Show: GoldSeek.com Radio
Host: Chris Waltzek
Chris Waltzek: Well, my next guest, Dr. Ron Paul, is a champion of freedom; and the author of several books including “The Revolution – A Manifesto” and “A Foreign Policy of Freedom”. Let’s begin with the discussion, Dr. Paul, on a topic that has many in the gold crowd concerned; that’s section 9006 of the new healthcare reform bill, that states that businesses submit a form 1099, for all purchases of goods and services of more than $600 a year, made from many source; and the legislation goes into effect in January 2012. I know that you’ve been watching this and many folks are concerned, Dr. Paul, that this could lead to tracking of gold purchases.
Ron Paul: Well, I’m sure it can, and they’ve already tracked the bigger purchases like $10,000, they’ve already done that; they are involved. It’s the way to do this which is such an outrage to think this is the way they’re going to pay for the medical bill. I’ve always argued the medical bill and that plan was not good for our health, it isn’t good for our economic health, it isn’t good for our freedom or anything else. But a lot of members of Congress have already become aware of this; and we have a bill; and many of us, well over 100 co-sponsors are trying to get rid of this. But it’s a shame that this stuff has to get passed and you have to offer amendments to strike this and strike that. But at least the people are watching and listening, and it won’t go into effect for a little bit. So let’s hope that Congress can get their act together. And maybe after November we can put enough pressure on them to repeal that. But this is an outrage whether it’s tracking gold or tracking guns, there are some there that always want to know exactly what we’re doing.
Chris Waltzek: And I’d like to move on to the supposed gold shortage of the US Mint. You’ve been talking about this for a while; the Mint announced it was suspending sales of one ounce gold bullion coins due to heavy demand until December. And you know the fractional half and quarter and tenth ounce gold eagle coins have not been available for the better part of this year.
Ron Paul: Yeah, and when the Mint’s director was before our committee not too long ago, I was asking, how could anybody conceive of this coming up if it were a private business? A shortage, they didn’t have the blanks, they couldn’t stamp them; and it’s really complicated to make us a gold blank. I mean, you know how to make jewelry, you think we could do a gold blank. “Oh no, we have to buy those overseas.” It’s so ridiculous, and you wonder exactly what is going on, because they’re making it harder and harder for people to actually get the gold and the silver in the real sense and hold it, so I don’t know exactly what’s going to happen on that. But it’s obviously either a reflection of a plan that they have to make it more difficult for us, or they are just totally inept like most bureaucrats are.
Chris Waltzek: And you know, regarding those blanks, Dr. Paul, there was legislation back in 1980s – if I’m not mistaken, in 1985, that stated that all the gold must be mined in U.S., then they ship it offshore
Ron Paul: That’s why it’s ridiculous! That sort of pushes the cost of those coins up and makes us less competitive.
Chris Waltzek: It does and it all seems to tie in with your idea of, there might be something else going on behind the scenes there.
Let’s talk about the bill you introduced, the SEC Transparency Act of 2010, that’s HR 5970. This legislation seeks greater transparency in the securities industry; it’s designed to repeal the amendments made by the Dodd-Frank Wall Street Reform, the Consumer Protection Act relating to confidentiality. Would you care to tell folks more?
Ron Paul: Well, you know, nobody talked about this before it went in. I mean, a lot of us talked about a lot of the bad things and how horrible the whole bill was, but the fact that this extra power given to the SEC was slipped through there, I actually believe that Dodd Frank probably didn’t know that because he acted a little bit honestly surprised about it. But what it does, it says the SEC does not have to respond to Freedom of Information requests. And once again, it’s bigger government; more secrecy; less privacy for the individuals.
I worked hard on trying to get more transparency of the Fed. We got a lot of attention, and we got a little bit through this, since the Fed came out of that bill with more power than ever before, which is rather characteristic of how these things work. So the SEC gets stronger, more secrecy, the Fed get more power; and of course the consumers will be “protected”, because government bureaucrats know how to protect the consumer by destroying the marketplace. It’s a real mess and these kinds of things going on here, the tax issue, along with all the regulations is the reason people are uncertain about the future.
I met with a group of business people in my district just yesterday; and one word they kept saying is the uncertainty of what we’re going to get in the way of taxes and the regulations. These were people from the chemical industry. And they have no idea what the regulations are going to be like, in the process of trying to revamp them all. All the regulations under […] bill and all these things that we’re talking about contribute to the inability of our economy reviving, so government is doing exactly the wrong things. As far as I’m concerned, they are making things worse.
Chris Waltzek: It seems as though they have really changed the worlds here at halftime and have all the players scratching their collective heads; just what can we expect? What’s the riff going to throw at us next? You also defended recently your gold stocks position, gold equities, and rebutted Jim Cramer’s call to sell gold stocks; could you tell us more?
Ron Paul: Well, I can’t remember exactly the conversation there. I imagine at the time I was probably not overly anxious to talk about gold stocks. But I think he did get me cornered and I had to defend what I do, because it’s public record; and you can go the public record and know exactly what I’m doing. But I mean, some people would buy gold coins and use them as good insurance, others would deal in gold stocks. But what was Cramer’s position, that he would buy stocks but not coins, is that what he was saying?
Chris Waltzek: The GLD, I think that was it.
Ron Paul: Oh yeah, that’s right, it was GLD. I don’t get excited about that, people want to be there for a short while. But ultimately I believe in the protection with people holding their money, their real money; so that’s if you have a true gold coin standard, so that the people can vote by holding their coins. So in a way we have access to that, because a lot of us buy gold coins and hold them. So GLD, if people hold it for a short period of time that’s their business, if you have gold stocks, there are times when people have to be nimble there. Gold stocks are definitely different because it’s more of an investment. I think buying gold coins is more of an insurance, because if you’re buying stocks, you have to know the companies. Not every gold companies going to make money. So that’s a little different type of investment and there’s more leverage there and more risk too.
Chris Waltzek: Dr. Paul, do you worry that gold companies could become targeted by big government legislation and taxes on things of that nature in the coming year?
Ron Paul: They’re susceptible to the taxation right now and the regulations; whether they can single out only gold stock companies — they shouldn’t be able to do that; they might try to do that by manipulating language. I probably worry a little bit more about how they might regulate us on buying and selling our coins, and I think you alluded to that about the 1099; sorting that out no matter what you do, the government knows exactly who’s buying coins and what’s happening. When they overregulate, what do they end up doing? They drive people into the underground economy and that of course is risky business. When you’re in business you got to obey the law and how you do that, but when the government broke the law and the constitution, it puts a lot of pressure on people who want to survive and take care of their families. That’s why I consider it so dangerous. Also the reason I’m in politics is because I don’t like some of those options. I’d like to try to contribute something to straightening this mess out, so that we don’t have the government bearing down on everything that we do.
Chris Waltzek: Many folks have made comparisons with the 1980s peak and the ultimate price for gold, […] when adjusted for inflation that’s over $2,500.00 per ounce; does that sound a reasonable target?
Ron Paul: It sounds like a start. I don’t usually think about 1979, 1981 because markets are never real smooth, sometimes things are too low and sometimes things seem to be too high. And I can remember back in the 1970s, I actually thought that when it went from 35 up to 500 I thought this thing had gone crazy. “I’m not buying anymore now” because it just didn’t make and sense. So it overshoots, and then probably the gold bear market that went on for 20 years — that was probably way overdone — and you have the government interference, the price of gold probably really wanted to grow up all through the 1960s and the 1970s, but it was held in check by the government fixing the price of gold artificially, at $35 an ounce by dumping hundreds of millions of ounces of gold onto the market. So that was artificially low, then it bounces up too high; and now of course, gone through a period of time, where they’re probably in a more sophisticated manner doing the same thing.
If I were trying to compare it to the 1970s, I probably won’t pick $800.00. I’d probably pick $300.00 or $400.00. It finally settled out once again too low, $260.00, even if you calculate it through inflation I just don’t think those calculations mean all that much because there are too many other factors involved. I mean, there’s the monetary factor, there’s the political factor, there’s just a lot of emotion packed into there. But I just try to pay attention to the long term economic laws, which means that we print a lot of paper money, the ratio of that paper money to gold will show that the paper money always depreciates. And I don’t try to say that it should be — if it was $800.00 back in 1979, now it should be $2500. I might say from what I know about Washington, the way they’re running up debt at $1.6 trillion a year, and printing and sending us back to Washington as emergency to send out $26 billion to keep some teachers employed — I would say that long term, $2,500.00 is very low.
Just think of the percentage increase from $35.00 to $800.00, that’s more than a tenfold increase. If we were talking about it back then, it was just doubling gold. I’d just look at the long term; we’re printing money, we’re spending money, we have not reformed Washington, they’re destined to destroy the dollar, which means, not that the gold price is going up but the value of gold will be maintained. The value of the dollar is destined to go down. We are devaluing our dollar, that’s what we’re doing.
Chris Waltzek: Exactly. And all the world’s currencies now seem to be doing so at the record clip as well. Dr. Paul, you’ve also introduce legislation to prohibit the taxation on coins and bullion. The goal of the Free Competition in Currency Act HR 4248 is to dissolve the legal tender laws and prohibit taxation on certain coins and bullion. If dollars aren’t taxed, why should our gold and silver coins be taxed?
Ron Paul: Because they don’t like gold to be money and that’s why they want it to be a mere commodity like jewelry so they can tax it; they can’t repeal 6,000 years of history as gold being money. So this is the whole point. We know that gold is money, we want it to compete. I personally despise the Fed but I don’t have a bill in that would close the Fed down tomorrow. So what we need in this country is competition and free up the market; it is exactly the opposite from what they’re doing, when you see that they’re making coin companies send in 1099s for a purchase of $600 or more. So this is the wrong way, that’s why I think if we’re only allowed to compete, we’d win this fight hands down.
Chris Waltzek: And lastly, according to RonPaul.org, you may have plans to run for president in 2012.
Ron Paul: I guess the word “may”, I guess that can exist. I’ve not made any decisions. Some people seem to want to jump the gun but I haven’t. I’m obviously going to continue thinking about it, because people are continuously asking me about it. I think it’s a little bit early for that and I have to assess things a little bit later on to find out if the supports are really there or not; see what the conditions are like. But so far, no decisions have been made.
Chris Waltzek: Well Dr. Paul, your books; “The Revolution – A Manifesto” and “A Foreign Policy of Freedom” can be found at RonPaul.org. Are there any other online resources you’d like to share with our listeners?
Ron Paul: They can get anything really from Amazon; there’s several there, so through Amazon, or the Campaign for Liberty, they’ll be able to find what they need.
Chris Waltzek: I want to thank you so much for joining me on the broadcast today, and wish you a very safe and profitable week ahead.
Ron Paul: Thanks a lot.