is the to remove the power of valuing our currency from the elite.
"Um, because the supply of gold is severly limited and because there is a demand of a global economy number 6 billion people? You know, when demand outstrips supply, prices increase?"
Right, so if you own gold, the value of gold goes up, and in relation, the value of everything else goes down. Which is what should happen. As economies grow, prices should drop.
"Production does not start with the currency. Production starts in the factory. Wages in the factory are the result of the size of the labor pool, which is huge in Mexico. Many Mexicans = low wages."
Fiat currency = central economic planning = low value currency = wages with low purchasing power
If production starts in the factory, where does the factory come from?
"Nothing is perfect. I was reading briefly the other day of a paper currency backed by lands. It was interesting. The point, in the end, is the to remove the power of valuing our currency from the elite."
The point is that such positions are based on paranoia. I'd actually be on board if there were any Czars in government other than Bush and his ministers.
"Right, so if you own gold, the value of gold goes up, and in relation, the value of everything else goes down. Which is what should happen. As economies grow, prices should drop."
Yes, but that assumes that gold will continue to have an average price. Modern uses of gold give it a commodity price and its limited nature would dramatically increase its value if there were a global demand for it as a currency medium. Actually, come to think of it, the current system is the best of all worlds assuming a low level of corruption: the paper currency brings down the actual cost of product to where it actual is, while the valuation of the paper currency through fiat assures that gold will always be invested in by those who are nervous about corruption.
Post a Comment