Going Back To The Gold Standard?

Ron Paul is interviewed about “dumping the faith-based Federal Reserve system”. He talks about the history of the gold standard and the dollar, and proposes a transition period where free-market gold currencies could openly compete against the dollar.

Channel: Fox Business
Date: 1/30/2009


Reporter: It’s not too long ago the dollar was as good as gold. In fact, dollar bills were labeled gold certificates, so just imagine if the dollar was as good as gold once again. If confidence is one of the failures of our financial system right now, would a gold standard restore the faith and confidence and allow us to move on? The loudest voice in favor of dumping the faith based Federal Reserve System going back to the gold standard is Congressman Ron Paul; he joins us now by phone tonight. Good to hear you Congressman, thanks for coming in, appreciate it.

Ron Paul: Thank you, good to be with you.

Reporter: So, tell us what the possibility, how would we go about going back to gold standard?

Ron Paul: Well we have some pretty good history to look at; we can look at our own history. We went off the gold standard during the civil war period, and the gold price soared, a couple hundred dollars, from twenty dollars. We lived in a different time then, in the 1970s they passed a Resumption Act and they had a three year period and a lot of part 1870s, and there was a transition. They quit printing greenbacks, they withdrew some greenbacks, they balanced the budget and we weren’t running a welfare-warfare state. And the people, believe it or not, trusted their government and it was a non-event and three years the dollar was as good as gold at twenty dollars an ounce. England, after World War I, tried to do the same thing, but they had too many pounds circulating. They went back to an old price and they didn’t withdraw any pounds so it didn’t work, and now we have a bigger problem. The transition would be pretty tough, not written and talked a lot about this and you’d have to device a system where there would be a transition where maybe you could have a gold standard competing with a paper standard and then obviously gold would win out.

Reporter: Well sure.

Ron Paul: People would eventually go to gold because the paper, we’re getting down to the bottom right now. The last thing before they really rushed to gold is the Treasury bill.

Reporter: And that’s about popped hasn’t it the dues on that?

Ron Paul: Look at what the rates have done just recently so if money quits flowing in there or what if a few foreigners decide to dump some of that stuff then the panic is uncontrollable. Then you’re going to see gold instead of being pressed twenty dollars a day, it might be a hundred dollars or two hundred dollars a day, I believe that is conceivable.

Reporter: Alright, well let’s see if we can get a close-up of what I’m holding in my hand right now. This is an old dollar, I don’t know if you can see it. Can you get any closer than this? This is a silver certificate that was issued, I guess they stopped issuing it about thirty, forty years ago something like that. But is this what you are envisioning? Where a dollar bill that does have a signature, a dollar after all is a contract. There are two signatures in there including the treasury secretary, and those signatures mean this is a contract that a year from now the money that you earn should be worth about as much, and if not, if you have any doubt about this you can trade it in and you can see up on top there it says, “Silver certificate for gold or silver.” Is this what you want again?

Ron Paul: To some degree, but there’s been a lot of writings about how you might do this in the private market and not have a government monopoly, because we did have shortcomings in our gold standard because we have bimetalism and we have artificial prices fixed between gold and silver. You don’t want that, you’d have to be on a gold standard or a silver standard, but you could. Hayek has written about baskets of currencies and having this work in the private market. A competing currency could be private but, yes, eventually what you’d want to do, a lot of people say, “Oh we don’t want no gold, we can’t carry all that gold around in our pockets.

Reporter: Right.

Ron Paul: No, I think your point that you’re making is right. You’re still going to have certificates or you’re going to have electronic entries. There are people today who are trying to promote this idea through electronic gold, but the problem is the legal tender laws force us to use dollars in all settlements, so one of my goals in Washington to move in that direction would be to repeal legal tender laws. Actually, all we need to do is obey the Constitution because it’s still very clear it hasn’t been repealed that only gold and silver can be legal tender. Believe it or not, they don’t even obey the Constitution anymore.

Reporter: We believe it now. We’ve seen enough examples of that unfortunately in the last couple of months. Congressman, thank you so much for being here, appreciate it.

  • Warren Wilson, WWII Vet

    The Federal Reserve Bank is a private corporation that prints fiat money that is backed by nothing. The Fed lends this “money” to the U.S. government at an interest rate determined by the Fed. The loan must be repaid to the Fed with interest. The government doesn’t have any money except what it steals from us taxpayers. So we taxpayers are paying interest to the Fed for paper money that has no more intrinsic value than toilet paper. You might not like to to hear this, but it is true: The stockholders in the Fed are international banking dynasties such as the Rothschilds. It is because of the greed of these bankers that the world now is in an economic crisis far worse than the Great Depression. How do I know? I lived through the Great Depression, and I can tell you it was a cakewalk compared to what we face today. Here are a few things that didn’t exist during the Great Depression: Medicare, Medicaid, Social Security, foreign aid, welfare, Fannie & Freddy guaranteed mortgages, credit cards, student loans, etc. American Blacks were segregated and had not yet become militant as many of them are today. And there weren’t 20 million illegal aliens who hate White Americans, who don’t want to assimilate, who take your jobs, who commit violent felony crimes such as murder, rape and child molestation. Just in case you don’t know, the Rothschilds are Jews, as are most of the principal owners of the Fed. Chairman Ben Bernanke is a Jew, as was his predecessor, Alan Greenspan. In fact every chairman of the Fed since its inception has been a Jew. Jews take care of their own, which is why the Jewish-owned Wall Street banksters (bankers-gangsters) have been bailed out, while you and I are picking up the tab. Such a deal, huh? Until you learn the history behind the Fed, you are not in a position to intelligently argue who and what brought on the financial meltdown. Oh, yeah! I forgot to mention, the crook Obama nominated for Secretary of the U.S. Treasury, Timothy Geithner, is a Jew who failed to pay a big chunk of income tax he owed–until he was nominated. Had he not been nominated, he never would have paid. Let you or me try cheating on our income tax, and we will cool our heels in the slammer. Now go to the library (those of you who can read) and check out some history books that were written before WWII. All the new books–the kind you read in school (those of you who can read) were written my Marxist conspirators (Jews) who tell you only what they want you to know. Did I mention that Geithner who cheated on his taxes, and only paid up after he was nominated as Secretary of the Treasury, is the guy who now is in charge of the IRS, the agency that collects income taxes from you and me?

    • Nate

      With respect, I’ll take the value and discard the bigotry in your post.

      • Warren Wilson, WWII Vet

        Nate (Short for Nathan, correct? Perhaps Jewish?) why do you accuse me of bigotry? Since when has telling the truth become bigotry? I merely tell the true facts as they are well documented. Abe Foxman and his goons at ADL have done an outstanding job of brainwahing most Americans. But I am not one of the sheeple. I am an intelligent person who thinks for myself. I have dealt with Jews on all levels throughout my long life (87 years). Every Jew I’ve ever known treated me as though I was intellectually inferior to him (or her). It is not my imagination. Incidentally, I am familiar with the Talmud, so Jewish supremacy is not a mystery to me.

        • Nate

          Yes, short for Nathan. But not Jewish. I was baptizeed Catholic but no longer believe in gods. I’m sorry you had the misfortune of having every Jew you’ve met treat you as intellectually inferior. Have you met the “20 million illegal immigrants who hate Americans”? The bigotry comes from implying that a person’s faith/race/immigrant status is of any relevance at all in these matters. If we had reason to believe these people are motivated by their religion/race it would be a different story. But we have no evidence of that. It is enough to condemn the actions of people without mentioning their faith/race/immigrant status.

          We have to start looking at each other as individuals not members of the groups into which we are born.

          Bringing up faith, race, immigrant status, for no reason does nothing to advance the idea of personal liberty. Indeed, such talk marginalizes the message.

          • Warren Wilson, WWII Vet

            Nathan, I mean no offense, but you simply do not have a firm grasp on the current world crisis. Until about ten years ago I had not been paying close attention. While I knew something was terribly wrong, I didn’t have a clue to the underlying cause of the problem. Then I began to explore the underground media, and soon began to realize that I, like most people, had been mesmerized and totally brainwashed by the mainstream media that is owned, edited and censored by the conspirators. It finally dawned on me that there actually was a conspiracy to destroy America as I had known it. But there were so many dots that had to be connected before the big picture came clearly into view. Please take my advice. visit http://www.anu.org and read three of four articles at random. At first you likely will be skeptical of what you read. Go back for a few minutes every day for a week. I predict your curiosity will prompt you to follow links that will lead you to an ever-expanding realm of knowledge to which you might never before have been exposed. Another good site is http://www.newswithviews.com … sure, you’ll run into kooks, but you’ll soon learn to separate the grain from the chaff. Anti-Semitism didn’t fall out of the wild blue yonder. There are many valid reasons why it exists. And I might add that the Jews have brought it upon themselves.

          • Nate

            Mr. Wilson, you are not offending me in the slightest and I doubt you ever could. I just think your words are counterproductive and erode the message of freedom and liberty.

    • Mike D

      Could you please elaborate on the militant blacks? I’d like to hear more on this topic. Can I guess you’re a Christian white male? I noticed you had nothing negative to say about them.

  • bobadi

    One of the problems of adopting the gold standard is that it would inflate the price of precious metals beyond anyone’s ability to purchase it as there are far too many people in the world today.
    It would make those hording it extremely wealthy, and they would have to be in order to survive, because it would also cause extreme inflation in our economy as it is used in many of our most important industries, especially electronics.
    For an example, listen to jewelers; they were being driven out of business due to the price of metals, no one wanted to buy them at an inflated cost, can you imagine if that cost was driven up 500% or more? Remember we are not talking just jewelers, but nearly all major electronic industries.


    • Nate

      You’re likely right there would be problems going back to the old system and Ron Paul argues that point. I don’t think they would be the specific problems you state but whatever.

      But it is important to remember that there is no such thing as “the gold standard”. When people argue for the gold standard or a gold standard, they are pretty much arguing for commodity money/certificate money. The important thing is that money is a commodity or backed up by a commodity. Gold and silver tend to win out whenever and wherever they are available to be used as money. So really what Ron Paul is arguing for is sound money and a repeal legal tender laws and allow competing currencies. Let the market (the people) decide what money is best.

      • bobadi

        Thanks for your reply.
        Where can I read about Ron Paul’s argument on this point? I would like to read this, as I do respect his opinion, even though I do not generally agree with everything he would implement.
        I understand that precious metals are a real and honest commodity, but if the US starts banking in it, you must realize that there will not be enough of any of it to satisfy our world masses, in a sense it would become a new Malthusian trap in reverse technology. This again will drive up the value of these metals to such an extent that this; our new age world capitalist manufacturing will become impossible…. perhaps this return to “antiquity” would actually be better for our world in view of our near complete ecological vitiation of it?
        Is this, what you are proposing; a new Luddite green world paradise?
        If so, I may well be in favor of it..

  • Anthony

    Hey the Gold Standard? That’s what where talking about.

    • Meetra

      I know, right……….

  • Warren Wilson, WWII Vet

    Gabriel, thank you! Warren

  • Gabriel Gonzaga


  • Warren Wilson, WWII Vet

    Judaism no longer is a religion, it is a cult. Every Jew I’ve ever known in 87 years has been an atheist who proclaimed himself morally and intellectually superior to me. Anybody who cannot or will not recognize the current crisis having been precipitated by Marxist Jews needs a brain transplant. Look at Obama’s cabinet. Look at his staff. Look at the Fed. Look at Wall Street. What do you see? All I see is Jews. If you don’t see them, you are blind.

  • Anthony

    Thank you, I’ll check them asap.

  • Kenny

    Well I am very glad we have returned to the topic at hand. Essentially the problem is that our beloved country is no longer functioning under capitalism, but is everyday becoming more fascist and ipso facto more socialist. So really the problem is not necessarily the monetary standard but the interference of the government (even simple paper currency could work as a standard so long as it is generally excepted and not forced). Anyway, Anthony some good books to read would be Gold, Peace and Prosperity by Ron Paul and also The Gold Standard: Perspectives in the Austrian School by Lew Rockwell (I have not actually read the latter but I trust LR enough to know that it will definitely answer your questions.

  • Anthony

    Now that the subject is back to where it should have been from the beging, what is every is everyone’s ideas on how to fix the problem at hand. I don’t know to much about the gold standard? What are good books to read to better inform my self on this topic.

    • Meetra

      The gold standard was what was used to back up our currency. simple put: one dollar bill was backed up by a dollar’s worth of gold by the US treasury. At one point there was a shortage of gold and so silver was in the mix. Most of the transition away from the gold standard was due to FD Roosevelt and the new deal. The government started printing money on credit that was backed up by investors. It is really complicated any further into the subject.
      In addition to other suggestions, anything you can find on global economics post WWII; like the Bretton Woods agreement will help you understand why this is such a big deal right now. We are basically out of credit for which the US can print money.

    • I think hard money has always been a mix of gold, silver, and copper. You cannot have one because while gold is divisible to really fine amounts, it becomes impractical past a point. Silver and copper make good alternates for smaller values or always have in the past. I will take payment in any of the three or any other high value metal, LOL.

      I don’t think you can cold turkey anything here. Congress has to force the Fed to accept competing currencies, though. Anything else will not work. The Fed will fight because as everybody knows, good money will drive out bad money. I have my doubts about whether a competing currency such as hard money would improve the dollar’s value by virtue of competition, though. I think it would just inspire more machinations from the Fed against our economy.

  • voodootree

    It is regrettable that the issue of returning to a fair monetary system has been dragged into the territory of anti-semetic rhetoric. There are conspirators, yes. There are conspirators for every single thing that that we do on purpose. For example: just this morning, my son and I conspired to have breakfast. But the conspirators are not all jews, as Warren suggests. I would wager that many of them are convinced that their system will actually work even, and that they aren’t in the least sinister – thay are just wrong. Further, I wouldn’t doubt (on the subject of conspiracies) that Warren’s entire purpose is to “taint” this discussion (and thus the entire topic of a gold standard) by bringing in this anti-Jewish nonsense. Regardless of purpose, that is what he has done.

    So – Warren: IF you would like to help bring the national conversation concerning a return to a gold standard into the light, you need to stop it with that.

  • Ken

    Our men and women in the military are strong, courageous and believe in the constitution and what it stands for. I think they need to be brought back home so they can take a stand against those destroying America. It almost seems they are purposely sent to far away lands outside of our borders so their voices will not be heard as America is being destroyed from within.

    • Now, THAT is the most interesting thing I have read today.

  • Anthony

    Thank you, why should we hate more when hatred is the problem in this world. I’m young and I know I have a lot to learn. One thing I do know is that we need to stop piling ignorance on top of ignorance, and by blaming one religion is not going to stop that.

  • Jesse

    You have to engage…This means turning off the TV lifting your ass off the couch picking up the telephone and telling your gov’t officials what you want…It also means voting for congressman and women who are actually qualified…Because very few people in Washington know very little about balancing a budget the door is wide open…Do your home work next election and find out who are the fiscally responsible candidates…Real change can only occur when the establishment of life time politicians are voted out of office…Restore the republic!!!!

  • Judy

    In my opinion,Anthony is right. Warren is wrong. Look around and blame anyone you choose. Warren says it’s the Jews. Did anyone make you choose to believe them? We all choose what to believe and then act upon our beliefs. Just like now, some are rushing out to buy gold because some are saying that will solve the problems. The only happy people I see are the ones who are ignoring it all and always have. They go about each day working, eating, laughing, enjoying their families and saying we want no part of the material craziness. We just want to be free to enjoy life our way. We are bombarded with media, marketing, etc. When we are young, we get caught up in that and fall victim to it. As we get older, we mature and learn the truth and reject it. The youth will always do this. It is youthful nature. We who are older need to take a stand now and preserve our liberties for our children and grandchildren. The greedy ones put their faith into believing they can con us into this material system. We need to say no! We do need to ignore them. At the same time, we need to pay attention to saving our constitution and our way of life. I don’t worry about the economy. If need be, people will return to local farming co-ops and such things. This would be a good thing. People will not be dependent (slaves) to the government and the financiers. They will depend on themselves and their families. I think the liberals are imploding. Just a little while longer and we’ll see big change for the better.

  • Anthony

    I’m not saying ignore them, i’m saying that you cannot inspire fear into people like you are about a religion who is the oldest religion in the world.Not paying attention is not ignoring them just don’t listen to what they say. How do plain on fixing this problem by inforcing more laws and more governent. Maybe you should get your hard out of your ass. What you say is very afensive to me and millions out there who belive in free people.

  • Warren Wilson, WWII Vet

    What do you mean, our best response is to ignore them? Don’t you understand that the conspirators are the Jewish, Marxist Zionists who literally own Congress, the White House, the Treasury, the Fed, Wall Street, the media, the Hollywood propaganda mill, the Ivy League thinks tanks, the public school system, etc.? Where in the hell are you coming from? Get your stupid head out of your rectum, and smell the YIDDISH coffee! It is the JEWS, stupid!

    • I will be more blunt. To state that it is the Jews is not only incorrect, it is stupid and works against the cause of going back to sound money. Take your anti-semitism somewhere else.

      “IT IS THE JEWS!” you cry and bang, ears and minds close, as they should, to anything else you have to say.

      Those who instigated a fiat currency are godless and amoral. As to your service, well, I appreciate it. Now, go clear out the shellshock of disinformation that has you working against your own best self-interests. Four of my great uncles were in Normandy on D-Day and none of them run around hollering about Jews, even David White, the second American to be greeted by the Queen. What he DID see was a war torn apart by central banks and greed and he spared no pains educating me about it.

  • Warren Wilson, WWII Vet

    We concur, but our voices fall on deaf ears. Figuratively deaf, that is, because the Marxist conspirators have brainwashed and made dumb two generations of Americans who now have their heads buried in their rectums and don’t know up from down. Only when we all have courage to bluntly state that “conspirators” and “Jews” are synonymous terms might we begin to make progress. The Jews who totally control government, business, the media and the Hollywood propaganda mill must be removed from power. No, I’m not suggesting genocide, but thus far my nimble brain hasn’t conceived of viable alternatives. Who among readers can offer optional methods?

    • Anthony

      I give the most respect to you for fighting for this nation of ours. I do agree that we need to take the power back from these “conspiraitors” you talk about, but the best way to take there power away is by paying no attention to them. As a young adult (20) it is a hard battle but I know the outcome will be very rewarding to our society and for our freedom. With remorse as a person who belives in the right to choose what relgion they can follow we cannot blame it on one. Who gives the power to those few we do, with years of appatiy and following and not caring. We are the ones who are responsable.

  • Anthony

    Once again Ron is right, we need to trash the fed and go back to gold. People wake up please 2012 is right around the corner and this is the man we need in office for real “change”.

  • Mike

    Crazy! The gold standard getting play on national television! The times they are a changin!

  • History has taught us that fiat paper doesn’t last. Bring the gold back!