Ron Paul to Ft. Knox: Show Me The Gold

Show: Lew Rockwell Show
Date of Interview: 05/07/2010

Ron Paul, long the leader in American public life for sound money, sound banking, and the free market, talks about the progress of his Audit the Fed bill – and why the Fed, the Treasury, and the banksters fear it. He also discusses the crisis in Europe and especially Greece, and the Fed’s sinister and secret role. We know why the Fed wants its secrets kept safe from the American people, about what banks and other institutions it bails out by printing new money.

But why do they so fiercely resist a physical audit of the gold at Ft. Knox and the vaults of the NY Fed? What are they hiding? Did far more US gold flow overseas under LBJ and Nixon than is admitted? Has some or all of the remaining gold been sold, though it is still physically in the US? Ron Paul, and all of us, wants some answers.


Lew Rockwell: Well, how wonderful to have as our guest this morning, Dr. Ron Paul. Congressman Paul has been for a number of years a great spokesman in American national life and really with an international presence as well for sound money, sound banking, the free market, and a very different system from the one we have today Ron, and what seems to be in trouble. But before we talk about maybe the European situation, tell us, everybody’s interested, what is the progress of your bill to audit the Fed? Also, I might mention that Ron’s most recent book is called “End the Fed”. So this bill has already done I think huge good in this country in alerting people to what a secret operation the Fed is, why we ought to be able to know what they’re doing, and you’ve gotten a huge number of co-sponsors in the House, you’ve gotten co-sponsors in the Senate, but of course there are very bad people including the Federal Reserve itself and the Treasury who are opposing you. So tell us, what’s happening with your bill to audit the Fed?

Ron Paul: Well fortunately, we got it passed in the House. We had to stick it on a terrible bill but there weren’t any other options. So in the Financial Services Committee it was passed and attached, the bill came to the floor and it was passed overwhelmingly. Interestingly enough though, I voted against the bill because the bill itself was terrible. But anyway, using the process, we were able to put a good amendment on to a bad bill, so it does exist. But now they’re debating financial reform in the Senate, and just yesterday on Thursday a major event occurred because Bernie Sanders, who was supposed to introduce my amendment and brought it up and at the last minute changed it. And I did have a conversation with him today, which is Friday. He did describe it as, “well that was the best he could get, it had to be watered down a bit. There was no way the other one would be passed,” that argument.

I think he has one point. If his bill as it is written, even though it’s much different than my bill that I introduced, it probably would be better than the rest. But my point to him was that it would be important that we have the Senate at least be on record they haven’t voted for a much cleaner bill. If it doesn’t pass, then offer his as a substitute and pass it. Under those circumstances I may well support it but I would want to go for the best bill.

But it looks like Vitter may be introducing the much cleaner bill and I know Jim DeMint has worked hard on it. He would be supporting it to come up. Quite frankly I don’t think it will pass. I think Bernie is counting the votes, he claims he has to have 60 votes to pass anything. But you know, if Dodd is supporting what Bernie wants to do as well as Reid has said that he would support Sanders, and if they’re supporting it it means the president is going to sign it, and if they’re all supporting it, I would be very suspicious that the Fed is quite aware of this and they’re satisfied with this and maybe they think they’re getting off the hook.

But anyway, there’s lots of activity going on and next week is when we’re probably going to find out one way or the other. That bill in the Senate is a mess because they don’t even know how far they’ll go. If Sanders’ amendment passes the Senate, it’s possible that we’d go into a conference and they’d have to pick between the House version versus the Senate version.

So it will be in the news, and as you’ve pointed out, the bill has already done some good just by bringing attention to it. And I think that is by far the most important thing that we’ve done so far is get the attention of the American people and the financial community, looking at the Federal Reserve. As you noticed in recent months, I’ve gotten a lot more interviews on financial news stations and they’re at least open to discussing the Federal Reserve. This was unheard of a few years ago. So I’m pretty pleased with the national debate that’s going on.

Lew Rockwell: Ron, you’re responsible for it. Of course, the great economists, a number of whom knew you and approved of you, I might say. Whether Ludwig von Mises or Friedrich von Hayek, Henry Hazlitt, Murray Rothbard, your good friend, Hans Sennholz, also your good friend. These men just a tremendous work about the nature of money, the nature of what money ought to be, banking, and all that. But you are the one, and even though your degree is in medicine but you really are an economist too. You’re the one who brought this to public attention and made the American people realize, that if I can put it in these terms, that we’re all being ripped off, that this is a rip off operation that punishes the regular person for the benefit of the government-connected rich guys.

Ron Paul: It’s counterfeit. I would like to think that Mises would be pleased because the statement he put in Human Action about there are certain individuals who are more inclined to write theoretical or intellectual articles explaining economic policies and he says then there will be others that would take these ideas and try to make them palatable to the general public. So one of my goals in life has always been to try to understand the best I could more complex issues involving economics and make them more palatable.

Fortunately, for us who believe in Austrian economics, it makes a lot more sense. Not only is that difficult, if I had to explain the mathematical explanation of Keynes the government would go nuts. I guess that’s how they get away with it. Nobody can understand it and they just demagogue the issues. But Austrian economics make so much sense. I don’t think the chore is too great. But I think groups like yours, the Mises institute and others have laid the groundwork for a political discussion. It comes together. The great writers and then the people who then advance these ideas and then eventually it gets into a political discussion.

Lew Rockwell: Ron, one of the things that’s always interested you about the Fed secrecy is what the heck they’re doing internationally. So here we have this crisis in Europe. We have the Greek sovereign debt question and of course England and Spain and Italy and Portugal and maybe even more than that, and of course the US too. What’s happening? Tell us what’s happening in Europe and maybe what the Fed is doing illegally and unconstitutionally about it.

Ron Paul: I guess I have to do a little speculating on that since we’re not privy to what they do and we don’t have a right to ask questions or get any answers. Even with an audit bill passed, they would do everything in the world to prevent that information from coming out. But I do know that they have the legal authority to buy sovereign debt and I asked Bernanke if he could buy Greek debt, and he looked at his staff at the time if he could answer that question, acknowledge that. And the staffer shook her head yes and he says yes, we can buy Greek debt.

I sort of think that they probably haven’t done that yet. But in the next time Bernanke was before the committee, I can sense this has happened, this IMF plan to bail out the Greek government, and that’s with funds that we have created. He has to create this money that goes into the IMF and we have like what? 25 percent of that? So we will be involved when it’s in our interest to prop up the international system. We will do the bailing out, but as of now I guess we don’t have any proof of that. They have the authority to do it. They don’t have the Constitutional authority to do it, but they have the technical legal authority to do whatever they want. It’s just a shame that the American people don’t have the right to know what they’re doing and we don’t have much transparency on what they’re doing.

Lew Rockwell: Ron, yesterday we had some interesting turmoil on the market that they ascribed I thought hilariously to some guy pushing the B button instead of the M button on his keyboard.

Ron Paul: What if they hit the T button?

Lew Rockwell: What’s happening? I’m going to ask you to speculate again. What’s happening? Do you see real trouble ahead immediately? Is it going to be longer term? What’s ahead?

Ron Paul: Well, I think this week was a significant week because I watch the dollar very closely. The conventional wisdom of watching the dollar is to see how it’s doing on the international exchange markets, and it’s been doing rather well. It looks real strong. Who wants to buy euros right now? So the dollar remains strong and people are frightened, we still have the most amount of wealth and the biggest military, so people do go buy Treasury bills and buy dollars.

Ordinarily, when people buy dollars, the dollar goes up. You can buy gold cheaper in the gold price in terms of the dollar going down. This week, just yesterday when we has this big rout and concern about the market; the market goes down sharply and the dollar goes up but this time, gold went up. I mean, gold in dollar terms, should be down a whole lot but not according to those who were just purchasing gold as a haven or turmoil. It went up $50. I think this is the first time for a while that it started acting like the true money that it is.

It’s always been money and always will be money but the last several decades it’s been acting more like a commodity, which it is and should be a commodity. But it’s also a monetary metal. Yesterday, the commodities were down sharply. Even silver went down. But gold acted in a proper manner and people around the world are starting to look at it and seeing it as a haven.

But I think this is the second event that I think is significant. In November of last year, the IMF always notoriously dumps gold to keep the price down like they did in 1970. In November, they dumped 200 tons of gold and it didn’t do anything. One central bank, a poor central bank for a poor country bought all 200 tons and that was India. And I thought yeah, gold is still money. The irony of it all is the West, the European nations, the United States, we’re dumping the gold, we get rid of the gold, at the same time this gold is moving eastward so I guess maybe Jim Rogers might be right. The future is in the east, not in the west.

Lew Rockwell: Ron, what about the people who think that maybe all the gold isn’t there in Fort Knox or in the New York Fed? That maybe under LBJ and Nixon a lot more left that they ever admitted?

Ron Paul: You know that’s the big thing now. If we could audit the Fed, that would include the gold because they have that on their balance sheet. I think obviously we should. You do recall during the gold commission I proposed that the gold commission go on record of auditing the gold reserve and we had 17 members of the gold commission. I think […] and I voted for auditing the gold and nobody else did.

Now why do we do this? They check on the gold every year. They go out and they look at 5 percent every year and check it and that’s supposed to be a true audit. But no, we need to know. Even if you look and saw the gold, where’s the commitment? Have they loaned it out? Has it been sold or who actually owns it? That would be pretty important, but until we get a true audit and get control of our government, we’re not going to know.

Lew Rockwell: Well I think we know the answer, that the Fed and the Treasury resist an audit of the gold. So this is not like they claim they don’t want an audit of the Fed itself because they don’t want monetary policy to interfere with this wonderful activity on all our behalf. But the fact that they don’t want to audit the physical gold, they don’t want an independent check of how much gold there is, it seems to me that’s proof that a lot of it may not be there.

Ron Paul: You know, that’s a good point. I just wonder maybe that might be. I talk a lot about the foreign entanglements with loans and guarantees as being a major issue and also the discount window where they can make loans to governments. By the way, the Bernie Sanders amendment would not permit auditing of the discount window, how they do this with the corporations. But this gold issue, there are certainly a lot of people who believe this could be one real big issue because even though technically they say gold is not money because they want paper to be money, I bet you the people who have the power over our monetary system know darn well that gold is the ultimate money and they probably don’t let their fingers get too far from the gold.

Lew Rockwell: Dr. Ron Paul, thanks so much for being with us today. Take a look at Ron’s latest book, “End the Fed”. We’re going to be featuring a number of his books in this podcast and Ron, thanks for all you do. Thanks for coming on the show, and we follow all your activities with great interest and great support.

Ron Paul: Thank you

Lew Rockwell: Goodbye Ron

  • Jesse Hunter

    Yo Ron I have sum bad news for you, an this is in no way directed at you or your family, however psychology is everything in our society today an when a dumbass like myself “average citizen throughout the world” hears your name I imediatley think of ru paul, which is not funny at all since you have brains an guts. I wouldnt know about your batting style I hope you bat for the home team meaning you are a headeral sexual man to women guy. anywho what up Ron want to hit sum golf balls around in myrtle beach, you have to pay for it all an I’ll just make you laugh the whole time, wait my lessons are 33k per round. Far from golf lessons are the lessons of a man grown up with premeditated mercy no longer a valued commodity to posses among todays standards for human beings. Why the hell not what the heck else are you doing besides talking to all those who have been poked in the eyes for so long that when it finally stops for years after they do not realize that they have been blind an bleeding form it. Have your people attempt to contact me an I’ll see if I feel up to penciling you into my schedual of beach bum life. Take care farewell an lesson number one, care less for those who do so for themselves.

  • Jesse Hunter

    Blah blah blah blah blah blah blah, you are all slaves to money, an therefore a slave to the system of monetary value, your peon worth is in trinkets of shinny metals, an rocks that can be polished an shine from lightbulbs. “ColonialScript” is the only way fiat currency can reshape the economy independant of the private bankers. But you all are far to stupid to notice an those that do notice are far to weak to stand up for themselves an fellow citizens, an is why you will always be slaves cloaked in sheeps wool. Brought to you by a bum lightyears ahead of you fools. Beach Bum or Billionair, the mentality is the same, not a carer in the world therefore able to see the way life truely is an is why laa=w enforcement is told to make souls like mine out to be evil an potentially dangerous under the guise of fear. Simple I could care less for those who care so much about money. An is why I will never help humanitarian efforts, you see I make it about money so you can show just how money greedy you are, an the true reasons behind it not happening is all because you are money greedy.

  • Weylin

    Well if Ron Paul and others get to checkup on all that imagined gold at Ft. Knox they better take a drill with them and drill some test holes into them because hundreds of fake gold bars from the US – the 400 ounce ones like is supposedly in Ft. Knox have been discovered in Hong Kong by market buyers and traders there. They were basically about 99% percent Zinc bars that had been gold plated,lol. Most likely the Ft. Knox Gold has long since made its way in stages and various amounts to the West Point gold suppository where it has been in custodial status and picked up in stages by the foreign creditors to the US. Strangely enough the audit record there shows increases but the US Treasury departments correlative audit reports on gold do not show any changes, not even an ounce,lol. So my point is where is all that gold going into the West Point gold custodial station coming from?


      Weylin: India has bought up a lot of gold when it was still cheap. Every family in India has gold jewelry, and there are a lot of families in India. If you are looking for the rest: try Switzerland.

  • Fred’s a troll.

    • longshotlouie

      The good part, …. no charge for the floor show!!

      • Jesse Hunter

        the floor price is dignity an self worth by the wayside, funny there are only 54 responses to this site, how fat are americans, the greates drug of all is food, I love it it makes me feel warm an cuddly inside cuz I’m a bitch inside. Fat asses lmfao cant stop eating long enough to see reality. Good I’m going to be a physical trainer an make them all do overhead pulldowns to strenghthen there capability to shit on themselves while I blow a whistle an encourage them to be the next biggest loser, LMFAO, Dont worry there is a solution methamphetamine’

  • longshotlouie

    Sweet, another troll. Hope they bring a friend or two.

    Traffic was slow before the influx of trolls.

    We need more trolls.

  • The Feds.are the Elite super rich.If Fort Knots is empty,you can bet it will be full by the time of the audit.The money people run this country not the goverment ,which they like you to think.Why do you think the bailouts have no arrest of the crooks.The feds are “The New world order”.money is power over goverment.

  • We are broke, can we re-start from zero, with just the fact that we are here and want to work? I think so.

    • fred the protectionist

      No we can’t start from zero, ever since the rest of the world left the Breton-Woods system even if the US had a trade surplus we couldn’t trade our surplus for foreign gold.

      The 700 billion a year trade deficit would drain the US treasury of gold and silver in less then a year, then we’d be left standing around looking dumb with our d***s in our hand.

      • EndtheFed

        Didn’t Citizen already make it clear that there is a difference between the trade deficit and the federal deficit?

        • fred the protectionist

          You know the world is older then 30 years. Read up on history and why we left the gold standard…

          Google: “Nixon Shock”


        • EndtheFed

          Nixon went off the gold standard because it was getting in the way of his inflationary monetary dreams. Bretton Woods wasn’t a true gold standard.

          The problems you attribute to the gold standard are actually problems that never would have occured had we not left the real gold standard. They occur because of inflation — and inflation wouldn’t work under a true gold standard. Just as the US has enjoyed economic stability due to having one national currency, the world once enjoyed that benefit with the gold standard. No plethora of many currencies all exchanging at different rates. Does one US state lose gold to another because of a trade deficit? The loss of gold from one country to another occured because of inflation. NOT because of the gold standard.

          Nixon went off the gold standard because it was getting in the way of his inflationary monetary dreams.

          Kings have understood that gold stands in the way of monetary control in the middle ages, as evidenced by clipped coins. Read up on that.

          Also read up on why governments temporarily suspended specie payments initially. Just as with the Income tax in the US, which was originally only “temporary and would only be felt by the richest of the rich and wouldn’t go above 2%”, the suspension of specie payments was supposed to be temporary so that money could be printed to fund world war 1.

          Gold was 20 dollars an ounce when it was made illegal to hold in the US so Americans HAD to exchange their gold for dollars. Then, when the gold value was changed to 35 dollars per ounce, and people were allowed to hold it again, anyone that bought their gold back lost almost half of their purchasing power. Read up on this robbery.

          To blame the gold standard for the pitfalls of going off the gold standard is irrational. Read up on rational thinking.

        • fred the protectionist

          No, Nixon went off the gold standard because the trade deficit was starting to bleed US treasury of gold.

        • EndtheFed

          The trade deficit only existed because the world went off the international gold standard.

    • Says you, your glass will always be half empty, it’s your MO, IMHO.

  • Theresa Romano

    Fred Dobbs,
    I understand your point but think about the fact that paper is easily manufactured and gold is not. Isn’t it precisely that fact which makes it difficult to inflate the value of gold?
    Imagine for example that 300,000,000 gold coins were in existence in the USA. Then in theory one coin could exist for each American. If that were being used as a standard for currency then we could weigh out what each citizen could produce as far as labor and product and compare it to the existing coins per person and we could basically say…. a coin is worth the average output of a single American.
    In other words if the amount of grain produced by Americans were ? and the houses built were ? and the doctor services were ? then we could add up all the ?s that America produces as a whole and divide that by the number of citizens and say that this number were worth a gold coin.
    Like lets say we produce 100 tons of grain and 100 barrels of oil and 100 nuclear weapons (I’m oversimplifying of course)….and so now we can say that our production per year is 300 whatevers….we can say that each ton of grain and barrel of oil and nuke have a similar worth.
    So we have 300 products. Then we could value labor in a similar way. So we might look at the population and say that we produce 300 thousand whatevers per year….(of course I’m really oversimplifying).
    Anyhow now we can value each of these things at 1, 000 silver coins.
    But if we had a coin producing machine then suddenly each whatever might be worth double the amount based on the fact that we just doubled the amount of coins.
    So now suddenly I owe my doctor twice as much and a loaf of bread doubles in price and the nuke…well who knows.
    But gold can’t be artificially reproduced.
    So the artificial inflation isn’t likely to occur.
    It’s a standard. You know…something which can’t be changed because it just is what it is.

    • fred the protectionist

      If we literally, literally, went on a real gold coin standard. It would be inflated. Half the Chinese population would stop selling gold on World of Warcraft and start slaving in gold mines. Half the Chinese mountain tops would be leveled in 2 years and Greenpeace would be whining, “OMG THE MOUNTAIN GOATS!” WHO WANTS THAT!

      • EndtheFed

        Mining gold is just as expensive, time-consuming and profitable as many other possible ventures the chinese could undertake. Commercial uses for gold justify a need for newly mined gold.

        I thought you were worried that “there isn’t enough gold”?

        Actually, according to Marc Faber, if we went back to the gold coin standard, we would need to value gold at about a million dollars per ounce.

        That directly displays the ridicuous amount of inflation that the dollar has incurred. From $20 to $1 000 000 in terms of dollars. Are they worthless yet?

        • fred the protectionist

          Mining gold would “inflate” gold.

        • EndtheFed

          Some gold is used up in production and not used as monetary metals. An increase in the gold supply is justified by this fact.

          It would be impossible to double the gold supply today. Bernanke could create a hundred trillion dollars in the same time it takes to type that many zeros on his keyboard.

          Aside from that, it is expensive to mine gold. Therefore the benefits of mining gold for use as money are not as appealing as you would like people to believe.

  • Fred Dobbs

    Aren’t rocks as equally worthless as pieces of paper?
    Just like modern currency, the value of gold is arbitrarily determined by human perception.
    For instance, I don’t like jewelery & don’t work with electronics, so gold has absolutely no worth for me.
    Going back to the gold standard seems like moving from one shell game to another.

    • EndtheFed

      Paper currencies are trying to immitate the benefits of gold without it’s limitations, however it is gold’s limitations that make it so appealing as a money. It cannot be instantly diluted. The supply is relatively constant. Paper money has no limit to it’s supply, and it can be instantly doubled or tripled.

      This is significant because of inflation. When a paper money supply is expanded, the value of each unit of currency already in existence is reduced. In other words, the fed’s newly printed money has value because it stole the value from the dollars you hold. Think of it like this: if the supply of Babe Ruth baseball cards suddenly doubled, the one you have will not sell for as much. It has been devalued.

      Even the federal reserve chairman Ben Bernanke has acknowledged inflation as a hidden tax. Most Keynesian economists insist that inflation is a monetary “phenomenon”, and they only want you to think of it as price increases as opposed to monetary expansion.

      The worst thing about monetary expansion is that it harms poor people and the elderly unfairly. People on fixed incomes or people who can’t afford to invest to earn interest and combat inflation are hit the hardest. Is it a good idea to rob old grandmothers, military widows, and the poor of their hard earned value and then hand it over to the politically connected?

      Gold is a way more effective medium of exchange because it protects against confiscation of wealth through government induced inflation. Money in the form of gold is the most compatible with freedom.

      • fred the protectionist

        With a 700 billion dollar a year trade deficit, US treasury be out of gold in less then 1 year.

        The only thing a gold standard would accomplish is draining the US treasury of gold in record time.

        • Citizen

          Fred the P…
          You’re equating Trade Deficit with Federal Deficit
          They are NOT THE SAME THING!

          TRADE DEFICITS are a good thing, those foolish Chinese continue to peg their currency to our weak and rapidly declining worthless Federal Reserve Notes. WE benefit from their foolishness, cheap WalMart stuff!
          The value of 1 Chinese yuan = 0.146436 U.S. dollars
          The yuan should be “unpegged” and allowed to float to $0.84 – $0.95 for 1 yuan… but the ChiComs FEAR that massive hit to their EXPORTS. WalMart would go out of business, Americans would have jobs again!
          Trade Deficits OVER VALUE our currency, their stupidity is our benefit, cheap stuff.

          Federal Deficits irrational spending, printing, and bogus Cyber-Cash, debases the US Citizen’s currency, our savings are diluted, our retirements are washed out, our internal purchasing power is destroyed….
          Federal Deficit spending is Taxation Without Representation, INFLATION, Grand Theft Government of the Citizen’s wealth.

          The ChiComs can bale those Federal Reserve Notes for burning in their newly constructed coal burning power plants, that’s about what they’re worth.

        • Citizen

          Fred the P…


          AS FOR GOLD…. we have NONE!
          Fort Knox was emptied out by 1974! There is no gold reserves anymore. When the Government (FDR) CONFISCATED our Grandparents GOLD in 1933, and TRANSFERRED it to Ft Knox. Then the FED NY Reserve Bank took physical possession as “collateral” for the our government’s endless deficit and profligate spending.

          The last audit of Ft Knox was in 1969 and that report was suppressed due to the dismal shrinkage due to FED Reserve Demand Receipts against the US Treasury to cover “DEFICIT SPENDING”.
          It’s GONE… NADA!!!

          US Citizens have a CONSTITUTIONAL RIGHT to SOUND MONEY!!!
          Only SILVER and/or GOLD are permitted as CURRENCY…
          NOT worthless fiat paper.

        • EndtheFed

          Citizen, thanks for pointing that out.

          That bogus argument was the last playable track on Fred’s broken record. I think you just ripped the power cord out of his record player.

          Nice work.

        • fred the protectionist

          If Fort Knox is empty then you audit the US TREASURY, not the federal reserve.


        • fred the protectionist

          Libertarian say: “TRADE DEFICITS are a good thing”

          See, told you so. I told you Libertarians believed this.

        • Forest

          Citizen says: “weak and rapidly declining worthless Federal Reserve Notes”

          Another Ron Paul myth…

          “Measured against a basket of currencies from the Group of 10 nations proportioned by how they trade against each other, the greenback is up about 3 percent since 1975, according to Bloomberg Correlation-Weighted Currency Indexes. That was four years after the Bretton Woods agreement, set up in 1944 to link currencies to the price of gold, collapsed. The U.K. pound has dropped 34 percent and the Canadian dollar has fallen 6 percent.”

        • EndtheFed

          Forest, you really should find out what Ron Paul actually says before you step on your dick again.

          When any currency is inflated it is devalued in terms of real goods and gold. That’s what inflation is.
          Ron Paul often makes note of the declining value of the dollar in terms of gold, because gold historically has been used as a measuring stick to find the true value of an inflated currency. That’s a mechanicism of economics.

          The reason your link doesn’t apply to Ron Paul’s statement is actually the first six words of the quote you posted yourself. Since most currencies are pegged to the dollar, they are often devalued together.

        • fred the protectionist

          Ah yes, Relativity, my dear Watson.

      • Fred Dobbs

        That doesn’t address the fact that we’re investing a ridiculous amount of time & resources into digging ricks out of the ground, and then acting like they’re actually valuable outside of the scientific uses of gold.
        The fact that it’s rarer than paper doesn’t change the fact that its “worth” is still based on an arbitrary human conceit.

        • EndtheFed

          It doesn’t matter what the practical uses of a medium of exchange is, as long as it fits the characteristics that make any medium of exchange appealing. Gold has been continuously chosen on the free market for money. This means it has not been chosen arbitrarily. It has been preferred over all other potential mediums of exchange mainly because it is the most marketable, and uniform. That is, gold is widely generally accepted as payments, and an ounce of gold from the US is the same as any ounce of gold the world over. We’ve already gone over it’s characterstic as a protector of wealth confiscation through inflation (it’s supply is limited), and the fact that it’s a costly and time consuming processs to mine gold keeps it that way. The relatively small amount of newly mined gold is okay because it replaces gold that has been used in products over time.

          Money can’t be chosen arbitrarily because nobody would place their faith in it. It must first be tied to something that is valuable to people as a medium of exchange. The value of a currency doesn’t come from government decree, it comes from the market. Gold has been chosen by the market as the money that best fits the characteristics that make a good medium of exchange.

      • gander

        thats because all the other currencies in the basket are also worthless. use your brain. try comparing today’s dollar to the 1911 dollar. its worth 3 cents.

        • Forest

          Use your brain, Gander. How many united states dollars have you held for 90 years? Has your personal wealth been reduced to 3% of what it used to be because you buried all of your dollar bills in a can in your backyard? No only a moron would do that. Most people either 1) Invested their long term savings or 2) Purchased long term assets (home, car, etc…) or 3) Consumed FAR before inflation had a meaningful impact.

          The problem is not the Fed, nor is it inflation. The problem is an inability of our political process to address structural issues such as entitlements or defense spending.

          Being on a gold standard, among other items, rendered us uncompetitive, and worse inflexible, in the world’s labor markets in the 1970’s.

          This is a similar situation to which Greece is facing now – they are trapped in the Euro and are finding they cannot devalue their currency relative to those in the rest of the world – therefore their exports will never be more competitive.

          This is not to say they shot themselves in the foot by reaping the benefits of being IN the Euro by not taking advantage of a lessened borrowing cost, but it is just one more component of a very complex situation.

        • fred the protectionist

          “thats because all the other currencies in the basket are also worthless. use your brain.”

          That’s right. It’s a matter of relativity. If the US had a super-strong dollar, we wouldn’t export anything and nobody would have a job.

          And if the US only had a fixed amount of dollars, say a couple hundred thousand in circulation from 1913, then US citizens would be bartering in Euros or Pesos right now.

        • EndtheFed

          Your concern over the “uncompetitive exports” from Greece is a problem that would never have been able to occur had the world gold standard not been abandoned in order for warring governments to inflate their currencies to fund world war 1.

          It is the re-valuation (inflation) of the world’s currencies that causes trade deficits to occur.

        • EndtheFed

          This is a perfect example of why a fiat money system doesn’t last.

        • EndtheFed

          Fred the P said: “If the US had a super-strong dollar, we wouldn’t export anything and nobody would have a job.”

          Nobody would have a job, huh?

        • fred the protectionist

          “It is the re-valuation (inflation) of the world’s currencies that causes trade deficits to occur.”

          OH so your solution would be to create a world-government to regulate foreign currencies. OK gotcha.

        • EndtheFed

          You’re a funny guy.

          My solution would be don’t go off the international gold standard. Since it’s too late for that, I’d say the first step is to allow gold and silver to compete with the dollar as money which would curb the wealth confiscation caused by inflation and force the government to cut spending.

          There is only one way to make the US dollar as good as gold again, and that’s to link it back to gold — although, it may be too late for the dollar. Properly restoring the damage done by inflationary monetary policy would be no cake walk.

    • Citizen


      “Aren’t rocks as equally worthless as pieces of paper?”
      Sure they are…

      Tell you what, you send me a Federal Reserve Note with Benjamin Franklin on it and I’ll send you a 100 pound box of rocks!

      • Fredd Dobbs

        What do you think precious metals are?
        They’re rocks people dig up out of the ground.

        • Citizen

          You say >>”They’re rocks people dig up out of the ground.”

          Not so Fredd, allow me this proof
          I buy lots of rocks and because I build roads and they are very useful and I buy them uniformly crushed and finely screened to size and I pay about $8.50 a ton.

          Now when I go to the Batteries Plus store to buy a new cell phone battery, about 18 Federal Reserve Notes, I could try dumping 3 tons of “uniformly crushed and finely screened” rocks in their parking lot and they might accept those “rocks” in exchange for the battery I need?
          But my intuition suggests that they probably would call the cops instead, what to you think?

          Both Gold and Silver are SCARCE metals native to rock formations world wide, but metals are not rocks! You first need to mine and process 100-500 tons to extract 1 oz of GOLD or 30-100 tons for 1 oz SILVER. Now add to that the diesel fuel, capital equipment, smelting and refining cost…GOLD extraction costs about $500-$600 / oz and fetches about $700-$900/oz at the wholesale market level. Silver is proportionately about 20:1 less.
          But I Digress

          Now I’d be willing to bet that if I produced a shiny newly minted 2010 US Treasury Silver Eagle (1 oz 99.99% pure silver) to purchase that same battery, I would probably walk out with a battery and some disgustingly dirty and flimsy Federal Reserve Notes as change back. Thus I can safely conclude that Rocks are NOT equal to Gold or Silver in market value.

          Therefore I prefer GOLD and SILVER, precisely because I know that the Chief Government Alchemist, Timmy Gietner, is unable to COUNTERFEIT Gold or Silver….as easily as he COUNTERFEITS those Federal Reserve Notes.

          Ron Paul knows that as well… THAT’S WHY I SUPPORT
          *************RON PAUL FOR PRESIDENT****************

        • EndtheFed


        • Forest

          Another version of chickens for checkups, huh?

          Citizen says: “Now I’d be willing to bet that if I produced a shiny newly minted 2010 US Treasury Silver Eagle”

          I’ll take that bet.

          You actually try that anywhere? Safeway, piggly wiggly, sears, burger king, ANYWHERE? Because in NO WAY would the average store be able to confirm the weight/purity of that coin.

          By the way, you should head out into the hills of northern california – you can find more of those shiny rocks in the ground that you say don’t exist.

          • Jesse Hunter

            Hey smarty pants, good idea there is no way they will be able to verify the weight purity of that coin, an the hills in northern california, yes I believe you.

  • Robert A. Brown

    I have absolutely NO DOUBT that you will be hearing the crickets chirping when they open the vault due to the emptiness of the room!

  • ddd

    India holds 1/5 of the world’s gold – so it is not surprising they bought all the gold from the IMF. India’s appetite for gold does not support Paul’s premise as it is unique to Indian citizens’ desire for gold jewelry, not as a monetary haven for the western world.

  • Shouldn’t take long – not much there!

  • That is what will exacly happen if we listen to people like Fred who thinks that an audit to the fed would be a bad thing and Fort Knox would lose everything. I guess Fred is blissfully ignorant because that junk of a Government name rhymes with his name. It all goes together Fed + Fred=Married to each other.
    Please Dr. Paul don’t stop ending the FED! You’re doing a great job with your plans. Bernie Sanders and the Fed Loving Idiots want to keep us in the dark.

    • Jesse Hunter

      cool bottom line in fear much of not staying within the confines of annonomous, wonder why, you have kids an mortgage payments you must attend to an the company you work for is owned by the internation private bankers? Positive you are yes blatently obvious your connotations in referrence to word association, but why an for who are you attempting to help those who care less for themselves than another human being? Galant hero yes one could say or throwing sand against the tide the you an most all have to ride to not become homeless. You see unless all citizens have not a fear of becoming homeless there is no way on earth for eternety that the way things are will ever change. Not in a million years let alone during a term in the presidential office which holds only a meager authority to vito a bill. not make them or pass them. Besides presidents are figure heads an thats about it. I’m listening to you an all I hear is mindless pipe dreams from behind a psuedonim?

  • fred the protectionist

    Free Trade+Gold Standard = empty Fort Knox.

    Ron Paul is a free trader who likes the gold standard. Why would he complain about an empty Fort Knox when that is his goal?

    • EndtheFed

      Yeah, Fred, That’s his goal.

      • fred the protectionist

        Yup, that is his goal, empty Fort Knox.

    • Jesse Hunter

      because all polotitions do the same thing, exactly what the other politions would do if they were elected into office, LMFAO.