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U.S. Rep. Ron Paul gold Book of Ron Paul gold 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. gold The Bubble 28 April 1998    1998 Ron Paul 39:43 Washington goes along because it is furtively, but definitely, acknowledged there that a free-market, high gold price would send a bad signal worldwide about the world financial system. Therefore, every effort is made to keep the price of gold low for as long as possible. It’s true the supply-siders have some interest in gold, but they are not talking about a gold standard, merely a price rule that encourages central-bank fixing of the price of gold. Most defenders of the free-enterprise system in Washington are Keynesians at heart and will not challenge interventionism on principle. gold The Bubble 28 April 1998    1998 Ron Paul 39:44 Instead of making sure that policy is correct, central bankers are much more interested in seeing that the gold-price message reflects confidence in the paper money. Thus gold has remained in the doldrums despite significant rising prices for silver, platinum, and palladium. However, be assured that even central banks cannot “fix” the price of gold forever. They tried this in the 1960’s with the dumping of hundreds of millions of ounces of American gold in order to artificially prop up the dollar by keeping the gold price at $35/oz., but in August 1971 this effort was abandoned. gold The Bubble 28 April 1998    1998 Ron Paul 39:45 THE SOLUTION The solution to all of this is not complex. But no effort is going to be made to correct the problems that have allowed our financial bubble to develop, because Alan Greenspan has been practically declared a god by more than one Wall Street guru. Because Alan Greenspan himself understands Austrian free-market economics and the gold standard, it is stunning to see him participate in the bubble when he, deep down inside, knows big problems lurk around the corner. Without the motivation to do something, not much is likely to happen to our monetary system in the near future. gold 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. gold 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. gold 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. gold 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.” gold Every Currency Crumbles 24 June 1998    1998 Ron Paul 65:8 Monetary systems have broken down every generation or so for the past century. The true-blue international gold standard didn’t survive World War I. Its successor, a half-strength gold standard, didn’t survive the Great Depression. The Bretton Woods regime — in which the dollar was convertible into gold and the other, lesser currencies were convertible into the dollar — didn’t survive the inflationary period of the late 1960’s and early 1970’s. gold Every Currency Crumbles 24 June 1998    1998 Ron Paul 65:9 Today, the unnamed successor to Bretton Woods is showing its years. The present-day system is also dollar-based, but it differs from Bretton Woods in that the dollar is no longer anchored to anything. It is defined as 100 cents and only as 100 cents. Its value is derived not from a specified weight of gold, as it was up until Aug. 15, 1971, but from the confidence of the market. gold Every Currency Crumbles 24 June 1998    1998 Ron Paul 65:15 And no degree of excellence can forestall a new monetary crisis indefinitely. Some monetary systems are better than others, and some last longer than others, but each and every one comes a cropper. The bezant, the standard gold coin of the Byzantine empire, was minted for 800 years at the same weight and fineness. The gold may still be in existence (in fact — no small recommendation for gold bullion — it probably is), but the empire has fallen. gold Exchange Stabilization Fund 16 July 1998    1998 Ron Paul 79:4 Where did the money come from? It came from confiscation, not through taxation, but confiscating gold from the American people, revaluing the gold, taking the net profits, putting it into the Exchange Stabilization Fund, as well as the initial financing of the IMF. gold Honoring 4-H Programs And Gold Star Recipients 4 August 1998    1998 Ron Paul 94:2 Head, Hand, Hearts and Health, these are the “4–H’s” and they are truly indicative of what this organization is all about. One of the primary missions that this organization undertakes is agricultural education. Earlier this year I introduced a bill which would exempt the sale of livestock by those involved in educational activities such as FFA and 4–H from federal income taxation. By making young men and women who participate in these activities hire a group of tax accountants and attorneys we are sending the wrong message. Young people who sell livestock at county fairs and the like should be rewarded for taking self initiative and allowed to keep the money they’ve earned to help pay for their education or to re-invest in other animals to raise. My bill would eliminate the current policy of forcing these youngsters to visit the tax man. Mr. Speaker, I want to commend the following winners of the Gold Star, the highest award possible at the county level, for achievements in competition at state levels, leadership ability, community service and years of service. They are: Deidrea Harris, Josh Weber, Amanda Tacquard, and Allison Sauer. Again, I want to commend these young people for their achievements. gold Gold Star Awards 5 August 1998    1998 Ron Paul 95:2 Mr. Speaker, I want to commend the following winners of the Gold Star, the highest award possible at the county level, for achievements in competition at state levels, leadership ability, community service and years of service. They are: Kim Evans, Courtney Wallis and Lindsey Kubecka. Again, I want to commend these young people for their achievements. gold Recognizing The Award Winners Of The Fayette County 4-H 7 October 1998    1998 Ron Paul 114:2 Being awarded the Gold Star will be Michelle Cernoch; Ashley Dittert, and Vickie Sanders. gold Congratulating Fayette County 4-H Award Recipients 9 October 1998    1998 Ron Paul 116:3 Receiving the Gold Star award are Michelle Cernoch, Ashley Dittert, and Vickie Sanders. gold 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. gold New Global Economic Plan 9 October 1998    1998 Ron Paul 117:5 Decades ago, the gold standard was abandoned and now our global planners want to take another step to regulate all capital flows throughout the world thus removing the only good indicator left to warn of dangers ahead and the need for sound reform. The rapid transfer of capital around the world is the messenger and not the cause. Killing the messenger will only hide and increase distortions while prolonging the economic pain. gold New Global Economic Plan 9 October 1998    1998 Ron Paul 117:6 The proposal of the Group of 22 to regulate capital flows through a new “World Central Bank” prevents any effort to restore efficient market mechanisms and prevents any serious discussion for using gold as the money of choice. gold Monetary Policy 16 October 1998    1998 Ron Paul 120:4 A world-wide system of fiat money is the root of the crisis. The post-World War II Bretton Woods gold-exchange system was seriously flawed, and free market economists from the start predicted its demise. Twenty-seven years later, on August 15, 1971, it ended with a bang ushering in its turbulent and commodity-driven inflation of the 1970’s. gold Monetary Policy 16 October 1998    1998 Ron Paul 120:15 Second, Congress should legalize the Constitutional principle that gold and silver be legal tender by prohibiting sales and capital gains taxes from being placed on all American legal tender coins. gold Opposing Congressional Medal of Honor for Rosa Parks 20 April 1999    1999 Ron Paul 28:1 Mr. PAUL. Mr. Speaker, I rise today in opposition to H.R. 573. At the same time, I rise in great respect for the courage and high ideals of Rosa Parks who stood steadfastly for the rights of individuals against unjust laws and oppressive governmental policies. However, I oppose the Congressional Gold Medal for Rosa Parks Act because authorizing $30,000 of taxpayer money is neither constitutional nor, in the spirit of Rosa Parks who is widely recognized and admired for standing up against an overbearing government infringing on individual rights. gold Opposing Flag Burning Amendment 23 June 1999    1999 Ron Paul 66:7 Our Nation was not founded on devotion to symbolic idols, but on principles, beliefs and ideals expressed in the Constitution and its Bill of Rights. American veterans who have protected our banner in battle have not done so to protect a golden calf. Instead, they carried the banner forward with reverence for what it represents, our beliefs and freedom for all. Therein lies the beauty of our flag. A patriot cannot be created by legislation. gold Exchange Stabilization Fund 15 July 1999    1999 Ron Paul 76:4 The Exchange Stabilization Fund was set up, I think in error; but it was set up for the purpose of stabilizing the dollar in the Depression. How did that come about? Well, it started with an Executive order. It started with an Executive order to take gold forcefully from the people. And then our President then revalued gold from $20 an ounce to $35 an ounce, and there was a profit and they took this profit and used some of those profits to start the Exchange Stabilization Fund. They set it up with $200 million. It does not seem like a whole lot of money today. How did it come about over these many years that this fund has been allowed to exist without supervision of this Congress, and now has reached to the size of $34 billion and we give it no oversight? It is supposed to send reports to us, very superficial reports to the Congress. We don’t know how they got $34 billion. They earned interest on some of the loans, and all the loans are paid back because the countries who get the loans borrow more money. gold Elementary and Secondary Education Act (SEA) 21 October 1999    1999 Ron Paul 108:2 The Congress that created Title I promised the American public that, in exchange for giving up control over their schools and submitting to increased levels of taxation, federally-empowered “experts” would create an educational utopia. However, rather than ushering in a new golden age of education, increased federal involvement in education has, not coincidently, coincided with a decline in American public education. In 1963, when federal spending on education was less than nine hundred thousand dollars, the average Scholastic Achievement Test (SAT) score was approximately 980. Thirty years later, when federal education spending ballooned to 19 billion dollars, the average SAT score had fallen to 902. Furthermore, according to the National Assessment of Educational Progress (NAEP) 1992 Survey, only 37% of America’s 12th graders were actually able to read at a 12th grade level! gold A Republic, If You Can Keep It 31 January 2000    2000 Ron Paul 2:89 The U.S. monetary system. The U.S. monetary system during the 20th Century has dramatically changed from the one authorized by the Constitution. Only silver and gold were to be used in payment of debt, and no paper money was to be issued. In one of the few restrictions on the states, the Constitution prohibited them from issuing their own money, and they were to use only gold and silver in payment of debt. No Central Bank was authorized. gold 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. gold A Republic, If You Can Keep It 31 January 2000    2000 Ron Paul 2:91 Unfortunately, their concerns as they were reflected in the Constitution have been ignored and as this century closes we do not have a sound dollar as good as gold. The changes to our monetary system are by far the most significant economic events of the 20th Century. The gold dollar of 1900 is now nothing more than a Federal Reserve note with a promise by untrustworthy politicians and the central bankers to pay nothing for it. gold 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. gold A Republic, If You Can Keep It 31 January 2000    2000 Ron Paul 2:96 The record of the Federal Reserve is abysmal, yet at the close of the 20th Century, its chairman is held in extremely high esteem, with almost zero calls for study of sound money with the intent to once again have the dollar linked to gold. gold A Republic, If You Can Keep It 31 January 2000    2000 Ron Paul 2:98 The reasons for rejecting gold and promoting paper are not mysterious, since quite a few special interests benefit. Deficit financing is much more difficult when there is no Central Bank available to monetize government debt. This gives license to politicians to spend lavishly on the projects that are most likely to get them reelected. War is more difficult to pursue if government has to borrow or tax the people for its financing. The Federal Reserve’s ability to create credit out of thin air to pay the bills run up by Congress establishes a symbiosis that is easy for the politician to love. gold A Republic, If You Can Keep It 31 January 2000    2000 Ron Paul 2:106 Even though the Fed did great harm before 1971 after the total elimination of the gold-dollar linkage, the problems of deficit spending, welfare expansion and military-industrial complex influence have gotten much worse. gold A Republic, If You Can Keep It 31 January 2000    2000 Ron Paul 2:108 The stage has been set. Rampant monetary growth has led to historic high asset inflation, massive speculation, overcapacity, malinvestment, excessive debt, a negative savings rate and a current account deficit of huge proportions. These conditions dictate a painful adjustment, something that would have never occurred under a gold standard. gold 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. gold A Republic, If You Can Keep It – Part 2 2 February 2000    2000 Ron Paul 5:11 Bailing out foreign governments, financial corporations and huge banks can all be achieved without congressional approval. One hundred years ago when we had a gold standard, credit could not be created out of thin air, and, because a much more limited government philosophy prevailed, this could not have been possible. Today it is hard to even document what goes on, let alone expect Congress to control it. gold A Republic, If You Can Keep It – Part 2 2 February 2000    2000 Ron Paul 5:42 Our government pursued alcohol prohibition in the 1920s and confiscation of gold in the 1930s, so it is logical to conclude that our government is quite capable of confiscating all privatelyowned firearms. That has not yet occurred; but as we move into the next century, many in Washington advocate just that and would do it if they did not think the American people would revolt, just as they did against alcohol prohibition. gold 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. gold ON PRESENTING CONGRESSIONAL GOLD MEDAL TO JOHN CARDINAL O’CONNOR February 15, 2000    2000 Ron Paul 8:2 I must, however, oppose the Gold Medal for Cardinal O’Connor because appropriating $30,000 of taxpayer money is neither constitutional nor, in the spirit of Cardinal O’Connor who dedicates his life to voluntary and charitable work, particularly humanitarian. gold ON PRESENTING CONGRESSIONAL GOLD MEDAL TO JOHN CARDINAL O’CONNOR February 15, 2000    2000 Ron Paul 8:4 In fact, as a means of demonstrating my personal regard and enthusiasm for the work of Cardinal O’Connor, I invited each of these colleagues to match my private, personal contribution of $100 which, if accepted by the 435 Members of the House of Representatives, would more than satisfy the $30,000 cost necessary to mint and award a gold medal to the well-deserving Cardinal O’Connor. To me, it seemed a particularly good opportunity to demonstrate one’s genuine convictions by spending one’s own money rather than that of the taxpayers who remain free to contribute, at their own discretion, to the work of Cardinal O’Connor as they have consistently done in the past. For the record, not a single Representative who solicited my support for spending taxpayer’s money, was willing to contribute their own money to demonstrate the courage of their so-called convictions and generosity. gold SENIOR CITIZENS’ FREEDOM TO WORK ACT OF 1999 March 1, 2000    2000 Ron Paul 11:5 In conclusion, Mr. Speaker, I wish to reiterate my strong support for the Senior Citizens Freedom to Work Act. Repealing the ‘earnings limitation’ will help ensure that America’s seniors can continue to enjoy fulfilling and productive lives in their ‘golden years.’ I also urge my colleagues to protect the integrity of the Social Security Trust Fund by cosponsoring the Social Security Preservation Act (H.R. 219). gold AWARDING GOLD MEDAL TO FORMER PRESIDENT AND MRS. RONALD REAGAN IN RECOGNITION OF SERVICE TO NATION April 3, 2000    2000 Ron Paul 25:2 * I must, however, oppose the Gold Medal for Ronald and Nancy Reagan because appropriating $30,000 of taxpayer money is neither constitutional nor, in the spirit of Ronald Reagan’s notion of the proper, limited role for the federal government. gold AWARDING GOLD MEDAL TO FORMER PRESIDENT AND MRS. RONALD REAGAN IN RECOGNITION OF SERVICE TO NATION April 3, 2000    2000 Ron Paul 25:4 * In fact, as a means of demonstrating my personal regard and enthusiasm for Ronald Reagan’s advocacy for limited government, I invited each of these colleagues to match my private, personal contribution of $100 which, if accepted by the 435 Members of the House of Representatives, would more than satisfy the $30,000 cost necessary to mint and award a gold medal to Ronald and Nancy Reagan. To me, it seemed a particularly good opportunity to demonstrate one’s genuine convictions by spending one’s own money rather that of the taxpayers who remain free to contribute, at their own discretion, to commemorate the work of the Reagans. For the record, not a single Representative who solicited my support for spending taxpayer’s money, was willing to contribute their own money to demonstrate their generosity and allegiance to the Reagan’s stated convictions. gold INTRODUCTION OF THE ESSENTIAL RURAL HOSPITAL PRESERVATION ACT September 20, 2000    2000 Ron Paul 78:2 * I believe I can speak for all of my colleagues when I say that while none of us want to endanger the Medicare trust fund, we also want to ensure that Medicare reforms do not drive valuable health care providers into bankruptcy. After all, denying Medicare recipients in rural areas access to quality health care breaks the promise the government makes to the American people when it requires them to pay taxes to finance the Medicare trust fund that they will receive quality health care in their golden years. gold 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. gold 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. gold CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC — February 07, 2001    2001 Ron Paul 7:55 During the past 30 years in the post-Bretton Woods era, worldwide sentiment has permitted us to inflate our money supply and get others to accept the dollar as if it were as good as gold. This convenient arrangement has discouraged savings, which are now at an historic low. Savings in a capitalist economy are crucial for furnishing capital and establishing market interest rates. With negative savings and with the FED fixing rates by creating credit out of thin air and calling it capital, we have abandoned a necessary part of free-market capitalism, without which a smooth and growing economy is sustainable. gold CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC — February 07, 2001    2001 Ron Paul 7:59 A slumping stock market will also cause the dollar to decline and interest rates to rise. Federal Reserve Board central planning through interest-rate control is not a panacea. It is instead the culprit that produces the business cycle. Government and FED officials have been reassuring the public that no structural problems exists, citing no inflation and a gold price that reassures the world that the dollar is indeed still king. gold CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC — February 07, 2001    2001 Ron Paul 7:61 If gold prices reflected the true extent of the inflated dollar, confidence in the dollar specifically and in paper more generally would be undermined. It is a high priority of the FED and all central banks of the world for this not to happen. Revealing to the public the fraud associated with all paper money would cause loss of credibility of all central banks. This knowledge would jeopardize the central banks’ ability to perform the role of lender of last resort and to finance/monetize government debt. It is for this reason that the price of gold in their eyes must be held in check. gold CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC — February 07, 2001    2001 Ron Paul 7:62 From 1945 to 1971, the United States literally dumped nearly 500 million ounces of gold at $35 an ounce in an effort to do the same thing by continuing the policy of printing money at will, with the hopes that there would be no consequences to the value of the dollar. That all ended in 1971 when the markets overwhelmed the world central banks. gold CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC — February 07, 2001    2001 Ron Paul 7:63 A similar effort continues today, with central banks selling and loaning gold to keep the price in check. It’s working and does convey false confidence, but it can’t last. Most Americans are wise to the government’s statistics regarding prices and the “no-inflation” rhetoric. Everyone is aware that the prices of oil, gasoline, natural gas, medical care, repairs, houses, and entertainment have all been rapidly rising. The artificially low gold price has aided the government’s charade, but it has also allowed a bigger bubble to develop. This policy cannot continue. Economic law dictates a correction that most Americans will find distasteful and painful. Duration and severity of the liquidation phase of the business cycle can be limited by proper responses, but it cannot be avoided and could be made worse if the wrong course is chosen. gold CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC — February 07, 2001    2001 Ron Paul 7:74 We must reassess the responsibility Congress has in maintaining a sound monetary system. In the 19th Century, the constitutionality of a central bank was questioned and challenged. Not until 1913 were the advocates of a strong federalist system able to foist a powerful central bank on us, while destroying the gold standard. This banking system, which now serves as the financial arm of Congress, has chosen to pursue massive welfare spending and a foreign policy that has caused us to be at war for much of the 20th Century. gold Blame Congress for HMOs February 27, 2001    2001 Ron Paul 15:12 Offering “free care” led to predictable results. Because Congress placed no restrictions on benefits and removed all sense of cost-consciousness, health-care use and medical costs skyrocketed. Congressional testimony reveals that between 1969 and 1971, physician fees increased 7 percent and hospital charges jumped 13 percent, while the Consumer Price Index rose only 5.3 percent. The nation’s health-care bill, which was only $39 billion in 1965, increased to $75 billion in 1971. Patients had found the fount of unlimited care, and doctors and hospitals had discovered a pot of gold. gold The Beginning of the End of Fiat Money March 13, 2001    2001 Ron Paul 18:1 The golden new Era of the 1990s has been welcomed and praised by many observers. But I’m afraid a different type of new era is arriving-a dangerous one- heralding the end of 30 years of fiat money. If so, it’s a serious matter that deserves close attention by Congress. gold The Beginning of the End of Fiat Money March 13, 2001    2001 Ron Paul 18:17 There are many countries only too anxious to get back at the United States for our military and economic aggressiveness, and some unknown economic or military event will one day knock us off our pedestal and a dangerous New Era will be upon us, instead of the golden one dreamed about. gold Statement on the Congressional Education Plan May 22, 2001    2001 Ron Paul 38:1 Mr. PAUL. Mr. Chairman, thirty-six years ago Congress blatantly disregarded all constitutional limitations on its power over K-12 education by passing the Elementary and Secondary Education Act (ESEA). This act of massive federal involvement in education was sold to the American people with promises that federal bureaucrats had it within their power to usher in a golden age of education. Yet, instead of the promised nirvana, federal control over education contributed to a decline in education quality. Congress has periodically responded to the American people’s concerns over education by embracing education “reforms,” which it promises are the silver bullet to fixing American schools. “Trust us,” proponents of new federal edcation programs say, we have learned from the mistakes of the past and all we need are a few billion more dollars and some new federal programs and we will produce the educational utopia in which “all children are above average.” Of course, those reforms only result in increasing the education bureaucracy, reducing parental control, increasing federal expenditures, continuing decline in education and an inevitable round of new “reforms.” gold Flag Burning Amendment 17 July 2001    2001 Ron Paul 53:7 “Our Nation was not founded on devotion to symbolic idols, but on principles, beliefs, and ideals expressed in the Constitution and its Bill of Rights. American veterans who have protected our banner in battle have not done so to protect a ‘golden calf.’ A patriot cannot be created by legislation.” gold Flag Burning Amendment 17 July 2001    2001 Ron Paul 53:19 Too often in this debate, the issue of patriotism is misplaced. This is well addressed by Keith Kruel, an Army veteran and a past national commander of the American Legion. He has said that, “Our nation was not founded on devotion to symbolic idols, but on principles, beliefs and ideals expressed in the constitution and its Bill of Rights. American veterans who have protected our banner in battle have not done so to protect a ‘golden calf.’ . . . A patriot cannot be created by legislation.” gold Flag Burning Amendment 17 July 2001    2001 Ron Paul 53:20 Our nation would be far better served that if instead of loyalty to an object — what Mr. Kruel calls the “golden calf” — we had more Members of Congress who were loyal to the Constitution and principles of liberty. If more people demonstrated a strong conviction to the Tenth Amendment, rather than creating even more federal powers, this issue would be far better handled. gold Tribute To Tom Phillips And William Rusher 19 July 2001    2001 Ron Paul 59:2 Also, at this event, Mr. William Rusher will receive a lifetime achievement award. Mr. Rusher was instrumental in the founding of YAF in 1960 around those set of principles enunciated in the Sharon Statement, a great document explicating the philosophy of freedom. In addition, Mr. Rusher was instrumental in many other important activities such as the Draft Goldwater Committee and the National Review Magazine. gold LEGISLATION WHICH ENHANCES SENIOR CITIZENS’ HEALTH CARE -- HON. RON PAUL Thursday, August 2, 2001    2001 Ron Paul 70:6 * Mr. Speaker, the most important reason to enact this legislation is seniors should not be treated like children and told what health care services they can and cannot have by the federal government. We in Congress have a duty to preserve and protect the Medicare trust fund and keep the promise to America’s seniors and working Americans, whose taxes finance Medicare, that they will have quality health care in their golden years. However, we also have a duty to make sure that seniors can get the health care that suits their needs, instead of being forced into a cookie cutter program designed by Washington-DC-based bureaucrats! Medicare MSAs are a good first step toward allowing seniors the freedom to control their own health care. gold The US Dollar and the World Economy September 6, 2001    2001 Ron Paul 75:1 Congress has a constitutional responsibility to maintain the value of the dollar by making only gold and silver legal tender and not to “emit bills of credit.” gold The US Dollar and the World Economy September 6, 2001    2001 Ron Paul 75:2 This responsibility was performed relatively well in the 19 th Century, despite the abuse the dollar suffered during the Civil War and despite repeated efforts to form a central bank. This policy served to maintain relatively stable prices, and the shortcomings came only when the rules of the gold standard were ignored or abused. gold The US Dollar and the World Economy September 6, 2001    2001 Ron Paul 75:3 In the 20 th Century, however we saw the systematic undermining of sound money, with the establishment of the Federal Reserve System in 1913, and the outright rejection of gold, with the collapse of the Bretton Woods Agreement in 1971. gold 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. gold 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. gold 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. gold The US Dollar and the World Economy September 6, 2001    2001 Ron Paul 75:18 Fiat money has been around for a long time off and on throughout history. But never has the world been so enthralled with the world economy being artificially structured with paper money and with a total rejection of the anchor that gold provided for thousands of years. Let there be no doubt, we live in unprecedented times, and we are just beginning to reap what has been sown the past thirty years. Our government and Federal Reserve officials have grossly underestimated this danger. gold The US Dollar and the World Economy September 6, 2001    2001 Ron Paul 75:19 Current concerns are expressed by worries about meeting the criteria for a government-declared recession and whether a weaker dollar would help. The first is merely academic, because if you are one of the many thousands who have been laid off, you’re already in a recession. The second doesn’t make a lot of sense unless one asks “compared to what?” The dollar has been on a steady course of devaluation for thirty years, against most major currencies and against gold. Its purchasing power in general has been steadily eroded. The fact that the dollar has been strong against third-world currencies and against most major currencies for the past decade doesn’t cancel out the fact that the Federal Reserve has systematically eroded the dollar’s value by steadily expanding the money supply. Recent reports of a weakening dollar on international exchange markets have investment implications but do not reflect a new policy designed to weaken the dollar. This is merely the market adjusting to thirty years of systematic monetary inflation. gold 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. gold The US Dollar and the World Economy September 6, 2001    2001 Ron Paul 75:40 Someday, stable money based on the gold standard must be reconsidered. Stable money is a constitutional responsibility of Congress. The Federal Reserve Board’s goal of stable prices, economic growth and low interest rates, through centralized economic planning by manipulating money and credit, is a concoction of 20 th Century Keynesian economics. These efforts are not authorized by the Constitution, and are economically detrimental. gold The US Dollar and the World Economy September 6, 2001    2001 Ron Paul 75:48 There are no other options if we hope to remain a free and prosperous nation. Economic and monetary meddling undermines the principles of a free society. A free society and sound money maximize production and minimize poverty. The responsibility of Congress is clear: avoid the meddling so engrained in our system and assume the responsibility, all but forgotten, to maintain a free society while making the dollar once again as good as gold. gold H.R. 3054 16 December 2001    2001 Ron Paul 106:1 Mr. PAUL. Mr. Speaker, I rise today in opposition to H.R. 3054. At the same time, I rise in great respect for the courage and compassion shown by those who gave their lives attempting to rescue their fellow citizens in the aftermath of the World Trade Center attacks. I also rise in admiration and gratitude to the passengers of Flight 93 who knowingly sacrificed their lives to prevent another terrorist attack. However, I do not believe that an unconstitutional authorization for Congressional Gold Medals is in the true spirit of these American heros. After all, this legislation purports to honor personal sacrifices and acts of heroism by forcing others to pay for these gold medals. gold H.R. 3054 16 December 2001    2001 Ron Paul 106:2 Mr. Speaker, money appropriated for gold medals, or any other unconstitutional purpose, is, in the words of Davy Crockett, “Not Yours to Give.” It is my pleasure to attach a copy of Davy Crockett’s “Not Yours to Give” speech for the record. I hope my colleagues will carefully consider its’ message before voting to take money from American workers and families to spend on unconstitutional programs and projects. gold H.R. 3054 16 December 2001    2001 Ron Paul 106:3 Instead of abusing the taxing and spending power, I urge my colleagues to undertake to raise the money for these medals among ourselves. I would gladly donate to a Congressional Gold Medal fund whose proceeds would be used to purchase and award gold medals to those selected by Congress for this honor. Congress should also reduce the federal tax burdened on the families of those who lost their lives helping their fellow citizens on September 11. Mr. Speaker, reducing the tax burden on these Americans would be a real sacrifice for many in Washington since any reduction in taxes represents a loss of real and potential power for the federal government. gold H.R. 3054 16 December 2001    2001 Ron Paul 106:4 H.R. 3054 violates fundamental principles of fiscal responsibility by giving the Secretary of the Treasury almost unquestioned authority to determine who can and cannot receive a gold medal. Official estimates are that implementation of this bill will cost approximately 3.9 million dollars, however the terms of the bill suggest that the costs incurred by the United States taxpayer could be much higher. Furthermore, unlike previous legislation authorizing gold medals, H.R. 3054 does not instruct the Secretary of the Treasury to use profits generated by marketing bronze duplicates of the medal to reimburse the taxpayer for the costs of producing the medal. Unfortunately, because this bill was moved to the suspension calender without hearings or a mark-up there was no opportunity for members of the Financial Services Committee such as myself to examine these questions. gold H.R. 3054 16 December 2001    2001 Ron Paul 106:5 Because of my continuing and uncompromising opposition to appropriations not authorized within the enumerated powers of the Constitution, I must remain consistent in my defense of a limited government whose powers are explicitly delimited under the enumerated powers of the Constitution — a Constitution which each Member of Congress swore to uphold. Therefore, Mr. Speaker, I must oppose this legislation and respectfully suggest that perhaps we should begin a debate among us on more appropriate processes by which we spend other people’s money. Honorary medals and commemorative coins, under the current process, come from other people’s money. It is, of course, easier to be generous with other people’s money, but using our own funds to finance these gold medal is true to the sprit of the heros of September 11. gold The Case For Defending America 24 January 2002    2002 Ron Paul 1:22 Give less credit to the Washington politicians who sing the songs of patriotism but used the crisis to pursue their endless personal goal to gain more political power; but the greatest combination should be directed toward the special interests’ lobbyists who finance the politicians in order to secure their power by using patriotism as a cover and a crisis as a golden opportunity. Indeed, those who are using the crisis to promote their own agenda are many. There is no doubt, as many have pointed out, our country changed dramatically with the horror that hit us on 9–11. gold Stimulating The Economy February 7, 2002    2002 Ron Paul 5:20 Instead of moving in that direction of freer markets, the more problems the western countries face, the more government programs are demanded. If one looks at Europe, the United States, or even Japan as their economies weaken, government involvement in the economy increases. But in China and Russia, the horrible conditions that communism causes, ironically, made these two countries move toward freer markets when they encountered serious troubles. Even the central banks of these two countries today are accumulating gold, while western central banks are selling. gold 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. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:1 Mr. Speaker, I rise to introduce the Monetary Freedom and Accountability Act. This simple bill takes a step toward restoring Congress’ constitutional authority over U.S. monetary policy by requiring congressional approval before the President or the Treasury secretary buys or sells gold. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:2 Federal dealings in the gold market have the potential to seriously disrupt the free market by either artificially inflating or deflating the price of gold. Given gold’s importance to America’s (and the world’s) monetary system, any federal interference in the gold market will have ripple effects through the entire economy. For example, if the government were to intervene to artificially lower the price of gold, the result would be to hide the true effects of an inflationary policy until the damage was too severe to remain out of the public eye. gold 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. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:4 While the Treasury denies it is dealing in gold, the Gold Anti-Trust Action Committee (GATA) has uncovered evidence suggesting that the Federal Reserve and the Treasury, operating through the Exchange-Stabilization Fund and in cooperation with major banks and the International Monetary Fund, have been interfering in the gold market with the goal of lowering the price of gold. The purpose of this policy has been to disguise the true effects of the monetary bubble responsible for the artificial prosperity of the 1990s, and to protect the politically-powerful banks that are heavy invested in gold derivatives. GATA believes federal actions to drive down the price of gold help protect the profits of these banks at the expense of investors, consumers, and taxpayers around the world. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:5 GATA has also produced evidence that American officials are involved in gold transactions. Alan Greenspan himself referred to the federal government’s power to manipulate the price of gold at hearings before the House Banking Committee and the Senate Agricultural Committee in July, 1998: “Nor can private counterparts restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise .” [Emphasis added]. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:6 Mr. Speaker, in order to allow my colleagues to learn more about this issue, I am enclosing “All that Glitters is Not Gold” by Kelly Patricia O’Meara, an investigative reporter from Insight magazine. This article explains in detail GATA’s allegations of federal involvement in the gold market. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:7 Mr. Speaker, while I certainly share GATA’s concerns over the effects of federal dealings in the gold market, my bill in no way interferes with the ability of the federal government to buy or sell gold. It simply requires that before the executive branch engages in such transactions, Congress has the chance to review it, debate it, and approve it. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:8 Given the tremendous effects on the American economy from federal dealings in the gold market, it certainly is reasonable that the people’s representatives have a role in approving these transactions, especially since Congress has a neglected but vital constitutional role in overseeing monetary policy. Therefore, I urge all my colleagues to stand up for sound economics, open government, and Congress’ constitutional role in monetary policy by cosponsoring the Monetary Freedom and Accountability Act. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:9 All That Glitters Is Not Gold By Kelly Patricia O’Meara Insight Magazine March 4, 2002, edition Even though Enron employees and the company’s accounting firm, Arthur Andersen, have destroyed mountains of documents, enough information remains in the ruins of the nation’s largest corporate bankruptcy to provide a clear picture of what happened to wreck what once was the seventh-largest U.S. corporation. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:14 In recent years Morgan Chase has invested much of its capital in derivatives, including gold and interest-rate derivatives, about which very little information is provided to shareholders. Among the information that has been made available, however, is that as of June 2000, J.P. Morgan reported nearly $30 billion of gold derivatives and Chase Manhattan Corp., although merged with J.P. Morgan, still reported separately in 2000 that it had $35 billion in gold derivatives. Analysts agree that the derivatives have exploded at this bank and that both positions are enormous relative to the capital of the bank and the size of the gold market. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:15 It gets worse. J.P. Morgan’s total derivatives position reportedly now stands at nearly $29 trillion, or three times the U.S. annual gross domestic product. Wall Street insiders speculate that if the gold market were to rise, Morgan Chase could be in serious financial difficulty because of its “short positions” in gold. In other words, if the price of gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:16 gold were to increase substantially, Morgan Chase and other bullion banks that are highly leveraged in gold would have trouble covering their liabilities. One financial analyst, who asked not to be identified, explained the situation this way: “Gold is borrowed by Morgan Chase from the Bank of England at 1 percent interest and then Morgan Chase sells the gold on the open market, then reinvests the proceeds into interest-bearing vehicles at maybe 6 percent. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:17 At some point, though, Morgan Chase must return the borrowed gold to the Bank of England, and if the price of gold were significantly to increase during any point in this process, it would make it prohibitive and potentially ruinous to repay the gold.” gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:18 Bill Murphy, chairman of the Gold Anti-Trust Action Committee, a nonprofit organization that researches and studies what he calls the “gold cartel” (J.P. Morgan Chase, Deutsche Bank, Citigroup, Goldman Sachs, Bank for International Settlements (BIS), the U.S. Treasury, and the Federal Reserve), and owner of www.LeMetropoleCafe.com, tells Insight that “Morgan Chase and other bullion banks are another Enron waiting to happen.” Murphy says, “Enron occurred because the nature of their business was obscured, there was no oversight and someone was cooking the books. Enron was deceiving everyone about their business operations C and the same thing is happening with the gold and bullion banks.” gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:19 According to Murphy, “The price of gold always has been a barometer used by many to determine the financial health of the United States. A steady gold price usually is associated by the public and economic analysts as an indication or a reflection of the stability of the financial system. Steady gold; steady dollar. Enron structured a financial system that put the company at risk and eventually took it down. The same structure now exists at Morgan Chase with their own interest-rate/gold-derivatives position. There is very little information available about its position in the gold market and, as with the case of Enron, it could easily bring them down.” gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:20 In December 2000, attorney Reginald H. Howe, a private investor and proprietor of the Website www.goldensextant.com, which reports on gold, filed a lawsuit in the U.S. District Court in Boston. Named as defendants were J.P. Morgan & Co., Chase Manhattan Corp., Citigroup Inc., Goldman Sachs Group Inc., Deutsche Bank, Lawrence Summers (former secretary of the Treasury), William McDonough (president of the Federal Reserve Bank of New York), Alan Greenspan (chairman of the Board of Governors of the Federal Reserve System), and the BIS. gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:21 Howe’s claim contends that the price of gold has been manipulated since 1994 “by conspiracy of public officials and major bullion banks, with three objectives: 1) to prevent rising gold prices from sounding a warning on U.S. inflation; 2) to prevent rising gold prices from signaling weakness in the international value of the dollar; and 3) to prevent banks and others who have funded themselves through borrowing gold at low interest rates and are thus short physical gold from suffering huge losses as a consequence of rising gold prices.” gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:22 While all the defendants flatly deny participation in such a scheme, Howe’s case is being heard. Howe tells Insight he has provided the court with very compelling evidence to support his claim, including sworn testimony by Greenspan before the House Banking Committee in July 1998. Greenspan assured the committee, “Nor can private counterparties restrict supply of gold, another commodity whose derivatives are often traded over the counter, where central banks stand ready to lease gold in increasing quantities should the price rise.” Howe and other “gold bugs” cite this as a virtual public announcement “that the price of gold had been and would continue to be controlled if necessary.” gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:23 According to Howe, “There is a great deal of evidence, but this is a very complicated issue. The key, though, is the short position of the banks and their gold derivatives. The central banks have ‘leased’ gold for low returns to the bullion banks for the purpose of keeping the price of gold low. Greenspan’s remarks in 1998 explain how the price of gold has been suppressed at times when it looked like the price of gold was increasing.” gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:24 Furthermore, Howe’s complaint also cites remarks made privately by Edward George, governor of the Bank of England and a director of the BIS, to Nicholas J. Morrell, chief executive of Lonmin Plc: “We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:25 taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control, but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K. [United Kingdom].” gold Introduction of the Monetary Freedom and Accountability Act February 13, 2002    2002 Ron Paul 8:26 Whether the Fed and others in the alleged “gold cartel” have conspired to suppress the price of gold may, in the end, be secondary to the growing need for financial transparency. Wall Street insiders agree that as long as regulators, analysts, accountants, and politicians can be lobbied and “corrupted” to permit special privileges, there will be more Enron-size failures. gold Statement on the Financial Services committee’s “Views and Estimates for Fiscal Year 2003” February 28, 2002    2002 Ron Paul 12:5 Rather than embracing an agenda of expanded statism, I hope my colleagues will work to reduce government interference in the market that only benefits the politically powerful. For example, the committee could take a major step toward ending corporate welfare by holding hearings and a mark-up on my legislation to withdrawal the United States from the Bretton Woods Agreement and end taxpayer support for the International Monetary Fund (IMF). The Financial Services committee can also take a step toward restoring Congress’ constitutional role in monetary policy by acting on my Monetary Freedom and Accountability Act (HR 3732), which requires Congressional approval before the federal government buys or sells gold. gold Statement Opposing Military Conscription March 20, 2002    2002 Ron Paul 20:9 President Reagan and Daniel Webster are not the only prominent Americans to oppose conscription. In fact, throughout American history the draft has been opposed by Americans from across the political spectrum, from Henry David Thoreau to Barry Goldwater to Bill Bradley to Jesse Ventura. Organizations opposed to conscription range from the American Civil Liberties Union to the United Methodist Church General Board of Church and Society, and from the National Taxpayers Union to the Conservative Caucus. Other major figures opposing conscription include current Federal Reserve Chairman Alan Greenspan and Nobel Laureate Milton Friedman. gold Predictions 24 April 2002    2002 Ron Paul 25:15 Federal Reserve policy will continue at an expanding rate, with massive credit expansion, which will make the dollar crisis worse. Gold will be seen as an alternative to paper money as it returns to its historic role as money. gold 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? gold 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. gold Beware Dollar Weakness June 5, 2002    2002 Ron Paul 52:1 Mr. Speaker, I have for several years come to the House floor to express my concern for the value of the dollar. It has been, and is, my concern that we in the Congress have not met our responsibility in this regard. The constitutional mandate for Congress should only permit silver and gold to be used as legal tender and has been ignored for decades and has caused much economic pain for many innocent Americans. Instead of maintaining a sound dollar, Congress has by both default and deliberate action promoted a policy that systematically depreciates the dollar. The financial markets are keenly aware of the minute-by-minute fluctuations of all the fiat currencies and look to these swings in value for an investment advantage. This type of anticipation and speculation does not exist in a sound monetary system. gold 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. gold 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. gold Beware Dollar Weakness June 5, 2002    2002 Ron Paul 52:5 History and economic law are on the side of the gold. Paper money always fails. Unfortunately, though, this occurs only after many innocent people have suffered the consequences of the fraud that paper money represents. Monetary inflation is a hidden tax levied more on the poor and those on fixed incomes than the wealthy, the bankers, or the corporations. gold 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. gold 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. gold Beware Dollar Weakness June 5, 2002    2002 Ron Paul 52:10 Trust in paper is difficult to measure and anticipate, but long-term value in gold is dependable and more reliably assessed. Printing money and creating artificial credit may temporarily lower interest rates, but it also causes the distortions of malinvestment, overcapacity, excessive debt and speculation. These conditions cause instability, and market forces eventually overrule the intentions of the central bankers. That is when the apparent benefits of the easy money disappear, such as we dramatically have seen with the crash of the dot-coms and the Enrons and many other stocks. gold H.R. 4954 27 June 2002    2002 Ron Paul 63:11 Mr. Speaker, seniors should not be treated like children by the federal government and told what health care services they can and cannot have. We in Congress have a duty to preserve and protect the Medicare trust fund. We must keep the promise to American’s seniors and working Americans, whose taxes finance Medicare, that they will have quality health care in their golden years. However, we also have a duty to make sure that seniors can get the health care that suits their needs, instead of being forced into a cookie cutter program designed by Washington, DC — based bureaucrats! Medicare MSAs are a good first step toward allowing seniors the freedom to control their own health care. gold Has Capitalism Failed? July 9, 2002    2002 Ron Paul 66:7 In the 1930s, it was quite popular to condemn the greed of capitalism, the gold standard, lack of regulation, and a lack government insurance on bank deposits for the disaster. Businessmen became the scapegoat. Changes were made as a result, and the welfare/warfare state was institutionalized. Easy credit became the holy grail of monetary policy, especially under Alan Greenspan, "the ultimate Maestro." Today, despite the presumed protection from these government programs built into the system, we find ourselves in a bigger mess than ever before. The bubble is bigger, the boom lasted longer, and the gold price has been deliberately undermined as an economic signal. Monetary inflation continues at a rate never seen before in a frantic effort to prop up stock prices and continue the housing bubble, while avoiding the consequences that inevitably come from easy credit. This is all done because we are unwilling to acknowledge that current policy is only setting the stage for a huge drop in the value of the dollar. Everyone fears it, but no one wants to deal with it. gold Has Capitalism Failed? July 9, 2002    2002 Ron Paul 66:18 If we were to choose freedom and capitalism, we would restore our dollar to a commodity or a gold standard. Federal spending would be reduced, income taxes would be lowered, and no taxes would be levied upon savings, dividends, and capital gains. Regulations would be reduced, special-interest subsidies would be stopped, and no protectionist measures would be permitted. Our foreign policy would change, and we would bring our troops home. gold Hard Questions for Federal Reserve Chairman Greenspan July 17, 2002    2002 Ron Paul 71:4 "Now I would like to bring us back to sound money. And I would like to quote an eminent economist by the name of Alan Greenspan who gives me some credibility on what I am interested in. A time ago you said, “In the absence of the gold standard there is no way to protect savings from the confiscation through inflation. There is no safe store of value without gold. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process that stands as a protector of property rights.’" gold Hard Questions for Federal Reserve Chairman Greenspan July 17, 2002    2002 Ron Paul 71:6 "But gold has always had to be undermined if fiat money is to work and there has to be an illusion of trust for paper to work. And I think this has been happening for thousands of years. At one time the kings clipped coins. Then they debased the metals. Then we learned how to print money. Even as recently as the 1960’s for us to perpetuate a myth about our monetary system, we dumped 2/3 of our gold, or 500 million ounces of gold at $35 per ounce in order to try to convince people to trust the money. And even today, there is a fair amount of trading by central banks, the dumping of hundreds of tonnes of gold, loaning of gold for the sole purpose that this indicator of gold does not discredit the paper money and I think there is a definite concerted effort to do that. gold Hard Questions for Federal Reserve Chairman Greenspan July 17, 2002    2002 Ron Paul 71:7 "My questions are two fold relating to gold. One, I have been trying to desperately to find out the total amount of gold either dumped and sold on to the markets by all the central banks of the world or loaned by the central banks of the world. And this is in hundreds and hundreds of tons. But those figures are not available to me. Maybe you can help me find this. I think it would be important to know since all central banks still deal with and hold gold whether they are dumping, or loaning or buying for that matter. gold Hard Questions for Federal Reserve Chairman Greenspan July 17, 2002    2002 Ron Paul 71:8 "But along this line, I have a bill that would say that our government, our Treasury could not deal in gold and could not be involved in the gold market unless the Congress knows about it. Now that to me seems like such a reasonable approach and reasonable request. But they say they don’t use it (gold) so we don’t need the bill. But if they are not trading in gold, what would be the harm in the Congress knowing about handling and dealing about this asset, gold?" gold Hard Questions for Federal Reserve Chairman Greenspan July 17, 2002    2002 Ron Paul 71:9 Chairman Greenspan: "Well first of all, neither we nor the Treasury trade gold. And my impression is that were we to do so, we would announce it. It is certain the case that others do. There are data published monthly or quarterly which shows the reported gold holdings of central banks throughout the world, so you do know who holds what. The actual trading data, ah, I don’t think is available though the London gold exchange does show what its volume numbers are. And periodically, individual central banks do indicate when they are planning to sell gold. But they all report what they own. So it may well be the case that you can’t find specific transactions. I think what you can find is the net result of those transactions and they are published. But so far as the United States is concerned, we don’t do it." gold Department of Homeland Security 26 July 2002    2002 Ron Paul 80:2 Mr. Speaker, as many commentators have pointed out, the creation of this new department represents the largest reorganization of federal agencies since the creation of the Department of Defense in 1947. Unfortunately, the process by which we are creating this new department bears little resemblance to the process by which the Defense Department was created. Congress began hearings on the proposed department of defense in 1945 — two years before President Truman signed legislation creating the new Department into law! Despite the lengthy deliberative process through which Congress created the new department, turf battles and logistical problems continued to bedeviled the military establishment, requiring several corrective pieces of legislation. In fact, Mr. Speaker, the Goldwater-Nicholas Department of Defense Reorganization Act of 1986 (PL 99–433) was passed to deal with problems stemming from the 1947 law! The experience with the Department of Defense certainly suggests the importance of a more deliberative process in the creation of this new agency. gold The Price Of War 5 September 2002    2002 Ron Paul 83:17 Historically, the driving force behind world domination is usually an effort to control wealth. The Europeans were searching for gold when they came to the Americas. Now it is our turn to seek control over the black gold which drives much of what we do today in foreign affairs. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:1 Mr. PAUL. Mr. Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. I also ask unanimous consent to insert the attached article by Lew Rockwell, president of the Ludwig Von Mises Institute, which explains the benefits of abolishing the Fed and restoring the gold standard, into the RECORD. gold 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. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:9 WHY GOLD? (By Llewellyn H. Rockwell, Jr.) As with all matters of investment, everything is clear in hindsight. Had you bought gold mutual funds earlier this year, they might have appreciated more than 100 percent. Gold has risen $60 since March 2001 to the latest spot price of $326. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:11 These are all conditions that make gold particularly attractive. gold 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. gold 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. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:14 The supply of money is not limited by the amount of gold. Gold is just another good for which the dollar can be exchanged, and in that sense is legally no different from a gallon of milk, a tank of gas, or an hour of babysitting services. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:15 Why, then, do people turn to gold in times like these? What is gold used for? Yes, there are industrial uses and there are consumer uses in jewelry and the like. But recessions and inflations don’t cause people to want to wear more jewelry or stock up on industrial metal. The investor demand ultimately reflects consumer demand for gold. But that still leaves us with the question of why the consumer demand exists in the first place. Why gold and not sugar or wheat or something else? gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:16 There is no getting away from it: investor markets have memories of the days when gold was money. In fact, in the whole history of civilization, gold has served as the basic money of all people wherever it’s been available. Other precious metals have been valued and coined, but gold always emerged on top in the great competition for what constitutes the most valuable commodity of all. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:17 There is nothing intrinsic about gold that makes it money. It has certain properties that lend itself to monetary use, like portability, divisibility, scarcity, durability, and uniformity. But these are just descriptors of certain qualities of the metal, not explanations as to why it became money. Gold became money for only one reason: because that’s what the markets chose. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:18 Why isn’t gold money now? Because governments destroyed the gold standard. Why? Because they regarded it as too inflexible. To be sure, monetary inflexibility is the friend of free markets. Without the ability to create money out of nothing, governments tend to run tight financial ships. Banks are more careful about the lending when they can’t rely on a lender of last resort with access to a money-creation machine like the Fed. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:19 A fixed money stock means that overall prices are generally more stable. The problems of inflation and business cycles disappear entirely. Under the gold standard, in fact, increased market productivity causes prices to generally decline over time as the purchasing power of money increases. In 1967, Alan Greenspan once wrote an article called Gold and Economic Freedom. He wrote that: gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:20 “An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other. . . . This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.” gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:21 He was right. Gold and freedom go together. Gold money is both the result of freedom and its leading protector. When money is as good as gold, the government cannot manipulate the supply for its own purposes. Just as the rule of law puts limits on the despotic use of police power, a gold standard puts extreme limits on the government’s ability to spend, borrow, and otherwise create crazy unworkable programs. It is forced to raise its revenue through taxation, not inflation, and generally keep its house in order. gold 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. gold 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. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:26 How much easier matters were when we didn’t have to rely on the wisdom of exalted monetary central planners like Greenspan. Under the gold standard, the supply of money regulated itself. The government kept within limits. Banks were more cautious. Savings were high because credit was tight and saving was rewarded. This approach to economics is the foundation of a sustainable prosperity. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:27 We don’t have that system now for the country or the world, but individuals are showing their preferences once again. By driving up the price of gold, prompting gold producers to become profitable again, the people are expressing their lack of confidence in their leaders. They have decided to protect themselves and not trust the state. That is the hidden message behind the new luster of gold. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:28 Is a gold standard feasible again? Of course. The dollar could be redefined in terms of gold. Interest rates would reflect the real supply and demand for credit. We could shut down the Fed and we would never need to worry again what the chairman of the Fed wanted. There was a time when Greenspan was nostalgic for such a system. Investors of the world have come to embrace this view even as Greenspan has completely abandoned it. gold Abolishing The Federal Reserve 10 September 2002    2002 Ron Paul 86:29 What keeps the gold standard from becoming a reality again is the love of big government and war. If we ever fall in love with freedom again, the gold standard will once more become a hot issue in public debate. gold Statement on Medical Malpractice Legislation September 26, 2002    2002 Ron Paul 90:6 I am also disturbed by the language that limits liability for those harmed by FDA-approved products. This language, in effect, establishes FDA approval as the gold standard for measuring the safety and soundness of medical devices. However, if FDA approval guaranteed safety, then the FDA would not regularly issue recalls of approved products later found to endanger human health and/or safety. gold Oppose The New Homeland Security Bureaucracy! November 13, 2002    2002 Ron Paul 101:2 The last time Congress attempted a similarly ambitious reorganization of the government was with the creation of the Department of Defense in 1947. However, the process by which we are creating this new department bears little resemblance to the process by which the Defense Department was created. Congress began hearings on the proposed Department of Defense in 1945 – two years before President Truman signed legislation creating the new Department into law! Despite the lengthy deliberative process through which Congress created that new department, turf battles and logistical problems continued to bedevil the military establishment, requiring several corrective pieces of legislation. In fact, Mr. Speaker, the Goldwater-Nicholas Department of Defense Reorganization Act of 1986 was passed to deal with problems steaming from the 1947 law! The experience with the Department of Defense certainly suggests the importance of a more deliberative process in the creation of this new agency. gold 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. gold Expand Medicare MSA Program 5 February 2003    2003 Ron Paul 12:5 Mr. Speaker, the most important reason to enact this legislation is seniors should not be treated like children and told what health care services they can and cannot have by the federal government. We in Congress have a duty to preserve and protect the Medicare trust fund and keep the promise to America’s seniors and working Americans, whose taxes finance Medicare, that they will have quality health care in their golden years. gold Support Medical Savings Accounts for Medicare February 13, 2003    2003 Ron Paul 21:6 Mr. Speaker, the most important reason to enact this legislation is seniors should not be treated like children and told what health care services they can and cannot have by the federal government. We in Congress have a duty to preserve and protect the Medicare trust fund and keep the promise to America’s seniors and working Americans, whose taxes finance Medicare, that they will have quality health care in their golden years. gold The Financial Services Committee’s Terrible Blueprint for 2004 February 28, 2003    2003 Ron Paul 27:6 Rather than embracing an agenda of expanded statism, I hope my colleagues will work to reduce government interference in the market that only benefits the politically powerful. For example, the committee could take a major step toward ending corporate welfare by holding hearings and a mark-up on my legislation to withdraw the United States from the Bretton Woods Agreement and end taxpayer support for the International Monetary Fund (IMF). The Financial Services Committee can also take a step toward restoring Congress’ constitutional role in monetary policy by passing legislation requiring congressional approval before the federal government buys or sells gold. gold Freedom from Unnecessary Litigation Act (H.R. 1249) 13 March 2003    2003 Ron Paul 34:5 I am also disturbed by the language that limits liability for those harmed by FDA-approved products. This language, in effect, establishes FDA approval as the gold standard for measuring the safety and soundness of medical devices. However, if FDA approval guaranteed safety, then the FDA would not regularly issue recalls of approved products later found to endanger human health and/or safety. gold The Flag Burning Amendment June 3, 2003    2003 Ron Paul 57:26 “Our Nation was not founded on devotion to symbolic idols, but on principles, beliefs and ideals expressed in the Constitution and its Bill of Rights. American veterans who have protected our banner in battle have not done so to protect a golden calf. Instead, they carried the banner forward with reverence for what it represents, our beliefs and freedom for all. Therein lies the beauty of our flag. A patriot cannot be created by legislation.” gold Does Tony Blair Deserve a Congressional Medal? June 25, 2003    2003 Ron Paul 68:1 Mr. Speaker, I rise in strong opposition to this legislation for a number of reasons. First, forcing the American people to pay tens of thousands of dollars to give a gold medal to a foreign leader is immoral and unconstitutional. I will continue in my uncompromising opposition to appropriations not authorized within the enumerated powers of the Constitution- a Constitution that each member of Congress swore to uphold. gold Does Tony Blair Deserve a Congressional Medal? June 25, 2003    2003 Ron Paul 68:2 Second, though these gold medals are an unconstitutional appropriation of American tax dollars, at least in the past we have awarded them to great humanitarians and leaders like Mother Theresa, President Reagan, Pope John Paul II, and others. These medals generally have been proposed to recognize a life of service and leadership, and not for political reasons - as evidenced by the overwhelming bi-partisan support for awarding President Reagan, a Republican, a gold medal. These awards normally go to deserving individuals, which is why I have many times offered to contribute $100 of my own money, to be matched by other members, to finance these medals. gold Medicare Funds For Prescription Drugs 26 June 2003    2003 Ron Paul 71:18 Mr. Speaker, seniors should not be treated like children by the federal government and told what health care services they can and cannot have. We in Congress have a duty to preserve and protect the Medicare trust fund. We must keep the promise to America’s seniors and working Americans, whose taxes finance Medicare, that they will have quality health care in their golden years. However, we also have a duty to make sure that seniors can get the health care that suits their needs, instead of being forced into a cookie cutter program designed by Washington, DC-based bureaucrats! Medicare MSAs are a good first step toward allowing seniors the freedom to control their own health care. gold Neo – CONNED ! July 10, 2003    2003 Ron Paul 73:83 The supply-siders’ policy of low-marginal tax rates has been incorporated into neoconism, as well as their support for easy money and generous monetary inflation. Neoconservatives are disinterested in the gold standard and even ignore the supply-siders’ argument for a phony gold standard. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:1 Mr. PAUL. Mr. Speaker, I rise to introduce the Monetary Freedom and Accountability Act. This simple bill takes a step toward restoring Congress’ constitutional authority over U.S. monetary policy by requiring congressional approval before the President or the Treasury secretary buys or sells gold. I also ask for unanimous consent to insert into the RECORD articles by Kelly Patricia O Meara of Insight magazine detailing the evidence supporting allegations that the United States Government has manipulated the price of gold over the past decade and the harm such manipulation caused American investors, taxpayers, consumers, and workers. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:2 Federal dealings in the gold market have the potential to seriously disrupt the free market by either artificially inflating or deflating the price of gold. Given gold’s importance to America’s (and the world’s) monetary system, any federal interference in the gold market will have ripple effects through the entire economy. For example, if the government were to intervene to artificially lower the price of gold, the result would be to hide the true effects of an inflationary policy until the damage was too severe to remain out of the public eye. gold 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. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:4 While the Treasury denies it is dealing in gold, the Gold Anti-Trust Action Committee (GATA) has uncovered evidence suggesting that the Federal Reserve and the Treasury, as detailed in the attached article. GATA alleges that the Treasury, operating through the Exchange- Stabilization Fund and in cooperation with major banks and the International Monetary Fund, has been interfering in the gold market with the goal of lowering the price of gold. The purpose of this policy has been to disguise the true effects of the monetary bubble responsible for the artificial prosperity of the 1990s, and to protect the politically-powerful banks that are heavy invested in gold derivatives. GATA believes federal actions to drive down the price of gold help protect the profits of these banks at the expense of investors, consumers, and taxpayers around the world. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:5 GATA has also produced evidence that American officials are involved in gold transactions. Alan Greenspan himself referred to the federal government’s power to manipulate the price of gold at hearings before the House Banking Committee and the Senate Agricultural Committee in July, 1998: “Nor can private counterparts restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.”. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:6 Mr. Speaker, while I certainly share GATA’s concerns over the effects of federal dealings in the gold market, my bill in no way interferes with the ability of the federal government to buy or sell gold. It simply requires that before the executive branch engages in such transactions, Congress has the chance to review it, debate it, and approve it. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:7 Given the tremendous effects on the American economy from federal dealings in the gold market, it certainly is reasonable that the people’s representatives have a role in approving these transactions, especially since Congress has a neglected but vital constitutional role V in overseeing monetary policy. Therefore, I urge all my colleagues to stand up for sound economics, open government, and Congress’ constitutional role in monetary policy by cosponsoring the Monetary Freedom and Accountability Act. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:8 [From Insight Magazine, July 8, 2003] PANIC IS NEAR IF “THE GOLD IS GONE” (By Kelly Patricia O Meara) Gold. It’s been called a barbarous relic, and those who focus on its historic role as a standard of value frequently are labeled “lunatic fringe.” Given the recent highs in the gold market, it looks like the crazies have been having a hell of a year. With the stock market taking its third yearly loss, gold returned nearly 30 percent to investors, moving from $255 an ounce to six-year highs of $380. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:9 Just about every analyst and “expert” on Wall Street willing to mention any of this has been quick to explain that the increase in the price of gold is due to impending war with Iraq. But hard-money analysts are arguing that should the United States go to war it will be of very little consequence to the price of gold — a momentary blip — because gold is a commodity and its price a matter of supply and demand. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:10 The “lunatic fringe” long has argued that the price of gold was being manipulated by a “gold cartel” involving J.P. Morgan Chase, Citigroup, Deutsche Bank, Goldman Sachs, the Bank for International Settlements (BIS), the U.S. Treasury and the Federal Reserve, but that the manipulation had been sufficiently exposed to require that it be abandoned, producing the steady upward increase in the price of the shiny, yellow metal. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:11 In fact the “gold bugs,” as they’re known, are so sure of their research that not only do they believe the price of gold will continue to climb, but many are expecting to see prices of $800 to $1,000 an ounce. Until recently, most in the gold and financial worlds scoffed at such a prediction, but last month the Bank of Portugal made an announcement that shocked those who credit official gold-reserve data and added fuel to the contention of the gold bugs that the “gold-cartel” manipulation is in meltdown. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:12 What the Bank of Portugal revealed in its 2001 annual report is that 433 tonnes [metric tons] of gold — some 70 percent of its gold reserve — either have been lent or swapped into the market. According to Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA), a nonprofit organization that researches and studies the gold market and reports its findings at www.LeMetropoleCafe.com: “This gold is gone — and it lends support to our years of research that the central banks do not have the 32,000 tonnes of gold in reserve that they claim. The big question is: How many other central banks are in the same predicament as the Portuguese?” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:13 Murphy explains: “The essence of the rigging of the gold market is that the bullion banks borrowed central-bank gold from various vaults and flooded the market with supply, keeping the price down. The GATA camp has uncovered information that shows that around 15,000 to 16,000 tonnes of gold have left the central banks, leaving the centralbank reserves with about half of what is officially reported.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:14 This is why those who follow such arcana are predicting an explosion in the price of gold. According to Murphy, “The gold establishment says that the gold loans from the central banks are only 4,600 to 5,000 tonnes,” but his information is that these loans are more than three times that number, which means “they’re running out of physical gold to continue the scheme.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:15 According to Murphy, “The cartel has been able to get away with lying about the amount of gold in reserve because the International Monetary Fund [IMF] is the Arthur Andersen of the gold world.” He has provided to Insight documents from central banks confirming that the IMF instructed them to count both lent and swapped gold as a reserve. “In other words, the IMF told the central banks to deceive the investment and gold world[s]. Once this gold is lent [or] swapped, it’s gone until such time as it can be repurchased. And with the skyrocketing price of gold we’re now seeing, it would be incredibly expensive, let alone nearly physically impossible, to get it back.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:16 What is important to understand, says Murphy, “is that there is a mine and scrap supply deficit of 1,500 tonnes, which is an enormous deficit when yearly mine supply is only 2,500 tonnes and going down. On top of that, there are these under-reported gold loans and other derivatives that are on the short side. There is no way to pay this gold back to the central banks without the price of gold going up hundreds of dollars per ounce. So the peasants and women of the world will have to sell their jewelry at say $800 an ounce to bail out these short positions or someone is going to have to tell the world that they don’t have the gold that they have reported,” shaking the world’s financial system to its core. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:17 The gold bugs appear to be basing their identification of a world gold shortage on industry data, much of which has been summarized in two papers prepared by four different gold analysts at different times using separate methods. The first paper was written by governmental investment adviser Frank Veneroso and his associate, mining analyst Declan Costelloe. Titled Gold Derivatives, Gold Lending: Official Management of the Gold Price and the Current State of the Gold Market, it was presented at the 2002 International Gold Symposium in Lima, Peru, and estimates the gold deficit of the central banks at between 10,000 and 15,000 tonnes. The second paper, Gold Derivatives: Moving Towards Checkmate, by Mike Bolser, a retired businessman, and Reginald H. Howe, a private investor and proprietor of the Website www.goldensextant.com, estimates the alleged shortage of central-bank gold at between 15,000 and 16,000 tonnes — nearly a decade’s worth of mine production. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:18 George Milling-Stanley, manager of goldmarket analysis for the World Gold Council (WGC), a private organization made up of leading gold-mining companies that promotes the acquisition and retention of gold, is aware of these papers and shortage numbers but tells Insight that “there are no official [gold-reserve] reports.” That is, “The central banks are under no obligation to report what they lend into the market, what they place on deposit and what they do with their swaps, so there’s a conventional-wisdom view, and a couple of different bodies have done some fairly serious research in[to] this and have come up with a figure [of] around 4,500 to 5,000 tonnes.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:19 Stanley’s estimate is based on data provided by so-called “serious” researchers, including Londonbased Gold Fields Mineral Services (GFMS), one of the world’s foremost precious-metals consultants, and a report titled Gold Derivatives: The Market View, commissioned by the WGC to London-based Virtual Metals Consultancy. While these two groups appear to be the research choice of the official gold world, there are in fact no “official” figures, and both studies, like the Veneroso/Costelloe and Bolser/Howe reports, are based on interviews, data analysis and other research generally available to the industry. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:20 Those who believe the central banks to have misrepresented their actual gold holdings place much of the blame for the lack of transparency on the shoulders of the IMF, which presents itself as being responsible for ensuring the stability of the international financial system. Although the IMF would not respond to questions about its gold-loan/ swap requirements, what information has been made public appears to support GATA’s understanding of how central-bank reserves are reported. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:21 For example, in October 2001 the IMF responded to questions posed by GATA by saying it is not correct that the IMF insists members record swapped gold as an asset when a legal change in ownership has occurred. According to this response, “The IMF in fact recommends that swapped gold be excluded from reserve assets.” Nonetheless, says GATA, there is abundant evidence that this is not the case, citing as an example the Central Bank of the Philippines (BSP). gold 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.” gold 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. gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:24 Although the WGC’s Stanley stands by the data provided by the industry’s “serious” researchers, he insists he cannot say for certain that the numbers are accurate. “There is no requirement on any country to tell the IMF how much gold it owns,” says Stanley. “The requirement is to tell the IMF how much gold it has decided to place in its official reserves. Nobody knows whether that is the total of what they own or not. Obviously they can’t report more than what they own, but they can certainly report less if they chose to. That gold may have been lent out, but is nevertheless still owed to them. It’s a bit like any company reporting a cash position. It will report cash on hand and cash due — money owed by other people. I’m not saying this is ideal, but this is how it works.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:25 John Embry, the manager of last year’s best-performing North American gold fund and manager of the Royal Precious Metals Fund for the Royal Bank of Canada, says he is putting his and his clients’ money on the “lunatic fringe” in this dispute: “I’ve examined all the evidence gathered by GATA and everyone else, and I think these guys are anything but lunatics. They’ve done their homework and have unearthed a lot of interesting stuff. The problem, though, is that the market is sufficiently opaque that there is really no way to know who is right and who is wrong.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:26 “The fact is,” continues Embry, “a lot of this stuff is based on estimations. I do however believe that, based on the evidence dug up by Veneroso and Howe, they are presenting equally if not more credible numbers than the other side. I find the campaign to undermine their credence simply bizarre. I think these guys [GATA] are right and that the number put out by Gold Fields Mineral Services as the amount of gold loaned out by the central banks is definitely wrong. Now, whether it’s as much as 15,000 is up for interpretation. The recent release by the Bank of Portugal is important. When a central bank has 70 percent of its gold loaned or swapped, I don’t think it is operating independently, and I suspect there are an awful lot of them that have loaned out much more than has been reported.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:27 Embry says, “I’ve made a fortune for my clients investing in gold and gold stocks because I have operated on the premise that the Veneroso/Howe reports are right — that gold was significantly undervalued in the daily quote and that it was going a lot higher. The circumstantial evidence, and I bet my clients’ money on it, was very much in favor of the guys who said a great deal more central-bank gold had entered the market and driven the price down far too low. GATA has had this story from day one. I think that they’re right and that officialdom doesn’t want this exposed. GATA is willing to have a public debate but the gold world won’t debate. I think there is a tacit admission of anyone who has an IQ above that of a grapefruit that Veneroso and Howe have a pretty good point. I’m an analyst who has looked at both sides of the issue and I bet my money on GATA. So far they’ve been right.” gold The Monetary Freedom And Accountability Act 17 July 2003    2003 Ron Paul 79:28 Whether the gold bugs are right about the reasons for the meteoric rise in the price of gold is uncertain, but, according to GATA’s Murphy: “It’s all the more reason to have the central banks come clean about the actual amount of gold that physically exists in their reserves. Either way, the price of gold will continue to rise because, as we already know and others are discovering, the gold is gone.” gold Bring Back Honest Money 17 July 2003    2003 Ron Paul 82:2 Absent legal tender laws, individuals acting through the markets, rather than government dictates, determine what is to be used as money. Historically, the free-market choice for money has been some combination of gold and silver, whenever they were available. As Dr. Edwin Vieira, the nation’s top expert on constitutional money, states: “A free market functions most efficiently and most fairly when the market determines the quality and the quantity of money that’s being used.” gold Bring Back Honest Money 17 July 2003    2003 Ron Paul 82:8 The drafters of the Constitution were well aware of how a government armed with legal tender powers could ravage the people’s liberty and prosperity. That is why the Constitution does not grant legal tender power to the federal government, and the states are empowered to make legal tender only out of gold and silver (see Article 1, Section 10). Instead, Congress was given the power to regulate money against a standard, i.e., the dollar. When Alexander Hamilton wrote the Coinage Act of 1792, he simply made into law the market-definition of a dollar as equaling the silver content of the Spanish milled dollar (371.25 grains of silver), which is the dollar referred to in the Constitution. This historical definition of the dollar has never been changed, and cannot be changed any more than the term “inch,” as a measure of length, can be changed. It is a gross misrepresentation to equate our irredeemable paper-ticket or electronic money to “dollars.” gold 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. gold 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. gold Abolishing The Federal Reserve 17 July 2003    2003 Ron Paul 83:24 After 90 years of manipulating interest rates, it is time to abolish the FED and return the country to the only sound monetary system that is consistent with liberty and prosperity — the gold standard. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:2 Alan Greenspan, years before he became Federal Reserve Board Chairman in charge of flagrantly debasing the U.S. dollar, wrote about this connection between sound money, prosperity, and freedom. In his article “Gold and Economic Freedom” ( The Objectivist, July 1966), Greenspan starts by saying: “An almost hysterical antagonism toward the gold standard is an issue that unites statists of all persuasions. They seem to sense…that gold and economic freedom are inseparable.” Further he states that: “Under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth.” Astoundingly, Mr. Greenspan’s analysis of the 1929 market crash, and how the Fed precipitated the crisis, directly parallels current conditions we are experiencing under his management of the Fed. Greenspan explains: “The excess credit which the Fed pumped into the economy spilled over into the stock market- triggering a fantastic speculative boom.” And, “…By 1929 the speculative imbalances had become overwhelming and unmanageable by the Fed.” Greenspan concluded his article by stating: “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.” He explains that the “shabby secret” of the proponents of big government and paper money is that deficit spending is simply nothing more than a “scheme for the hidden confiscation of wealth.” Yet here we are today with a purely fiat monetary system, managed almost exclusively by Alan Greenspan, who once so correctly denounced the Fed’s role in the Depression while recognizing the need for sound money. gold 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. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:5 But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be made more available to everyone. Those who believe in fiat money often believe wealth can be increased without a commensurate amount of hard work and innovation. They also come to believe that savings and market control of interest rates are not only unnecessary, but actually hinder a productive growing economy. Concern for liberty is replaced by the illusion that material benefits can be more easily obtained with fiat money than through hard work and ingenuity. The perceived benefits soon become of greater concern for society than the preservation of liberty. This does not mean proponents of fiat money embark on a crusade to promote tyranny, though that is what it leads to, but rather they hope they have found the philosopher’s stone and a modern alternative to the challenge of turning lead into gold. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:6 Our Founders thoroughly understood this issue, and warned us against the temptation to seek wealth and fortune without the work and savings that real prosperity requires. James Madison warned of “The pestilent effects of paper money,” as the Founders had vivid memories of the destructiveness of the Continental dollar. George Mason of Virginia said that he had a “Mortal hatred to paper money.” Constitutional Convention delegate Oliver Ellsworth from Connecticut thought the convention “A favorable moment to shut and bar the door against paper money.” This view of the evils of paper money was shared by almost all the delegates to the convention, and was the reason the Constitution limited congressional authority to deal with the issue and mandated that only gold and silver could be legal tender. Paper money was prohibited and no central bank was authorized. Over and above the economic reasons for honest money, however, Madison argued the moral case for such. Paper money, he explained, destroyed “The necessary confidence between man and man, on necessary confidence in public councils, on the industry and morals of people and on the character of republican government.” gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:21 In the past, money and gold have been dominant issues in several major political campaigns. We find that when the people have had a voice in the matter, they inevitably chose gold over paper. To the common man, it just makes sense. As a matter of fact, a large number of Americans, perhaps a majority, still believe our dollar is backed by huge hoards of gold in Fort Knox. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:22 The monetary issue, along with the desire to have free trade among the states, prompted those at the Constitutional Convention to seek solutions to problems that plagued the post-revolutionary war economy. This post-war recession was greatly aggravated by the collapse of the unsound fiat Continental dollar. The people, through their representatives, spoke loudly and clearly for gold and silver over paper. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:23 Andrew Jackson, a strong proponent of gold and opponent of central banking (the Second Bank of the United States,) was a hero to the working class and was twice elected president. This issue was fully debated in his presidential campaigns. The people voted for gold over paper. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:24 In the 1870s, the people once again spoke out clearly against the greenback inflation of Lincoln. Notoriously, governments go to paper money while rejecting gold to promote unpopular and unaffordable wars. The return to gold in 1879 went smoothly and was welcomed by the people, putting behind them the disastrous Civil War inflationary period. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:25 Grover Cleveland, elected twice to the presidency, was also a strong advocate of the gold standard. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:26 Again, in the presidential race of 1896, William McKinley argued the case for gold. In spite of the great orations by William Jennings Bryant, who supported monetary inflation and made a mocking “Cross of Gold” speech, the people rallied behind McKinley’s bland but correct arguments for sound money. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:27 The 20 th Century was much less sympathetic to gold. Since 1913 central banking has been accepted in the United States without much debate, despite the many economic and political horrors caused or worsened by the Federal Reserve since its establishment. The ups and downs of the economy have all come as a consequence of Fed policies, from the Great Depression to the horrendous stagflation of the ‘70s, as well as the current ongoing economic crisis. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:48 Today’s economic conditions reflect a fiat monetary system held together by many tricks and luck over the past 30 years. The world has been awash in paper money since removal of the last vestige of the gold standard by Richard Nixon when he buried the Bretton Woods agreement- the gold exchange standard- on August 15, 1971. Since then we’ve been on a worldwide paper dollar standard. Quite possibly we are seeing the beginning of the end of that system. If so, tough times are ahead for the United States and the world economy. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:51 Following the breakdown of the Bretton Woods agreement, the world essentially accepted the dollar as a replacement for gold, to be held in reserve upon which even more monetary expansion could occur. It was a great arrangement that up until now seemed to make everyone happy. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:58 The long-term philosophic problem with this is that the central bank and the fiat monetary system are not blamed; instead free market capitalism is. This is what happened in the 1930s. The Keynesians, who grew to dominate economic thinking at the time, erroneously blamed the gold standard, balanced budgets, and capitalism instead of tax increases, tariffs, and Fed policy. This country cannot afford another attack on economic liberty similar to what followed the 1929 crash that ushered in the economic interventionism and inflationism which we have been saddled with ever since. These policies have brought us to the brink of another colossal economic downturn and we need to be prepared. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:59 Big business and banking deserve our harsh criticism, but not because they are big or because they make a lot of money. Our criticism should come because of the special benefits they receive from a monetary system designed to assist the business class at the expense of the working class. Labor leader Samuel Gompers understood this and feared paper money and a central bank while arguing the case for gold. Since the monetary system is used to finance deficits that come from war expenditures, the military industrial complex is a strong supporter of the current monetary system. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:64 The world central bankers are concerned with the lack of response to low interest rates and they have joined in a concerted effort to rescue the world economy through a policy of protecting the dollar’s role in the world economy, denying that inflation exists, and justifying unlimited expansion of the dollar money supply. To maintain confidence in the dollar, gold prices must be held in check. In the 1960s our government didn’t want a vote of no confidence in the dollar, and for a couple of decades, the price of gold was artificially held at $35 per ounce. That, of course, did not last. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:65 In recent years, there has been a coordinated effort by the world central bankers to keep the gold price in check by dumping part of their large horde of gold into the market. This has worked to a degree, but just as it could not be sustained in the 1960s, until Nixon declared the Bretton Woods agreement dead in 1971, this effort will fail as well. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:66 The market price of gold is important because it reflects the ultimate confidence in the dollar. An artificially low price for gold contributes to false confidence and when this is lost, more chaos ensues as the market adjusts for the delay. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:67 Monetary policy today is designed to demonetize gold and guarantee for the first time that paper can serve as an adequate substitute in the hands of wise central bankers. Trust, then, has to be transferred from gold to the politicians and bureaucrats who are in charge of our monetary system. This fails to recognize the obvious reason that market participants throughout history have always preferred to deal with real assets, real money, rather than government paper. This contest between paper and honest money is of much greater significance than many realize. We should know the outcome of this struggle within the next decade. gold 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. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:76 Already, we took a big step in this direction. Gold was illegal to own between 1933 and 1976. Today millions of Americans do own some gold. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:77 Gold contracts are legal, but a settlement of any dispute is always in Federal Reserve notes. This makes gold contracts of limited value. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:78 For gold to be an alternative to Federal Reserve notes, taxes on any transactions in gold must be removed, both sales and capital gains. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:79 Holding gold should be permitted in any pension fund, just as dollars are permitted in a checking account of these funds. gold Paper Money and Tyranny September 5, 2003    2003 Ron Paul 93:83 It’s no coincidence that during the period following the establishment of the Federal Reserve and the elimination of the gold standard, a huge growth in the size of the federal government and its debt occurred. Believers in big government, whether on the left or right, vociferously reject the constraints on government growth that gold demands. Liberty is virtually impossible to protect when the people allow their government to print money at will. Inevitably, the left will demand more economic interventionism, the right more militarism and empire building. Both sides, either inadvertently or deliberately, will foster corporatism. Those whose greatest interest is in liberty and self-reliance are lost in the shuffle. Though left and right have different goals and serve different special-interest groups, they are only too willing to compromise and support each other’s programs. gold Thrift Savings Improvement Act 16 September 2003    2003 Ron Paul 99:4 In contrast, increases in gold spot prices more than offset the losses experienced by even the worst performing stock-indexed fund in the Thrift Savings Plan in 2002, with the price of gold increasing by nearly 25 percent in the year and by more than nine percent in December! gold 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. gold Mourning The Death Of Ronald Reagan 9 June 2004    2004 Ron Paul 38:3 Ronald Reagan was one of the most eloquent exponents of the freedom philosophy in modern American politics. One of his greatest achievements is the millions of Americans he helped convert to the freedom philosophy and the many he inspired to become active in the freedom movement. One of the best examples of President Reagan’s rhetorical powers is his first major national political address, “A Time for Choosing.” Delivered in 1964 in support of the presidential campaign of Barry Goldwater, this speech launched Ronald Reagan’s career as both a politician and a leader of the conservative movement. The following excerpt from that speech illustrates the power of Ronald Reagan’s words and message. Unfortunately, these words are as relevant to our current situation as they were when he delivered them in 1964: gold Raising the Debt Limit: A Disgrace November 18, 2004    2004 Ron Paul 79:7 Increasing the national debt sends a signal to investors that the government is not serious about reining in spending. This increases the risks that investors will be reluctant to buy government debt instruments. The effects on the American economy could be devastating. The only reason why we have been able to endure such large deficits without skyrocketing interest rates is the willingness of foreign nations to buy the federal government’s debt instruments. However, the recent fall in the value of the dollar and rise in the price of gold indicate that investors may be unwilling to continue to prop up our debt-ridden economy. Furthermore, increasing the national debt will provide more incentive for foreign investors to stop buying federal debt instruments at the current interest rates. Mr. Speaker, what will happen to our already fragile economy if the Federal Reserve must raise interest rates to levels unseen since the seventies to persuade foreigners to buy government debt instruments? gold Where To From Here? November 20, 2004    2004 Ron Paul 81:17 More important was the reaction of the international exchange markets immediately following the election. The dollar took a dive and gold rose. This indicated that holders of the trillions of dollars slushing around the world interpreted the results to mean that even with conservatives in charge, unbridled spending will not decrease and will actually grow. They also expect the current account deficit and our national debt to increase. This means the economic consequence of continuing our risky fiscal and monetary policy is something Congress should be a lot more concerned about. gold Where To From Here? November 20, 2004    2004 Ron Paul 81:18 One Merrill Lynch money manager responded to the election by saying, “Bush getting reelected means a bigger deficit, a weaker dollar, and higher gold prices.” Another broker added, “Four more years of Bush is a gift to the gold markets — more war, more deficits, more division.” gold 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. gold 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. gold 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. gold 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. gold Statement on the Flag Burning Amendment June 22, 2005    2005 Ron Paul 71:17 ” Our Nation was not founded on devotion to symbolic idols, but on principles, beliefs and ideals expressed in the Constitution and its Bill of Rights. American veterans who have protected our banner in battle have not done so to protect a golden calf. Instead, they carried the banner forward with reverence for what it represents, our beliefs and freedom for all. Therein lies the beauty of our flag. A patriot cannot be created by legislation.” gold The Coming Category 5 Financial Hurricane September 15, 2005    2005 Ron Paul 98:5 Runaway inflation is a well-known phenomenon. It leads to political and economic chaos of the kind we witnessed in New Orleans. Hopefully we’ll come to our senses and not allow that to happen. But we’re vulnerable and we have only ourselves to blame. The flawed paper money system in existence since 1971 has allowed for the irresponsible spending of the past 30 years. Without a linkage to gold, Washington politicians and the Federal Reserve have no restraints placed on their power to devalue our money by merely printing more to pay the bills run up by the welfare-warfare state. gold The Coming Category 5 Financial Hurricane September 15, 2005    2005 Ron Paul 98:7 Since the last link to gold was severed in 1971, the dollar has lost 92% of its value relative to gold, with gold going from $35 to $450 per ounce. gold Introduction Of The Affordable Gas Price Act 6 October 2005    2005 Ron Paul 99:7 Finally, the Affordable Gas Price Act creates a Federal study on how the abandonment of the gold standard and the adoption of freely floating currencies are affecting the price of oil. It is no coincidence that oil prices first became an issue shortly after President Nixon unilaterally severed the dollar’s last connection to gold. The system of fiat money makes consumers vulnerable to inflation and to constant fluctuations in the prices of essential goods such as oil. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:2 After all of this great success, our dollar dominance is coming to an end. It has been said, rightly, that he who holds the gold makes the rules. In earlier times it was readily accepted that fair and honest trade be required in an exchange of something of real value. First, it was simply barter of goods, and then it was discovered that gold held a universal attraction and was a convenient substitute for more cumbersome barter transactions. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:3 Not only did gold facilitate exchange of goods and services, it served as a store of value for those who wanted to save for a rainy day. Though money developed naturally in the marketplace as governments grew in power, they assumed monopoly control over money. Sometimes governments succeeded in guaranteeing the quality and purity of gold; but in time, governments learned to outspend their revenues. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:4 New or higher taxes always incurred the disapproval of the people, so it was not long before the kings and caesars learned how to inflate their currencies by reducing the amount of gold in each coin, always hoping their subjects would not discover the fraud. But the people always did, and they strenuously objected. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:5 This helped pressure leaders to seek more gold by conquering other nations. The people became accustomed to living beyond their means and enjoyed the circuses and bread. Financing extravagances by conquering foreign lands seemed a logical alternative to working harder and producing more. Besides, conquering nations not only brought home gold; they brought home slaves as well. Taxing the people in conquered territories also provided an incentive to build empires. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:6 This system of government worked well for a while, but the moral decline of the people led to an unwillingness to produce for themselves. There was a limit to the number of countries that could be sacked for their wealth, and this always brought empires to an end. When gold no longer could be obtained, their military might crumbled. In those days, those who held the gold truly wrote the rules and lived well. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:7 That general rule has held fast throughout the ages. When gold was used and the rules protected honest commerce, productive nations thrived. Whenever wealthy nations, those with powerful armies and gold, strived only for empire and easy fortunes to support welfare at home, those nations failed. gold 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. gold 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. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:12 When paper money is rejected, or when gold runs out, wealth and political stability are lost. The country then must go from living beyond its means to living beneath its means until the economic and political systems adjust to the new rules; rules no longer written by those who ran the now defunct printing press. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:18 Dollar dominance got a huge boost after World War II. We were spared the destruction that so many other nations suffered, and our coffers were filled with the world’s gold. But the world chose not to return to the discipline of the gold standard, and the politicians applauded. Printing money to pay the bills was a lot more popular than taxing or restraining or unnecessary spending. In spite of the short-term benefits, imbalances were institutionalized for decades to come. gold 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. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:20 The dollar was said to be as good as gold and convertible to all foreign banks at that rate. For American citizens, however, it remained illegal to own. This was a gold exchange standard that from inception was doomed to fail. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:21 The U.S. did exactly what many predicted she would do: she printed more dollars for which there was no gold backing. But the world was content to accept these dollars for more than 25 years with little question, until the French and others in the late 1960s demanded we fulfill our promise to pay 1 ounce of gold for each $35 they delivered to the U.S. Treasury. This resulted in a huge gold drain that brought an end to a very poorly devised pseudo-gold standard. gold 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. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:26 This post-Bretton Woods system was much more fragile than the system that existed between 1945 and 1971. Though the dollar-oil arrangement was helpful, it was not nearly as stable as the pseudo-gold standard under Bretton Woods. It certainly was less stable than the gold standard of the late 19th century. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:27 During the 1970s, the dollar nearly collapsed as oil prices surged and gold skyrocketed to $800 an ounce. By 1979, interest rates of 21 percent were required to rescue the system. The pressure on the dollar in the 1970s, in spite of the benefits accrued to it, reflected reckless budget deficits and monetary inflation during the 1960s. The markets were not fooled by LBJ’s claim that we could afford both guns and butter. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:28 Once again, the dollar was rescued, and this ushered in the age of true dollar hegemony, lasting from the early 1980s to the present. With tremendous cooperation coming from the central banks and international commercial banks, the dollar was accepted as if it were gold. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:29 Federal Chairman Alan Greenspan, on several occasions before the House Banking Committee, answered my challenges to him about his previously held favorable views on gold by claiming that he and other central bankers had gotten paper money, that is the dollar system, to respond as if it were gold. Each time I strongly disagreed and pointed out that if they had achieved such a feat they would have defied centuries of economic history regarding the need for money to be something of real value. He smugly and confidently concurred with this. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:30 In recent years, central banks and various financial institutions, all with vested interest in maintaining a workable fiat dollar standard, were not secretive about selling and maintaining large amounts of gold to the market, even while decreasing gold prices raised serious questions about the wisdom of such a policy. They never admitted to gold price fixing, but the evidence is abundant that they believed that if the gold price fell, it would convey a sense of confidence to the market, confidence that they, indeed, had achieved amazing success in turning paper into gold. gold 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. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:32 Even during the Depression, one of Roosevelt’s first acts was to remove free-market pricing as an indication of a flawed monetary system by making it illegal for American citizens to own gold. Economic law eventually limited that effort, as it did in the early 1970s, when our Treasury and the IMF tried to fix the price of gold by dumping tons into the market to dampen the enthusiasm of those seeking a safe haven for a falling dollar after gold ownership was relegalized. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:33 Once again, the effort between 1980 and 2000 to fool the market as to the true value of the dollar proved unsuccessful. In the past 5 years, the dollar has been devalued in terms of gold by more than 50 percent. You just cannot fool all the people all the time, even with the power of the mighty printing press and the money-creating system of the Federal Reserve. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:38 Price inflation is raising its ugly head, and the NASDAQ bubble, generated by easy money, has burst. The housing bubble likewise created is deflating. Gold prices have doubled, and Federal spending is out of sight, with zero political will to rein it in. The trade deficit last year was over $728 billion. A $2 trillion war is raging, and plans are being laid to expand the war into Iran and possibly Syria. The only restraining force will be the world’s rejection of the dollar. It is bound to come and create conditions worse than 1979–1980, which required 21 percent interest rates to correct. But everything possible will be done to protect the dollar in the meantime. We have a shared interest with those who hold our dollars to keep the whole charade going. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:39 Greenspan, in his first speech after leaving the Fed, said that gold prices were up because of concern about terrorism and not because of monetary concerns or because he created too many dollars during his tenure. Gold has to be discredited and the dollar propped up. Even when the dollar comes under serious attack by market forces, the central banks and the IMF will surely do everything conceivable to soak up the dollars in hope of restoring stability. Eventually, they will fail. gold The End Of Dollar Hegemony 15 February 2006    2006 Ron Paul 3:53 It is an unbelievable benefit to us to import valuable goods and export depreciating dollars. The exporting countries have become addicted to our purchases for their economic growth. This dependency makes them allies in continuing the fraud, and their participation keeps the dollar’s value artificially high. If this system were workable long term, American citizens would never have to work again. We, too, could enjoy “bread and circuses” just as the Romans did, but their gold finally ran out and the inability of Rome to continue to plunder conquered nations brought an end to her empire. gold 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. gold 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. gold 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. gold 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. gold Debt Addiction 1 March 2006    2006 Ron Paul 6:3 Debt is like an addiction: the political pain of withdrawal keeps politicians spending, so they do not offend any special interest groups demanding that government benefits continue. As with all addictions, long-term dependency on a dangerous substance can kill the patient. Dependency on bad policy also can destroy the goose that many believe lays the golden egg. gold 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. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:1 Mr. PAUL. Madam Speaker, the financial press and even the network news shows have begun reporting the price of gold regularly. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:2 For 20 years, between 1980 and 2000, the price of gold was rarely mentioned. There was little interest, and the price was either falling or remaining steady. Since 2001, however, interest in gold has soared along with its price. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:3 With the price now over $600 an ounce, a lot more people are becoming interested in gold as an investment and an economic indicator. Much can be learned by understanding what the rising dollar price of gold means. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:4 The rise in gold prices, from $250 per ounce in 2001 to over $600 today has drawn investors and speculators into precious metals markets. Though many already have made handsome profits, buying gold, per se, should not be touted as a good investment. After all, gold earns no interest, and its quality never changes. It is static and does not grow as sound investments should. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:5 It is more accurate to say that one might invest in a gold or silver mining company, where management, labor costs, and the nature of new discoveries all play a vital role in determining the quality of the investment and the profits made. gold 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. gold 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. gold 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. gold 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. gold 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. gold 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. gold 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. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:15 This recent deception failed just as it did in the 1960s when our government tried to hold gold artificially low at $35 an ounce. But since they could not truly repeal the economic laws regarding money, just as many central bankers sold, others bought. It is fascinating that the European central banks sold gold while the Asian central banks bought it over the last several years. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:16 Since gold has proven to be the real money of the ages, we see once again a shift in wealth from the West to the East, just as we saw a loss of our industrial base in the same direction. gold 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. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:18 But the fact that gold has gone from $250 an ounce to over $600 an ounce means there is concern about the future of the dollar. The higher the price of gold the greater the concern for the dollar. But instead of dwelling on the dollar price of gold, we should be talking about the depreciation of the dollar. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:19 In 1934, a dollar was worth one-twentieth of an ounce of gold. $20 to buy one ounce. Today a dollar is worth one-six- hundredth of an ounce, meaning it takes $600 to buy one once of gold. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:20 The number of dollars created by the Federal Reserve and through the fractional reserve banking system is crucial in determining how the market assesses the relationship of the dollar and gold. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:21 Though there is a strong correlation, it is not instantaneous or perfectly predictable. There are many variables to consider. But in the long term, the dollar price of gold represents past inflation of the money supply. Equally important, it represents the anticipation of how much new money will be created in the future. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:25 Most knowledgeable people therefore assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not yet been fully discounted, guarantees the future depreciation of the dollar in terms of gold. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:30 Already we see this trend developing, which surely will accelerate in the not- too-distant future. Part of this reaction will be from those who seek a haven to protect their wealth, not invest, by treating gold and silver as universal and historic money. This means holding fewer dollars that are decreasing in value while holding gold as it increases in value. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:31 A soaring gold price is a vote of no confidence in the central bank and the dollar. This certainly was the case in 1979 and 1980. Today gold prices reflect a growing restlessness with the increasing money supply, our budgetary and trade deficits, our unfunded liabilities, and the inability of this Congress and the administration to rein in runaway spending. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:32 Denying us statistical information, manipulating interest rates, and artificially trying to keep gold prices in check won’t help in the long run. If the markets are fooled only on the short term, it only means the adjustments will be much more dramatic later on, and in the meantime other market imbalances develop. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:35 Even if it were recognized that a gold standard without monetary inflation would be advantageous, few in Washington would accept the political disadvantages of living with the discipline of gold since it serves as a check on government size and power. This is a sad commentary on the politics of today. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:41 Foreign policy plays a significant role in the economy and the value of the dollar. A foreign policy of militarism and empire building cannot be supported through direct taxation. The American people would never tolerate the taxes required to pay immediately for overseas wars under the discipline of a gold standard. Borrowing and creating new money is much more politically palatable. It hides and delays the real costs of the war. The people are lulled into complacency, especially since the wars we fight are couched in terms of patriotism, spreading the ideas of freedom and stamping out terrorism. Unnecessary wars and fiat currencies go hand in hand, while a gold standard encourages a sensible foreign policy. gold 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. gold 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. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:49 Today we hear threats from some Arab, Muslim and some Far Eastern countries about undermining the dollar system not by dishonest counterfeiting, but by initiating an alternative monetary system based on gold. Wouldn’t that be ironic? Such an event theoretically could do great harm to us. This day may well come not so much as a direct political attack on the dollar system, but out of necessity to restore confidence in money once again. gold 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. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:51 Gold or any acceptable market commodity money is required to preserve liberty. Monopoly control by government of a system that creates fiat money out of thin air guarantees the loss of liberty. No matter how well intended our militarism is portrayed or how happily the promises of wonderful programs for the poor are promoted, inflating the money supply to pay these bills makes government bigger. gold 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. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:67 A recent headline in the financial press announced that gold prices surged over concern that confrontation with Iran will further push oil prices higher. This may well reflect the current situation, but higher gold prices mainly reflect monetary expansion by the Federal Reserve. Dwelling on current events and their effect on gold prices reflects concern for symptoms rather than an understanding of the actual cause of these price increases. Without an enormous increase in the money supply over the past 35 years and a worldwide paper monetary system, this increase in the price of gold would not have occurred. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:68 Certainly geopolitical events in the Middle East under a gold standard would not alter its price, though they could affect the supply of oil and cause oil prices to rise. Only under conditions created by excessive paper money would one expect all or most prices to rise. This is a mere reflection of the devaluation of the dollar. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:70 One of the strongest restraints against unnecessary war is a gold standard. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:72 The harmful effects of the business cycle are virtually eliminated with an honest gold standard. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:73 Saving and thrift are encouraged by gold standard and discouraged by paper money. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:77 Speculative financial bubbles are characteristic of paper money, not gold. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:81 The value of gold is remarkably stable. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:82 The dollar price of gold reflects dollar depreciation. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:83 Holding gold helps preserve and store wealth; but technically, gold is not a true investment. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:88 If ever there was a time to get a handle on what sound money is and what it means, that time is today. Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket, along with the profits of the military industrial complex, the oil industry, and other special interests. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:89 A sharply rising gold price is a vote of no confidence in the Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East. gold 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. gold Gold And The U.S. Dollar 25 April 2006    2006 Ron Paul 23:92 Economic law dictates reform at some point, but should we wait until the dollar is 1/1000 of an ounce of gold or 1/2000 of an ounce of gold? The longer we wait, the more people will suffer and the more difficult reforms become. Runaway inflation inevitably leads to political chaos, something numerous countries have suffered throughout the 20th century. The worst example, of course, was the German inflation of the 1920s that led to the rise of Hitler. gold Congressional Medal Of Honor For The Dalai Lama 13 September 2006    2006 Ron Paul 78:1 Mr. PAUL. Mr. Speaker, with great sadness I must rise to oppose this measure granting a congressional gold medal to the 14th Dalai Lama. While I greatly admire and respect His Holiness the Dalai Lama, and fully recognize his tremendous status both as a Buddhist leader and international advocate for peace, I must object to the manner in which this body chooses to honor him. gold Congressional Medal Of Honor For The Dalai Lama 13 September 2006    2006 Ron Paul 78:2 I wonder if my colleagues see the irony in honoring a devout Buddhist monk with a material gift of gold. The Buddhist tradition, of course, eschews worldly possessions in favor of purity of thought and action. Buddhism urges its practitioners to alleviate the suffering of others whenever possible. I’m sure His Holiness the Dalai Lama would rather see $30,000 spent to help those less fortunate, rather than for a feel-good congressional gesture. gold Congressional Medal Of Honor For The Dalai Lama 13 September 2006    2006 Ron Paul 78:3 We cannot forget that Congress has no authority under the Constitution to spend taxpayer money on medals and awards, no matter how richly deserved. And I reiterate my offer of $100 from my own pocket to pay for this medal — if members wish to honor the Dalai Lama, all we need to do is pay for it ourselves. If all 435 of us contribute, the cost will be roughly $70 each. So while a gold medal sounds like a great idea, it becomes a bit strange when we see the actual cost involved. gold Congressional Medal Of Honor For The Dalai Lama 13 September 2006    2006 Ron Paul 78:12 Mr. Speaker, in closing let me join my colleagues in stating my tremendous respect for His Holiness the Dalai Lama. While I cannot agree with forcible taxation to pay for gold medals, I certainly hope Congress takes the teaching of His Holiness to heart and begins to rethink our aggressive, interventionist foreign policy. gold Shareholder Vote On Executive Compensation Act 18 April 2007    2007 Ron Paul 43:10 Past government actions have made it more difficult for shareholders to hold CEOs and boards of directors accountable for disregarding shareholder interests by, among other things, wasting corporate resources on compensation packages and golden parachutes unrelated to performance. During the 1980s, so-called corporate raiders helped keep corporate management accountable to shareholders through devices such as “junk” bonds that made corporate takeovers easier. gold 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. gold The Affordable Gas Price Act 21 May 2007    2007 Ron Paul 54:7 Finally, the Affordable Gas Price Act creates a federal study on how the abandonment of the gold standard and the adoption of freely floating currencies are affecting the price of oil. It is no coincidence that oil prices first became an issue shortly after President Nixon unilaterally severed the dollar’s last connection to gold. The system of fiat money makes consumers vulnerable to inflation and to constant fluctuations in the prices of essential goods such as oil. gold In The Name Of Patriotism (Who Are The Patriots?) 22 May 2007    2007 Ron Paul 55:21 Protesters against this unconstitutional system of paper money are considered unpatriotic criminals and at times are imprisoned for their beliefs. The fact that, according to the Constitution, only gold and silver are legal tender and paper money outlawed matters little. The principle of patriotism is turned on its head. Whether it’s with regard to the defense of welfare spending at home, confiscatory income tax, or an immoral monetary system or support for a war fought under false pretense without a legal declaration, the defenders of liberty and the Constitution are portrayed as unpatriotic, while those who support these programs are seen as the patriots. gold Opening Statement Committee on Financial Services World Bank Hearing 22 May 2007    2007 Ron Paul 56:2 Like many bureaucracies, the World Bank has constantly attempted to reinvent itself and redefine its mission. Some critics have referred to this as “mission creep.” It is the reaction of self-interested bureaucrats who are intent on saving their jobs at all costs. The non-institutional elements of Bretton Woods, such as the gold-backed dollar standard, have gone by the wayside, but the World Bank and the IMF soldier on. gold Introduction Of The Honest Money Act 15 June 2007    2007 Ron Paul 64:8 Legal tender laws have reversed that order to where the market follows the lead of Congress. Beginning in the 19th century, Federal politicians sought to enhance their power and enrich their cronies, by using legal tender powers to change the definition of a dollar from a silver-or-gold-backed unit whose value is determined by the market, to a piece of paper produced by the State. The “value” of this paper may be normally backed in part by gold or silver, but its ultimate backing is the power of the State, and its value is determined by the political needs of the State and the powerful special interests who influence monetary policy. gold 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. gold Opening Statement Committee on Financial Services Paulson Hearing 20 June 2007    2007 Ron Paul 71:15 All meetings and decision and actions by the Presidents Working Group on Financial Markets must be fully open to public scrutiny. If our government is artificially propping up the dollar by directly manipulating gold prices, or colluding with other central banks, it is information that belongs in the public domain. The same is true about any interference in the stock, bond, or commodity markets. gold 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. gold Statement before the Financial Services Committee – Humphrey Hawkins Prequel Hearing 17 July 2007    2007 Ron Paul 76:1 During the 30 th year of the Humphrey-Hawkins hearings, it would be helpful for Congress to reassess the usefulness of the Humphrey-Hawkins mandate. The dual mandate calls for full employment and stable prices. Humphrey-Hawkins assumes that the Federal Reserve has unique insights into the United States economy that no one else possesses, that the Federal Reserve knows what prices should be and how much unemployment there should be. Full employment which is brought about through rising inflation will eventually lead to a stagnant economy which will lead to more unemployment. 30+ years after the stagflation era, I would hope that Phillips curves are one of those barbarous relics of the past that have been sent to their graves, along with wage and price controls and bans on the private ownership of gold. gold Statement Before the Joint Economic Committee 8 November 2007    2007 Ron Paul 103:1 Mr. Chairman, our economy finds itself in a precarious state. Oil prices are rising, gold is nearing all-time highs, and the dollar is nearing all-time lows. The root of this crisis, as with past financial and economic crises, results from federal government intervention into the economy, not to anything endemic to the market, nor to the the actions of market participants. gold 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. gold 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. gold 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. gold 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. gold Statement on Competing Currencies February 13, 2008    2008 Ron Paul 4:11 The second step to reestablishing competing currencies is to eliminate laws that prohibit the operation of private mints. One private enterprise which attempted to popularize the use of precious metal coins was Liberty Services, the creators of the Liberty Dollar. Evidently the government felt threatened, as Liberty Dollars had all their precious metal coins seized by the FBI and Secret Service this past November. Of course, not all of these coins were owned by Liberty Services, as many were held in trust as backing for silver and gold certificates which Liberty Services issued. None of this matters, of course, to the government, who hates to see any competition. gold 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. gold Statement on Competing Currencies February 13, 2008    2008 Ron Paul 4:13 The final step to ensuring competing currencies is to eliminate capital gains and sales taxes on gold and silver coins. Under current federal law, coins are considered collectibles, and are liable for capital gains taxes. Short-term capital gains rates are at income tax levels, up to 35 percent, while long-term capital gains taxes are assessed at the collectibles rate of 28 percent. Furthermore, these taxes actually tax monetary debasement. As the dollar weakens, the nominal dollar value of gold increases. The purchasing power of gold may remain relatively constant, but as the nominal dollar value increases, the federal government considers this an increase in wealth, and taxes accordingly. Thus, the more the dollar is debased, the more capital gains taxes must be paid on holdings of gold and other precious metals. gold Statement on Competing Currencies February 13, 2008    2008 Ron Paul 4:14 Just as pernicious are the sales and use taxes which are assessed on gold and silver at the state level in many states. Imagine having to pay sales tax at the bank every time you change a $10 bill for a roll of quarters to do laundry. Inflation is a pernicious tax on the value of money, but even the official numbers, which are massaged downwards, are only on the order of 4% per year. Sales taxes in many states can take away 8% or more on every single transaction in which consumers wish to convert their Federal Reserve Notes into gold or silver. gold “Monetary Policy and the State of the Economy” February 26, 2008    2008 Ron Paul 8:5 The setting of the interest rate strikes me as quite similar to the way FDR used to set gold prices in the 1930’s, at his whim, resulting in economic havoc and uncertainty. When market actors have to devote much of their time to discerning the mindset of government price-setters, to parsing FOMC statements and minutes, they are necessarily diverted from productive economic activity. They cease to become purely economic actors and are forced to become political forecasters. This is not a problem isolated to this particular case, as businesses are forced to reckon with tax increases, expiring tax credits, import tariffs, subsidies to competitors, etc. However, because the interest rate determines the cost of borrowing and therefore determines whether or not marginal long-term business investments are undertaken, this politicized interest rate manipulation has far more impact than other government policies. gold 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. gold 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. gold DO NOT BELIEVE THE U.S. FEAR FACTOR PROPAGANDA AS IT RELATES TO OUR FOREIGN POLICY 26 June 2008    2008 Ron Paul 40:1 Mr. PAUL. Madam Speaker, today we saw some financial fireworks on the markets. The Dow Jones average was down 350-some points, gold was up $32, oil was up another $5, and there’s a lot of chaos out there; and everyone is worried about $4-a-gallon gasoline. I don’t think there is a clear understanding exactly why that has occurred. gold Statement: “Something Big is Happening” 9 July 2008    2008 Ron Paul 42:5 Today things are different from even ancient times or the 1970s. There is something to the argument that we are now a global economy. The world has more people and is more integrated due to modern technology, communications, and travel. If modern technology had been used to promote the ideas of liberty, free markets, sound money and trade, it would have ushered in a new golden age — a globalism we could accept. gold Statement: “Something Big is Happening” 9 July 2008    2008 Ron Paul 42:12 There were several stages. From the inception of the Federal Reserve System in 1913 to 1933, the Central Bank established itself as the official dollar manager. By 1933, Americans could no longer own gold, thus removing restraint on the Federal Reserve to inflate for war and welfare. gold 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. gold Statement: “Something Big is Happening” 9 July 2008    2008 Ron Paul 42:15 Ironically in these past 35 years, we have benefited from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas (indirectly encouraging our jobs to go overseas as well) and enjoy unearned prosperity. Those who took our dollars and gave us goods and services were only too anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we now are starting to see. gold 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. gold “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. gold The Austrians Are Right November 20, 2008    2008 Ron Paul 71:11 Who’s being ignored? The Austrian free-market economists—the very ones who predicted not only the Great Depression, but the calamity we’re dealing with today. If the crisis was predictable and is explainable, why did no one listen? It’s because too many politicians believed that a free lunch was possible and a new economic paradigm had arrived. But we’ve heard that one before — like the philosopher’s stone that could turn lead into gold. Prosperity without work is a dream of the ages. gold 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. gold 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. gold Humphrey-Hawkins Hearing Statement February 25, 2009    2009 Ron Paul 18:5 Chairman Bernanke and others in positions of authority seem to gloss over these systemic instabilities and assume an excessively rosy outlook on the economy. I believe we are at another major economic crossroad, where the global financial system will have to be fundamentally rethought. The post-Bretton Woods dollar standard system has proven remarkably resilient, lasting longer than the gold-exchange system which preceded it, but the current economic crisis has illustrated the unsustainability of the current dollar-based system. To think that the economy will begin to recover by the end of this year is absurd. The dollar’s supposed strength exists only because of the weakness of other currencies. The Fed’s increase of the monetary base and establishment of “temporary” funding facilities has set the stage for hyperinflation, and it remains to be seen what results. gold THRIFT SAVINGS FUND IMPROVEMENT ACT March 10, 2009    2009 Ron Paul 25:2 The Thrift Savings Plan is one of the most important benefits offered to congressional employees. A strong TSP can obviously play a key role in attracting and retaining talented individuals to serve in the legislative branch. Adding a precious metals option will strengthen the TSP. In the last year, the price of gold rose by 5.5 percent while the Dow Jones experienced one of its worst years ever, falling by 33.8 percent, while the NASDQ declined by 40.5 percent! gold TRIBUTE TO BURT BLUMERT April 2, 2009    2009 Ron Paul 49:2 As the founder and manager of Camino Coins in Burlingame, CA, Burt was one of the nation’s leading dealers in gold and silver coins. A student of Ludwig von Mises and the Austrian school of economics, Burt understood the important role precious metals played in protecting ordinary citizens from the damage wrought by fiat money and inflation. Thus, he regarded his work as a coin dealer not just as a business, but as an opportunity to help people by providing with some protection from the Federal Reserve’s inflation tax. gold HONORING JACK KEMP May 6, 2009    2009 Ron Paul 53:2 Jack is probably best known for the key role he played in the “supply side revolution” that led to the tax rate reductions of the early eighties. However, what I most remember about Jack was that he was one of the few politicians I have met who understood how fiat money harms Americans. Jack was passionate about reforming monetary policy so America would again have, as Jack memorably put it, a “dollar as good as gold.” It was largely due to Jack’s efforts that the Republican Party platform of 1980 endorsed a return to the gold standard. Jack’s support was instrumental in me being named to the U.S. Gold Commission in 1982. While I was not always in total agreement with Jack’s views on monetary policy, I always appreciated his interest in the issue. gold INTRODUCTION OF THE AFFORDABLE GAS PRICE ACT May 21, 2009    2009 Ron Paul 60:7 Finally, the Affordable Gas Price Act creates a Federal study on how the abandonment of the gold standard and the adoption of freely floating currencies are affecting the price of oil. It is no coincidence that oil prices first became an issue shortly after President Nixon unilaterally severed the dollar’s last connection to gold. The system of fiat money makes consumers vulnerable to inflation and to constant fluctuations in the prices of essential goods such as oil. gold THE BIG GUNS HAVE LINED UP AGAINST H.R. 1207 July 30, 2009    2009 Ron Paul 88:3 Former Federal Reserve Board Chairman Arthur Burns, when asked about all the inflation he brought about in 1971, before Nixon’s re-election, said that the Fed has to do what the President wants it to do, or it would “lose its independence.” That about tells you everything. Not by accident, Chairman Burns strongly supported Nixon’s program of wage and price controls, the same year; but I guess that’s not political. Is not making secret deals with the likes of Goldman Sachs, international financial institutions, foreign governments and foreign central banks, politicizing monetary policy? Bernanke argues that the knowledge that their discussions and decisions will one day be scrutinized will compromise the freedom of the Open Market Committee to pursue sound policy. If it is sound and honest, and serves no special interest, what’s the problem? gold TRANSPARENCY AT THE FEDERAL RESERVE December 1, 2009    2009 Ron Paul 100:9 My bill, H.R. 1207, has nothing to do with interference with monetary policy. This was explicitly stated in the amendment voted on in the Financial Services Committee. Bernanke’s argument for protecting the independence of the Fed is his argument for protecting the secrecy of the Fed. Chairman Bernanke concludes that “America needs a strong” – think cartel – “nonpolitical” – think Goldman Sachs – “and independent” – think secret – “central bank with the tools to promote financial stability, in the midst of a horrendous financial crisis, and to help steer our economy to recovery without inflation.” gold 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. gold 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. gold 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. gold 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. gold INTRODUCING THE FREE COMPETITION IN CURRENCY ACT December 9, 2009    2009 Ron Paul 102:10 The second step to reestablishing competing currencies is to eliminate laws that prohibit the operation of private mints. One private enterprise which attempted to popularize the use of precious metal coins was Liberty Services, the creators of the Liberty Dollar. Evidently the government felt threatened, as Liberty Dollars had all their precious metal coins seized by the FBI and Secret Service in November of 2007. Of course, not all of these coins were owned by Liberty Services, as many were held in trust as backing for silver and gold certificates which Liberty Services issued. None of this matters, of course, to the government, which hates competition. The responsibility to protect contracts is of no interest to the government. gold 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. gold INTRODUCING THE FREE COMPETITION IN CURRENCY ACT December 9, 2009    2009 Ron Paul 102:12 The final step to ensuring competing currencies is to eliminate capital gains and sales taxes on gold and silver coins. Under current federal law, coins are considered collectibles, and are liable for capital gains taxes. Short- term capital gains rates are at income tax levels, up to 35 percent, while long-term capital gains taxes are assessed at the collectibles rate of 28 percent. Furthermore, these taxes actually tax monetary debasement. As the dollar weakens, the nominal dollar value of gold increases. The purchasing power of gold may remain relatively constant, but as the nominal dollar value increases, the Federal Government considers this an increase in wealth, and taxes accordingly. Thus, the more the dollar is debased, the more capital gains taxes must be paid on holdings of gold and other metals. gold INTRODUCING THE FREE COMPETITION IN CURRENCY ACT December 9, 2009    2009 Ron Paul 102:13 Just as pernicious are the sales and use taxes which are assessed on gold and silver at the state level in many States. Imagine having to pay sales tax at the bank every time you change a $10 bill for a roll of quarters to do laundry. Inflation is a pernicious tax on the value of money, but even the official numbers, which are massaged downwards, are only on the order of 4 percent per year. Sales taxes in many states can take away 8 percent or more on every single transaction in which consumers wish to convert their Federal Reserve Notes into gold or silver. Texas Straight Talk gold Deceptive economic euphoria 17 August 1998    Texas Straight Talk 17 August 1998 verse 12 ... Cached But all good things must end when they are built on a fiction. A fiction is precisely what fiat money is - the economic equivalent of the philosopher's stone, which was hoped to turn lead into gold. gold The problem is the currency 21 September 1998    Texas Straight Talk 21 September 1998 verse 15 ... Cached A limited government designed to protect liberty and provide a national offense is one that could easily be managed with minimal taxes, but it would also require that we follow the advise of the Founders who explicitly admonished us not "to emit bills of credit" that is, paper money and use only silver and gold as legal tender. We need to lay plans for our future because we are rapidly approaching a time of crisis and chaos. gold Economic crisis looms 19 October 1998    Texas Straight Talk 19 October 1998 verse 5 ... Cached A world-wide system of fiat money is the root of the crisis. The post-World War II Bretton Woods gold-exchange system was seriously flawed, and free market economists from the start predicted its demise. Twenty-seven years later, on August 15, 1971, it ended with a bang ushering in the turbulent and commodity-driven inflation of the 1970s. gold Economic crisis looms 19 October 1998    Texas Straight Talk 19 October 1998 verse 15 ... Cached Second, Congress should legalize the Constitutional principle that gold and silver be legal tender by prohibiting sales and capital gains taxes from being placed on all American legal tender coins. gold Flag Amendment is a reckless solution 28 June 1999    Texas Straight Talk 28 June 1999 verse 10 ... Cached Too often in this debate, the issue of patriotism is misplaced. This is well addressed by Keith Kruel, an Army veteran and a past national commander of the American Legion. He has said that, "Our nation was not founded on devotion to symbolic idols, but on principles, beliefs and ideals expressed in the Constitution and its Bill of Rights. American veterans who have protected our banner in battle have not done so to protect a 'golden calf.' …A patriot cannot be created by legislation." gold Greenspan Nominated to a Fourth Term 17 January 2000    Texas Straight Talk 17 January 2000 verse 13 ... Cached Likewise, the world central banks have for years sold and loaned gold to keep the gold price artificially low. A rise in gold price is a vote of no confidence in paper. And it's in the interest of all central banks to keep this from happening. Their credibility is at stake. But we must remember through the 50s and the 60s, gold was "fixed" at $35 an ounce and in the 70s the markets overruled the powerful Fed and the US Treasury and vetoed this price. gold Greenspan Nominated to a Fourth Term 17 January 2000    Texas Straight Talk 17 January 2000 verse 14 ... Cached Alan Greenspan was at one time a free market adherent and gold standard advocate. Read what he had to say about the Federal Reserve Board policy of the 1920s and the subsequent depression. The experts in the 20s had also declared a New Era economic growth without price inflation resulting from technological advances and wise monetary management. Greenspan explains: "The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late. By 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a constant demoralizing of business confidence." (Gold and Economic Freedom, 1966) gold Spending, Tax Cuts, or Debt Reduction? 25 September 2000    Texas Straight Talk 25 September 2000 verse 8 ... Cached Obviously, taxpayers should decide what is done with any surplus funds. Rest assured many in Congress are eager to spend the surplus on a variety of wasteful federal programs. This is a golden opportunity for Congress, because it can go on a spending spree without raising taxes! I supported the "lockbox" legislation because it prevents any spending of surplus dollars, instead requiring that funds be applied to debt reduction (I also have introduced legislation that prevents non-surplus Social Security and Medicare trust funds from being spent on unrelated programs). Reduction of the national debt certainly is preferable to new spending. My preference, however, would be to return any surplus directly to taxpayers. American families are taxed far too much now, and they never should be required to overfund the government. A surplus refund check would be a step in the right direction. The most important point, however, is that Congress should not be permitted to find new ways to spend your surplus dollars. gold 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. gold Predictions for an Unwritten Future 29 April 2002    Texas Straight Talk 29 April 2002 verse 20 ... Cached Inflationary Federal Reserve policies will accelerate, with massive credit creation worsening the dollar crisis. Gold will be seen as an alternative to paper money as it returns to its historic monetary role. gold Gold, Dollars, and Federal Reserve Mischief 10 June 2002    Texas Straight Talk 10 June 2002 verse 2 ... Cached Gold, Dollars, and Federal Reserve Mischief gold Gold, Dollars, and Federal Reserve Mischief 10 June 2002    Texas Straight Talk 10 June 2002 verse 3 ... Cached The mainstream financial press is now reporting the weakening of the U.S. dollar as measured against other currencies. This is unsettling news, as a relatively strong dollar was considered a hallmark of the economic boom of the 1990s- a boom that had far more to do with rapid credit expansion than real increases in productivity. The value of the dollar is down 18% this year compared to gold, which acts as a bellwether for the health of paper money. Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from the arbitrary actions of the world’s central banks, including our own Federal Reserve. gold 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. gold Gold, Dollars, and Federal Reserve Mischief 10 June 2002    Texas Straight Talk 10 June 2002 verse 5 ... Cached Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold. So even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception. Should the dollar continue to decline in value, America will find itself struggling to service our already massive debt load even as our foreign creditors become less interested in our dollars. gold Gold, Dollars, and Federal Reserve Mischief 10 June 2002    Texas Straight Talk 10 June 2002 verse 6 ... Cached America once enjoyed a stable dollar backed by gold deposits, a "gold standard" system. This system gradually was undermined throughout the last century, until President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Fed has employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the total amount of dollars in circulation (the money supply), and the financial markets. In other words, fiat dollars have no intrinsic value. gold Homeland Security is the Largest Federal Expansion in 50 Years 25 November 2002    Texas Straight Talk 25 November 2002 verse 4 ... Cached Ironically, many in Congress who usually champion limited government were enthusiastic supporters of the largest federal expansion in 50 years. Twenty years ago President Reagan revitalized conservatives across the country by appealing to their Goldwater roots, promising to slash the size of government and eliminate whole departments. Yet the promise of a smaller government went unfulfilled, and today Congress passes budgets even larger that those of the Clinton years. gold 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. gold What Happened to Conservatives? 14 July 2003    Texas Straight Talk 14 July 2003 verse 4 ... Cached True limited government conservatives have been co-opted by the rise of the neoconservatives in Washington. The neoconservatives- a name they gave themselves- are largely hardworking, talented people who have worked their way into positions of power in Washington. Their views dominate American domestic and foreign policy today, as their ranks include many of the President’s closest advisors. They have successfully moved the Republican party away from the Goldwater-era platform of frugal government at home and nonintervention abroad, toward a big-government, world empire mentality more reminiscent of Herbert Hoover or Woodrow Wilson. In doing so, they have proven that their ideas are neither new nor conservative. gold The Tyranny of Paper Money 08 September 2003    Texas Straight Talk 08 September 2003 verse 2 ... Cached In an article entitled “Gold and Economic Freedom,” Federal Reserve Chairman Alan Greenspan wrote that “The excess credit which the Fed pumped into the economy spilled over into the stock market- triggering a fantastic speculative boom…The speculative imbalances had become overwhelming and unmanageable by the Fed… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.” The irony is that Mr. Greenspan’s words, written in 1966 to describe the era leading up to the Great Depression, could easily have been written in 2003 to describe the consequences of his own Fed policies during the 1990s. gold Economic Woes Begin at Home 03 November 2003    Texas Straight Talk 03 November 2003 verse 8 ... Cached This answer should send a clear message to every lawmaker in America: the taxes and regulations imposed on American businesses are hurting economic growth and killing jobs. If we are serious about creating jobs, we should be working on an aggressive agenda of cutting taxes and repealing needless regulations. We should be working to adopt a stable, gold-backed dollar whose value is determined by the market. We don’t need to bully our foreign competitors, we just need to stop subsidizing them while releasing the regulatory and tax stranglehold on American businesses. gold GOP Abandons Conservatives 01 December 2003    Texas Straight Talk 01 December 2003 verse 2 ... Cached The Medicare prescription drug bill passed by Congress last week may prove to be a watershed event for political conservatives in America. This latest expansion of the federal government, potentially the largest in our nation’s history, is firmly in keeping with the failed New Deal and Great Society programs of the utopian left. This leaves true conservatives, who believe strongly in limited government and identify with the Goldwater- era Republican party, wondering whether they still have a political home in the modern GOP. In the eyes of many conservatives, today’s GOP simply has abandoned its limited-government heritage to buy votes and gain political power in Washington. gold The Disappearing Dollar 08 December 2003    Texas Straight Talk 08 December 2003 verse 4 ... Cached For much of our history a gold standard imposed discipline on U.S. dollar policy, since every dollar printed theoretically was redeemable in gold. Since the last links between the dollar and gold were severed in 1971, the dollar essentially has operated as an article of faith. Christopher Mayer, writing for the Ludwig von Mises Institute, states: “Faith that paper money itself was of any lasting value would have struck our forebears as patently absurd.” gold Inflation- Alive and Well 08 March 2004    Texas Straight Talk 08 March 2004 verse 7 ... Cached The prices of many other goods and services, including medical care and energy, also have increased substantially in the past decade. Commodity prices in particular have risen recently. In fact, broad indexes show commodities have risen 49% since last spring! The price of gold, steel, lumber, coal, lead, soybeans, corn, and rice have all spiked over the past year. When raw materials and basic consumables rise in price, all of us feel the effects in our pocketbooks. Mr. Greenspan may dismiss commodities as mere “physical” assets in his vision of an increasingly “conceptual” economy, but the markets are showing their preference for hard assets over fiat dollars and dollar-denominated equities. gold A Texas Platform for the GOP 30 August 2004    Texas Straight Talk 30 August 2004 verse 2 ... Cached As the 2004 national GOP convention begins Monday, we should be prepared to hear a Republican agenda that sounds more like FDR or Woodrow Wilson than Barry Goldwater or Ronald Reagan. A party that once defined itself by the fundamental conservative principle that government power should be used sparingly and judiciously, now supports a program of bigger government at home, more militarism abroad, and less respect for constitutional freedoms. An examination of the Texas state GOP platform reveals just how far the national Republican party has strayed from true conservative principles and the ideal of limited constitutional government. gold Raising the Debt Limit: A Disgrace 22 November 2004    Texas Straight Talk 22 November 2004 verse 7 ... Cached Increasing the national debt sends a signal to investors that the government is not serious about reining in spending. This increases the risks that investors will be reluctant to buy government debt instruments. The effects on the American economy could be devastating. The only reason we have been able to endure such large deficits without skyrocketing interest rates is the willingness of foreign nations to buy the federal government’s debt instruments. However, the recent fall in the value of the dollar and rise in the price of gold indicate that investors may be unwilling to continue to prop up our debt-ridden economy. Furthermore, increasing the national debt will provide more incentive for foreign investors to stop buying federal debt at current interest rates. What will happen to our already fragile economy if the Federal Reserve must raise interest rates to levels unseen since the seventies to persuade foreigners to buy our debts? gold Gold Exposes the Dollar 06 December 2004    Texas Straight Talk 06 December 2004 verse 1 ... Cached Gold Exposes the Dollar gold Gold Exposes the Dollar 06 December 2004    Texas Straight Talk 06 December 2004 verse 3 ... Cached The existence of gold in the economy is a constant reminder of the poor quality of the government paper, and it always poses a threat to replace the paper as the country's money. gold 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. gold Another UN Insult 03 January 2005    Texas Straight Talk 03 January 2005 verse 5 ... Cached The oil-for-food scandal brewing in the United Nations also has provoked long-overdue denunciations of the organization from several pundits and politicians on the right. Of course most of you didn’t need a scandal to convince you that the UN is anti-American, or that it egregiously wastes our tax dollars. I’m glad more Republicans are finally catching on to what many Constitutionalists, libertarians, Birchers, Goldwaterites, and religious conservatives have been saying for decades: we should get out of the UN, and get the UN out of America. I certainly agree with these newly minted critics, having advocated getting out for twenty-five years. This growing anti-UN sentiment provides an opportunity to make a larger point, namely that participation in the organization is fundamentally incompatible with American sovereignty and the Constitution. gold What does Freedom Really Mean? 07 February 2005    Texas Straight Talk 07 February 2005 verse 11 ... Cached The political right equates freedom with national greatness brought about through military strength. Like the left, modern conservatives favor an all-powerful central state-- but for militarism, corporatism, and faith-based welfarism. Unlike the Taft-Goldwater conservatives of yesteryear, today’s Republicans are eager to expand government spending, increase the federal police apparatus, and intervene militarily around the world. The last tenuous links between conservatives and support for smaller government have been severed. “Conservatism,” which once meant respect for tradition and distrust of active government, has transformed into big-government utopian grandiosity. gold 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.” gold The Maestro Changes his Tune 21 February 2005    Texas Straight Talk 21 February 2005 verse 5 ... Cached I had an opportunity to ask him about his change of heart when he appeared before the House Financial Services committee last week. Although Mr. Greenspan is a master of evasion, he was surprisingly forthright in his responses to me. In short, he claimed he was wrong about his predictions of calamity for the fiat U.S. dollar, that the Federal Reserve does a good job of essentially mimicking a gold standard, and that inflation is well under control. He even made the preposterous assertion that the Fed does not facilitate government expansion and deficit spending. In other words, he utterly repudiated the arguments he made 40 years ago. Yet this begs the question: If he was so wrong in the past, why should we listen to him now? gold 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. gold 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. gold 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. gold Borrowing, Spending, Counterfeiting 22 August 2005    Texas Straight Talk 22 August 2005 verse 3 ... Cached Few Americans truly understand how our Federal Reserve system enables Congress to spend far beyond its means, but the cycle of spending and printing money affects all of us. Simply put, the more money our Treasury prints, the less every dollar is worth. Our pure fiat money system, in place since the last vestiges of a gold standard were eliminated in the early 1970s, has reduced the value of your savings by 80%. Disregard the government’s Consumer Price Index, which substantially underreports price inflation. Monetary inflation is true inflation, and we only need to look at the cost of homes, cars, energy, and medical care to recognize that a dollar buys far less today than ever. gold What do Rising Gold Prices Mean? 05 December 2005    Texas Straight Talk 05 December 2005 verse 1 ... Cached What do Rising Gold Prices Mean? gold What do Rising Gold Prices Mean? 05 December 2005    Texas Straight Talk 05 December 2005 verse 3 ... Cached The market price for an ounce of gold rose to over $500 last week, a significant milestone for economists watching precious metals and commodities markets. The last time gold topped $500 was December 1987, in the wake of the “Black Monday” stock market collapse earlier that fall. gold 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. gold 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. gold What do Rising Gold Prices Mean? 05 December 2005    Texas Straight Talk 05 December 2005 verse 6 ... Cached Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold. Even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception. gold What do Rising Gold Prices Mean? 05 December 2005    Texas Straight Talk 05 December 2005 verse 7 ... Cached President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Federal Reserve and U.S. Treasury have employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the money supply, and the financial markets. In other words, fiat dollars have no intrinsic value. gold The Declining Dollar Erodes Personal Savings 15 May 2006    Texas Straight Talk 15 May 2006 verse 4 ... Cached Of course the real measure of just how far the dollar has fallen can be found in the price of gold, which has reached a 25-year high of more than $700 per ounce. It’s much more accurate to measure the dollar against a stable store of value like gold, rather than against other fiat currencies. Gold has nearly tripled against the dollar since 2001, when the price was $250 per ounce. By this measure the dollar is losing value at an alarming rate. gold The Declining Dollar Erodes Personal Savings 15 May 2006    Texas Straight Talk 15 May 2006 verse 5 ... Cached Remember, gold is static. Gold isn’t going up, the dollar is going down. And it’s going to continue until the American people demand an end to deficit spending by Congress and unrestrained creation of new dollars by the Federal Reserve and Treasury department. gold The Declining Dollar Erodes Personal Savings 15 May 2006    Texas Straight Talk 15 May 2006 verse 6 ... Cached A sharply rising gold price is really a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East. gold Why Won't Congress Abolish the Estate Tax? 12 June 2006    Texas Straight Talk 12 June 2006 verse 3 ... Cached The U.S. Senate had a golden opportunity to repeal the federal estate tax last week, but fell a few votes short. I fear that vote might represent the high-water mark in the movement to get rid of this destructive tax once and for all. gold Federal Reserve Policy Destroys the Value of Your Savings 10 July 2006    Texas Straight Talk 10 July 2006 verse 3 ... Cached For years officials at the Federal Reserve Bank, including Chairman Bernanke himself, have assured us that inflation is under control and not a problem-- even as the price of housing, energy, medical care, school tuition, gold, and other commodities skyrockets. gold High Risk Credit 20 August 2007    Texas Straight Talk 20 August 2007 verse 8 ... Cached We’ve been headed in the wrong direction since 1971. This week marks the 36th anniversary of Nixon’s decision to close the gold window, which convinced me to seek public office to call attention to the runaway money train that would come in the aftermath of that decision. The temptation to print and spend money with impunity, like the temptation to max out lines of credit, is too strong to for government to resist. While Nixon brokered exclusivity deals with OPEC to prop up demand for the tidal wave of green pieces of paper the Fed pumped into the markets, the world is tiring of marching to the beat of our drum in order to secure their energy needs. The house of cards Nixon built is now on the verge of collapsing on our heads, and on our children’s heads. gold Hope for the Economy 02 March 2008    Texas Straight Talk 02 March 2008 verse 2 ... Cached It is becoming harder and harder for Washington and the mainstream media to ignore the ripple effect the collapse of the housing bubble is having on the economy. Inflation is up, cost of food is up, oil and gold are up, foreclosures are up, unemployment is up, government spending is at record highs, its seems that the only thing down is the value of the dollar. The middle and lower classes are getting squeezed as prices jump and wages stay flat. gold Big Government Responsible for High Gas Prices 04 May 2008    Texas Straight Talk 04 May 2008 verse 3 ... Cached Instead of imposing further restraints on the market, Congress should consider reforming the federal policies that raise gas prices. For example, federal and state taxes can account for as much as a third of what consumers’ pay at the pump. The Federal Government’s boom-and-bust monetary policy also makes consumers vulnerable to inflation and to constant fluctuations in the prices of essential goods such as oil. It is no coincidence that oil prices first became an issue shortly after President Nixon unilaterally severed the dollar’s last link to gold. 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. Home Page    Contents    Concordance   E-mail list.