Ron Paul questions Ben Bernanke about World Currency

Ron Paul questions Ben Bernanke about his secret meetings with other central bankers. What have they been talking about? Is the dollar finished and is there a new world currency on the agenda? What role is gold going to play, if any? Bernanke, while remaining evasive about the details of his meetings, denies the rumors and asserts that the dollar is not dead.

Ron Paul: The Austrian free market economists had predicted all these problems would come, and they were certainly correct in everything that they said. Of course they’re not very satisfied including myself with the so-called solutions, because it looks like we’re spending a lot of energy and a lot of money trying to patch a system together that is unworkable.

So we have Congress spending a lot of money, we have Treasury very much involved in trying to pick and choose which worthless asset that we’re going to buy, and of course the Federal Reserve is involved in injecting trillions of dollars that nobody seems to be keeping track of.

But what we’re failing to do I think is to recognize that the system no longer works, but I can understand why we do this because if Congress couldn’t do this and if the Fed couldn’t do this and Treasury couldn’t do this, it would make us all irrelevant. And instead of looking at the causes of this, and then finding the solutions aren’t going to be found here, we have to make ourselves feel pretty important.

But I think there’s another reason we think we’re pretty important, it’s because in a way our interference in the market corrections that tried to come about since 1971 seem to work. I mean, the failure was established in 1971 with a system that had no way of automatically correcting the balance of payment and the current account deficits.

And that’s where the problems have been, and economists – whether they were left or right or middle – over the last several decades have always said, this current account deficit is a big problem. And now it’s totally out of hand. So here we are struggling with all these rules and shifting back and forth and really getting nowhere.

My question is directed toward, when we come to the full realization that the system is unworkable, what are we going to do, what have you thought about doing, and already we see talk in the newspapers. We see articles about a new international world reserve currency, and to me that’s pretty important, because the fiat dollar reserve system is not going to work anymore, and that’s the information that we have to accept and decide what we’re going to do in the future.

Also, this is not new in history. Currencies have failed, financial systems have failed, and generally, to restore the confidence that everybody is talking about, they usually have to go back to a currency with integrity to it, rather than just fiat money.

And, you know, the stages is there. It’s not impossible, already the central banks of the world still own 15% of all the gold that was ever mined in all of history. So they hold on to this gold for some reason, and therefore something has to give, or are we going to keep trying to waste more money and time patching this system together.

Just last week there was a report that Iran purchased 75 billion dollars worth of gold, took their reserves out of Europe, bought gold and put it in Asia. So is that a sign of the times, is that moving on?

My question is, in your meetings, and you had a meeting just recently with other central bankers, does this thought come up about a new international world reserve currency, and if so, does the subject of gold ever come up?

How do you restore the confidence? Have you recently had conversations with any central banker, and is there a move on to replace the dollar system, because the dollar system is essentially declared dead, because it’s not working, but this indeed was predictable because of these tremendous imbalances that were never allowed to be corrected, and they were always patched up. We always came in. We’d spend, we’d inflate, we would run up deficits, and since ’71 we’ve been able to correct these problems.

Could you tell me what kind of conversations you’ve had regarding a new reserve currency?

Ben Bernanke: Yes, Congressman. I don’t think the dollar system is dead. I think the dollar remains the premier international currency. We’ve seen a good deal of appreciation in the dollar recently during the crisis precicely because there’s been a lot of interest in the safe haven and the liquidity of dollar markets.

And the Federal Reserve has been engaged in swap agreements to make sure there’s enough dollar liquidity in other countries because the need for dollars is so strong. So I think the dollar system remains quite strong.

I do agree with you very much on one point, which is about the current accounts. The current account imbalances have proved to a very serious problem. It was in fact the large capital inflows in those current accounts which created a lot of the financial imbalances we saw and have led to some of the problems we are seeing, and one of the silver linings in this huge grey cloud is that we’re seeing some improvement and greater balance in our current account deficits.

Ron Paul: But does the subject of a new regime ever come up?

Ben Bernanke: No, it doesn’t.

Ron Paul: And does the subject of gold ever come up in any of your conversations?

Ben Bernanke: Only in terms of the sales that the central banks are planning.

Ron Paul later released the following comments:

  • Kevin Smith

    I didn’t look back as to who suggested to research the Zeitgeist movie(s), but thank you.

    What an absolute eye opener!



  • Al Fata

    The solution to the crisis, even now after many missteps, is to spend $10 bln to hire 10,000 new bankruptcy judges and their support staff. The purpose of bankruptcy is to create a fresh start by cleaning the slate of problems of an unfortunate or irresponsible past, and it does so without rewarding irresponsible behavior. We need to restore the rule of law, rather than reinventing government.

  • chris

    bw thanks for the reply.I like you was convinced last year to buy metal for my retirement (Im 45)so I picked up tons of copper @ $3.00 a pound.I believed that I should have the actual metal and also believed gold had been pushed for a year in every publication around so it was over-sold.Well if the dollar crashes like I believe is comming I will be long as someone wants copper.But these are things that no-one can pridict.And since all the mining is on hold,it seems I am not the only one holding an unwanted asset.If I could find actual gold at a reasonable price I would by some,but no more then 10% of my wealth.Most of my time and$ is spent growing crops and tools..But the anallegy that 1 once of gold has always bought a fine suit speaks for itself.I just fear a different future. thanks


    President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy’s order gave the Treasury the power “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.” This meant that for every ounce of silver in the U.S. Treasury’s vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.I think this order is still in effect,not sure.


  • Brian

    Amero was a reference to a new gold-backed standard – sorry, I wasn’t talking about Fiat.

  • Brian

    Thanks, Nick. Just trying to get a better view of the big picture. So, in theory, Britain goes bankrupt if the Fed doesn’t lower interest rates after WWI?

    Also, it appears that changes in gold supply could create huge swings in the currency for better or worse. Assume Fort Knox stores tons of gold in their coffers if we move to a gold-backed international standard. What happens if Iran nukes Fort Knox? Gold and therefore the “Amero” goes through the rough, right? What’s the downside?

    • Nick

      I’m not a master historian so I don’t know if they would have gone bankrupt, but I assume they would have went through a rescission. They certainly stopped being the world’s economic leader because they spent too much.

      If the gold supply goes down then basic economics tell us that the price is going to go up. I’m not sure why the “Amero” or any other kind of fiat money would go up though. Fiat money that is not tied to any gold-standard will ultimately go down in value because you can just make more of it to dodge recessions.

      By the way, I think Iran would probably bomb something else, like Israel!

  • Brian

    Were we not already on a gold-standard when the Great Depression occurred? I thought that was why we abandoned it in the first place.

    I have a hard time with Paul’s economic message sometimes, because it is extremely difficult to find counter-points. Are people ignoring him or just can’t refute him?

    • Nick

      No, we were not entirely on the gold-standard. Gold was still tied to money, but the Federal Reserve used its power to lower interest rates below market value in order to help Great Britain out of their deflation problems. This had a ripple effect through-out our economy causing the disaster.

      There’s counter-points, but they are all bad. I suggest reading through to learn more about Austrian theory economics.

  • hirize

    Nick…you may want to call 1-800-686-2237 ext. 129 if you are interested in hard gold or silver. These guys have the best prices on coins according to what I have found. They are also one of Alex Jones talk radio show sponsors so you can be sure they are legitimate. As you may or may not know, stay away from paper ownership of gold, silver or anything else paper for a back up. They will screw us all out of everything less than hard gold and silver in our possession. Watch out for Obama and his cronies as well as the totally corrupt congress to put an 80 or 90% capitol gains tax on gold and silver to discourage us from buying it. However, and probably as you know, there are always ways around thug laws like that. If you are not familiar with Alex Jones Radio show at and be sure to listen as much as possible. Alex Jones sounds a little wild and unbelievable at first but after listening to him this past year, he has always been right on the money and tells his listeners how to document everything he says if they want to check it out for themselves. His info. is real time factual first class information that everyone needs to know and respond to.
    Hope this helps you out.

  • Nick

    Anyone been following the advice of Ron Paul, Peter Schiff, and Jim Rogers by buying Gold? I was thinking about purchasing the actual coins since I don’t have enough money to invest with Euro Pac, but then I thought I should just buy the GLD stock through etrade. It’s only 13 dollars per trade and you can get a way better deal per ounce then you can buying an actual gold coin. Anyone else doing this?

  • MEL


  • ac

    BW, you don’t get my point, only people give gold and silver value. If a farmer had a broken tractor and i needed food and had a tractor, that is real value. Gold is just like paper in that sense, people are giving it value. People us humans give gold value, but to the everyday person it really does not do much. People make it a medium. You need to think outside the box more to understand what I am saying.

    Let’s say if an alien race came to earth because they needed to eat sea shells to survive, then those sea shells would be of great value to them, gold nothing. Gold and Silver are just substances of the earth. People give it value, and it could be that those with a lot of it give it value, just like the banks try and give the us dollar notes value. It’s all man made value not real value.

    When some Jews tried to by thier lives by giving gold to the Nazi”s, it didn’t work, it had no value for them at that sad point in time. If a nazi soldier was going to stab a Jewish person in a room, what has more value a piece of gold or a sword made of sharp steel. Get my point???

    People give gold and silver value, humans give it value as a medium of exchange, but it is just an earth substance that is not needed to sustain life. Food, Water, Shelter, etc… That is what is real value. Do you understand my point now????

    IF you do not, then I am sorry.

    Get my point???

    • Brian

      We get your point but you are missing THE point here. If you are going to have a monetary system it must have checks and balances. The only thing gold does is regulate the overspending and gives creditors something to “foreclose” on. It could be seashells, dolphin teeth whatever. The operation of a fiat currency has spawn a service economy of borrowers because there are no checks and balances. You cannot trust government to manage that.
      Your point is true. Food, shelter and most importantly water are the essentials we all need, this is a discussion about how to maintain value in the money system. The means to acquire those essentials. Get my point? Get my point?

  • lextcs

    Back in the 97-98 financial crisis, asia took a rather bad beating. Even with most of its economies have trade surpluses, each individual country currencies continues to be hammered mercilessly by the likes of Soros and his hordes of blood thirsty hedge fund vampires. Some took drastic steps (such as pegging and capital controls), some beg for aids from world banks, etc etc. Asia now is in better shape thanks to lessons learnt. But we are still not immuned to the disease of the BIG APPLE. Despite uncle sam’s dollar vitually worthless yet our currency depreciates against it. How is that so? How could our monies back up by the golf standards (to a certain extend) continues to fall?

    I truly think its time the world shift its attention entirely off BIG APPLE.

  • Brian


  • sallyk

    Everyone is reading and watching movies and trying to decipher this mess, does anyone read the Bible? A one world government and money is inevitable. We just dont know when.

  • bmeister

    The auto industry should take a new course. This could be a good start:

    Might anger some oil companies though 🙂

  • ac

    Um, no you can’t. Well as of today paper buys food and necessities. I never went shopping with metal. My point is that it is the same difference. Go try and buy food with a gold ring and see what happens. If the world goes to hell what makes people think that metal will buy them stuff? It’s really the same difference. If you really think about it.

    • bw

      The basic idea is that we need a medium of exchange which has intrinsic value (as in, people want it for itself, versus paper, which people don’t generally want, except that it has been given value by monopolistic banking practices.) Gold and silver, as of now, obviously do not buy food. However, when the dollar (paper) becomes worth less and less, eventually it will be worth nothing, and in that case, people will not trade you things unless you have something of actual value (like precious metals) to offer in exchange. To comment on a gold standard discussion, you really need to have at least a basic understanding of what money is: a means of avoiding having to find a double coincidence of wants. Basically, without some medium of exchange, if you want food, you have to trade with someone who has food by giving them something they want. So, you each have to have what the other one wants. That is why gold started being exchanged: to act as a medium, so that if you have extra of something, you can trade it for gold to anyone who wants what you have extra of, and then you can take that gold and either save it, or exchange it for what you want from somebody else. Since gold is rare and can be made into larger or smaller increments (melted) without debasing its actual elemental characteristics, it (and silver for the same reason) can be used functionally as a means of exchange when the double coincidence of wants does not exist.

      The reason silver and gold are better than paper is twofold:

      one: inflation. The dollar buys less every day, and eventually, will buy nothing and will have to be reformulated, and will most likely be reformulated by an equally fraudulent note of some kind.

      two: if we ever get to the point where people are short on food, they may not accept gold or silver, but they DEFINITELY will not accept PAPER.

      Obviously, no one will accept a gold ring in exchange for a loaf of bread and some eggs and 3 lbs of bacon at the grocery store. But that’s because we have adopted a fraudulent system, whereby worthless paper is exchanged and debased until its eventual death. However, if you went to a farmers market, and wanted to buy all that stuff, if you wanted to pay someone with a gold ring, and had a means to measure and weigh and value it, you would probably be able to buy what you want in relation to the ring’s gold content value. However, nobody is arguing that we should start using rings as currency, so the point you made only serves to make you sound like a fool. Do some research, use your brain, and if you get it, you get it, but not everybody has wisdom; some people will live their whole lives as fools, accepting whatever system they are born into, and calling anyone with wisdom a fool. So the choice is yours; you can learn the truth and change your opinion, or you can revel in blindness, making fun of those with sight, never knowing what sight is. Choose wisely, if you can.

      • chris

        You lay a pretty good argument for precious metals,but there is much more to evaluate than what could be done in just one page.Such as who owns it /who wants it/for what reason/what else is happening in the world that may trump it/what the imf or world gov is doing monitarilly/the economy/flow of wealth/dubai etc.and much please lets not call people with questions blind fools.because looking at the current value drop,it would seem like 99% of the world disagrees with you.(and that should matter to your plan)

        • bw

          The current value drop has nothing to do with intrinsic value; it has only to do with spot prices. Future prices for un-mined gold with limits on purchasing. That is called manipulation. Keeping the buying interest down, to suppress the price through regulation. Banks which own a large portion of the world’s gold can also lease and sell gold to each other, keeping the price down, making the dollar look good.

          All you have to do to understand the value of gold is look at what is happening to the price of actual hard gold right now. It’s anywhere from 10-15% over spot price. Gold as valued against d fraudulent currency is a bogus estimation, so you won’t convince me with an unresearched argument.

          The 99% of the world that disagrees with me have no understanding of money, and the idea is, you change that through a little less involvement in foreign affairs and a little more free trade within our borders. And education.

          Also, you said: ” so please lets not call people with questions blind fools.”

          I didn’t call anyone with questions a blind fool. I called anyone who accepts the system they are born into WITHOUT questioning it a fool. The guy I responded to knows nothing of what I am talking about, and you seem to concerned with the rest of the world. There’s more to this than just changing the currency to gold and silver, obviously. If you want a global system, it will never happen; the people who want to run that have already decided that.

  • Queena

    Ron Paul is correct in asking Ben and as expected Ben wouldn’t answer. I have called and written to other politicians regarding this and the “bail-out” which didn’t work. I did inform them I wouldn’t vote for them if they voted for the bail out and I didn’t vote for any of them because they have not listened. Now, as I have said for some time, if you can get your hands on gold or silver and hold on to it, you will be smart. The banks (Goldman, etc) are holding the prices down and we are just in waiting for it to blast off. Look at and read what Jim has to say, go to and read as much as you can, these folks are not dumb to what is happening. You can hardly get your hands on small sums of gold or silver now. If you have gold or silver you can get premium prices above “spot”, there is a reason people want it. Call Ron Paul’s office and ask them. I have talked to Ron’s office, I could only wish he were in my area so I could have voted for him (I did a write in but they do not count). If you think it is bad now just wait and see…Best wishes for your future.

  • ac

    Gold, Silver, Bronze, have no real Value. People give it value like paper money. Food, Energy, Water, that has real value.
    So I don’t think Gold or a metal is the total answer. If you have no food or water and lots of gold you will die. People give those metals value just like paper money.

    • Queena

      With metals you can buy food and necessities. If you are smart you cover your rear, have assets (metals and land – paid for), have food to last for more than a few days. Paper is just that paper that can burn up, it has little value and will have less as times go by….

  • ac

    There is no more Soviet Union.

  • Kevin Smith

    I won’t claim to know everything, but I think DigDoug is off base.

    I can’t argue with the fact that bringing up the gold standard losses the audience.

    Who determines what algorithm will be used, and for how long, why not change the algorithm? Who will define and audit? The FED? our current (or new) administration?

    Who will determine the top 5%, and of those making the determination, why not 7% or 10% (or what ever other %).

    Then, those making that determination find major corruption, but can cover it up, making billions (if not trillions for themselves – not just that day, but each day forward).

    We need a concrete money supply and if Hoboken discovers 100 billions pounds of gold, they will use that gold to further the free market (although an argument can be made that Hoboken will have huge impact – Hoboken will still be part of the free economy).

    Want more stability in the market, want stability of inflation and debt? Then base a currency on hard assets (gold, silver, bronze, etc.) and have the money based on those assets controlled by a government for distribution at no interest from that government.

    Our economy is in trouble because there has been excessive regulation since ~1913.