2002 Ron Paul 71:1
Rep. Paul: "Welcome Chairman Greenspan.
I’ve listened carefully to your
testimony but I get the sense I may be listening to the Chairman of the
Board of Central Economic planning rather than the chairman of a board
that
has been entrusted with protecting the value of the dollar.
2002 Ron Paul 71:2
"I have for quite a few years now
expressed concern about the value of the
dollar which I think we neglect here in the Congress, here in the
committee
and I do not think that the Federal Reserve has done a good job in
protecting the value of the dollar. And it seems that maybe others are
coming around to this viewpoint because I see that the head of the IMF
this
week, Mr. Koehler has expressed a concern and made a suggestion that
all
the central bankers of the world need to lay plans in the near future
to
possibly prop up the dollar. So others have this same concern.
2002 Ron Paul 71:3
"You have in your testimony expressed
concern about the greed factor which
obviously is there. And you implied that this has come out from the
excessive capitalization/excessive valuations, which may be true. But I
believe where you have come up short is in failing to explain why we
have
financial bubbles. I think when you have fiat money and excessive
credit
you create financial bubbles and you also undermine the value of the
dollar
and now we are facing that consequence. We see the disintegration of
some
of these markets. At the same time we have potential real depreciation
of
the value of our dollar. And we have pursued rampant inflation of the
money
supply. Since you have been Chairman of the Federal Reserve we have
literally created $4.7 trillion worth of new money in M-3. Even in this
last year with this tremendous burst of inflation of the money supply
has gone up since last January over $1 trillion. You can’t have
anything but lower value of that unit of account if you keep printing
and creating new money.
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.’"
2002 Ron Paul 71:5
Congressman Paul then added the he
strongly believed this statement by
Greenspan taken from a 1966 article that was included in an article he
had
written titled, "Gold & Economic Freedom" was true. Congressman
Paul
continued,
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.
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.
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?"
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."
This chapter appeared in Ron Paul’s Congressional website at http://www.house.gov/paul/congrec/congrec2002/cr071702.htm
