U.S. Rep. Ron Paul | currency |
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State Of The Republic
28 January 1998 1998 Ron Paul 2:7
The economy, crime, the environment, drugs, currency instability, and many other problems are important. But it is in the area of foreign policy and for interventionism that provokes the greatest threat to our liberties and sovereignty. Whenever there are foreign monsters to slay, regardless of their true threat to us, misplaced patriotic zeal is used to force us to look outward and away from domestic problems and the infractions placed on our personal liberties here at home.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:42
The Republican Congress and President Clinton benefited, while the Democratic Congressional leaders could only ask why can’t more be spent on welfare if the country is doing so well? Fundamental problems like the size of the budget, the deficit, the debt, higher taxes, currency problems and excessive regulations were put on the back burner, if not ignored altogether.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:59
There is a sense of relief the welfare state has received a reprieve. One can almost hear the sigh amplified by hearing of the problems in the Southeast Asia countries with their currency and stock market problems, not realizing it is the U.S. taxpayers and the dollar that will be called upon for the bailout of this financial crisis.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:62
The international currency crisis: Congress lacks concern and understanding of the significance of the Asian currency crisis. Monetary policy has never excited many Members of the Committee on Banking, let alone other members of Congress. A handful of Members do consistently complain to the Chairman of the Federal Reserve, but inevitably it is to object to the high interest rates and not enough credit being available to either the poor or the rich beneficiaries of Central Bank credit largesse.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:63
The Southeast Asian currency and economic bailout will exceed $100 billion. We will be propping up these currencies by sending American taxpayers’ dollars, the same thing we did in Mexico in 1995. Multilateral efforts through the IMF, World Bank and other development banks are used, and in each one the United States is the most generous donor.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:64
IMF bailouts, just as our military foreign intervention, are generally supported by the leadership of both parties. The establishment has firm control in these two areas and who, out of ignorance or neglect, the Congress as a whole provides little resistance. When the stronger currencies, in this case the dollar, props up a weaker currency, it is nothing more than an example of an international transfer of payment that helps our banks and international corporate investors who have financial exposure in the country or currency under attack.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:68
After the Mexican bailout, her citizens lost 50 percent of their purchasing power, a dramatic pay cut. Yet the great danger is that some day we will be forced to pay, possibly with a dollar crisis that will make the Asian currency crisis look small in comparison.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:69
All currency crises are serious and usher in economic and political problems for the country involved, and since no one likes it, blame is generally misplaced.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:70
When the dollar comes under attack, since it is the reserve currency of the world, a much more serious crisis than we are currently witnessing in Asia will occur. Only a universal acceptance of a single worldwide commodity standard of money can prevent these periodic devaluations and disruptions in trade that are so prevalent today.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:71
The day before we adjourned the first session of the 105th Congress, the Committee on Banking and Financial Services held hearings on the Asian currency crisis, but it was more an attempt to reassure the financial community than to sort out the cause and do something about it.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:73
Currency issues are serious and a much bigger problem than Congress realizes. Even the Fed has convinced itself it is quite capable of managing our fiat currency and our financial markets through any crisis. The money managers are every bit as powerful as the Congress, which taxes and spends, but the Federal Reserve’s actions are much less scrutinized.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:76
Eventually, everyone though is threatened by the political disruption that can ensue with a currency mishap. Our greatest concern should be for our loss of liberties that so often accompany a currency crisis. Congressional attitude toward monetary policy is not likely to change soon, so we can expect a lot more turmoil in the currency markets in the months ahead.
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Three Important Issues For America
11 February 1998 1998 Ron Paul 7:114
We here in the Congress should be talking about defending this country, providing national security, providing for a strong currency, not deliberately distorting the currency. We should be protecting private property rights and making sure that there is no incentive for the special interests of this country to come and buy their influence up here.
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Follow The Constitution — Don’t Raise Taxes
22 April 1998 1998 Ron Paul 36:7
We will limit the borrowing power. We will limit the ability of this Congress to inflate the currency to pay the bills. And we certainly will follow the rules of this House and this Constitution and not raise taxes.
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The Bubble
28 April 1998 1998 Ron Paul 39:19
PROBLEMS AND VICTIMS The basic cause of any financial bubble is the artificial creation of credit by a central bank (in this case our Federal Reserve). Artificially creating credit causes the currency to depreciate in value over time. It is important to understand the predictable economic problems that result from a depreciating currency:
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The Bubble
28 April 1998 1998 Ron Paul 39:21
2. Inflated currency and artificially low interest rates result in mal-investment that produces over capacity in one area or another.
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The Bubble
28 April 1998 1998 Ron Paul 39:22
3. Wealth generally transfers from the hands of the middle-class into the hands of the very wealthy. (The very poor receiving welfare gain a degree of protection, short of a total destruction of the currency.)
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The Bubble
28 April 1998 1998 Ron Paul 39:34
THE CRUELEST TAX OF ALL This process of deliberately depreciating a currency over time (inflation) causes a loss in purchasing power and is especially harmful to those individuals who save. AIER (American Institute for Economic Research) calculates that 100 million households since 1945 have lost $11.2 trillion in purchasing power. This comes out to $112,000 per household, or put another way, over 5 decades each one of these households lost $2,200 every year.
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The Bubble
28 April 1998 1998 Ron Paul 39:40
Central bankers have also become more sophisticated in the balancing act between inflation and deflation. They are great technicians and are quite capable of interpreting events and striking a balance between these two horrors. This does not cancel out the basic flaw of a fiat currency; central bankers cannot replace the marketplace for determining interest rates and the proper amount of credit the economy needs.
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The Bubble
28 April 1998 1998 Ron Paul 39:42
THE PRICE OF GOLD Another reason for the central bankers greater recent success is that they have been quite willing to cooperate with each other in propping up selected currency values and driving down others. They have cooperated vigorously in dumping or threatening to dump gold in order to keep the dollar price of gold in check. They are all very much aware that a soaring gold price would be a vote of no confidence for central-bank policy.
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The Bubble
28 April 1998 1998 Ron Paul 39:47
The key element to the financial system under which we are now living is the dollar. If confidence is lost in the dollar and a subsequent free-market price for gold develops, the whole financial system is threatened. Next year, with the European currency unit (ECU) coming on line, there could be some serious adjustments for the dollar. The success of the ECU is unpredictable, but now that they are indicating some gold will be held in reserve, it is possible that this currency will get off the ground.
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The Bubble
28 April 1998 1998 Ron Paul 39:56
Whether it’s Japan that tries to inflate their currency to get out of an economic problem, or the East Asian countries facing their crisis, or our willingness to bail out the IMF, resorting to monetary inflation is the only option being considered. We can rest assured that inflation is here to stay.
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The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:4
The illusion of prosperity created by inflation, and artificially high currency values, encourage over-expansion, excessive borrowing and delusions that prosperity will last forever. This attitude was certainly present in Indonesia prior to the onset of the economic crisis in mid 1997. Even military spending by the Indonesian government was enjoying hefty increases during the 1990’s. All that has quickly ended as the country now struggles for survival.
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The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:8
Blame is misplaced. Rarely is the Central Bank and paper money blamed — unless a currency value goes to zero. In Indonesia the most vulnerable scapegoat has been the Chinese businessmen, now in threat of their lives and fleeing the country.
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The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:11
Any serious economic crisis eventually generates political turmoil, especially if political dissent has been held in check by force for any significant period of time. There should be no surprise to see the blood in the streets of Jakarta — soon to spread and build. Political events serve to aggravate and magnify the logical but subjectively sensitive declining currency values and the faltering economy. The snowballing effect makes the political crisis much more serious than the economic crisis since it distracts from the sound reforms that could restore economic growth. These circumstances, instead of leading to more freedom, invite marshal law for the purpose of restoring stability and the dangers that go with it.
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The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:16
The Indonesian government had one idea worth considering under these very difficult circumstances. They wanted to replace their central bank with a currency board. It’s not the gold standard, but it would have been a wise choice under current conditions. But the United States and the IMF insisted that in order to qualify for IMF funding this idea had to be rejected outright and the new central bank for Indonesia had to be patterned after the Federal Reserve with, I’m sure, ties to it for directions from Greenspan and company. A currency board would allow a close linkage of the rupiah to the dollar, its value controlled by market forces, and would have prevented domestic Indonesia monetary inflation — the principle cause of the economic bubble now collapsed. The shortcoming of a currency board is that the Indonesian currency and economy would be dependent on dollar stability which is far from guaranteed.
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The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:17
REFUSAL In the approximately 8 months since the crisis hit Indonesia there has been no serious look at the underlying cause — monetary inflation brought about by a central bank. Nor has any serious thought gone into the internationalization of credit as United States exports of billions of dollars, and thus our own inflation, to most nations of the world who hold these dollars in reserve and use them to further inflate their own currencies. Our huge negative trade balance and foreign debt is not considered by conventional wisdom to be relevant to the Asian currency problems, yet undoubtedly it is. True reform to deal with the growing worldwide crisis can only be accomplished by us first recognizing the underlying economic errors that caused the current crisis.
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The Indonesia Crisis
19 May 1998 1998 Ron Paul 52:20
MESSAGE What should the message be to the Congress and the American people regarding this sudden and major change in the economic climate in Indonesia? First and foremost is that since we operate with a fiat currency, as do all the countries of the world, we are not immune from a sudden and serious economic adjustment — at any time. Dollar strength and our ability to spend dollars overseas, without penalty, will not last forever. Confidence in the U.S. economy, and the dollar will one day be challenged. The severity of the repercussion is not predictable but it could be enormous. Our obligation, as Members of Congress, is to protect the value of the dollar, not to deliberately destroy it, in an attempt to prop up investors, foreign governments or foreign currencies. That policy will only lead to a greater crisis for all Americans.
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The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:4
The illusion of prosperity created by inflation, and artificially high currency values, encourage over-expansion, excessive borrowing and delusions that prosperity will last forever. This attitude was certainly present in Indonesia prior to the onset of the economic crisis in mid 1997. Even military spending by the Indonesian government was enjoying hefty increases during the 1990’s. All that has quickly ended as the country now struggles for survival.
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The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:8
Blame is misplace. Rarely is the Central Bank and irredeemable paper money blamed — unless a currency value goes toward zero. In Indonesia the most vulnerable scapegoat has been the Chinese businessmen who are now in threat of their lives and fleeing the country.
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The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:11
Any serious economic crisis eventually generates political turmoil, especially if political dissent has been held in check by force for any significant period of time. There should be no surprise to see the discontent, with blood in the streets of Jakarta, soon spread and build. Political events serve to aggravate and magnify the logical but subjectively-sensitive declining currency values and the faltering economy. The snowballing effect makes the political crisis much more serious than the economic crisis since it distracts from the sound reforms that could restore economic growth. These circumstances, instead of leading to more freedom, invite marshal law for the purpose of restoring stability and the dangers that go with marshal law.
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The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:16
The Indonesian Government had one idea worth considering under these very difficult circumstances. They wanted to replace their central bank with a currency board. It’s not as good as gold standard, but it would have been a wise choice under current conditions. But the United States and the IMF insisted that in order to qualify for IMF funding this idea had to be rejected outright and the new central bank for Indonesia had to be patterned after the Federal Reserve with, I’m sure, ties to it for directions from Federal Reserve Board Governor Alan Greenspan and company. A currency board would allow a close linkage of the rupiah to the dollar, with its value controlled by market forces, and would have prevented domestic Indonesia monetary inflation — the principle cause of the economic bubble now collapsed. The shortcoming of a currency board tied to the U.S. dollar is that the Indonesian currency and economy would be dependent on dollar stability which is far from guaranteed.
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The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:17
REFUSAL In the approximately eight months since the crisis hit Indonesia, there has been no serious look at the underlying cause: monetary inflation brought about by a central bank. Nor has any serious thought gone into the internationalization of credit as United States exports of billions of dollars, and thus our own inflation, to most nations of the world which hold these dollars in reserve and use them to further inflate their own currencies. Our huge negative trade balance and foreign debt is not considered by conventional wisdom to be relevant to the Asian currency problems, yet undoubtedly it is. True reform to deal with the growing worldwide crisis can only be accomplished by us first recognizing the underlying economic errors that caused the current crisis.
currency
The Indonesia Crisis
22 May 1998 1998 Ron Paul 54:20
MESSAGE What should the message be to the Congress and the American people regarding this sudden and major change in the economic climate in Indonesia? First and foremost is that since we operate with a fiat currency, as do almost all the countries of the world. We are not immune from a sudden and serious economic adjustment — at any time. Dollar strength and our ability to spend dollars overseas, without penalty, will not last forever. Confidence in the U.S. economy, and the dollar, will one day be challenged. The severity of the repercussion is not predictable but it could be enormous. Our obligation, as Members of Congress, is to protect the value of the dollar, not to destroy it deliberately, in an attempt to prop up investors, foreign governments or foreign currencies. That policy will only lead to a greater crisis for all Americans.
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:1
Mr. PAUL. Mr. Speaker, it has recently come to my attention that James Grant has made a public warning regarding monetary crises. In an Op-Ed entitled “Every Currency Crumbles” in The New York Times on Friday, June 19, 1998, he explains that monetary crises are as old as money. Some monetary systems outlive others: the Byzantine empire minted the bezant, the standard gold coin, for 800 years with the same weight and fineness. By contrast, the Japanese yen, he points out, is considered significantly weak at 140 against the U.S. dollar now to warrant intervention in the foreign exchange markets but was 360 as recently as 1971. The fiat U.S. dollar is not immune to the same fate as other paper currencies. As Mr. Grant points out, “The history of currencies is unambiguous. The law is, Ashes to ashes and dust to dust.”
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:3
[From the New York Times, June 19, 1998] EVERY CURRENCY CRUMBLES (By James Grant) Currencies, being made of paper, are highly flammable, and governments are forever trying to put out the fires. Thus a half decade before the bonfire of the baht, the rupiah and the yen, there was the conflagration of the markka, the lira and the pound. The dollar, today’s global standard of value, was smoldering ominously as recently as 1992.
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:6
Currency management is a political art. The intrinsic value of a unit of currency is the cost of the paper and printing. The stated value of a unit of currency derives from the confidence of the holder in the promises of the issuing government.
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:10
For the moment, the market is highly confident. So is the world at large. In 1996, the Federal Reserve Board estimated that some 60 percent of all American currency in existence circulates overseas. The dollar has become the Coca-Cola of monetary brands.
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:11
However, as Madison Avenue knows as well as Wall Street, brand loyalties are fickle. In the early 1890’s, the United States Treasury was obliged to seek a bailout from the Morgan bank. During the great inflation of the 1970’s, Italian hotel clerks, offered payments in dollars, rolled their eyes. The yen, today reckoned dangerously weak at 140 or so to the dollar, was 360 as recently as 1971. The tendency of the purchasing power of every paper currency down through the ages is to regress. Is there any good reason that the dollar, universally esteemed today, should be different?
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:12
None. Certainly, the deterioration of the American balance-of-payments position doesn’t bode well for the dollar’s long-term exchange rate. Consuming more than it produces, the United States must finance the shortfall. And it is privileged to be able to pay its overseas bills with dollars, the currency that it alone can legally produce. Thailand would be a richer country today if the world would accept baht, and nothing but baht, in exchange for goods and services. It won’t, of course. America and the dollar are uniquely blessed.
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:13
Or were. France and Germany have led the movement to create a pan-European currency, one that would compete with the dollar as both a store of value and a medium of exchange. The euro, as the new monetary brand is called, constitutes the first serious competitive threat to the dollar since the glory days of the pound sterling.
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:14
In a world without a fixed standard of value, a currency is strong or weak only in relation to other currencies. The dollar’s “strength,” therefore, is a mirror image of — for example — the yen’s “weakness.” It is not necessarily a reflection of the excellence of the American economy.
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Every Currency Crumbles
24 June 1998 1998 Ron Paul 65:16
After the 1994 crisis involving the Mexican peso, the world’s financial establishment vowed to stave off a recurrence. Even as the experts delivered their speeches, however, Asian banks were overlending and Asian businesses were overborrowing; the credit-cum-currency eruption followed in short order. Naturally, officials and editorialists are now calling for even better fire prevention systems.
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Exchange Stabilization Fund
16 July 1998 1998 Ron Paul 79:6
We should be talking about this in terms of a free society. Certainly, if we had a sound currency, under a sound currency we do not have all this kind of mischief going on. And certainly, if we had a lot of respect for the Constitution and actually knew something about the Doctrine of Enumerated Powers, we would say, where do we get this authority to prop up other countries and other currencies at the expense of the American taxpayers?
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Exchange Stabilization Fund
16 July 1998 1998 Ron Paul 79:8
Yes, we can get into the currency markets to the tune of billions of dollars. They say, well, there is only 38; they might not be able to do any mischief. But my strong suspicion is that the line of credit to the Federal Reserve is endless in the time of crisis.
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Exchange Stabilization Fund
16 July 1998 1998 Ron Paul 79:11
If we are going to give away $250 million per country for propping up a foreign currency or foreign country or propping up some banks that made loans overseas or propping up our competitors to our own industries, we have to at least know about it.
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Exchange Stabilization Fund
16 July 1998 1998 Ron Paul 79:13
We talk a lot about supporting the currency. On a day-to-day basis, $1.6 trillion are transferred over the wire service. There is not one reputable economist in this country that I know of that really defends currency intervention as being productive and being able to change the course of events. Because although $38 billion is a lot of money and intervention does cause sudden shocks, causes some bond traders, currency traders to lose money quickly, it has no long-term effect.
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Worldwide Financial Crisis
10 September 1998 1998 Ron Paul 97:2
All financial bubbles are currency driven. When central banks generously create credit out of thin air speculation, debt, and malinvestment result. Early on the stimulative effect is welcomed and applauded as the boom part of the cycle progresses. But illusions of wealth brought about by artificial wealth creation end when the predictable correction arrives. Then we see the panic and disappointment as wealth is wiped off the books.
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Revamping The Monetary System
24 September 1998 1998 Ron Paul 102:5
Yesterday also Greenspan announced that he would lower interest rates. I do not think this was an accident or not coincidental. It was coincidental that at this very same time they were meeting this crisis, Greenspan had to announce that, yes indeed, he would inflate our currency, he would expand the money supply, he would increase the credit, he would lower interest rates. At least that is what the markets interpreted his statement to mean. And the stock market responded favorably by going up 257 points.
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Don’t Fast-Track Free Trade Deal
25 September 1998 1998 Ron Paul 103:9
Fast track is merely a procedure under which the United States can more quickly integrate and cartelize government in order to entrench the interventionist mixed economy. In Europe, this process culminated in the Maastricht Treaty, the attempt to impose a single currency and central bank and force relatively free economies to ratchet up their regulatory and welfare states. In the United States, it has instead taken the form of transferring legislative and judicial authority from states and localities and to the executive branch of the federal government. Thus, agreements negotiated under fast track authority (like NAFTA) are, in essence, the same alluring means by which the socialist Eurocrats have tried to get Europeans to surrender to the super-statism of the European community. And just as Brussels has forced low-tax European countries to raise their taxes to the European average or to expand their respective welfare states in the name of “fairness,” a “level playing field,” and “upward harmonization,” so too will the international trade governors and commissions be empowered to “upwardly harmonize,” internationalize, and otherwise usurp laws of American state governments.
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Hedge Fund Bailout
2 October 1998 1998 Ron Paul 105:2
STATEMENT OF HON. GREG KAZA, MICHIGAN STATE REPRESENTATIVE, ADJUNCT PROFESSOR OF FINANCE, WALSH COLLEGE Derivatives are financial instruments broadly defined as any contract or convertible security that changes in value in concert with a related or underlying security, fixed-income instrument, future or other instrument, currency or index; or that obtains much of its value from price movements in a related or underlying instrument; or an option, swap, warrant, or debt instrument with one or more options embedded in or attached to it, the value of which contract or security is determined in whole or in part by the price of one or more underlying instruments or markets.
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New Global Economic Plan
9 October 1998 1998 Ron Paul 117:2
The world economies have been built on generous credit expansion with each country inflating their currencies at different rates. Additionally, each country has had different political, tax, and regulatory policies leading to various degrees of trust and stability. Economies that have “enjoyed” inflationary booms, by their very nature, must undergo a market correction. The market demands deflation of all excesses, while the politicians and special interests agitate for continued credit inflation. Under these circumstances, financial assets may deflate in price but monetary inflation continues and the currency is further depreciated thus putting serious pressure on the dollar; as in the case of the United States.
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New Global Economic Plan
9 October 1998 1998 Ron Paul 117:3
Fluctuating fiat currencies, no matter how inefficient as compared to a world commodity monetary standard, function solely because exchange rates are allowed to fluctuate and currency movements across borders are freely permitted as capital seeks the most efficient market. This process provides an indication when host countries need to improve monetary and fiscal policy.
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New Global Economic Plan
9 October 1998 1998 Ron Paul 117:4
A gold standard solves capital flow problems automatically and avoids all currency speculation. Gold prevents excesses from developing to any dangerous level.
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New Global Economic Plan
9 October 1998 1998 Ron Paul 117:7
All money managers in major countries decry currency controls by any individual country yet are now about to embark on a new world-wide approach to regulating all capital flows — a global economic plan to socialize all world credit. But, it won’t work because the plan is deeply and inherently flawed.
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Monetary Policy
16 October 1998 1998 Ron Paul 120:7
We must understand the serious flaw in the current system that is playing havoc with world markets. When license is given to central banks to inflate (debase) a currency, they eventually do so. Politicians love the central bank’s role as lender of last resort and their power to monetize the steady stream of public debt generated by the largesse that guarantees the politician’s reelection.
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Monetary Policy
16 October 1998 1998 Ron Paul 120:10
If the problem were merely that there were not enough money, then money creation alone could make us all millionaires and no one would have to work. But increasing the money supply does not increase wealth. Only work and savings do that. The deception comes because, for a while for the luck few, benefits are received when government inflate the currency and pass it out for political reasons.
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Freedom And Privacy Restoration Act
6 January 1999 1999 Ron Paul 1:8
A more recent assault on privacy is a regulation proposed jointly by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Reserve, known as “Know Your Customer.” If this regulation takes effect in April 2000, financial institutions will be required not only to identify their customers but also their source of funds for all transactions, establish a “profile” and determine if the transaction is “normal and expected.” If a transaction does not fit the profile, banks would have to report the transaction to government regulators as “suspicious.” The unfunded mandate on financial institutions will be passed on to customers who would have to pay higher ATM and other fees and higher interest rates on loans for the privilege of being spied on by government-inspired tellers.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:68
Credit expansion is the root cause of all financial bubbles. Fiat monetary systems inevitably cause unsustainable economic expansion that results in a recession and/or depression. A correction always results, with the degree and duration being determined by government fiscal policy and central bank monetary policy. If wages and prices are not allowed to adjust and the correction is thwarted by invigorated monetary expansion, new and sustained economic growth will be delayed or prevented. Financial dislocation caused by central banks in the various countries will differ from one to another due to political perceptions, military considerations, and reserve currency status.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:69
The U.S.’s ability to inflate has been dramatically enhanced by other countries’ willingness to absorb our inflated currency, our dollar being the reserve currency of the world. Foreign central banks now hold in reserve over $600 billion, an amount significantly greater than that even held by our own Federal Reserve System. Our economic and military power gives us additional license to inflate our currency, thus delaying the inevitable correction inherent in a paper money system. But this only allows for a larger bubble to develop, further jeopardizing our future economy.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:70
Because of the significance of the dollar to the world economy, our inflation and the dollar-generated bubble is much more dangerous than single currency inflation such as Mexico, Brazil, South Korea, Japan and others. The significance of these inflations, however, cannot be dismissed.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:83
One characteristic of an economy that suffers from a constantly debased currency is sluggish or diminished growth in real income. In spite of our so-called great economic recovery, two-thirds of U.S. workers for the past 25 years have had stagnant or falling wages. The demands for poverty relief from government agencies continue to increase. Last year alone, 678,000 jobs were lost due to downsizing. The new service sector jobs found by many of those laid off are rarely as good paying.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:84
In the last 1 1/2 years, various countries have been hit hard with deflationary pressures. In spite of the IMF-led bailouts of nearly $200 billion, the danger of a worldwide depression remains. Many countries, even with the extra dollars sent to them courtesy of the American taxpayer, suffer devaluation and significant price inflation in their home currency.
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Congress Relinquishing The Power To Wage War
2 February 1999 1999 Ron Paul 4:88
The Constitution is clear that the Congress has responsibility for guaranteeing the value of the currency, and no authority has ever been given to create a central bank. Creating money out of thin air is counterfeiting, even when done by a bank that the Congress tolerates.
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Peace
25 March 1999 1999 Ron Paul 23:3
Let other nations always keep the idea of their sovereign self-government associated with our Republic and they will befriend us, and no force under heaven will be of power to tear them from our allegiance. But let it be once understood that our government may be one thing and their sovereignty another, that these two things exist without mutual regard one for the other — and the affinity will be gone, the friendship loosened and the alliance hasten to decay and dissolution. As long as we have the wisdom to keep this country as the sanctuary of liberty, the sacred temple consecrated to our common faith, wherever mankind worships freedom they will turn their faces toward us. The more they multiply, the more friends we will have, the more ardently they love liberty, the more perfect will be our relations. Slavery they can find anywhere, as near to us as Cuba or as remote as China. But until we become lost to all feeling of our national interest and natural legacy, freedom and self-rule they can find in none but the American founding. These are precious commodities, and our nation alone was founded them. This is the true currency which binds to us the commerce of nations and through them secures the wealth of the world. But deny others of their national sovereignty and self-government, and you break that sole bond which originally made, and must still preserve, friendship among nations. Do not entertain so weak an imagination as that UN Charters and Security Councils, GATT and international laws, World Trade Organizations and General Assemblies, are what promote commerce and friendship. Do not dream that NATO and peacekeeping forces are the things that can hold nations together. It is the spirit of community that gives nations their lives and efficacy. And it is the spirit of the constitution of our founders that can invigorate every nation of the world, even down to the minutest of these.
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Why Taxes Are High
15 April 1999 1999 Ron Paul 27:5
Something that we do here in Washington which is also unconstitutional is to inflate the currency to pay for debt. Last year the Federal Reserve bought Treasury debt to the tune of $43 billion. This helps finance big government. This is illegal, unconstitutional, and is damaging to our economy.
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Africa Growth And Opportunity Act
16 July 1999 1999 Ron Paul 77:11
Fast track is merely a procedure under which the United States can more quickly integrate an cartelize government in order to entrench the interventionist mixed economy. In Europe, this process culminated in the Maastricht Treaty, the attempt to impose a single currency and central bank and force relatively free economies to ratchet up their regulatory and welfare states. In the United States, it has instead taken the form of transferring legislative and judicial authority from states and localities and to the executive branch of the federal government. Thus, agreements negotiated under fast track authority (like NAFTA) are, in essence, the same alluring means by which the socialistic Eurocrats have tried to get Europeans to surrender to the super-statism of the European Union. And just as Brussels has forced low-tax European countries to raise their taxes to the European average or to expand their respective welfare states in the name of “fairness,” a “level playing field,” and “upward harmonization,” so too will the international trade governors and commissions be empowered to “upwardly harmonize,” internationalize, and otherwise usurp laws of American state governments.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:20
Government statistics are continuously reaffirming our great prosperity with evidence of high and rising wages, no inflation, and high consumer confidence and spending. The U.S. Government still enjoys good credit and a strong currency in relationship to most other currencies of the world. We have no trouble financing our public nor private debt. Housing markets are booming and interest rates remain reasonable by modern day standards. Unemployment is low.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:84
Recently, the Secretary of HUD, using public funds to sue gun manufacturers, claimed this is necessary to solve the problems of crime which government housing perpetuates. If a government agency, which was never meant to exist in the first place under the Constitution, can expand their role into the legislative and legal matters without the consent of the Congress, we indeed have a serious problem on our hands. The programs are bad enough in themselves but the abuse of the rule of law and ignoring the separation of powers makes these expanding programs that much more dangerous to our entire political system and is a direct attack on personal liberty. If one cares about providing the maximum best housing for the maximum number of people, one must consider a free market approach in association with a sound, nondepreciating currency. We have been operating a public housing program directly opposite to this and along with steady inflation and government promotion of housing since the 1960s, the housing market has been grossly distorted. We can soon expect a major downward correction in the housing industry prompted by rising interest rates.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:90
The authors of the Constitution were well aware of the dangers of inflation, having seen the harm associated with the destruction of the Continental currency. They never wanted to see another system that ended with the slogan, “it’s not worth a Continental.” They much preferred sound as a dollar, or as good as gold, as a description of our currency.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:92
No longer is there silver or gold available to protect the value of a steadily depreciating currency. This is a fraud of the worst kind and the type of a crime that would put a private citizen behind bars. But there have been too many special interests benefitting by our fiat currency, too much ignorance and too much apathy regarding the nature of money.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:93
We will surely pay the price for this negligence. The relative soundness of our currency that we enjoy as we move into the 21st Century will not persist. The instability in world currency market because of the dollar’s acceptance for so many years as the world’s currency, will cause devastating adjustments that Congress will eventually be forced to address.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:97
Ironically, the government and politicians are held in very low esteem, yet the significant trust in them to maintain the value of the currency is not questioned. But it should be.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:110
There are many reasons to believe the economic slowdown will be worldwide, since the dollar is the reserve currency of the world. An illusion about our dollar’s value has allowed us to prop up Europe and Japan in this pass decade during a period of weak growth for them, but when reality sets in, economic conditions will deteriorate. Greater computer speed, which has helped to stimulate the boom of the 1990s, will work in the opposite direction as all of the speculative positions unwind, and that includes the tens of trillions of dollars in derivatives.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:112
A paper money system is dangerous economically and not constitutionally authorized. It is also immoral for government to counterfeit money, which dilutes the value of the currency and steals values from those who hold the currency and those who do not necessary benefit from its early circulation.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:113
Not everyone benefits from the largesse of government spending programs or systematic debasement of the currency. The middle class, those not on welfare and not in the military industrial complex suffer the most from rising prices and job losses in the correction phase of the business cycle.
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A Republic, If You Can Keep It – Part 2
2 February 2000 2000 Ron Paul 5:10
We know, of course, it has been involved in the past 50 years in assassinations and government overthrows on frequent occasions. The Federal Reserve operation, which works hand in hand with the administration, is not subject to congressional oversight. The Fed manipulates currency exchange rates, controls short-term interest rates, and fixes the gold price, all behind closed doors.
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A Republic, If You Can Keep It – Part 2
2 February 2000 2000 Ron Paul 5:117
2. In order to maintain economic protection against Government debasement of the currency, gold ownership must be preserved, something taken away from the American people during the Depression.
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WHAT IS FREE TRADE?
May 2, 2000 2000 Ron Paul 29:6
When the colonies did not thrive well prior to the Constitution, two of the main reasons why the Constitutional Convention was held was, one, there was no unified currency, that provided a great deal of difficulty in trading among the States, and also trade barriers are among the States.
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WHAT IS FREE TRADE?
May 2, 2000 2000 Ron Paul 29:7
Even our Constitution was designed to make sure that there were not trade barriers, and this was what the interstate commerce clause was all about. Unfortunately though, in this century the interstate commerce clause has been taken and twisted around and is the excuse for regulating even trade within a State. Not only interstate trade, but even activities within a State has nothing to do with interstate trade. They use the interstate commerce clause as an excuse, which is a wild distortion of the original intent of the Constitution, but free trade among the States having a unified currency and breaking down the barriers certainly was a great benefit for the development and the industrialization of the United States.
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Manipulating Interest Rates
May 15, 2000 2000 Ron Paul 36:8
* But that’s a fallacy. There is always a cost. Artificially low interest rates prompt lower savings, over-capacity expansion, mal-investment, excessive borrowing, speculation, and price increases in various segments of the economy. And since money creation is not wealth creation, it inevitably leads to a lower value for the currency. The inflation always comes to an end with various victims, many of whom never enjoyed the benefits of the credit creation and deficit spending.
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Manipulating Interest Rates
May 15, 2000 2000 Ron Paul 36:11
* There are some who see this fallacy and object to deliberately slowing the economy but instead clamor for even more monetary growth to keep interest rates low and the economy booming. But this is just as silly because that leads to even more debasement of the currency, rising prices, and instead of lowering interest rates will in time, due to inflationary expectation, actually raise rates.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:4
* Japan has yet to recover from its monetary inflation of the 70s and 80s and has now suffered with a lethargic economy for over a decade. Even after this length of time there is no serious thought for currency reform in Japan or any other Asian nation.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:5
* Although international trade imbalances are a predictable result of fiat money, the duration and intensity of the cycles associated with it are not. A reserve currency, such as is the dollar, is treated by the market quite differently than another fiat currency.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:6
* The issuer of a reserve currency-in the case the United States-has greater latitude for inflating and can tolerate a current account deficit for much longer periods of time than other countries not enjoying the same benefit. But economic law, although at times it may seem lax, is ruthless in always demanding that economic imbalances arising from abuse of economic principles be rectified. In spite of the benefits that reserve currency countries enjoy, financial bubbles still occur and their prolongation, for whatever reason, only means the inevitable adjustment, when it comes, is more harsh.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:9
* By inflating our currency, we can then spend our dollars overseas getting products at good prices which on the short run raises our standard of living - but, on borrowed money. All currency account deficits must be financed by borrowing from abroad.
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The Dollar And Our Current Account Deficit
May 16, 2000 2000 Ron Paul 37:10
* It all ends when the world wakes up and realizes it has been had by the US printing press. No country can expect to inflate its currency at will forever.
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INTERNATIONAL TRADE
May 23, 2000 2000 Ron Paul 39:4
For the past decade, with sharp adjustments in currency values such as occurred during the Asian financial crisis, the dollar and the U.S. consumers benefitted. But these benefits will prove short-lived, since the unprecedented prosperity and consumption has been achieved with money that we borrow from abroad.
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INTERNATIONAL TRADE
May 23, 2000 2000 Ron Paul 39:6
The Federal Reserve believes that prosperity causes high prices and rising wages, thus causing it to declare war on a symptom of its own inflationary policy, deliberately forcing an economic slowdown, a sad and silly policy, indeed. The Fed also hopes that higher interest rates will curtail the burgeoning trade deficit and prevent the serious currency crisis that usually results from currency-induced trade imbalances. And of course, the Fed hopes to do all this without a recession or depression.
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INTERNATIONAL TRADE
May 23, 2000 2000 Ron Paul 39:7
That is a dream. Not only is the dollar due for a downturn, the Chinese currency is, as well. When these adjustments occur and recession sets in, with rising prices in consumer and producer goods, there will be those who will argue that it happened because of, or the lack thereof, of low tariffs and free trade with China.
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INTERNATIONAL TRADE
May 23, 2000 2000 Ron Paul 39:8
But instead, I suggest we look more carefully for the cause of the coming currency crisis. We should study the nature of all the world currencies and the mischief that fiat money causes, and resist the temptation to rely on the WTO, the IMF, the World Bank, pseudo free trade, to solve the problems that only serious currency reform can address.
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WITHDRAWING APPROVAL OF UNITED STATES FROM AGREEMENT ESTABLISHING WORLD TRADE ORGANIZATION
June 21, 2000 2000 Ron Paul 45:26
Let me say there is another reason why we expect chaos in the economy and in trade. It has to do with the trade imbalances. Today we are at record highs. The current account deficit hit another record yesterday. It is 4.5 percent of the GDP, and it is significant. But unfortunately the WTO can do nothing about that because that is a currency problem. It too causes chaos. Yet there will be an attempt by the WTO to share the problem of imbalances. Just think of how NAFTA came to the rescue of the Mexican peso immediately after NAFTA was approved; a $50 billion rescue for the politicians and the bankers who loaned money to Mexico.
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WITHDRAWING APPROVAL OF UNITED STATES FROM AGREEMENT ESTABLISHING WORLD TRADE ORGANIZATION
June 21, 2000 2000 Ron Paul 45:27
Quite frankly, I have a suspicion that when the Chinese currency fails, that will be one of the things that we will do. China will be our trading partner. They are in the family of countries, so therefore we will bail out their currency. That is what I suspect will happen. Why else would the Chinese put up with the nonsense that we pass out about what we are going to do, investigate them and tell them how to write their laws? They have no intention of doing that. I think they are anxious to be with WTO because they may well see a need for their currency to be supported by our currency, which would be a tax on the American people.
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World Trade Organization
21 June 2000 2000 Ron Paul 55:8
Let me say there is another reason why we expect chaos in the economy and in trade. It has to do with the trade imbalances. Today we are at record highs. The current account deficit hit another record yesterday. It is 4.5 percent of the GDP, and it is significant. But unfortunately the WTO can do nothing about that because that is a currency problem. It too causes chaos. Yet there will be an attempt by the WTO to share the problem of imbalances. Just think of how NAFTA came to the rescue of the Mexican peso immediately after NAFTA was approved; a $50 billion rescue for the politicians and the bankers who loaned money to Mexico.
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World Trade Organization
21 June 2000 2000 Ron Paul 55:9
Quite frankly, I have a suspicion that when the Chinese currency fails, that will be one of the things that we will do. China will be our trading partner. They are in the family of countries, so therefore we will bail out their currency. That is what I suspect will happen. Why else would the Chinese put up with the nonsense that we pass out about what we are going to do, investigate them and tell them how to write their laws? They have no intention of doing that. I think they are anxious to be with WTO because they may well see a need for their currency to be supported by our currency, which would be a tax on the American people.
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FSC Repeal And Extra-Territorial Income Exclusion Act Of 2000
September 12, 2000 2000 Ron Paul 73:14
* millions of dollars of U.S. exports. These trade problems will only worsen if the world slips into a recession when protectionist sentiments are strongest. Also, since currency fluctuations by their very nature stimulate trade wars, this problem will continue with the very significant weakness of the EURO.
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FSC Repeal And Extra-Territorial Income Exclusion Act Of 2000
September 12, 2000 2000 Ron Paul 73:17
* In addition to the danger of a recession and a continual problem with currency fluctuation, there are also other problems that will surely aggravate this growing trade war. The Europeans have already complained and have threatened to file suit in the WTO against the Americans for selling software products over the Internet. Europeans tax their Internet sales and are able to get their products much cheaper when bought from the United States thus penalizing European countries. Since the goal is to manage things in a so-called equitable manner the WTO very likely could rule against the United States and force a tax on our international Internet sales.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:2
Congress has certainly reneged on its responsibility in this area. We continue to grant authority to a central bank that designs monetary policy in complete secrecy, inflating the currency at will, thus stealing value from the already existing currency through a dilution effect.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:4
It should surprise no one that our financial markets are getting more volatile every day. Inflating a currency and causing artificially low interest rates always leads to malinvestment, overcapacity, excessive debt, speculation, and dangerous trade imbalances. We now live in a world awash in a sea of fiat currencies, with the dollar, the yen, and the Euro leading the way. The inevitable unwinding of the wild speculation, as reflected in the derivatives market, is now beginning.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:8
Destroying the value of a currency is immoral and remains unconstitutional. It should be illegal. And only a responsible Congress can accomplish that.
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CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY POLICY
October 11, 2000 2000 Ron Paul 84:9
In preparation for the time when we are forced to reform the monetary system, we must immediately begin to consider the problems that befall a nation that permits systematic currency depreciation as a tool to gain short-term economic benefits while ignoring the very dangerous long-term consequences to our liberty and prosperity.
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WARNING ABOUT FOREIGN POLICY AND MONETARY POLICY
October 12, 2000 2000 Ron Paul 86:4
Most good economists recognize that inflation is a consequence of monetary policy; as one increases the supply of money, it inflates the currency. This distorts interest rates, and it distorts the markets. Sometimes this goes into goods and services, and other times these excessive funds will go into marketplaces and distort the value of stocks and bonds.
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WARNING ABOUT FOREIGN POLICY AND MONETARY POLICY
October 12, 2000 2000 Ron Paul 86:13
It is an illusion to believe that the new paradigm exists. Actually, the computer industry involves 5 percent of the economy; 95 percent is what they called the old economy. I ascribe to old economic laws, because the truth is, we cannot change economic laws. And if inflating a currency distorts the market and the boom leads to the bust, that cannot be repelled.
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THREATS TO FINANCIAL FREEDOM
October 19, 2000 2000 Ron Paul 88:5
The second is from Mayer Amschel Rothchild (1743-1812), founder of the famous banking dynasty, the House of Rothchild, who said: ‘Give me control over a nation’s currency and I care not who makes its laws.’ Both quotes have relevance to what I have to say.
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ECONOMIC PROBLEMS AHEAD
November 13, 2000 2000 Ron Paul 93:8
* Even in the midst of our great imaginary budgetary surpluses, there has been no effort to cut. Once the economy tends to slow and more problems are apparent, expenditures are going to soar not only because of future problems but because of the new programs recently initiated. A huge financial bubble has been created by the GSEs, such as Fannie Mae and Freddie Mac. The $33 billion of shareholder equities in these two organizations has been leveraged into $1.07 trillion worth of assets- a bubble waiting to be pricked. The Congress has reacted to all these events irresponsibly by increasing spending, increasing tax revenues, doing nothing to reduce regulations, and being totally apathetic toward the dollar and monetary policy. We in the Congress have a moral and constitutional obligation to protect the value of the dollar and to understand why it is so important to the economy that a central bank not be given the unbelievable power of inflating a currency at will and pretending that it knows how to find tune an economy through this counterfeit system of money.
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FSC Repeal and Extraterritorial Income Exclusion Act of 2000
14 November 2000 2000 Ron Paul 94:12
H.R. 4986 will only anger the European Union and accelerate the trade war. Most likely within two months, the WTO will give permission for the Europeans to place punitive tariffs on hundreds of millions of dollars of U.S. exports. These trade problems will only worsen if the world slips into a recession when protectionist sentiments are strongest. Also, since currency fluctuations by their very nature stimulate trade wars, this problem will continue with the very significant weakness of the EURO.
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FSC Repeal and Extraterritorial Income Exclusion Act of 2000
14 November 2000 2000 Ron Paul 94:15
In addition to the danger of a recession and a continual problem with currency fluctuation, there are also other problems that will surely aggravate this growing trade war. The Europeans have already complained and have threatened to file suit in the WTO against the Americans for selling software products over the Internet. Europeans tax their Internet sales and are able to get their products much cheaper when bought from the United States thus penalizing European countries. Since the goal is to manage things in a so-called equitable manner the WTO very likely could rule against the United States and force a tax on our international Internet sales.
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OUR FOOLISH WAR IN THE MIDDLE EAST
November 15, 2000 2000 Ron Paul 95:11
* As the world becomes less stable due to currency, trade and other economic reasons, this region will become even more volatile. We should expect higher oil prices. Hatred toward America will continue to escalate, and United States security will continue to be diminished due to the threat of terrorist attacks. All the anti-ballistic missiles in the world will not be able to protect us against attacks such as the Cole suffered or from the nuclear and biological weapons that can be brought into this country in a suitcase.
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OUR FOOLISH WAR IN THE MIDDLE EAST
November 15, 2000 2000 Ron Paul 95:13
* The turmoil in the Middle East is now spilling over into Indonesia, a country made up of 17,000 islands and very vulnerable to political instability, especially since its currency and financial crisis of a few years ago. Indonesia is the world’s fourth largest nation, with the largest Muslim population of any country. Hatred toward the West, and especially America, due to the Middle East policy, has led to Christian persecution in Indonesia. The embassy is now closed, and American ambassador Robert Gelbard has been recalled after his life was threatened.
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ECONOMIC UPDATE
December 4, 2000 2000 Ron Paul 97:18
* Many are starting to talk now about a legislative stalemate with no clear majority in the House or Senate and the Presidency being uncertain. This concern about a stalemate is overblown. Not that the problem isn’t serious, but I am certain that under the conditions that we are about to experience, the Congress and the President will be all too willing to deal with the deteriorating conditions with increased spending and with a concerted bi-partisan effort to pressure the Federal Reserve to further inflate the currency in pursuing the fiction that the Federal Reserve can prevent a “hard landing” by merely increasing the money supply in an effort to dictate short-term Fed funds rates.
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ECONOMIC UPDATE
December 4, 2000 2000 Ron Paul 97:33
* A major financial crisis is possible since the dollar is the reserve currency of the world, held in central banks as if it were gold itself. The current account deficit for the United States continues to deteriorate, warning us of danger ahead. Our foreign debt of $1.7 trillion continues to grow rapidly and it will eventually have to be paid.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:48
The big shift in sentiment of the past several months has come with a loss of confidence in the status of the new paradigm. If we’re not careful, the likely weakening of the US dollar could lead to a loss of confidence in America and all her institutions. US political and economic power has propped up the world economy for years. Trust in the dollar has given us license to borrow and spend way beyond our means. But just because world conditions have allowed us greater leverage to borrow and inflate the currency than otherwise might have been permitted, the economic limitations of such a policy still exist. This trust, however, did allow for a greater financial bubble to develop and dislocations to last longer, compared to similar excesses in less powerful nations.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:49
There is one remnant of the Bretton Woods gold-exchange standard that has aided US dominance over the past 30 years. Gold was once the reserve all central banks held to back up their currencies. After World War II, the world central banks were satisfied to hold dollars, still considered to be as good as gold since internationally the dollar could still be exchanged for gold at $35 an ounce. When the system broke down in 1971, and we defaulted on our promises to pay in gold, chaos broke out. By default the dollar maintained its status as the reserve currency of the world.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:57
The most recent new era of the 1990s appeared to be an answer to all politicians’ dreams: a good economy, low unemployment, minimal price inflation, a skyrocketing stock market, with capital gains tax revenues flooding the Treasury, thus providing money to accommodate every special-interest demand. But it was too good to be true. It was based on an inflated currency and massive corporate, personal, and government borrowing. A recession was inevitable to pay for the extravagance that many knew was an inherent part of the new era, understanding that abundance without a commensurate amount of work was not achievable.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:92
For years the US has accepted the international financial and currency management of the IMF- another arm of one-world government.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:142
Endless demands and economic corrections that come with the territory will always produce deficits. An accommodating central bank then is forced to steal wealth through the inflation tax by merely printing money and creating credit out of thin air. Even though these policies may work for a while, eventually they will fail. As wealth is diminished, recovery becomes more difficult in an economy operating with a fluctuating fiat currency and a marketplace overly burdened with regulation, taxes, and inflation.
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POTENTIAL FOR WAR
February 08, 2001 2001 Ron Paul 10:20
For years the U.S. has accepted the international financial and currency management of the IMF, another arm of one-world government.
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POTENTIAL FOR WAR
February 08, 2001 2001 Ron Paul 10:89
Endless demands and economic corrections that come with the territory will always produce deficits. An accommodating central bank then is forced to steal wealth through the inflation tax by merely printing money and creating credit out of thin air. Even though these policies may work for awhile, eventually they will fail. As wealth is diminished, recovery becomes more difficult in an economy operating with a fluctuating fiat currency and a marketplace overly burdened with regulation, taxes and inflation.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:2
There’s nothing to fear from globalism, free trade and a single worldwide currency. But a globalism where free trade is competitively subsidized by each nation, a continuous trade war is dictated by the WTO, and the single currency is pure fiat, fear is justified. That type of globalism is destined to collapse into economic despair, inflationism and protectionism, and managed by resurgent militant nationalism.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:4
The effort in recent decades to unify government surveillance over all world trade and international financial transactions through the UN, IMF, World Bank, WTO, ICC, the OECD, and the Bank of International Settlements can never substitute for a peaceful world based on true free trade, freedom of movement, a single but sound market currency, and voluntary contracts with private property rights.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:11
The lynch pin to the outstanding growth of the 1990s has been the US dollar. Although it too is totally fiat, its special status has permitted a bigger bonus to the United States while it has been used to prop up other world economies. The gift bequeathed to us by owning the world reserve currency, allows us to create dollars at will- and Alan Greenspan has not hesitated to accommodate everyone despite his reputation as an inflation fighter. This has dramatically raised our standard of living, and significantly contributed to the new era psychology that has been welcomed by so many naive enough to believe that perpetual prosperity had arrived and the bills would never have to be paid.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:15
The collapse of the Soviet system and the emergence of United States military and economic preeminence, throughout the world, have permitted the dollar-driven financial bubble to last longer than anticipated. But instead of a glorious New Era, as promised, we ended up with a huge financial bubble and an artificially integrated world economy dominated by an unstable dollar. But instead of a single commodity currency driving a healthy world economy, we have an economy that has numerous imbalances generated by the US dollar, unsustainable trade agreements and total instability in the currency markets.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:18
For thirty years the world has operated on a pure fiat monetary system and all the ill effects of such a system are now becoming apparent. Current adjustments will be different than all other previous currency adjustments, which were local or regional. This one is worldwide and may well be the biggest economic event in modern history.
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The Beginning of the End of Fiat Money
March 13, 2001 2001 Ron Paul 18:22
The ultimate solution will only come with the rejection of fiat money worldwide, and a restoration of commodity money. Commodity money if voluntarily and universally accepted could give us a single world currency requiring no money managers, no manipulators orchestrating a man-made business cycle with rampant price inflation. Real free trade without barriers or tariffs and a single sound currency is the best way to achieve international peace and prosperity.
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Manipulation Of Interest Rates Cause Economic Problems
20 March 2001 2001 Ron Paul 22:6
To lower interest rates, a central bank has to increase the money. That is debasement. That is devaluing the money deliberately. In the old days, when the king would do this, they would clip coins. Literally coin debasement, stealing value from coinage in the old days was a capital crime. Today, though, it is accepted practice in all economies of the world. We have had no linkage of any currency of the world in the last 30 years to anything of real value.
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Manipulation Of Interest Rates Cause Economic Problems
20 March 2001 2001 Ron Paul 22:14
Low middle-income earners, individuals who are still not on the dole but willing to work, they are having a tough time paying their bills. That is the early stages of what happens when a currency is destroyed.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:2
Some people claim that they are not quite sure why markets go up and all of a sudden crash; and others say if only Alan Greenspan would just print more money, inflate the currency faster, lower the interest rates, all would be well. But I do not think it is that simple.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:7
This is not the case. Ultimately what we have to have is monetary reform, currency reform. We have to have a time when once again we have money that cannot be created out of thin air. We have to have money of value, something that governments and politicians cannot create out of thin air. Unless we address that, we are going to continue with these problems.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:10
If he had been seriously concerned about the exuberance getting out of control in 1996, he might have considered not inflating the currency quite so rapidly, not devaluing the money quite so rapidly. But what has he done since that time? The Federal Reserve has literally created $2.3 trillion of new money since 1996, further creating a bigger bubble, which eventually had to collapse, and that is what we are in the midst of. It can be tough. It is going to be tough for a lot of people. We can have this economic downturn, and this means jobs and a standard of living that will be threatened.
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Addressing Monetary Problems
22 March 2001 2001 Ron Paul 23:12
So this mantra of saying all we need is more inflation will not work. Inflation caused the problem. The inflation of the monetary system is the problem. To believe that all we need is more inflation to solve the problem is a serious error. We need currency reform.
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AMERICA NOT GETTING FAIR SHAKE FROM UNITED NATIONS —
May 10, 2001 2001 Ron Paul 31:8
Just January of this past year, it was noted that the United Nations proposed for the first time, although not ready to be passed, that we have an international tax placed on currency transactions to raise billions of dollars to be spent for international activities. Now, you say well, that is probably just a proposal and it will never happen. But even today, in Bosnia, the United Nations peacekeepers over there are tax collectors. There are not enough revenues being collected for certain governments, and the UN peacekeepers are there collecting taxes. So it is already happening that we are involved in tax collecting.
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H.R. 1646
10 May 2001 2001 Ron Paul 32:6
The United Nations have already laid plans for an international tax. This January it was proposed that the U.N. would like to put a tax on all currency transactions to raise $1.5 billion. This is abhorrent. This should be abhorrent to all of us. It should be abhorrent to all Americans that we would have an international tax imposed by the United Nations.
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Prosecuting Milosevic
18 July 2001 2001 Ron Paul 55:5
There is an alternative to a single world government, and that is individual governments willing to get along; open and free trade as much as possible, free travel, people having a unified free market currency where we do not have currency devaluations and poverty throughout the world. There is a lot that can be done with freedom, rather than always depending, whether it is here in the United States or at the international level, on more government.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:6
Exporters always want a weak dollar, importers a strong one. But no one demands a stable sound dollar, as they should. Manipulation of foreign trade through competitive currency devaluations has become commonplace and is used as a form of protectionism. This has been going on ever since the worldwide acceptance of fiat money thirty years ago. Although some short-term advantage may be gained for certain manufacturers and some countries by such currency manipulation, it only adds fuel to the economic and financial instability inherent in a system of paper money.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:7
Paper money helps the strong and hurts the weak before it self-destructs and undermines international trade. The US dollar, with its reserve-currency status, provides a much greater benefit to American citizens than that which occurs in other countries that follow a similar monetary policy. It allows us to export our inflation by buying cheap goods from overseas, while our dollars are then lent back to us to finance our current account deficit. We further benefit from the confidence bestowed on the dollar by our being the economic and military powerhouse of the world, thus postponing the day of reckoning. This permits our extravagant living to last longer than would have otherwise occurred under a gold standard.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:14
Modern-day globalism, since gold’s demise thirty years ago, has been based on a purely fiat US dollar, with all other currencies tied to the dollar. International redistribution and management of wealth through the IMF, the World Bank, and the WTO have promoted this new version of globalism. This type of globalism depends on trusting central bankers to maintain currency values and the international institutions to manage trade equitably, while bailing out weak economies with dollar inflation. This, of course, has only been possible because the dollar strength is perceived to be greater than it really is.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:16
Globalism has existed ever since international trade started thousands of years ago. Whether it was during the Byzantine Empire or the more recent British Empire, it worked rather well when the goal was honest trade and the currency was gold. Today, however, world government is the goal. Its tools are fiat money and international agencies that believe they can plan globally, just as many others over the centuries believed they could plan domestically, ignoring the fact that all efforts at socialism have failed.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:20
Regardless of whether the experts demand a weak dollar or a strong dollar, each inevitably demands lower interest rates, hoping to spur the economy and save the stock market from crashing. But one must remember that the only way the Federal Reserve can lower interest rates is to inflate the currency by increasing the money supply and by further debasing the currency. In the long term, the dollar is always weakened, even if the economy is occasionally stimulated on a short-run basis.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:25
The special nature of the dollar, as the reserve currency of the world, has permitted the bubble to last longer and to be especially beneficial to American consumers. But in the meantime, understandable market and political forces have steadily eroded our industrial base, while our service sector has thrived. Consumers enjoyed having even more funds to spend as the dollars left manufacturing. In a little over a year, one million industrial production jobs were lost while saving rates sank to zero and capital investments plummeted. Foreigners continue to grab our dollars, permitting us to raise our standard of living, but unfortunately it’s built on endless printing of fiat money and self -limiting personal debt.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:32
A major problem still remains. Ultimately the market determines all value including all currencies. With the current direction of the dollar certainly downward, the day of reckoning is fast approaching. A weak dollar will prompt dumping of GSE securities before treasuries, despite the Treasury’s and the Fed’s attempt to equate them with government securities. This will threaten the whole GSE system of finance, because the challenge to the dollar and the GSEs will hit just when the housing market turns down and defaults rise. Also a major accident can occur in the derivatives markets where Fannie Mae and Freddie Mac are deeply involved in hedging their interest-rate bets. Rising interest rates that are inherent with a weak currency will worsen the crisis.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:34
Pseudo-free trade, managed poorly and driven by fiat money, is no substitute for true free trade in a world with a stable commodity currency, such as gold. Managed trade and fiat money, historically, have led to trade wars, which the international planners pretend to abhor. Yet the trade war is already gearing up. The WTO, purported to exist to lower tariffs, is actually the agency that grants permission for tariffs to be applied when complaints of dumping are levied. We are in the midst of banana, textile, steel, lumber, and tax wars, all managed by the WTO. When cheap imports hit our markets, it’s a good deal for consumers, but our manufacturers are the first to demand permission to place protective tariffs on imports. If this is already occurring in an economy that has been doing quite well, one can imagine how strong the protectionists’ sentiments will be in a worldwide slowdown.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:47
The longer the delay in establishing a free market and a commodity currency, even with interrupted blips of growth, the more unstable the economy and the moredifficult the task becomes. Instead it will result in what no one wants- more poverty and political turmoil.
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A SAD STATE OF AFFAIRS --
October 25, 2001 2001 Ron Paul 90:27
It is both annoying and sad that there is so little interest by anyone in Washington in free market solutions to the world’s economic problems. True private ownership of property without regulation and abusive taxation is a thing of the past. Few understand how the Federal Reserve monetary policy causes the booms and the busts that, when severe, as now, only serve to enhance the prestige of the money managers- while most politicians and Wall Streeters demand that the Fed inflate the currency at an even more rapid rate. Today’s conditions give license to the politicians to spend our way out of recession, they hope.
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Foolishness Of Fiat
31 October 2001 2001 Ron Paul 92:3
Fiat money works as long as trust in the currency lasts. But eventually trust is always withdrawn from paper money. Fiat money evolves out of sound money, which always originates in the market, but paper money inevitably fails no matter how hard the beneficiaries try to perpetuate the fraud. We are now witnessing the early stages of the demise of a worldwide financial system built on the fiction that wealth can come out of a printing press or a computer at our central banks.
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Foolishness Of Fiat
31 October 2001 2001 Ron Paul 92:4
Japan, failing to understand this, has tried for more than a decade to stimulate her economy and boost her stock market by printing money and increasing government spending, and it has not worked. Argentina, even with the hopes placed in its currency board, is nevertheless facing default on its foreign debt and a crisis in confidence. More bailouts from the IMF and U.S. dollar may temper the crisis for a while, but ultimately it will only hurt the dollar and the U.S. taxpayers.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:5
The magnitude of the distortions of the 1990s brought on by artificially low interest rates orchestrated by the Fed, on top of 30 years of operating with a fiat currency worldwide, suggests that this slowdown will not abort quickly.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:29
Every recession in the last 30 years, since the dollar became a purely fiat currency, has ended after a significant correction and resumption of all the bad policies that caused the recession in the first place. Each rebound required more spending, debt and easy credit than the previous recovery did. And with each cycle, the government got bigger and more intrusive.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:35
Our dollar system is quite similar to the Argentine and Mexican peso systems that periodically make sudden and painful adjustments. But ours is different in one respect, because the dollar is accepted as the reserve currency of the world- the paper gold of the world financial system. This gives us license to inflate- that is, steal- for longer periods of time, and we can avoid sudden and sharp devaluations since the world’s currencies are “defined” by our dollar. But this doesn’t permit the ultimate devaluation that will bring a significant increase in the cost of living to all Americans, but hurt the poor and the middle class the most.
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Stimulating The Economy
February 7, 2002 2002 Ron Paul 5:41
What they fail to recognize, once they lose interest in shrinking the size of government, is that government borrowing always takes money from productive enterprises, while placing these funds in the hands of politicians whose prime job is to serve special interests. Deficits are a political expedience that also forces the Federal Reserve to inflate the currency while reducing in real terms the debt owed by the government by depreciating the value of the currency.
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Introduction of the Monetary Freedom and Accountability Act
February 13, 2002 2002 Ron Paul 8:3
By artificially deflating the price of gold, federal intervention in the gold market can reduce the values of private gold holdings, adversely affecting millions of investors. These investors rely on their gold holdings to protect them from the effects of our misguided fiat currency system. Federal dealings in gold can also adversely affect those countries with large gold mines, many of which are currently ravished by extreme poverty. Mr. Speaker, restoring a vibrant gold market could do more than any foreign aid program to restore economic growth to those areas.
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Statement on the Financial Services committee’s “Views and Estimates for Fiscal Year 2003”
February 28, 2002 2002 Ron Paul 12:6
This committee should also examine seriously the need for reform of the system of fiat currency which is responsible for the cycle of booms and busts which have plagued the American economy. Many members of the committee have expressed outrage over the behavior of the corporate executives of Enron. However, Enron was created by federal policies of easy credit and corporate welfare. Until this committee addresses those issues, I am afraid the American economy may suffer many more Enron-like disasters in the future.
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Don’t Expand Federal Deposit Insurance
May 22, 2002 2002 Ron Paul 47:7
Finally, I would remind my colleagues that the federal deposit insurance program lacks constitutional authority. Congress’ only mandate in the area of money and banking is to maintain the value of the money. Unfortunately, Congress abdicated its responsibility over monetary policy with the passage of the Federal Reserve Act of 1913, which allows the federal government to erode the value of the currency at the will of the central bank. Congress’ embrace of fiat money is directly responsible for the instability in the banking system that created the justification for deposit insurance.
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AN OPEN LETTER TO TREASURY SECRETARY O’NEILL AND FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN
May 31, 2002 2002 Ron Paul 51:1
Why Does the IMF Prohibit Gold-Backed Currency for its Member States?
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AN OPEN LETTER TO TREASURY SECRETARY O’NEILL AND FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN
May 31, 2002 2002 Ron Paul 51:3
Dear Sirs: I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)’s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency. This policy could delay a country’s recovery from an economic crisis and retard economic growth, thus furthering economic and political instability.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:2
But Congress should be interested in the dollar fluctuation not as an investment but because of our responsibility for maintaining a sound and stable currency, a requirement for sustained economic growth.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:3
The consensus now is that the dollar is weakening and the hope is that the drop in its value will be neither too much nor occur too quickly; but no matter what the spin is, a depreciating currency, one that is losing its value against goods, services, other currencies and gold, cannot be beneficial and may well be dangerous. A sharply dropping dollar, especially since it is the reserve currency of the world, can play havoc with the entire world economy.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:4
Gold is history’s oldest and most stable currency. Central bankers and politicians hate gold because it restrains spending and denies them the power to create money and credit out of thin air. Those who promote big government, whether to wage war and promote foreign expansionism or to finance the welfare state here at home, cherish this power.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:6
In the past 2 years, gold has been the strongest currency throughout the world in spite of persistent central bank selling designed to suppress the gold price in hopes of hiding the evil caused by the inflationary policies that all central bankers follow. This type of depreciation only works for short periods; economic law always rules over the astounding power and influence of central bankers.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:7
That is what is starting to happen, and trust in the dollar is being lost. The value of the dollar this year is down 18 percent compared to gold. This drop in value should not be ignored by Congress. We should never have permitted this policy that was deliberately designed to undermine the value of the currency.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:9
Misplaced confidence in a currency can lead money managers and investors astray, but eventually the piper must be paid. Last year’s record interest rate drop by the Federal Reserve was like pouring gasoline on a fire. Now the policy of the past decade is being recognized as being weak for the dollar; and trust and confidence in it is justifiably being questioned.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:1
Mr. PAUL. Mr. Speaker, as the attached article (“A Classic Hayekian Hangover”) by economists Roger Garrison and Gene Callahan makes clear, much of the cause for our current economic uneasiness is to be found in the monetary expansion over most of the past decade. In short, expansion of the money supply as made possible by the policy of fiat currency, leads directly and inexorably to the kind of problems we have seen in the financial markets of late. Moreover, if we do not make the necessary policy changes, we will eventually see similar problems throughout the entire economy.
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The Price Of War
5 September 2002 2002 Ron Paul 83:58
I am convinced, though, that eventually restraint in our interventions overseas will be guided by a more reasonable constitutional policy. Economic reality will dictate it. Although political pressure in times of severe economic downturn and domestic strife encourages planned distractions overseas, these adventures always cause economic harm due to the economic costs. When the particular country or empire involved overreaches, as we are currently doing, national bankruptcy and a severely weakened currency call the whole process to a halt.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:4
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:5
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of the special interests and their own appetite for big government.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:6
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the Federal Government to erode Americans’ living standard via an inflationary monetary policy.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:7
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our Nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:12
Or perhaps it is not so obvious why this is true. It’s been three decades since the dollar’s tie to gold was completely severed, to the hosannas of mainstream economists. There is no stash of gold held by the Fed or the Treasury that backs our currency system. The government owns gold but not as a monetary asset. It owns it the same way it owns national parks and fighter planes. It’s just another asset the government keeps to itself.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:13
The dollar, and all our money, is nothing more and nothing less than what it looks like: a cut piece of linen paper with fancy printing on it. You can exchange it for other currency at a fixed rate and for any good or service at a flexible rate. But there is no established exchange rate between the dollar and gold, either at home or internationally.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:22
Without the gold standard, government is free to work with the Fed to inflate the currency without limit. Even in our own times, we’ve seen governments do that and thereby spread mass misery.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:24
In the real world, of course, there is a lag time between cause and effect. The Fed has been inflating the currency at very high levels for longer than a year. The consequences of this disastrous policy are showing up only recently in the form of a falling dollar and higher gold prices. And so what does the Fed do? It is pulling back now. For the first time in nearly ten years, some measures of money (M2 and MZM) are showing a falling money stock, which is likely to prompt a second dip in the continuing recession.
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Republic Versus Democracy
29 January 2003 2003 Ron Paul 6:41
It is for this reason that democracies always bring about currency debasement through inflation of the money supply.
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Republic Versus Democracy
29 January 2003 2003 Ron Paul 6:65
What has been our answer to the shortcomings of policies driven by manipulated majority opinion by the powerful elite? We have responded by massively increasing the Federal Government’s policing activity to hold American citizens in check and make sure we are well behaved and pose no threat, while massively expanding our aggressive presence around the world. There is no possible way these moves can make us more secure against terrorism, yet they will accelerate our march toward national bankruptcy with a currency collapse.
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Republic Versus Democracy
29 January 2003 2003 Ron Paul 6:81
The withholding principle was devised to make paying for the programs the majority demanded seem less painful. Passing on debt to the next generation through borrowing is also a popular way to pay for welfare and warfare. The effect of inflating a currency to pay the bills is difficult to understand and the victims are hard to identify. Inflation is the most sinister method of payment for a welfare state. It, too, grows in popularity as the demands increase for services that are not affordable.
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Republic Versus Democracy
29 January 2003 2003 Ron Paul 6:88
Even a system of free market money, a redeemable gold coin standard, functions through the principle of consumers always voting or withholding support for that currency. A gold standard can only work when freely converted into gold coins, giving every citizen a right to vote on a daily basis for or against the government’s money.
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The Financial Services Committee’s Terrible Blueprint for 2004
February 28, 2003 2003 Ron Paul 27:7
Perhaps the most disappointing omission from the committee’s views is the failure to address monetary policy. This is especially troubling given that many Americans have lost their jobs, while millions of others have seen severe declines in their net worth, because of the Federal Reserve’s continuing boom and bust monetary policy. It is long past time for Congress to examine seriously the need for reform of the system of fiat currency that is responsible for the cycle of booms and busts that plague the American economy. Until this committee addresses those issues, I am afraid the American economy may suffer more recessions or even depressions in the future.
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The Myth of War Prosperity
March 4, 2003 2003 Ron Paul 28:4
There are many economic shortcomings during a war. During wartime it is much more common to experience inflation because the money presses are running to fund military expenses. Also, during wartime there is a bigger challenge to the currency of the warring nation, and already we see that the dollar has dropped 20 percent in the past year. Although there are many other reasons for a weak dollar, the war certainly is contributing to the weakness in the dollar.
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Don’t Antagonize our Trading Partners
April 1, 2003 2003 Ron Paul 41:5
It is true that military might gives a boost to a nation’s currency; but this is not permanent if fiscal and monetary policies are abused. Currently, our budget deficits are exploding, as there is no restraint on spending.
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The Wisdom Of Tax Cuts
6 May 2003 2003 Ron Paul 56:4
The process by which the Fed monetizes debt and accommodates Congress contributes to, if not causes, most of our problems. This process of government financing generates the business cycle and thus increases unemployment. It destroys the value of the dollar and thus causes price inflation. It encourages deficits by reducing restraints on congressional spending. It encourages an increase in the current account deficit, the dollar being the reserve currency of the world, and causes huge foreign indebtedness. It reflects a philosophy of instant gratification that says, live for the pleasures of today and have future generations pay the bills.
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Legislation To Prohibit The Federal Government From Imposing A “Carry Tax”
17 July 2003 2003 Ron Paul 78:2
Proposals to punish people if their economic behavior meets with the disapproval of government officials form the foundation of the type of central planning which caused so much misery in the last century. The carry tax proposal is obviously incompatible with a free market. This proposal is also a major threat to personal and financial privacy and thus individual liberty. In order to enforce the carry tax, the government would need a means of monitoring how long each piece of currency has been in circulation and how many hands it passed through before coming into the possession of the person on whom the tax is assessed. Thus, enforcing this tax would also give the government the power to monitor the transactions of individual Americans. The Federal Government should not abuse the authority granted it by our current monetary system and legal tender laws as a backdoor means of prying into the private economic transactions of American citizens. That is why my legislation also forbids the Federal Government from placing any information storage capacity on any Federal Reserve notes.
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:3
By artificially deflating the price of gold, federal intervention in the gold market can reduce the values of private gold holdings, adversely affecting millions of investors. These investors rely on their gold holdings to protect them from the effects of our misguided fiat currency system. Federal dealings in gold can also adversely affect those countries with large gold mines, many of which are currently ravished by extreme poverty. Mr. Speaker, restoring a vibrant gold market could do more than any foreign aid program to restore economic growth to those areas.
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:22
A footnote on the Website of the Central Bank of the Philippines (www.bsp.gov.ph) in fact directly contradicts the IMF’s claim: “Beginning January 2000, in compliance with the requirements of the IMF’s reserves and foreign-currency-liquidity template under the Special Data Dissemination Standard (SDDS), gold swaps undertaken by the BSP with noncentral banks shall be treated as collateralized loans. Thus gold under the swap arrangement remains to be part of reserves, and a liability is deemed incurred corresponding to the proceeds of the swap.”
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The Monetary Freedom And Accountability Act
17 July 2003 2003 Ron Paul 79:23
The European Central Bank (ECB) also made it clear that the IMF policy is to include swaps and loans as reserves. The ECB responded to GATA: “Following the recommendations set out in the IMF operational guidelines of the ’Data Template on International Reserve and Foreign Currency Liquidity,’ which were developed in 1999, all reversible gold transactions, including gold swaps, are recorded as collateralized loans in balance of payments and international investment- position statistics. This treatment implies that the gold account would remain unchanged on the balance sheet.” The Bank of Finland and the Bank of Portugal also confirmed in writing that the swapped gold remains a reserve asset under IMF regulations.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:9
However, during the 20 th century, the legal tender power enabled politicians to fool the public into believing the dollar no longer meant a weight of gold or silver. Instead, the government told the people that the dollar now meant a piece of government-issued paper backed up by nothing except the promises of the government to maintain a stable value of currency. Of course, history shows that the word of the government (to protect the value of the dollar) is literally not worth the paper it is printed on.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:11
Another prescient Justice was Stephen Field, the only Justice to dissent in every legal tender case to come before the Court. Justice Field accurately described the dangers to our constitutional republic posed by legal tender laws: “The arguments in favor of the constitutionality of legal tender paper currency tend directly to break down the barriers which separate a government of limited powers from a government resting in the unrestrained will of Congress. Those limitations must be preserved, or our government will inevitably drift from the system established by our Fathers into a vast, centralized, and consolidated government.” A government with unrestrained powers is properly characterized as tyrannical.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:5
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:6
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of the special interests and their own appetite for big government.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:7
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:8
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:3
The Founders of this country, and a large majority of the American people up until the 1930s, disdained paper money, respected commodity money, and disapproved of a central bank’s monopoly control of money creation and interest rates. Ironically, it was the abuse of the gold standard, the Fed’s credit-creating habits of the 1920s, and its subsequent mischief in the 1930s, that not only gave us the Great Depression, but also prolonged it. Yet sound money was blamed for all the suffering. That’s why people hardly objected when Roosevelt and his statist friends confiscated gold and radically debased the currency, ushering in the age of worldwide fiat currencies with which the international economy struggles today.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:9
If indeed our generation can make the case for paper money, issued by an unauthorized central bank, it behooves us to at least have enough respect for the Constitution to amend it in a proper fashion. Ignoring the Constitution in order to perform a pernicious act is detrimental in two ways. First, debasing the currency as a deliberate policy is economically destructive beyond measure. Second, doing it without consideration for the rule of law undermines the entire fabric of our Constitutional republic.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:14
When the government can replicate the monetary unit at will without regard to cost, whether it’s paper currency or a computer entry, it’s morally identical to the counterfeiter who illegally prints currency. Both ways, it’s fraud.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:39
That’s why the Fed screams about a coming deflation, so it can continue the devaluation of the dollar unabated. The politicians don’t mind, the bankers welcome the business activity, and the recipients of the funds passed out by Congress never complain. The greater the debt, the greater the need to inflate the currency, since debt cannot be the source of long-term wealth. Individuals and corporations who borrow too much eventually must cut back and pay off debt and start anew, but governments rarely do.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:50
Although dollar creation is ultimately the key to its value, many other factors play a part in its perceived value, such as: the strength of our economy, our political stability, our military power, the benefit of the dollar being the key reserve currency of the world, and the relative weakness of other nation’s economies and their currencies. For these reasons, the dollar has enjoyed a special place in the world economy. Increases in productivity have also helped to bestow undeserved trust in our economy with consumer prices, to some degree, being held in check and fooling the people, at the urging of the Fed, that “inflation” is not a problem. Trust is an important factor in how the dollar is perceived. Sound money encourages trust, but trust can come from these other sources as well. But when this trust is lost, which always occurs with paper money, the delayed adjustments can hit with a vengeance.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:52
We own the printing press and create as many dollars as we please. These dollars are used to buy federal debt. This allows our debt to be monetized and the spendthrift Congress, of course, finds this a delightful convenience and never complains. As the dollars circulate through our fractional reserve banking system, they expand many times over. With our excess dollars at home, our trading partners are only too happy to accept these dollars in order to sell us their products. Because our dollar is relatively strong compared to other currencies, we can buy foreign products at a discounted price. In other words, we get to create the world’s reserve currency at no cost, spend it overseas, and receive manufactured goods in return. Our excess dollars go abroad and other countries-especially Japan and China- are only too happy to loan them right back to us by buying our government and GSE debt. Up until now both sides have been happy with this arrangement.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:54
A debt of this sort always ends by the currency of the debtor nation decreasing in value. And that’s what has started to happen with the dollar, although it still has a long way to go. Our free lunch cannot last. Printing money, buying foreign products, and selling foreign holders of dollars our debt ends when the foreign holders of this debt become concerned with the dollar’s future value.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:56
In the short run, the current system gives us a free ride, our paper buys cheap goods from overseas, and foreigners risk all by financing our extravagance. But in the long run, we will surely pay for living beyond our means. Debt will be paid for one way or another. An inflated currency always comes back to haunt those who enjoyed the “benefits” of inflation. Although this process is extremely dangerous, many economists and politicians do not see it as a currency problem and are only too willing to find a villain to attack. Surprisingly the villain is often the foreigner who foolishly takes our paper for useful goods and accommodates us by loaning the proceeds back to us. It’s true that the system encourages exportation of jobs as we buy more and more foreign goods. But nobody understands the Fed role in this, so the cries go out to punish the competition with tariffs. Protectionism is a predictable consequence of paper- money inflation, just as is the impoverishment of an entire middle class. It should surprise no one that even in the boom phase of the 1990s, there were still many people who became poorer. Yet all we hear are calls for more government mischief to correct the problems with tariffs, increased welfare for the poor, increased unemployment benefits, deficit spending, and special interest tax reduction, none of which can solve the problems ingrained in a system that operates with paper money and a central bank.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:68
Alan Greenspan, although once a strong advocate for the gold standard, now believes he knows what the outcome of this battle will be. Is it just wishful thinking on his part? In an answer to a question I asked before the Financial Services Committee in February 2003, Chairman Greenspan made an effort to convince me that paper money now works as well as gold: “I have been quite surprised, and I must say pleased, by the fact that central banks have been able to effectively simulate many of the characteristics of the gold standard by constraining the degree of finance in a manner which effectively brought down the general price levels.” Earlier, in December 2002, Mr. Greenspan spoke before the Economic Club of New York and addressed the same subject: “The record of the past 20 years appears to underscore the observation that, although pressures for excess issuance of fiat money are chronic, a prudent monetary policy maintained over a protracted period of time can contain the forces of inflation.” There are several problems with this optimistic assessment. First, efficient central bankers will never replace the invisible hand of a commodity monetary standard. Second, using government price indexes to measure the success of a managed fiat currency should not be reassuring. These indexes can be arbitrarily altered to imply a successful monetary policy. Also, price increases of consumer goods are not a litmus test for measuring the harm done by the money managers at the Fed. The development of overcapacity, excessive debt, and speculation still occur, even when prices happen to remain reasonably stable due to increases in productivity and technology. Chairman Greenspan makes his argument because he hopes he’s right that sound money is no longer necessary, and also because it’s an excuse to keep the inflation of the money supply going for as long as possible, hoping a miracle will restore sound growth to the economy. But that’s only a dream.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:84
If unchecked, the economic and political chaos that comes from currency destruction inevitably leads to tyranny- a consequence of which the Founders were well aware. For 90 years we have lived with a central bank, with the last 32 years absent of any restraint on money creation. The longer the process lasts, the faster the printing presses have to run in an effort to maintain stability. They are currently running at record rate. It was predictable and is understandable that our national debt is now expanding at a record rate.
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Misguided Policy Of Nation Building In Iraq
17 October 2003 2003 Ron Paul 111:62
But I am going to win this argument. Not because I am persuasive. I will win this argument that we have gone too far and have overextended. Sadly, I will win this argument because we are going to go broke. Because all great nations who believe that they can spread their will around the world, they always overextend; and then it virtually always leads to the debasement of the currency.
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Misguided Policy Of Nation Building In Iraq
17 October 2003 2003 Ron Paul 111:63
In the old days, they deluded the metal or clipped the coins. Today, it is more sophisticated, because we run up the debt, we send it over to the Fed, and they print the money. But that is debasing the currency, and it undermines the standard of living, already occurring with people on fixed incomes. So it will finally come to a halt, just as our intervention in Vietnam finally came to a sad halt. It did end. But the rest will come to an end when we can no longer afford it.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:1
Mr. PAUL. Mr. Speaker, like all Americans, I am concerned about the loss of jobs in America’s manufacturing sector and the role currency manipulation plays in that loss. For many years, I have warned my colleagues that America’s monetary policy is endangering America’s economy. The economic difficulties currently facing this country are a classic example of the harm resulting from a boom-andbust cycle caused by an inflationary monetary policy. An open debate on monetary issues is therefore long overdue.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:2
However, instead of debating America’s monetary policy, we are debating China’s monetary policy. Specifically, the goal of this resolution is to pressure China to change the valuation of its currency. Whatever short-term benefit our manufacturers may gain from this action, the policies urged today are not in the long-term interest of the American people.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:3
In arguing for fluctuating rates, the backers of H. Res. 414 are demanding that the Chinese Government adopt an irrational policy. A sound economy requires a sound and dependable unit of economic measurement. Yet, by definition, under fluctuating rates the currency, which serves as the basic unit of economic measurement, will not be sound and dependable. Instead, that value will change depending on the whims of politicians and the perceived economic needs of politically powerful special interests.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:4
China, in fact, has done very well with a fixed measurement of value. China’s economic growth rate is high; China is also exporting many products into our market while our domestic producers are suffering. Therefore, China makes a good scapegoat for our economic problems. Demanding that the Chinese government adjust its currency is a convenient distraction from addressing the real economic problems facing our country.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:5
Instead of having fluctuating currency exchange rates and the inevitable instability that accompanies them, we should be working to establish a gold-backed currency whose value is determined by the market. This would provide an objective measurement of the value of economic goods and services and thus strengthen the economy by freeing it from the negative effects of our unstable monetary policy.
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Encouraging People’s Republic Of China To Fulfill Commitments Under International Trade Agreements, Support United States Manufacturing Sector, And Establish Monetary And Financial Market Reforms
29 october 2003 2003 Ron Paul 115:12
In conclusion, Mr. Speaker, I remind my colleagues that stability in currencies is something we should seek, not something we should condemn Instead of urging China to adopt a floating rate, Congress should be working to adopt a stable, commodity-backed currency whose value is determined by the market and encourage other countries to also adopt a market-based currency. This will benefit American workers, entrepreneurs, and consumers. Congress should also strengthen America’s economy by reducing taxes and repealing unnecessary and unconstitutional regulations and stop forcing American taxpayers to subsidize their foreign competitors.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:16
It is long past time for Congress to examine seriously the need to reform the fiat currency system. The committee also should examine how Federal Reserve policies encourage excessive public and private sector debt, and the threat that debt poses to the long-term health of the American economy. Additionally, the committee should examine how the American government and economy would be affected if the dollar lost its privileged status as the world’s reserve currency. After all, the main reason the United States government is able to run such large deficits without suffering hyperinflation is the willingness of foreign investors to hold US debt instruments. If, or when, the dollar’s weakness causes foreigners to become reluctant to invest in US debt instruments, the results could be cataclysmic for our economy.
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In Support Of The Gutierrez-Paul Bill
28 April 2004 2004 Ron Paul 30:1
Mr. PAUL. Mr. Speaker, I am pleased to cosponsor the legislation offered by Mr. GUTIERREZ using the Congressional Review Act to disapprove the Office of the Comptroller of the Currency’s (OCC) preemption regulation because I strongly oppose any attempt to expand the OCC’s regulatory functions beyond the power Congress originally granted the OCC. The OCC was never meant to serve as a national consumer protection agency. Its limited, intended role has been underscored by Federal court rulings that State law remains applicable to national banks in the absence of explicit Federal preemption.
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The Same Old Failed Policies in Iraq
June 3, 2004 2004 Ron Paul 37:13
The day is fast approaching when we no longer will be able to afford this burden. For now foreign governments are willing to loan us the money needed to finance our current account deficit, and indirectly the cost of our worldwide military operations. It may seem possible for the moment because we have been afforded the historically unique privilege of printing the world’s reserve currency. Foreigners have been only too willing to take our depreciating dollars for their goods. Economic law eventually will limit our ability to live off others by credit creation. Eventually trust in the dollar will be diminished, if not destroyed. Those who hold these trillion plus dollars can hold us hostage if it’s ever in their interest. It may be that economic law and hostility toward the United States will combine to precipitate an emotionally charged rejection of the dollar.
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A Token Attempt to Reduce Government Spending
June 24, 2004 2004 Ron Paul 43:6
If Congress were serious about reining in government, it would also eliminate the Federal Reserve Board’s ability to inflate the currency. Federal Reserve policy enables excessive government spending by allowing the government to monitorize the debt, and hide the cost of big government through the hidden tax of inflation.
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Government Spending – A Tax on the Middle Class
July 8, 2004 2004 Ron Paul 52:14
The Fed’s great power over the money supply, interest rates, the business cycle, unemployment, and inflation is wielded with essentially no Congressional oversight or understanding. The process of inflating our currency to pay for government debt indeed imposes a tax without legislative authority.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:19
During the Bush administration gold surged 70%, as the dollar lost 30% of its value. A weakened currency is never beneficial, although it’s argued that it helps our exporters. People who work to earn and save dollars should never have the value of those dollars undermined and diminished by capricious manipulation of the money supply by our government officials.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:23
One cannot expect the needed changes to occur soon, considering that these options were not even considered or discussed in the campaign. But just because they weren’t part of the campaign, and there was no disagreement between the two candidates on the major issues, doesn’t distract from their significance nor disqualify these issues from being crucial in the years to come. My guess is that in the next four years little legislation will be offered dealing with family and moral issues. Foreign policy and domestic spending, along with the ballooning deficit, will be thrust into the forefront and will demand attention. The inability of our Congress and leaders to change direction, and their determination to pursue policies that require huge expenditures, will force a financial crisis upon us as the dollar is further challenged as the reserve currency of the world on international exchange markets.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:77
10. A policy of free exchange with other nations avoids the trappings of the new isolationists, who influence our foreign policy with the generous use of sanctions, trade barriers, and competitive currency devaluations. They are only too willing to defer to the World Trade Organization and allow it to dictate our trade and tax policies.
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America’s Foreign Policy Of Intervention
26 January 2005 2005 Ron Paul 6:10
We are still a wealthy Nation and our currency is still trusted by the world. Yet we are vulnerable to some harsh realities about our true wealth and the burden of our future commitments. Overwhelming debt and the precarious nature of the dollar should serve to restrain our determined leaders. Yet they show little concern for our deficits. Rest assured, though, the limitations of our endless foreign adventurism and spending will become apparent to everyone at some point in time.
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The Deficit
16 March 2005 2005 Ron Paul 33:14
And it is the philosophy of government and our philosophy on money that encourages these problems. And the current account deficits and this huge foreign indebtedness that are encouraged by our ability to maintain a reserve currency, it is going to lead to a crisis where this spending will have to come in check.
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Reject Taxpayer Bank Bailouts
May 4, 2005 2005 Ron Paul 46:7
Finally, I would remind my colleagues that the federal deposit insurance program lacks constitutional authority. Congress’ only mandate in the area of money, and banking is to maintain the value of the money. Unfortunately, Congress abdicated its responsibility over monetary policy with the passage of the Federal Reserve Act of 1913, which allows the federal government to erode the value of the currency at the will of the central bank. Congress’ embrace of fiat money is directly responsible for the instability in the banking system that created the justification for deposit insurance.
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The Hidden Cost of War
June 14, 2005 2005 Ron Paul 58:28
Americans have an especially unique ability to finance our war efforts while minimizing the immediate effect. As the issuer of the world’s reserve currency, we are able to finance our extravagance through inflating our dollars. We have the special privilege of printing that which the world accepts as money in lieu of gold. This is an invitation to economic disaster, permitting an ill-founded foreign policy that sets the stage for problems for years to come. A system of money that politicians and central bankers could not manipulate would restrain those with grandiose ideas of empire.
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The Hidden Cost of War
June 14, 2005 2005 Ron Paul 58:30
Being the issuer of the world’s premier currency allows for a lot more abuse than a country would have otherwise. World businesses, governments, and central banks accept our dollars as if they are as good as gold. This is a remnant of a time when the dollar was as good as gold. That is no longer the case. The trust is still there, but it’s a misplaced trust. Since the dollar is simply a paper currency without real value, someday confidence will be lost and our goose will no longer be able to lay the golden egg. That’s when reality will set in and the real cost of our extravagance, both domestic and foreign, will be felt by all Americans. We will no longer be able to finance our war machine through willing foreigners, who now gladly take our newly printed dollars for their newly produced goods and then loan them back to us at below market interest rates to support our standard of living and our war effort.
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The Hidden Cost of War
June 14, 2005 2005 Ron Paul 58:33
This ability to print the reserve currency of the world, and the willingness of foreigners to take it, causes gross distortions in our current account deficits and total foreign indebtedness. It plays a major role in the erosion of our manufacturing base, and causes the exporting of our jobs along with our dollars. Bashing foreigners, in particularly the Chinese and the Japanese, as the cause of our dwindling manufacturing and job base is misplaced. It prevents the evaluation of our own policies-- policies that undermine and increase the price of our own manufacturing goods while distorting the trade balance. Though we continue to benefit from the current circumstances, through cheap imports on borrowed money, the shaky fundamentals make our economy and financial system vulnerable to sudden and severe adjustments. Foreigners will not finance our excessive standard of living and our expensive war overseas indefinitely. It will end! What we do in the meantime to prepare for that day will make all the difference in the world for the future of freedom in this country. It’s the future of freedom in this country that is truly the legitimate responsibility of us as Members of Congress.
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The Hidden Cost of War
June 14, 2005 2005 Ron Paul 58:39
A free society produces more wealth for more people than any other. That wealth for many years can be confiscated to pay for the militarism advocated by those who promote preemptive war. But militarism and its costs undermine the very market system that provided the necessary resources to begin with. As this happens, productivity and wealth is diminished, putting pressure on authorities to ruthlessly extract even more funds from the people. For what they cannot collect through taxes they take through currency inflation-- eventually leading to an inability to finance unnecessary and questionable warfare and bringing the process to an end. It happened to the Soviets and their military machine collapsed. Hitler destroyed Germany’s economy, but he financed his aggression for several years by immediately stealing the gold reserves of every country he occupied. That, too, was self-limited and he met his military defeat. For us it’s less difficult since we can confiscate the wealth of American citizens and the savers of the world merely by printing more dollars to support our militarism. Though different in detail, we too must face the prospect that this system of financing is seriously flawed, and our expensive policy of worldwide interventionism will collapse. Only a profound change in attitudes regarding our foreign policy, our fiscal policy, and our monetary policy will save us from ourselves.
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Statement on HR 3283, the United States Trade Rights Enforcement Act
July 26, 2005 2005 Ron Paul 90:2
Mr. Speaker, in addition to the irony of the protectionist flavor of this bill, let me say that we should be careful what we demand of the Chinese government. Take the demand that the government “revalue” its currency, for example. First, there is sufficient precedent to suggest that doing this would have very little effect on China’s trade surplus with the United States. As Barron’s magazine pointed out recently, “the Japanese yen’s value has more than tripled since the breakdown of the Bretton Woods system, yet Japan’s trade surplus remains huge. Why should the unpegging of the Chinese yuan have any greater impact?”
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Statement on HR 3283, the United States Trade Rights Enforcement Act
July 26, 2005 2005 Ron Paul 90:3
As was pointed out in the Wall Street Journal recently, with the yuan tied to several foreign currencies and the value of the dollar dropping, China could be less inclined to purchase dollars as a way of keeping the yuan down. Fewer Treasury bond purchases by China, in turn, would drive bond prices down and boost yields--which, subsequently, would cause borrowing costs for residential and some corporate customers to increase. Does anyone want to guess what a sudden burst of the real estate bubble might mean for the shaky US economy? This is not an argument for the status quo , however, but rather an observation that there are often unforeseen consequences when we demand that foreign governments manipulate their currency to US “advantage.”
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The Coming Category 5 Financial Hurricane
September 15, 2005 2005 Ron Paul 98:3
Congress reacted to Katrina in the expected irresponsible manner. It immediately appropriated over $60 billion with little planning or debate. Taxes won’t be raised to pay the bill-- fortunately. There will be no offsets or spending reductions to pay the bill. Welfare and entitlement spending is sacrosanct. Spending for the war in Iraq and the military-industrial complex is sacrosanct. There is no guarantee that gracious foreign lenders will step forward, especially without raising interest rates. This means the Federal Reserve and Treasury will print the money needed to pay the bills. The sad truth is that monetary debasement hurts poor people the most-- the very people we saw on TV after Katrina. Inflating our currency hurts the poor and destroys the middle class, while transferring wealth to the ruling class. This occurs in spite of good intentions and misplaced compassion.
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The Coming Category 5 Financial Hurricane
September 15, 2005 2005 Ron Paul 98:11
My suggestion to my colleagues: Any new expenditures must have offsets greater in amount than the new programs. Foreign military and foreign aid expenditures must be the first target. The Federal Reserve must stop inflating the currency merely for the purpose of artificially lowering interest rates to perpetuate a financial bubble. This policy allows government and consumer debt to grow beyond sustainable levels, while undermining incentives to save. This in turn undermines capital investment while exaggerating consumption. If this policy doesn’t change, the dollar must fall and the current account deficit will play havoc until the house of cards collapses.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:8
Today, the principles are the same, but the process is quite different. Gold is no longer a currency of the realm; paper is. The truth now is he who prints the money makes the rules, at least for the time being. Although gold is not used, the goals are the same: compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:9
Since printing paper money is nothing short of counterfeiting, the issuer of the international currency must always be the country with the military might to guarantee control over the system. This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:10
The one problem, however, is that such a system destroys the character of the counterfeiting nation’s people just as was the case when gold was the currency, and it was obtained by conquering other nations. This destroys the incentive to save and produce while encouraging debt and runaway welfare.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:11
The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others. In both cases, personal responsibility for one’s actions is rejected.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:19
The 1944 Bretton Woods agreement solidified the dollar as the preeminent world reserve currency, replacing the British pound. Due to our political and military muscle, and because we had a huge amount of physical gold, the world readily accepted our dollar, defined as 1/35 of an ounce of gold as the world’s reserve currency.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:22
It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency, and everyone recognized that some other monetary system had to be devised in order to bring stability to the markets. Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency, with no restraints placed on it, not even a presence of gold convertibility, none whatsoever.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:31
Increasing gold prices historically are viewed as an indicator of distrust in paper currency. This recent effort was not a whole lot different than the U.S. Treasury selling gold at $35 an ounce in the 1960s in an attempt to convince the world the dollar was as sound and as good as gold.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:35
In the short run, the issuer of a fiat reserve currency can accrue great economic benefits. In the long run, it poses a threat to the country issuing the world currency. In this case, that is the United States. As long as foreign countries take our dollars in return for real goods, we come out ahead. This is a benefit many in Congress fail to recognize as they bash China for maintaining a positive trade balance with us. But this leads to a loss of manufacturing jobs to overseas markets as we become more dependent on others and less self-sufficient. Foreign countries accumulate our dollars due to their high savings rates and graciously lend them back to us at low interest rates to finance our excessive consumption and our wars.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:37
The agreement with OPEC in the 1970s to price oil in dollars has provided tremendous artificial strength to the dollar as the preeminent reserve currency. This has created a universal demand for the dollar and soaks up the huge number of new dollars generated each year. Last year alone, M3 increased by over $700 billion. The artificial demand for our dollar, along with our military might, places us in the unique position to “rule” the world without productive work or savings and without limits on consumer spending or deficits. The problem is it cannot last.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:40
Most importantly, the dollar/oil relationship has to be maintained to keep the dollar as the preeminent currency. Any attack on this relationship will be forcefully challenged, as it already has been.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:43
There was no public talk of removing Saddam Hussein because of his attack on the integrity of the dollar as a reserve currency by selling his oil in euros, yet many believe this was the reason for our obsession with Iraq. I doubt it was the only reason, but it may well have played a significant role in our motivation to wage war. Within a very short period after the military victory in Iraq, all Iraqi oil sales were carried out in dollars. The euro was immediately abandoned.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:45
After these attempts to nudge the euro toward replacing the dollar as the world’s reserve currency were met with resistance, the sharp fall of the dollar against the euro was reversed. These events may well have played a significant role in maintaining dollar dominance.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:51
But the truth is that paying the bills for this aggressive intervention is impossible the old-fashioned way, with more taxes, more savings, and more production by the American people. Much of the expense of the Persian Gulf War in 1991 was shouldered by many of our willing allies. That is not so today. Now more than ever, the dollar hegemony, its dominance as the world’s reserve currency, is required to finance our huge war expenditures. This $2 trillion never-ending war must be paid for one way or another. Dollar hegemony provides the vehicle to do just that.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:52
For the most part, the true victims are not aware of how they pay the bills. The license to create money out of thin air allows the bills to be paid through price inflation. American citizens as well as average citizens of Japan and China and other countries suffer from price inflation, which represents the tax that pays the bills for our military adventures. That is, until the fraud is discovered and the foreign producers decide not to take dollars nor hold them very long in payment for those goods. Everything possible is done to prevent the fraud of the monetary system from being exposed to the masses who suffer from it. If oil markets replace dollars with euros, it would in time curtail our ability to continue to print, without restraint, the world’s reserve currency.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:56
Our whole economic system depends on continuing the current monetary arrangement, which means recycling the dollar is crucial. Currently, we borrow over $700 billion every year from our gracious benefactors, who work hard and take our paper for their goods. Then we borrow all the money we need to secure the empire, which includes the entire DOD budget of $450 billion, plus more. The military might we enjoy becomes the backing of our currency. There are no other countries that can challenge our military superiority, and therefore they have little choice but to accept the dollars we declare are today’s “gold.” This is why countries that challenge the system, like Iraq, Iran, and Venezuela, become targets of our plans for regime change.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:63
Using force to compel people to accept money without real value can only work for a short time. It ultimately leads to economic dislocation, both domestic and international, and always ends with a price to be paid. The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold or its equivalent for their oil rather than dollars or Euros. The sooner the better.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:104
During this administration, the dollar has suffered severely as a consequence of the policy of inflating the currency to pay our bills. The dollar price of gold has more than doubled. This means the dollar has depreciated in terms of gold, the time-honored and reliable measurement of a nation’s currency, by an astounding 55 percent. The long-term economic health of a nation is measured by the soundness of its currency. Once Rome converted from a republic to an empire, she depreciated her currency to pay the bills. This eventually led to Rome’s downfall. That is exactly what America is facing unless we change our ways.
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:109
The question is, what will it take to bring about the changes in policy needed to reverse this dangerous trend? The answer is, quite a lot; and, unfortunately, it is not on the horizon. It probably will not come until there is a rejection of the dollar as the safest and strongest world currency and a return to commodity money like gold and silver to return confidence.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:1
Mr. PAUL. Mr. Speaker, I rise to introduce the Sunshine in Monetary Policy Act, which requires the Federal Reserve to resume reporting the monetary measure known as M3. M3 consists of M1 (M1 is currency in circulation plus travelers’ checks, demand deposits, Negotiable Order of Withdrawal (NOW) accounts, and similar interest-earning checking account balances) plus M2 (M2 is M1 plus household holdings of savings deposits, small time deposits, and retail money market mutual funds balances except for balances held in IRA and Keogh accounts) plus institutional money market mutual fund balances and managed liabilities of deposits consisting of large time deposits, repurchase agreements, and Eurodollars.
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Introduction Of The Sunshine In Monetary Policy Act
7 March 2006 2006 Ron Paul 10:4
Whatever lack of interest policymakers are currently displaying in M3 is no doubt related to the mistaken perception that the Federal Reserve Board has finally figured out how to effectively manage a fiat currency. This illusion exists largely because the effects of the Fed’s inflationary polices are concentrated in malinvestments in specific sectors of the economy, leading to “bubbles” such as the one that occurred in the stock market in the late nineties and the bubble that many believe is occurring in the current real estate market. When monetary inflation is reflected in sector- specific bubbles, it is easier to pretend that the bubbles are caused by problems specific to those sectors, instead of reflecting the problems inherent in a fiat currency system. Once the damage to our economy done by our reliance on fiat currency becomes clear, I am certain that policymakers will once again take more interest in M3.
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Tribute To Harry Browne
15 March 2006 2006 Ron Paul 16:2
Harry first came to public attention in the 1970 when he penned a best-selling investment book, How You Can Profit From the Coming Devaluation, which foresaw President Richard Nixon’s abandonment of the gold standard and the ways the American economy would be damaged by the inevitable resulting inflation. Harry’s book helped many Americans survive, and even profit, during the economic troubles of the seventies. It also introduced millions of people to the insights developed by followers of the Austrian school of economics regarding the dangers fiat currency poses to both prosperity and liberty posed by fiat. How You Can Profit From the Coming Devaluation is generally recognized as the founding document of the hard money movement, which combined the insights of the Austrian economists with a practical investment strategy.
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Iran, The Next Neocon Target
5 April 2006 2006 Ron Paul 21:60
Today’s economic problems, caused largely by our funny money system, won’t be solved by altering exchange rates to favor us in the short run or by imposing high tariffs. Only sound money with real value will solve the problems of competing currency devaluations and protectionist measures.
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Iran, The Next Neocon Target
5 April 2006 2006 Ron Paul 21:61
Economic interests almost always are major reasons for wars being fought. Noble and patriotic causes are easier to sell to a public who must pay and provide cannon fodder to defend the financial interests of a privileged class. The fact that Saddam Hussein demanded Euros for oil in an attempt to undermine the U.S. dollar is believed by many to be one of the ulterior motives for our invasion and occupation of Iraq. Similarly, the Iranian oil burse now about to open may be seen as a threat to those who depend on maintaining the current monetary system with the dollar as the world’s reserve currency.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:6
Buying gold and holding it is somewhat analogous to converting one’s saving into $100 bills and hiding them under the mattress, yet not exactly the same. Both gold and dollars are considered money, and holding money does not qualify as an investment. There is a big difference between the two, however, since by holding paper money, one loses purchasing power. The purchasing power of commodity money, that is gold, however, goes up if the government devalues the circulating paper currency.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:7
Holding gold is protection or insurance against government’s proclivity to debase the currency. The purchasing power of gold goes up not because it is a so-called good investment. It goes up in value only because the paper currency goes down in value. In our current situation, that means the dollar.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:8
One of the characteristics of commodity money, one that originated naturally in the marketplace, is that it must serve as a store of value. Gold and silver meet the test; paper does not. Because of this profound difference, the incentive and wisdom of holding emergency funds in the form of gold becomes attractive when the official currency is being devalued. It is more attractive than trying to save wealth in the form of a fiat currency, even when earning some nominal interest.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:9
The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn. The purchasing power of gold can rise even faster than increases in the cost of living.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:10
The point is that most who buy gold do so to protect against the depreciating currency, rather than as an investment in the classical sense. Americans understand this less than citizens of other countries. Some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:13
Not only that, paper money has worked surprisingly well in the past 35 years, the years the world has accepted pure paper money as currency. Alan Greenspan bragged that central bankers in these decades have gained the knowledge necessary to make paper money respond as if it were gold.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:14
This, they argue, removes the problem of obtaining gold to back the currency and hence frees the politician from the rigid discipline a gold standard imposes. Many central bankers in the last 15 years became so confident they had achieved this milestone that they sold off large hordes of their gold reserves. At other times they tried to prove that paper works better than gold by artificially propping up the dollar by suppressing the market price of gold.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:17
Though Treasury officials deny any U.S. sales or loans of our official gold holdings, no audits are permitted, so no one can be certain. The special nature of the dollar as the reserve currency of the world has allowed this gain to last longer than it would have otherwise.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:43
Yet even these costs may be preferable to paying for war with huge tax increases. This is because although fiat dollars are theoretically worthless, value is imbued by the trust placed in them by the world’s financial community. Subjective trust in a currency can override objective knowledge about government policies, but only for a limited time.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:44
Economic strength and military power contributes to the trust in a currency. In today’s world trust in the U.S. dollar is not earned, and, therefore, fragile. The history of the dollar, being as good as gold up until 1971, is helpful in maintaining an artificially higher value for the dollar than deserved.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:47
The Founders were especially adamant about avoiding the chaos, inflation and destruction associated with the continental dollar. That is why the Constitution is clear that only gold and silver should be legal tender in the United States. In 1792, the Coinage Act also authorized the death penalty for any private citizen who counterfeited the currency. Too bad they weren’t explicit that counterfeiting by government officials is just as detrimental to the economy and the value of the dollar.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:50
Historically paper money never has lasted for long periods of time, while gold has survived thousands of years of attacks by political interests and big government. In time the world once again will restore trust in the monetary system by making some currency as good as gold.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:66
The Founders understood this great danger and voted overwhelmingly to reject “emitting bills of credit,” the term they used for paper money or fiat currency. It is too bad the knowledge and advice of our Founders and their mandate in the Constitution are ignored, and it is ignored at great peril. The current surge in gold prices, which reflects our dollar’s devaluation, is warning us to pay closer attention to our fiscal, monetary, entitlement, and foreign policy.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:90
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country. It has been that way for a long time, and it is not about to change.
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Whom to Blame
19 July 2006 2006 Ron Paul 66:38
And we are running our program, whether it is our domestic welfare program or our foreign policy, it is being run on borrowed money. It is borrowed money from overseas, and it is also from inflated currency. And we can get away with it for a while longer, but let me tell you, there is a crisis coming, and it is going to be dealing with the dollar and it is going to involve our foreign policy. And then we will, as a sign of weakness, we will have to come home. We will have to come home because we can’t afford the empire. It is not wise to have it, and we should have more confidence and more belief that what we have in this country, and what America used to stand for, that we should spread that message more by setting an example and through a voluntary approach. And when that time comes, I think that maybe more people will reconsider it.
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Big-Government Solutions Don’t Work
7 september 2006 2006 Ron Paul 74:92
A real solution to our problems will require a better understanding of and a greater dedication to free markets and private property rights. It can’t be done without restoring a sound asset- backed currency. If we hope to restore any measure of constitutional government, we must abandon the policy of policing the world and keeping troops in the four corners of the earth. Our liberties and our prosperity depend on it.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:4
Even before a currency collapse occurs, the damage done by a fiat system is significant. Our monetary system insidiously transfers wealth from the poor and middle class to the privileged rich. Wages never keep up with the profits of Wall Street and the banks, thus sowing the seeds of class discontent. When economic trouble hits, free markets and free trade often are blamed, while the harmful effects of a fiat monetary system are ignored. We deceive ourselves that all is well with the economy, and ignore the fundamental flaws that are a source of growing discontent among those who have not shared in the abundance of recent years.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:5
Few understand that our consumption and apparent wealth is dependent on a current account deficit of $800 billion per year. This deficit shows that much of our prosperity is based on borrowing rather than a true increase in production. Statistics show year after year that our productive manufacturing jobs continue to go overseas. This phenomenon is not seen as a consequence of the international fiat monetary system, where the United States government benefits as the issuer of the world’s reserve currency.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:18
How can a policy of steadily debasing our currency be defended morally, knowing what harm it causes to those who still believe in saving money and assuming responsibility for themselves in their retirement years? Is it any wonder we are a nation of debtors rather than savers?
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The Scandal At Walter Reed
7 March 2007 2007 Ron Paul 34:16
Interventionism always leads to unanticipated consequences and blowback, like a weakened, demoralized military; exploding deficits; billions of dollars wasted; increased inflation; less economic growth; an unstable currency; painful stock market corrections; political demagoguery; lingering anger at home; and confusion about who is to blame.
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Shareholder Vote On Executive Compensation Act
18 April 2007 2007 Ron Paul 43:13
For evidence of who really benefits from a system of fiat money and inflation, consider that in 1971, before President Nixon severed the last link of the American currency to gold, the typical CEO’s salary was 30 times higher than the average wage of the typical employee; today it is 500 times higher.
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Statement On Chinese Currency
9 May 2007 2007 Ron Paul 50:4
The fact that the Chinese keep their currency artificially weak is a benefit to American consumers and long term is inflationary for the Chinese.
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Statement On Chinese Currency
9 May 2007 2007 Ron Paul 50:6
The fact that the US dollar is the principal reserve currency of the world gives us a benefit that others do not enjoy. It allows us to export paper dollars and import goods manufactured in countries with cheap labor. It also allows us to finance the welfare/warfare state with cheap loans from China and Japan. It's a good deal for us but according to economic law must come to an end, and the end will be messy for the US consumer and for world trade.
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Statement On Chinese Currency
9 May 2007 2007 Ron Paul 50:9
Financing deficits with monetary inflation is in itself a weak dollar policy in the long term. Trust in our currency due to our economic and military strength artificially props up the dollar on international exchange markets. Since these benefits come not from production or sound money policies, they only contribute to the instability and imbalances in international trade.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:3
While fiat money produced by the State is portable and, thanks to legal tender laws, widely accepted, it is certainly not of stable value. In fact, our entire monetary policy is predicated on the government’s ability to manipulate the value of the currency. Thus, absent legal tender laws, many citizens would refuse to accept government money for their transactions.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:10
Another prescient Justice was Stephen Field, the only justice to dissent in every one of the legal tender cases to come before the Court. Justice Field accurately described the dangers to the constitutional republic posed by legal tender laws: “The arguments in favor of the constitutionality of legal tender paper currency tend directly to break down the barriers which separate a government of limited powers from a government resting in the unrestrained will of Congress. Those limitations must be preserved, or our government will inevitably drift from the system established by our Fathers into a vast, centralized and consolidated government.”
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:11
Considering the growth of government since the Supreme Court joined Congress in disregarding the constitutional barriers to legal tender laws, can anyone doubt the accuracy of Justice Field’s words? Repeal of legal tender laws would restore constitutional government and protect the people’s right to use a currency chosen by the market because it serves the needs of the people, instead of having to use a currency chosen by the State because it serves the needs of power hungry politicians and special interests. Therefore, I urge my colleges to cosponsor the Honest Money Act.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:3
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:4
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:5
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the Federal Government to erode the American standard of living via an inflationary monetary policy.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:6
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our Nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:1
Mr. PAUL. Madam Speaker, I rise to introduce the Sunshine in Monetary Policy Act, which requires the Federal Reserve to resume reporting the monetary measure known as M3. M3 consists of M1, M1 is currency in circulation plus travelers’ checks, demand deposits, Negotiable Order of Withdrawal, NOW, accounts, and similar interest-earning checking account balances; M2, M2 is M1 plus household holdings of savings deposits, small time deposits, and retail money market mutual funds balances except for balances held in IRA and Keogh accounts, plus institutional money market mutual fund balances and managed liabilities of deposits consisting of large time deposits, repurchase agreements, and Eurodollars.
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Introduction Of The Sunshine In Monetary Policy Act
15 June 2007 2007 Ron Paul 66:4
Whatever lack of interest policymakers are currently displaying, in M3 is no doubt related to the mistaken perception that the Federal Reserve Board has finally figured out how to effectively manage a fiat currency. This illusion exists largely because the effects of the Fed’s inflationary polices are concentrated in malinvestments in specific sectors of the economy, leading to “bubbles” such as the one that occurred in the stock market in the late nineties and the bubble that many believe is occurring in the current real estate market. When monetary inflation is reflected in sector- specific bubbles, it is easier to pretend that the bubbles are caused by problems specific to those sectors, instead of reflecting the problems inherent in a fiat currency system. Once the damage to our economy done by our reliance on fiat currency becomes clear, I am certain that policymakers will once again take more interest in M3.
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Opening Statement Committee on Financial Services Paulson Hearing
20 June 2007 2007 Ron Paul 71:6
As our problems worsen, the blame game will certainly accelerate. Claiming it is all due to China’s manipulation of its currency and demanding protectionist measures will unfortunately continue to gain considerable attention. Unfortunately, there is little or no concern for how our own policies - monetary, tax, and regulatory- have contributed to the problems we face.
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Opening Statement Committee on Financial Services Paulson Hearing
20 June 2007 2007 Ron Paul 71:10
Since money growth statistics are key to calculating currency depreciation it is interesting to note, in this era of global financial markets, in a world engulfed with only fiat currencies, what total world wide money supply is doing.
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Remembering Dr. Hans Sennholz
27 June 2007 2007 Ron Paul 72:5
I first met Dr. Sennholz in the early 1970s during the campaign to legalize the private ownership of gold. He was a tremendous influence on me and introduced me to other eminent economists of the Austrian School. Dr. Sennholz consistently taught the beneficial effects of the gold standard and was a tireless opponent of inflation. He never ceased to persist in pointing out the problems of fiat currency, the evils of inflation, and the perils of the Federal Reserve’s loose monetary policy.
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Remembering Dr. Hans Sennholz
27 June 2007 2007 Ron Paul 72:6
Dr. Sennholz passed away on Saturday, June 23, 2007 at the age of 85, having lived a full and rewarding life. Generations of free- market economists are indebted to him, his spirited teaching, and his lucid writing for keeping free-market economic teaching alive during trying times. Congress would do well to heed his advice on the importance of free markets and the folly of fiat currency.
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Statement before the Financial Services Committee – Humphrey Hawkins Prequel Hearing
17 July 2007 2007 Ron Paul 76:6
Until the Congress realizes that the economy cannot be managed by a group of economists, no matter how large or how brilliant the group may be, the result will be the same. Inflation will continue to rise, and the American people will continue to grow poorer. We would be far better off if the Congress were to reassert its Constitutional authority over the monetary system, establish a sound currency, and eliminate its meddling in the free market.
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Introducing The Free Competition In Currency Act
13 December 2007 2007 Ron Paul 110:1
Mr. PAUL. Madam Speaker, I rise to introduce the Free Competition in Currency Act. This act would eliminate two sections of U.S. Code that, although ostensibly intended to punish counterfeiters, have instead been used by the Government to shut down private mints. As anticounterfeiting measures, these sections are superfluous, as 18 U.S.C. 485, 490, and 491 already grant sufficient authority to punish counterfeiters.
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Introducing The Free Competition In Currency Act
13 December 2007 2007 Ron Paul 110:2
The two sections this bill repeals, 18 U.S.C. 486 and 489, are so broadly written as to effectively restrict any form of private coinage from competing with the products of the United States Mint. Allowing such statutes to remain in force as a catch-all provision merely encourages prosecutorial abuse. One particular egregious recent example is that of the Liberty Dollar, in which Federal agents seized millions of dollars worth of private currency held by a private mint on behalf of thousands of people across the country.
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Introducing The Free Competition In Currency Act
13 December 2007 2007 Ron Paul 110:4
As a proponent of competition in currencies, I believe that the American people should be free to choose the type of currency they prefer to use. The ability of consumers to adopt alternative currencies can help to keep the Government and the Federal Reserve honest, as the threat that further inflation will cause more and more people to opt out of using the dollar may restrain the government from debasing the currency. As monopolists, however, the Federal Reserve and the Mint fear competition, and would rather force competitors out using the federal court system and the threat of asset forfeiture than compete in the market.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:2
I rise to speak on the concept of competing currencies. Currency, or money, is what allows civilization to flourish. In the absence of money, barter is the name of the game; if the farmer needs shoes, he must trade his eggs and milk to the cobbler and hope that the cobbler needs eggs and milk. Money makes the transaction process far easier. Rather than having to search for someone with reciprocal wants, the farmer can exchange his milk and eggs for an agreed-upon medium of exchange with which he can then purchase shoes.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:4
Over millennia of human history, gold and silver have been the two metals that have most often satisfied these conditions, survived the market process, and gained the trust of billions of people. Gold and silver are difficult to counterfeit, a property which ensures they will always be accepted in commerce. It is precisely for this reason that gold and silver are anathema to governments. A supply of gold and silver that is limited in supply by nature cannot be inflated, and thus serves as a check on the growth of government. Without the ability to inflate the currency, governments find themselves constrained in their actions, unable to carry on wars of aggression or to appease their overtaxed citizens with bread and circuses.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:5
At this country’s founding, there was no government controlled national currency. While the Constitution established the Congressional power of minting coins, it was not until 1792 that the US Mint was formally established. In the meantime, Americans made do with foreign silver and gold coins. Even after the Mint’s operations got underway, foreign coins continued to circulate within the United States, and did so for several decades.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:6
On the desk in my office I have a sign that says: “Don’t steal – the government hates competition.” Indeed, any power a government arrogates to itself, it is loathe to give back to the people. Just as we have gone from a constitutionally-instituted national defense consisting of a limited army and navy bolstered by militias and letters of marque and reprisal, we have moved from a system of competing currencies to a government-instituted banking cartel that monopolizes the issuance of currency. In order to introduce a system of competing currencies, there are three steps that must be taken to produce a legal climate favorable to competition.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:7
The first step consists of eliminating legal tender laws. Article I Section 10 of the Constitution forbids the States from making anything but gold and silver a legal tender in payment of debts. States are not required to enact legal tender laws, but should they choose to, the only acceptable legal tender is gold and silver, the two precious metals that individuals throughout history and across cultures have used as currency. However, there is nothing in the Constitution that grants the Congress the power to enact legal tender laws. We, the Congress, have the power to coin money, regulate the value thereof, and of foreign coin, but not to declare a legal tender. Yet, there is a section of US Code, 31 USC 5103, that purports to establish US coins and currency, including Federal Reserve notes, as legal tender.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:8
Historically, legal tender laws have been used by governments to force their citizens to accept debased and devalued currency. Gresham’s Law describes this phenomenon, which can be summed up in one phrase: bad money drives out good money. An emperor, a king, or a dictator might mint coins with half an ounce of gold and force merchants, under pain of death, to accept them as though they contained one ounce of gold. Each ounce of the king’s gold could now be minted into two coins instead of one, so the king now had twice as much “money” to spend on building castles and raising armies. As these legally overvalued coins circulated, the coins containing the full ounce of gold would be pulled out of circulation and hoarded. We saw this same phenomenon happen in the mid-1960s when the US government began to mint subsidiary coinage out of copper and nickel rather than silver. The copper and nickel coins were legally overvalued, the silver coins undervalued in relation, and silver coins vanished from circulation.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:9
These actions also give rise to the most pernicious effects of inflation. Most of the merchants and peasants who received this devalued currency felt the full effects of inflation, the rise in prices and the lowered standard of living, before they received any of the new currency. By the time they received the new currency, prices had long since doubled, and the new currency they received would give them no benefit.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:10
In the absence of legal tender laws, Gresham’s Law no longer holds. If people are free to reject debased currency, and instead demand sound money, sound money will gradually return to use in society. Merchants would have been free to reject the king’s coin and accept only coins containing full metal weight.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:12
The sections of US Code which Liberty Services is accused of violating are erroneously considered to be anti-counterfeiting statutes, when in fact their purpose was to shut down private mints that had been operating in California. California was awash in gold in the aftermath of the 1849 gold rush, yet had no US Mint to mint coinage. There was not enough foreign coinage circulating in California either, so private mints stepped into the breech to provide their own coins. As was to become the case in other industries during the Progressive era, the private mints were eventually accused of circulating debased (substandard) coinage, and in the interest of providing government-sanctioned regulation and a government guarantee of purity, the 1864 Coinage Act was passed, which banned private mints from producing their own coins for circulation as currency.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:15
In conclusion, Madam Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government’s ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies.
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Statement on Coinage
March 11, 2008 2008 Ron Paul 12:3
While I sympathize with the aim of Section 4 of this bill to save taxpayer dollars by minting steel pennies, it is disappointing that our currency has been so greatly devalued as to make this step necessary. At the time of the penny’s introduction, it actually had some purchasing power. Based on the price of gold, what one penny would have purchased in 1909 requires 47 cents today. It is no wonder then that few people nowadays would stoop to pick up any coin smaller than a quarter.
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Statement on Coinage
March 11, 2008 2008 Ron Paul 12:5
HR 5512 is a sad commentary on how far we have fallen, not just since the days of the Founders, but only in the last 75 to 100 years. We could not maintain the gold standard nor the silver standard. We could not maintain the copper standard, and now we cannot even maintain the zinc standard. Paper money inevitably breeds inflation and destroys the value of the currency. That is the reason that this proposal is before us today.
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Statement: “Something Big is Happening”
9 July 2008 2008 Ron Paul 42:13
By 1945, further restraints were removed by creating the Bretton-Woods Monetary System making the dollar the reserve currency of the world. This system lasted up until 1971. During the period between 1945 and 1971, some restraints on the Fed remained in place. Foreigners, but not Americans, could convert dollars to gold at $35 an ounce. Due to the excessive dollars being created, that system came to an end in 1971.
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Humphrey Hawkins Hearing on Monetary Policy
July 16, 2008 2008 Ron Paul 46:3
At the heart of this economic malaise is the Fed’s poor stewardship of the dollar. The cause of the dollar’s demise is not the result of a purely psychological response to public statements on US dollar policy, but is rather a reaction to a massive increase in the money supply brought about by the Federal Reserve’s loose monetary policy. The policies that led to hemorrhaging of gold during the 1960’s and the eventual closing of the gold standard are the same policies that are leading to the dollar’s decline in international currency markets today. Foreign governments no longer wish to hold depreciating dollars, and would prefer to hold stronger currencies such as the euro. Foreign investors no longer wish to hold underperforming dollars, and seek to hold better-performing assets such as ports and beer companies.
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Full Committee Hearing on “Implications of a Weaker Dollar for Oil Prices and the U.S. Economy”
July 24, 2008 2008 Ron Paul 50:2
The root of our current economic malaise, the weak dollar, the high price of oil, and the collapse of the housing market, comes about because almost no one understands what inflation is. Inflation is an increase in the money supply, which occurs by various methods, the printing of currency, low reserve requirements, Federal Reserve open market operations, etc.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:11
For 37 years the world built a financial system based on the dollar as the reserve currency of the world in an attempt to make the dollar serve as the new standard of value. However since 1971, the dollar has had no intrinsic value, as it is not tied to gold. The dollar is simply a fiat currency, which has fluctuated in value on a daily, if not hourly, bias. This worked to some degree until the market realized that too much debt and malinvestment existed and a correction was required.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:12
Because of our economic and military strength, compared to other countries, trust in America’s currency lasted longer than deserved. This resulted in the biggest worldwide economic distortion in all of history. The problem is much bigger than the fears of a temporary decline on Wall Street if the bailout is not agreed to.
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The Austrians Are Right
November 20, 2008 2008 Ron Paul 71:3
Today, a major economic crisis is unfolding. New government programs are started daily, and future plans are being made for even more. All are based on the belief that we’re in this mess because free-market capitalism and sound money failed. The obsession is with more spending, bailouts of bad investments, more debt, and further dollar debasement. Many are saying we need an international answer to our problems with the establishment of a world central bank and a single fiat reserve currency. These suggestions are merely more of the same policies that created our mess and are doomed to fail.
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The Austrians Are Right
November 20, 2008 2008 Ron Paul 71:16
There are limits. A country cannot forever depend on a central bank to keep the economy afloat and the currency functionable through constant acceleration of money supply growth. Eventually the laws of economics will overrule the politicians, the bureaucrats and the central bankers. The system will fail to respond unless the excess debt and mal-investment is liquidated. If it goes too far and the wild extravagance is not arrested, runaway inflation will result, and an entirely new currency will be required to restore growth and reasonable political stability.
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LIVING BENEATH OUR MEANS
January 21, 2009 2009 Ron Paul 10:4
A nation that has lived beyond its means for a long period of time must go through a similar process. Once the national debt grows to an extreme proportion, as ours has, there is no possibility of it being paid off in the conventional sense. Default and liquidation are required, but sovereign states that enjoy the ruthless power to tax and create new money always resort to paying their pays by deliberately depreciating the currency. This makes it hard to identify the victims and the beneficiaries.
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LIVING BENEATH OUR MEANS
January 21, 2009 2009 Ron Paul 10:6
We have become the greatest debtor nation in the world. The borrowed money was not used to build our industries but was used mainly for consumption. The fact that the world trusted the dollar as the reserve currency significantly contributed to the imbalances of the world financial system. The fiat dollar standard that evolved after the breakdown of Bretton Woods in 1971 has ended. This is a consequence of our privileged position of living way beyond our means for too many years.
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LIVING BENEATH OUR MEANS
January 21, 2009 2009 Ron Paul 10:8
Central bank cooperation in the scheme will not make it work. Pretending the dollar is maintaining real value by manipulating the price of gold – the historic mechanism for measuring a currency’s value – will work no better than the effort of the 1960s to keep gold at $35 an ounce. Nevertheless, Bretton Woods failed in 1971, as was predicted by the free market economists, despite these efforts.
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LIVING BENEATH OUR MEANS
January 21, 2009 2009 Ron Paul 10:9
This crisis we’re in is destined to get much worse because the real cause is not acknowledged. Not only are the corrections delayed and distorted, additional problems are yet to be dealt with – the commercial property bubble, the insolvent retirement funds, both private and public, state finances, and the university trust funds. For all these problems, only massive currency inflation is offered by the Fed. The real concern ought to be for a dollar crisis, which will come if we don’t change our ways.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:3
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:4
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:5
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:6
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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FEDERAL RESERVE IS THE CULPRIT
February 25, 2009 2009 Ron Paul 17:6
The Congress, by conceding this authority, conveys extraordinary economic powers to the elite few. This is a power that has been abused throughout history. Only the Federal Reserve can inflate the currency, creating new money and credit out of thin area, in secrecy, without oversight or supervision.
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FEDERAL RESERVE IS THE CULPRIT
February 25, 2009 2009 Ron Paul 17:7
Inflation facilitates deficits, needless wars, and excessive welfare spending. Debasing a currency is counterfeiting. It steals value from every dollar earned or saved. It robs the people and makes them poorer. It is the enemy of the working person.
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The Federal Reserve Transparency Act
February 26, 2009 2009 Ron Paul 20:4
The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.
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THE END IS NOT NEAR
March 4, 2009 2009 Ron Paul 21:9
Our military prowess, backed by a nuclear arsenal, will not suffice in overcoming the tragedy of a currency crisis. Soviet nukes did not preserve its empire or the communist economy.
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CURRENT CONDITIONS OR JUST A BAD DREAM
May 19, 2009 2009 Ron Paul 56:4
A central bank that deliberately destroys the value of the currency in secrecy, without restraint, without nary a whimper. Yet, cheered on by the pseudo-capitalists of Wall Street, the military industrial complex, and Detroit.
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MISTAKES: JUST A FEW!
June 3, 2009 2009 Ron Paul 63:8
We deliberately liquidate debt, especially government debt, by debasing the currency. We refuse to accept the fact that the debt cannot be paid, and future obligations are incomprehensible with revenues crashing and unpredictable while expenditures are put on auto pilot with no new request being denied.
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MORE GOVERNMENT WON’T HELP
September 23, 2009 2009 Ron Paul 90:8
Number seven, the costs are obviously too high, but in solving this problem one cannot ignore the debasement of the currency as a major factor.
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TRANSPARENCY AT THE FEDERAL RESERVE
December 1, 2009 2009 Ron Paul 100:2
During its 96 years of existence, the Federal Reserve has played havoc with our economy and brought great suffering to millions through unemployment and price escalation. And it has achieved what only a central bank can: A steady depreciation of our currency. Today’s dollar is now worth 4 cents, compared to the dollar entrusted to the Federal Reserve in 1913. Ninety-six years should have been plenty of time for the Fed to come up with a plan for preventing economic crises.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:1
Mr. PAUL. Madam Speaker, I rise to introduce the Free Competition in Currency Act of 2009. Currency, or money, is what allows civilization to flourish. In the absence of money, barter is the name of the game; if the farmer needs shoes, he must trade his eggs and milk to the cobbler and hope that the cobbler needs eggs and milk. Money makes the transaction process far easier. Rather than having to search for someone with reciprocal wants, the farmer can exchange his milk and eggs for an agreed-upon medium of exchange with which he can then purchase shoes.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:3
Over millennia of human history, gold and silver have been the two metals that have most often satisfied these conditions, survived the market process, and gained the trust of billions of people. Gold and silver are difficult to counterfeit, a property which ensures they will always be accepted in commerce. It is precisely for this reason that gold and silver are anathema to governments. A supply of gold and silver that is limited in supply by nature cannot be inflated, and thus serves as a check on the growth of government. Without the ability to inflate the currency, governments find themselves constrained in their actions, unable to carry on wars of aggression or to appease their overtaxed citizens with bread and circuses.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:4
At this country’s founding, there was no government controlled national currency. While the Constitution established the congressional power of minting coins, it was not until 1792 that the U.S. Mint was formally established. In the meantime, Americans made do with foreign silver and gold coins. Even after the Mint’s operations got underway, foreign coins continued to circulate within the United States, and did so for several decades.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:5
On the desk in my office I have a sign that says: “Don’t steal – the government hates competition.” Indeed, any power a government arrogates to itself, it is loathe to give back to the people. Just as we have gone from a constitutionally instituted national defense consisting of a limited army and navy bolstered by militias and letters of marque and reprisal, we have moved from a system of competing currencies to a government-instituted banking cartel that monopolizes the issuance of currency. In order to reintroduce a system of competing currencies, there are three steps that must be taken to produce a legal climate favorable to competition.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:6
The first step consists of eliminating legal tender laws. Article I Section 10 of the Constitution forbids the States from making anything but gold and silver a legal tender in payment of debts. States are not required to enact legal tender laws, but should they choose to, the only acceptable legal tender is gold and silver, the two precious metals that individuals throughout history and across cultures have used as currency. However, there is nothing in the Constitution that grants the Congress the power to enact legal tender laws. We, the Congress, have the power to coin money, regulate the value thereof, and of foreign coin, but not to declare a legal tender. Yet, there is a section of U.S. Code, 31 U.S.C. 5103, that purports to establish U.S. coins and currency, including Federal Reserve notes, as legal tender.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:7
Historically, legal tender laws have been used by governments to force their citizens to accept debased and devalued currency. Gresham’s Law describes this phenomenon, which can be summed up in one phrase: bad money drives out good money. An emperor, a king, or a dictator might mint coins with half an ounce of gold and force merchants, under pain of death, to accept them as though they contained one ounce of gold. Each ounce of the king’s gold could now be minted into two coins instead of one, so the king now had twice as much “money” to spend on building castles and raising armies. As these legally overvalued coins circulated, the coins containing the full ounce of gold would be pulled out of circulation and hoarded. We saw this same phenomenon happen in the mid-1960s when the U.S. government began to mint subsidiary coinage out of copper and nickel rather than silver. The copper and nickel coins were legally overvalued, the silver coins undervalued in relation, and silver coins vanished from circulation.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:8
These actions also give rise to the most pernicious effects of inflation. Most of the merchants and peasants who received this devalued currency felt the full effects of inflation, the rise in prices and the lowered standard of living, before they received any of the new currency. By the time they received the new currency, prices had long since doubled, and the new currency they received would give them no benefit.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:9
In the absence of legal tender laws, Gresham’s Law no longer holds. If people are free to reject debased currency, and instead demand sound money, sound money will gradually return to use in society. Merchants would have been free to reject the king’s coin and accept only coins containing full metal weight.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:11
The sections of U.S. Code which Liberty Services is accused of violating are erroneously considered to be anti-counterfeiting statutes, when in fact their purpose was to shut down private mints that had been operating in California. California was awash in gold in the aftermath of the 1849 gold rush, yet had no U.S. Mint to mint coinage. There was not enough foreign coinage circulating in California either, so private mints stepped into the breech to provide their own coins. As was to become the case in other industries during the Progressive era, the private mints were eventually accused of circulating debased (substandard) coinage, and with the supposed aim of providing government-sanctioned regulation and a government guarantee of purity, the 1864 Coinage Act was passed, which banned private mints from producing their own coins for circulation as currency.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:14
In conclusion, Madam Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the U.S. Government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government’s ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies and cosponsor the Free Competition in Currency Act.
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 1 ... Cached
The problem is the currency
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 3 ... Cached
A financial crisis is griping the world. It may yet prove to be the worst in all of history, but the source of the problem is not a mystery. It is a currency induced crisis.
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 4 ... Cached
Although taxes, spending, regulatory policies, and special interest cronyism compounds the problems, all nations of the world operate with a fiat monetary system and it has allowed the financial bubble to develop. Easy credit and artificially low interest rates starts a chain reaction that by its very nature guarantees a future correction. The later bad consequences of inflating a currency are certain, no matter how beneficial the earlier ones may seem.
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 11 ... Cached
What can we expect from our Federal Reserve? Just as difficult as it is for an addict to cut back on drugs, economic planners refuse to cut back the credit creation to which they have become addicted. Long life may be dependent on sound medical advice and drug abstinence, but feeling good on the short run drives the addict. Likewise, an economy feels good by perpetuating for as long as possible the easy credit that brought good times, while the long life of the currency, the economy and the political system gets little concern.
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Economic crisis looms
19 October 1998 Texas Straight Talk 19 October 1998 verse 8 ... Cached
We must understand the serious flaw in the current system that is playing havoc with world markets. When license is given to central banks to inflate a currency, they eventually do so. Money can be inflated for only so long until serious problems arise.
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Economic crisis looms
19 October 1998 Texas Straight Talk 19 October 1998 verse 10 ... Cached
If the problem was merely that there were not enough money, then money creation alone could make us all millionaires and no one would have to work. But increasing the money supply does not increase wealth. Only work and savings do that. The deception comes because, for a while for the lucky few, benefits are received when governments inflate the currency and pass it out for political reasons.
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 4 ... Cached
President Clinton's nomination of Alan Greenspan to a fourth term as Federal Reserve Board Chairman has been met with nearly unanimous praise. From Congressional leaders to Wall Street gurus, the announcement brought a sigh of relief that good times will continue. The only reservation I noticed was written by economist Mark Weisbrot, who worried that Greenspan might not inflate the currency fast enough. Otherwise, everyone seemed delighted with the nomination.
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 7 ... Cached
Many are delighted that Greenspan will stay in charge, believing he can prevent an economic turndown with proper monetary management. Sorry, but it's too late. The distortions are already in place, and because the most recent economic cycle has lasted longer than usual, it means there's been more credit creation and distortion than usual. Therefore a bigger downturn will result. The only policy available to the Fed today is to further inflate the currency in an attempt to delay the inevitable correction.
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Greenspan Nominated to a Fourth Term
17 January 2000 Texas Straight Talk 17 January 2000 verse 10 ... Cached
Every time the market in the past three years threatened to bring on a correction, Chairman Greenspan rushed to the rescue - to the delight of everyone in Washington and New York - with a massive influx of new money and lower rates. In 1997 the excuse was the Asian crisis; in 1998 it was the failure of Long Term Capital Management; and in 1999 it was the potential Y2K crisis. In the past 3 months, bank credit has increased at a greater than 30% annual rate. Greenspan, in this past quarter, may have talked about "tight money" and even raised overnight rates, but he was quite active inflating the currency.
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Religious Liberty Thwarted by the Supreme Court
04 June 2001 Texas Straight Talk 04 June 2001 verse 5 ... Cached
Moreover, there is ample evidence that most of our Founders were deeply religious men who never imagined a rigid separation between religious beliefs and governance. Indeed, our national documents, symbols, currency, and buildings are replete with religious symbolism. Our national motto, "In God We Trust," is an obvious example. These symbols are entirely inconsistent with the religion-free government supposedly mandated by the First amendment.
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The Fed Cannot Create Prosperity
03 September 2001 Texas Straight Talk 03 September 2001 verse 6 ... Cached
Still, while some in America have begun to challenge the wisdom of Alan Greenspan, few seem to question the concept of the Fed bank itself. In fact, the financial and political press never discuss the dangers of a fiat currency system managed by a centralized bank. Remember, every time the Fed cuts interest rates, it expands the amount of money in the economy. Economists have a simple word for this increase in the money supply: inflation. Inflation means your money has less buying power and your retirement savings are worth less. Yet we never hear the Fed criticized for its inflationary measures- on the contrary, Greenspan was widely praised throughout the 1990s as the all-knowing sage responsible for the good times.
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The Fed Cannot Create Prosperity
03 September 2001 Texas Straight Talk 03 September 2001 verse 8 ... Cached
In a truly free society, interest rates should be set by the market. The laws of supply and demand work better than any government bureaucrat in determining the correct cost of money, and without the political favoritism and secrecy that characterize central banks. Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution. The turbulent period we are entering may serve to remind Americans that the Fed cannot suspend the laws of economics. The key to lasting prosperity is a return to true private banking, where interest rates are set by the free market and dollars are backed by gold.
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UN Planting the Seeds for a Coming Global Tax
25 March 2002 Texas Straight Talk 25 March 2002 verse 6 ... Cached
Rest assured that the UN is absolutely serious about imposing a global tax. In fact, it has been discussing a global currency tax for years. The "Tobin tax," named after the Yale professor who proposed it, would be imposed on all worldwide currency transactions. Such a tax could prove quite lucrative for the UN, given the vast amount of currency that trades hands at certain times. It also might be a politically acceptable starting point, because most average people do not engage in cross-border currency transactions. A dangerous precedent would be set, however: the idea that the UN possesses legitimate taxing authority to fund its operations.
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Gold, Dollars, and Federal Reserve Mischief
10 June 2002 Texas Straight Talk 10 June 2002 verse 4 ... Cached
Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air. Governments by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. This expansion costs money, and the big-government politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now produce all of the world’s major currencies.
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Gold, Dollars, and Federal Reserve Mischief
10 June 2002 Texas Straight Talk 10 June 2002 verse 7 ... Cached
What does all of this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses. Inflation acts as a hidden tax levied disproportionately on the poor and fixed-income retirees, who find the buying power of their limited dollars steadily diminished. The corporations, bankers, and wealthy Americans suffer far less from this inflation, because they can take advantage of the credit expansion that immediately precedes each new round of currency devaluation.
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Declining Dollar, Declining Fortunes
23 June 2003 Texas Straight Talk 23 June 2003 verse 2 ... Cached
I recently had an opportunity to hear testimony by Federal Reserve Chairman Alan Greenspan at a hearing of the Joint Economic committee. I always relish the opportunity to question Mr. Greenspan at such hearings, because I disagree so strongly with Fed policies. Mr. Greenspan is a remarkable man, with a background as a devotee of novelist Ayn Rand, a supporter of the gold standard, and a fervent advocate of capitalism. So I’m at a loss to explain his metamorphosis into a believer in fiat currency and centralized economic planning.
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Declining Dollar, Declining Fortunes
23 June 2003 Texas Straight Talk 23 June 2003 verse 7 ... Cached
Both Congress and the Fed should be promoting sound dollar policies, because a sound and stable currency is required for sustained economic growth. Instead, both have through default and deliberate action promoted fiat policies that systematically depreciate the dollar. The financial markets understand this, and investors track the minute-by-minute fluctuations in value of the dollar seeking an investment advantage. This kind of speculation would not exist in a sound monetary system.
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Federal Reserve Inflation Punishes Saving
21 July 2003 Texas Straight Talk 21 July 2003 verse 9 ... Cached
Centralized planning is as disastrous in monetary affairs as in economic affairs. Just as Russian commissars could not determine prices or production levels in the absence of a free market, the Federal Reserve Board cannot determine the “proper” level for interest rates or the money supply. Our fiat currency and artificially low interest rates can only result in the deterioration of the U.S. dollar through inflation, which in the end will cause interest rates to rise no matter what the Fed says or does. Older Americans especially stand to suffer most from Mr. Greenspan’s easy money policies.
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The Tyranny of Paper Money
08 September 2003 Texas Straight Talk 08 September 2003 verse 3 ... Cached
Mr. Greenspan once understood that a fiat money system represents nothing more than a sinister and evil form of hidden taxation. When the government can print money at will, it’s morally identical to the counterfeiter who illegally prints currency. Fiat money polices especially hurt savers and those on fixed incomes, who find the value of their dollars steadily eroded by the Fed’s printing presses.
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Lessons from the California Recall
13 October 2003 Texas Straight Talk 13 October 2003 verse 6 ... Cached
The crisis in Sacramento should serve as a cautionary tale for all Americans. Legislators in statehouses across the country and in Washington lack the political will to cut spending. They consistently spend more each year, without regard to revenues. If the process goes on too long, government becomes insolvent, unable to tax or borrow enough to satisfy its voracious appetite. It could happen in your state, and it is happening in Washington. It’s worse in DC, however, because Federal Reserve printing presses help our national politicians temporarily evade reality. If Congress continues to spend and print dollars at the pace of recent years, however, the devaluation of our currency will make all of us poorer for decades to come.
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Economic Woes Begin at Home
03 November 2003 Texas Straight Talk 03 November 2003 verse 2 ... Cached
Many in Washington are concerned about the loss of jobs in our nation’s manufacturing sector, but few seem to understand the role Federal Reserve currency manipulation plays in that loss. The economic problems currently facing this country are the direct result of a boom-and-bust cycle caused by inflationary Fed policies. An open debate on monetary issues therefore is long overdue.
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Economic Woes Begin at Home
03 November 2003 Texas Straight Talk 03 November 2003 verse 3 ... Cached
However, instead of debating America’s monetary policy, Congress wants to debate China’s monetary policy. The goal is to pressure China to change the valuation of its currency, to unlink it from the U.S. dollar so that its value fluctuates. The main beneficiary of this would be certain U.S. manufacturers, at least in the short run. But American consumers would be the overwhelming losers in the long run, as the price of countless consumer items would rise. Manufacturing interests have powerful lobbies in Congress, but consumers do not.
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Economic Woes Begin at Home
03 November 2003 Texas Straight Talk 03 November 2003 verse 4 ... Cached
China exports many products into the United States, which makes her a convenient scapegoat for our economic problems. Demanding that China adjust its currency valuation is merely a distraction from addressing the real economic dilemmas facing our country, however. Congress should be focused on our own disastrous monetary policies. As long as the Fed can print money at will and set interest rates, the value of our dollars will be subject to the whims of politicians and the perceived economic needs of politically powerful special interests.
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The Disappearing Dollar
08 December 2003 Texas Straight Talk 08 December 2003 verse 5 ... Cached
The problem is that faith can be shaken, and the precipitous drop in the dollar shows how investors around the globe are very concerned about American deficits and debt. When government policies in a fiat system are the sole measure of a currency’s worth, the currency markets act as a reliable barometer of how those policies are viewed around the world. Politicians often manage to fool voters and the media, but they rarely fool the financial markets over time. When investors lack faith in the U.S. dollar, they really lack faith in the economic policies of the U.S. government. The Medicare prescription drug bill passed two weeks ago provides an example of this phenomenon- the day after the bill passed, the dollar dropped once again. Investors understand that the new entitlement will cost trillions over coming decades, trillions that will come from Treasury printing presses and further devalue existing dollars.
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The Disappearing Dollar
08 December 2003 Texas Straight Talk 08 December 2003 verse 7 ... Cached
Unlike Warren Buffett, most Americans are stuck with their U.S. dollars. Average people, particularly those who depend on savings or fixed incomes to fund their retirement years, cannot abide the continued devaluation of our currency. A true strong-dollar policy would require constriction of the money supply and higher interest rates, both of which would cause some short-term pain for the American economy. In the long run, however, such a correction is the only alternative to the continued erosion of our dollars.
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Greenspan's Black Magic
23 February 2004 Texas Straight Talk 23 February 2004 verse 6 ... Cached
Debt is the fundamental problem the central planners at the Fed will not address. The total U.S. federal debt is more than $7 trillion, and government spending as a percentage of gross domestic product has never been higher except during World War II. Mr. Greenspan’s attempts to stimulate economic growth by printing money become more and more tenuous: today the Fed must create nearly $7 of new debt in the form of new fiat currency to generate only $1 of new GDP. Twenty years ago the figure was less than $1.50. Clearly this is a race that has run its course.
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Inflation- Alive and Well
08 March 2004 Texas Straight Talk 08 March 2004 verse 3 ... Cached
Austrian- school economists demonstrate that true inflation is monetary inflation. True inflation therefore can be measured by an increase in the money supply. Mr. Greenspan and Fed policy makers have more than doubled the M3 money supply in less than ten years. While Treasury printing presses can print unlimited dollars, there are natural limits to economic growth. This flood of newly minted US currency can only increase consumer prices in the long term, as more and more dollars chase available goods and services.
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The Federal Reserve Debt Engine
26 April 2004 Texas Straight Talk 26 April 2004 verse 7 ... Cached
It’s not enough to question the wisdom of Mr. Greenspan. Americans should question why we have a central bank at all, and whose interests it serves. The laws of supply and demand work better than any central banker to determine both the correct supply of money in the economy and the interest rate at which capital is available- without the political favoritism and secrecy that characterize central banks. Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution.
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A Texas Platform for the GOP
30 August 2004 Texas Straight Talk 30 August 2004 verse 5 ... Cached
The Texas GOP platform also calls for a congressional audit of the Federal Reserve Bank, and demands full public access to the written minutes from Fed board meetings. Such an audit could at the very least serve to educate the American people about Fed inflation and the dangers of fiat currency. In Washington, the Federal Reserve system is virtually never discussed by Congress or the administration, despite its enormous impact on our economic well-being. Monetary policy is simply off the table as a political and policy matter for both national parties, but the Texas GOP recognizes the importance of sound money.
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Gold Exposes the Dollar
06 December 2004 Texas Straight Talk 06 December 2004 verse 6 ... Cached
Gold, by contrast, has surged 70% in the same period. The New York Times last week acknowledged that gold “was now a more favored currency than the U.S. dollar.” As analyst Harry Schultz points out, when gold prices are low the financial press calls gold a commodity. When prices are high, they call it a currency. Investors cannot afford to sit idly by while their dollar accounts lose another 30% in value, so the rise in demand for gold is hardly surprising.
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 3 ... Cached
Nearly 40 years ago, Federal Reserve chair Alan Greenspan wrote persuasively in favor of a gold monetary standard in an essay entitled Gold and Economic Freedom. In that essay he neatly summarized the fundamental problem with fiat currency in a few short sentences: “The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value… Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 4 ... Cached
Today, however, Mr. Greenspan has become one of those central planners he once denounced, and his views on fiat currency have changed accordingly. As the ultimate insider, he cannot or will not challenge the status quo, no matter what the consequences to the American economy. To renounce the fiat system now would mean renouncing the Fed itself, and his entire public career with it. The only question is whether history will properly reflect the destructive nature of Mr. Greenspan’s tenure.
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 6 ... Cached
First, the Federal Reserve does not mimic a gold standard by any measure. The clearest example of this lies in our current account deficit, which our fiat currency encourages. Under a gold standard we would not have exchange rate distortions between the Chinese renminbi and the U.S. dollar, for example. True currency stability is impossible when fiat dollars can be produced at will and foreign lenders bankroll our deficits.
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 8 ... Cached
Third, Fed policies do indeed have adverse political ramifications. Fiat currency and big government go hand-in-hand. Without a gold standard, Congress is free to spend recklessly and fall back on monetary expansion to pay the bills. Politically, it’s easier to print new dollars than raise taxes or borrow overseas. The Fed in essence creates paper reserves that enable Congress to undertake spending measures that far exceed tax revenues. The ill effects of this process are not felt by the politicians, who can always find popular support for new spending. Average Americans suffer, however, when their dollars are “confiscated through inflation,” as Mr. Greenspan termed it.
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 9 ... Cached
It’s not enough to question the wisdom of Mr. Greenspan. Americans should question why we have a central bank at all, and whose interests it serves. The laws of supply and demand work better than any central banker to determine both the correct supply of money in the economy and the interest rate at which capital is available- without the political favoritism and secrecy that characterize central banks. Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution.
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Congress and the Federal Reserve Erode Your Dollars
23 May 2005 Texas Straight Talk 23 May 2005 verse 3 ... Cached
Last week the US Treasury department issued a warning to the Chinese government with regard to its policy of pegging the value of the Chinese yuan to the US dollar. In essence, the Treasury department accuses China of artificially suppressing the value of its currency by tying it to the dollar, thus making Chinese imports very cheap and worsening our trade imbalance.
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Congress and the Federal Reserve Erode Your Dollars
23 May 2005 Texas Straight Talk 23 May 2005 verse 5 ... Cached
If anything, the US government should be embarrassed that another nation has depressed its currency by tying it to the US dollar. An economically sound nation would take pride in its currency, one that maintains a stable value and provides incentive for savers. Yet here we are, mad at China for our own sin of flooding the world with cheap dollars.
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Congress and the Federal Reserve Erode Your Dollars
23 May 2005 Texas Straight Talk 23 May 2005 verse 6 ... Cached
The root of the problem is the Federal Reserve and our fiat monetary system itself. Since US dollars and other major currencies are not backed by gold, they have no inherent value. Their relative values are subject to political events, and fluctuate constantly in highly volatile currency markets. A fiat system means every dollar you have can be eroded into nothing by the actions of politicians and central bankers. In essence, paper currencies like the US dollar operate as articles of faith-- faith in the policies of the governments and central banks that issue them. When it comes to a government as deeply indebted as our own, that faith is sorely lacking among investors worldwide. Politicians often manage to fool voters and the media, but they rarely fool financial markets over time. The precipitous drop in the US dollar over the past few years is proof that investors around the globe are very concerned about American deficits and debt. When investors lack faith in the U.S. dollar, they really lack faith in the economic policies of the U.S. government.
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Congress and the Federal Reserve Erode Your Dollars
23 May 2005 Texas Straight Talk 23 May 2005 verse 7 ... Cached
Unlike wealthy currency traders, most Americans are stuck with their U.S. dollars. Average people, particularly those who depend on savings or fixed incomes to fund their retirement years, cannot abide the continued devaluation of our currency. A true strong-dollar policy would not depend on the actions of China or any other nation. It would, however, require a constriction of the money supply and higher interest rates, both of which would cause some short-term pain for the American economy. In the long run, however, such a correction is the only alternative to the continued erosion of our dollars.
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Borrowing, Spending, Counterfeiting
22 August 2005 Texas Straight Talk 22 August 2005 verse 8 ... Cached
Finally, we face a reordering of the entire world economy. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks are increasingly reluctant to hold more U.S. dollars, understanding that American leaders do not have the discipline to maintain a stable currency. When the rest of the world finally abandons the dollar as the global reserve currency, both Congress and American consumers will find borrowing money a more expensive proposition.
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Borrowing, Spending, Counterfeiting
22 August 2005 Texas Straight Talk 22 August 2005 verse 10 ... Cached
The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars.
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More of the Same at the Federal Reserve
28 November 2005 Texas Straight Talk 28 November 2005 verse 5 ... Cached
What I mean is that Mr. Bernanke appears to have embraced the idea that the Federal Reserve can create prosperity more than Mr. Greenspan ever did. Like his predecessor, Mr. Bernanke views our system of fiat currency as a tool for creating wealth out of thin air by producing more dollars, whether paper or electronic. But he seems to take things further than Greenspan by refusing even to consider the destructive consequences of monetary expansion. In fact, he earned dubious notoriety for this quote in a 2002 speech discussing the supposed threat of deflation in the American economy: "The U.S. government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost."
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What do Rising Gold Prices Mean?
05 December 2005 Texas Straight Talk 05 December 2005 verse 4 ... Cached
Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from inflation. It’s interesting to note that while the U.S. dollar has regained some of its value relative to other paper currencies like the Euro, it continues to lose value relative to gold and other hard assets. This shows the folly of using one fiat currency to value another.
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What do Rising Gold Prices Mean?
05 December 2005 Texas Straight Talk 05 December 2005 verse 5 ... Cached
Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air. Governments by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. Expansion costs money, and politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now manage all of the world’s major currencies.
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What do Rising Gold Prices Mean?
05 December 2005 Texas Straight Talk 05 December 2005 verse 8 ... Cached
What does this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses.
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Scandals are a Symptom, Not a Cause
09 January 2006 Texas Straight Talk 09 January 2006 verse 6 ... Cached
Americans understandably expect ethical conduct from their elected officials in Washington. But the whole system is so out of control that it's simply unrealistic to place faith in each and every government official in a position to sell influence. The larger the federal government becomes, the more it controls who wins and who loses in our society. The temptation for lobbyists to buy votes-- and the temptation for politicians to sell them-- is enormous. Indicting one crop of politicians and bringing in another is only a temporary solution. The only effective way to address corruption is to change the system itself, by radically downsizing the power of the federal government in the first place. Take away the politicians' power and you take away the very currency of corruption.
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International Taxes?
06 March 2006 Texas Straight Talk 06 March 2006 verse 7 ... Cached
The "Tobin tax," named after the Yale professor who proposed it, would be imposed on all worldwide currency transactions. Such a tax could prove quite lucrative for the UN, given the vast amount of currency that trades hands at certain times. It also might be a politically acceptable starting point, because most average people do not engage in cross-border currency transactions. A dangerous precedent would be set, however: the idea that the UN possesses legitimate taxing authority to fund its operations.
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The Perils of Economic Ignorance
27 March 2006 Texas Straight Talk 27 March 2006 verse 3 ... Cached
Last week in this column I wrote of a perfect economic storm facing America, caused by a federal government that spends, borrows, and prints so much money that our dollars are eroding in value at an alarming rate. Year after year our federal government spends beyond its revenues, prints new money to pay its debts, and borrows hundreds of billions abroad in the form of Treasury obligations that someday must be paid. With too many dollars and debt instruments in circulation, and no political will in Washington to cut spending, we've created a monster. Our perceived prosperity depends on keeping the great debt and credit engine pumping, but the only way to attract new lenders to fuel the engine is higher interest rates. At some point one of two things must happen: either the party in Washington ends, or the supremacy of the dollar as the world's reserve currency ends. It's a sobering thought, but a choice must be made.
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Congress Rejects UN Taxes
19 June 2006 Texas Straight Talk 19 June 2006 verse 6 ... Cached
Rest assured that the UN is absolutely serious about imposing a global tax. In fact, it has been discussing a global currency tax for years. The "Tobin tax," named after the Yale professor who proposed it, would be imposed on all worldwide currency transactions. Such a tax could prove quite lucrative for the UN.
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Federal Reserve Policy Destroys the Value of Your Savings
10 July 2006 Texas Straight Talk 10 July 2006 verse 5 ... Cached
When the Federal Reserve increases the supply of dollars in circulation, both paper and electronic, prices must rise eventually. What other result it possible? The supply of dollars has risen much faster than the supply of goods and services being chased by those dollars. Fed policy makers have more than doubled the money supply in less than ten years. While Treasury printing presses can print unlimited dollars, there are natural limits to economic growth. This flood of newly minted US currency can only increase consumer prices in the long term.
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The NAFTA Superhighway
30 October 2006 Texas Straight Talk 30 October 2006 verse 11 ... Cached
The ultimate goal is not simply a superhighway, but an integrated North American Union--complete with a currency, a cross-national bureaucracy, and virtually borderless travel within the Union. Like the European Union, a North American Union would represent another step toward the abolition of national sovereignty altogether.
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Monetary Inflation is the Problem
04 December 2006 Texas Straight Talk 04 December 2006 verse 5 ... Cached
Federal Reserve Chairman Ben Bernanke faces two basic ongoing choices: raise interest rates to prop up the dollar, but risk pushing the economy into a recession; or lower interest rates to stimulate the economy, but risk further declines in the dollar. This unfortunate dilemma is inherent with a fiat currency, however.
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Monetary Inflation is the Problem
04 December 2006 Texas Straight Talk 04 December 2006 verse 9 ... Cached
The precipitous drop in the dollar shows how investors around the globe are very concerned about American deficits and debt. When government policies in a fiat system are the sole measure of a currency’s worth, the currency markets act as a reliable barometer of how those policies are viewed around the world. Politicians often manage to fool voters and the media, but they rarely fool the financial markets over time. When investors lack faith in the U.S. dollar, they really lack faith in the economic policies of the U.S. government.
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The World's Reserve Currency
01 January 2007 Texas Straight Talk 01 January 2007 verse 1 ... Cached
The World's Reserve Currency
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The World's Reserve Currency
01 January 2007 Texas Straight Talk 01 January 2007 verse 3 ... Cached
The financial press reported last week that the euro, the new currency created only five years ago and used by most European nations, has supplanted the U.S. dollar as the most widely used form of cash internationally. There are now more Euros in circulation worldwide than dollars.
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The World's Reserve Currency
01 January 2007 Texas Straight Talk 01 January 2007 verse 4 ... Cached
This alone is not necessarily troubling, as the dollar remains the world’s most important reserve currency. About 65% of foreign central bank exchange reserves are still held in dollars, versus only about 25% in euros. And the European Central Bank faces the same inflationary pressures that our own Federal Reserve Bank Governors face, including a growing entitlement burden that threatens economic ruin as both societies age. European politicians want to spend money just as badly as American politicians, and undoubtedly will clamor to inflate-- and thus devalue-- the euro to fund their creaky social welfare systems.
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The World's Reserve Currency
01 January 2007 Texas Straight Talk 01 January 2007 verse 5 ... Cached
Still, the rise of the Euro internationally is another sign that the U.S. dollar is not what it used to be. There is increasing pressure on nations to buy and sell oil in euros, and anecdotal evidence suggests that drug dealers and money launderers now prefer euros to dollars. Historically, the underground cash economy has always sought the most stable and valuable paper currency to conduct business.
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The World's Reserve Currency
01 January 2007 Texas Straight Talk 01 January 2007 verse 6 ... Cached
More importantly, our greatest benefactors for the last twenty years-- Asian central banks-- have lost their appetite for holding U.S. dollars. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks understand that American leaders do not have the discipline to maintain a stable currency. When the rest of the world finally abandons the dollar as the global reserve currency, both Congress and American consumers will find borrowing money a more expensive proposition.
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The World's Reserve Currency
01 January 2007 Texas Straight Talk 01 January 2007 verse 7 ... Cached
Remember, America can maintain a large trade deficit only if foreign banks continue to hold large numbers of dollars as their reserve currency. Our entire consumption economy is based on the willingness of foreigners to hold U.S. debt. We face a reordering of the entire world economy if the federal government cannot print, borrow, and spend money at a rate that satisfies its endless appetite for deficit spending.
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Another Spending Bill for the War in Iraq
12 February 2007 Texas Straight Talk 12 February 2007 verse 6 ... Cached
I doubt very seriously that most Americans think the war in Iraq is worth one trillion dollars. Even those who do must face the reality that the federal government simply doesn’t have the money. Congress continues to spend more than the Treasury raises in taxes year after year, by borrowing money abroad or simply printing it. Paying for war with credit is reckless and stupid, but paying for war by depreciating our currency is criminal.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 3 ... Cached
Federal Reserve Chairman Ben Bernanke testifies twice every year before the congressional Financial Services committee, and I look forward to these opportunities to raise questions about monetary policy. I believe monetary policy is critically important yet overlooked in Washington. Money is the lifeblood of any economy, and control over a nation's currency means control over its economic well being. Fed bankers quite literally determine the value of our money, by controlling the supply of dollars and establishing interest rates. Their actions can make you richer or poorer overnight, in terms of the value of your savings and the buying power of your paycheck. So I urge all Americans to educate themselves about monetary policy, and better understand how a small group of unelected individuals at the Federal Reserve and Treasury department wield tremendous power over our lives.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 13 ... Cached
How can a policy of steadily debasing our currency be defended morally, knowing what harm it causes to those who still believe in saving money and assuming responsibility for themselves in their retirement years? Is it any wonder we are a nation of debtors rather than savers?
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The Federal Reserve Monopoly over Money
09 April 2007 Texas Straight Talk 09 April 2007 verse 6 ... Cached
The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars.
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Keeping Promises to Seniors
07 October 2007 Texas Straight Talk 07 October 2007 verse 2 ... Cached
With our country's finances stretched thin, our credit limit fast approaching, and our currency inflated to the breaking point, there is no indication yet of any urgency on the part of Congress to rein in spending. The predictable answer to the government's voracious spending habits is this week’s proposal by some Democratic Congressional leaders for tax increases to pay for operations in Iraq . Here at home, however, there are promises our seniors heavily rely upon. We must keep these promises.
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The Importance of Fiscal Responsibility
16 December 2007 Texas Straight Talk 16 December 2007 verse 6 ... Cached
The difference now is that our printing presses at the Federal Reserve are getting worn out as we have expanded our money supply to the breaking point with yet another rate cut this week. As the dollar falls, it is losing its reserve currency status as many countries are shifting to the Euro or the Chinese yuan or other currencies. The more that trend continues, the weaker we become on the world stage. Those foreign governments and entities that enabled us to spend so much for so long are wearing thin and cutting us off.
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Making a Recession Great
16 March 2008 Texas Straight Talk 16 March 2008 verse 6 ... Cached
This spending spree is exactly the wrong policy for an economy on the brink of recession. History has shown that all empires eventually crumble under a worthless currency and with an exhausted military. Since too many of our nation's leaders haven't taken the time to learn from history, we are seeing mistakes repeated through recently enacted policies such as the new House budget.
Texas Straight Talk from 20 December 1996 to 23 June 2008 (573 editions) are included in this Concordance. Texas Straight Talk after 23 June 2008 is in blog form on Rep. Paul’s Congressional website and is not included in this Concordance.
Remember, not everything in the concordance is Ron Paul’s words. Some things he quoted, and he added some newspaper and magazine articles to the Congressional Record. Check the original speech to see.