Ron Paul: End the Fed, Legalize Competing Currencies

Without the Federal Reserve there could be no welfare state and no warfare state, and that’s just two of the compelling reasons why we need to end the secretive and unaccountable institution’s financial monopoly as soon as possible.

Date: 09/29/2010


Eric Bolling: Hello, America, and welcome to “Money Rocks”. You know, yesterday we did a whole show about gold. Well, there’s more to the story. A real quick history lesson about where gold has been. 1880 to 1933, the US currency was on what was called the “gold standard”. That means every paper currency that we held was tied to a piece of gold. FDR killed that in 1933. 1944, Bretton Woods Agreement – fix the price of gold and also fix a basket of world currencies tied to that gold price. Guess what happened? Everyone around the world starting hoarding gold. We were quickly running out of gold, so in 1971, President Nixon “nixed” any ties to the gold standard.

Why is gold precious? A couple reasons. No. 1, jewelry demand, investment demand, and this one right here, guys, the fear, the perception of what is to come. Give me that full screen. Here is where the demand comes from for gold. Here’s all the gold ever mined by humans in the world. Only 163,000 metric tons that would fit under the Eiffel Tower. 51% of it is in jewelry. 18%, “official” sector. That means government’s holding gold. 17%, investment. 12%, industrial. And this one, the 2%, unaccounted for.

That brings us to today, in a situation where people are flocking the gold and leaving the dollar. What does that say about the status of our currency? What does it say about the status of our country? What if people no longer had faith in paper money and carried around anything, anything but dollar bills in their pocket? Congressman Ron Paul of Texas has been asking these tough questions longer than anyone on Capitol Hill. He thinks the answer lies in the Federal Reserve that is spiraling out of control. He joins us from Washington, D.C. Thanks for joining us, Congressman.

You’ve been talking about…

Ron Paul: Thank you.

Eric Bolling: … eliminating the Fed for a long time. That means eliminating the Fed printing presses but then, Sir. Then, Sir, how do we pay for all the spending?

Ron Paul: Well, you have to ask how did we pay for it before 1913. You have to pay your bills by spending less money. You can’t have a welfare state. You can’t police the world. You can’t have a warfare state. Government has to change. But if you want big government, you have to have a Federal Reserve and just think of what’s happened since 1930. I mean, we have had tremendous increase in government and it really exploded after 1971.

You know, before 1971, we had less than $1 billion measured by M3. Today it’s over $14 trillion. The price of gold is not going up. It’s just the dollar is being devalued and some people have this silly notion that a weak currency is good and that’s all our federal government doesn’t – even Bernanke admits he wants inflation. He’s looking for it because that’s the way you pay your debt down. That’s how you default on sovereign debt. So to me, it’s wicked, because the people get cheated. They get cheated out of…

Eric Bolling: Right.

Ron Paul: … their savings. They get low interest rates. So it’s a wicked system and it was never meant to be, and it’s coming to an end. That’s what people have to realize.

Eric Bolling: Well, Congressman, I think you’re alluding to, when you say “that’s how you pay your debt”… If you were to print a bunch of $100 bills and people held on to them under their mattress, eventually, those $100 bills would be worth less and less. Therefore, there’s lesson of commitment by the government. But here’s the question, Sir. We need the currency. What do we do? We’re still going to need dollars. They still have to go to the corner and hail a cab, and pay with a $20 instead of a $5, that they may have done 20 years ago.

Ron Paul: Yeah. Well… I mean, they did it before. They paid with coins but even in the modern age with the technology, you don’t have to. I mean, there are exchange rated funds now. You can exchange gold over the internet. So, yes, there would be substitutes and there could be certificates. We had gold certificates. It’s the limitation of the Fed to print and create money that is the purpose.

Eric Bolling: But, Sir…

Ron Paul: People didn’t log heavy gold around their pockets. They carried silver certificates in my lifetime. You know, in 1965.

Eric Bolling: What’s the difference? There’s the question. What’s the difference between a silver certificate and a $100 bill, the Benjamin’s stamp on the front?

Ron Paul: The big difference is they can’t print a silver certificate without having the silver. So it restrains the monetary authority. It retrains the counterfeiters. It restrains those people who want big government. See, Conservatives want big government for some reasons. Liberals want it for other reasons. But they work hand in hand. They work together because they both brought about the Fed. They like the Fed to monetize debt. That’s the purpose of the Fed. But they get us into trouble. Over these many decades, the Fed has gotten credit for the good times and when we had a recession, they got credit for getting us out, and it was all an illusion. They should get all the blame for the bubbles and all the blame for the inflation, all the blame for the unemployment. And now, the secret is out. People now, main street Americans are walking up and they know there’s something strange about the Federal Reserve.

Eric Bolling: Well, Congressman, let me ask. I think what you’re trying to tell me… Tell me if I’m reading this right, is that we have to go back to the gold standard, go back to a Bretton Woods type agreement where you say everything we print better have some sort of value to it other than just a seal of the US.

Ron Paul: Well, we need a gold standard but the Bretton Woods was deeply flawed. Henry Hazlitt wrote about that back in 1945 and said it wouldn’t work because there was too much license. We weren’t even allowed to own gold. Yes, we should have a gold standard. We could start off by obeying the Constitution: only gold and silver can be legal tender; no emitting bills of credit, which is printing press money. But today we know a lot more about monetary policy than we did in the 19th century. We had bimetallism then. We had silver and gold fixed at 16 to 1. But, that wasn’t the market. So there’s a lot of things that we can do but the most important thing is have money of real value. Paper money never last. All paper currencies end…

Eric Bolling: Congressman,…

Ron Paul: … badly and that’s what we’re in the process of doing right now.

Eric Bolling: We’re going to run out of time with you, Sir, but one of the panelists last night had what I consider a pretty darn good idea. Instead of tying the dollar or the dollar bill, or the US currency to an ounce of gold, tying it to some form of energy. Whether it’s a barrel of oil, a gallon of gasoline, something that’s a little bit more fungible, probably a lot more available to us. What do you think of that idea?

Ron Paul: Well, I would let the market to determine it. I believe in competing currency as I would legalize that. That wouldn’t be legal under the Constitution but I would think it’s incorrect to say it’s more fungible. The reason gold is money because it’s naturally fungible and you can convert it. If I want to check on you, if you’re the banker, you’re the government and you’re there to issue me a certificate, I can’t go and get a barrel of oil from you.

Eric Bolling: But, Sir, here’s the difference. Here lies the difference. If I wanted to hoard gold, I could probably do it myself. But you can’t really hoard barrels of oil because they’re hard to store. They’re too big.

Ron Paul: Well, that’s good. That’s why it won’t work. You have to be able to get it. And the gold coin standard is the most important because governments cheat. You can’t trust government. And if you have a gold coin standard, you always can check on the politicians to make sure they’re not cheating us. And that’s why you want a gold coin standard.

Eric Bolling: Congressman Ron Paul from Texas, we appreciate your time, Sir. Thank you very much.

  • swizzlecheeks

    Government economic accountabllity?…I could see Timmy Gheitner out behind the Treasury Department spray painting GOLD bricks!!!


  • Forest

    Still waiting for the positive outcome y’all had predicted from Ron Paul’s witheringly crackpot, and somewhat hysterical, assertions that the Federal Reserve secretly was involved in Watergate and had to do with dropping off cash in Iraq.

    Why doesn’t he bring this truth to light anymore?

    Dr. Paul? You there anymore fighting for us, Dr. Paul?

    • PPT

      Great point. Wait a minute…did you have one other than needing attention? I mean, aside from showcasing classic narcissistic personality disorder for those of us who don’t have a DSM-IV handy.

  • maclovindotca

    6:10-6:20 Tying it to some form of energy… fungible, probably a lot more available to us.


  • repfreedomforce

    My man Ron Paul, always talking sense to mainstream, mixed up, back assward media.

  • atchisrj1

    Ron Paul for 2012!!!

  • bluzy25

    Ron rules!

  • katsfanman

    END THE FED ! RON PAUL IN 2012 !

  • hmmurdock835

    Ron Paul for King of Earth!

  • North2016

    Say good-bye to the dollar & hello to the AMERO!

  • TheThriftShopSampler

    Notice how Bolling left 1913 off the black board? Tis-tis.

  • ThirdRomeAquilo

    Ron Paul doesnt know anything.. go back to work you peasants..

    just remember who really protects you at the end of the day. daddy warbucks and barney ‘boy loving’ frank

  • rubanban5

    This man always amazes me and I always learn something new.

  • Gfcardi

    This interviewer actually wasn’t that bad…he admitted “good point” towards the end when Dr. Paul explained why gold is fungible and a barrel of oil was not as good as gold. He also did not try to talk over Dr. Paul, as most of the interviewers do today–I got the sense he was trying to get in as many good questions as he could in the allotted time.

    Dr. Paul has it completely right. The conservatives and liberals work hand-in-hand (and both hands in our pockets) to fund their warfare and welfare states, respectively. I hope Dr. Paul runs for President in 2012, with or without the backing of the “Republican” party. He is the only politician today that speaks reason, truth, and is consistently basing his politics on the United States Constitution. G_d bless Dr. Paul!

  • enduro0276

    Yeah, let me go down wall mart with my barrel of oil, or or go put some coal in my pocket and go out to to the festival.

  • Ross

    Competing currencies are an interium solution.It has worked in the past in the USA.

    Each yr about $8,000 per working person of new money is added to the US economy.It represents inflationary + GDP money. The US Fed creates this money as debt, when it fact should be created as a tax credit.

    See You can download this excellent documentary for free. L Frank Baum who wrote the ‘Wizard of Oz’ did so in the depths of the 1890’s Depression.There were two movements of currency at that time, ie the silver movement which was the more freely available liquidity of the masses and the gold movement representing the yellow brick road of the elites who wanted to control the wealth. The Scarecrow represented the seemingly ignorant farmer and the Tin Woodman the factory worker who needed oil to move.The Cowardly Lion represented Dylan who was the leader of the silver movement but relented to the gold of the elites. IT IS A MUST SEE.

  • carlo krenzelak

    why would anyone be against auditing the federal reserve?

    • Deft

      The powerful money trust doesn’t want people to know what they’ve been doing.

  • It’s impossible to solve inflation OR deflation with a gold standard. If represented wealth is less than the representative reserves, still, no precept prevents you from suffering a circulation exceeding the reserves, particularly if you further subject debts to interest. But this objection is largely only hypothetical, because generally, on the contrary, the real danger is suffering a restricted circulation (deflation). As industry and production tend to grow, you are deprived of the further circulation which you need to sustain that industry, if and when it exceeds the monetary reserves. So the more real (practical) fault is it cannot solve deflation. But even worse, is its further fault, that if it coexists with interest, it can’t solve terminal failure, or perpetual subversion of the *disposition* of the currency (Mike´s original term), that as interest inherently and irreversibly dedicates ever more of every unit of the circulation to servicing falsified, artificial debts, versus sustaining the desired industry. It means nothing to pretend solution then, unless you have answered for all three faults: inflation, deflation, and disposition.

    Mathematically perfected economy is a currency not subject to interest, comprising a debt financing all permissible enterprise, paid by each and every debtor exactly as they consume of the associated production.

    There is no inflation or deflation, as the currency in circulation is always equal to the current value of existent production across however much of the economy is supported by a circulation.

    Neither the value of money or assets are altered by changing proportions of circulation to indebted assets or services. The value of the money is always consistent in quantity — both in earnability and spendability — with the remaining value of the indebted assets which exist, for which it was issued, and which constitute its immutable value.

    The remaining circulation is always sufficient to pay off debt. Further production therefore is not impeded by a deficient circulation, deplenished by paying more than what circulation was introduced to finance the production.

    Debt is not multiplied beyond the circulation or remaining value of indebted assets. To pay debt obligations exceeding the remaining value of indebted assets sets off a perpetual cycle of re-borrowing and multiplication of debt. Merely to maintain a circulation, we must borrow again so much as we have paid beyond the original circulation which was equal only to the unmultiplied debt.

    Neither production or consumption are impeded by imposition of extrinsic cost. In every transaction, production is traded for equal production.

    So long as we make such a circulation available to production, no impediment, limitation, or inequity whatever are imposed upon production or commerce. Production and commerce are fully expedited only by a completely liquid and effectual currency.

    Mathematically perfected economy is no more than a singular prescription, dissolving unjust intervention.

    • Citizen


      You say:
      “by imposition of extrinsic cost. In every transaction, production is traded for equal production”

      Who, in your “Mathematically Perfect Economy”
      is in charge of the
      “imposition of extrinsic cost”

      Ist Der Furher channeling from the Bunker again?

  • While the gold standard can neither save us from further multiplication of debt or rectify the other issues before us, simply re-invoking the gold standard would pave the way for immediate loss of “our” monetary gold, for already twenty years ago, the perpetual process of multiplying debt had plunged us from the greatest creditor nation in the world to its lowliest debtor nation. For the very purposes of the lie, “our” currency is now held in immense quantities across the world; and thus even if “we” held gold for money instead of paper, our inevitable collapse under perpetually multiplying indebtedness therefore will mean giving up the last of our former gold, rather than the last of a mere paper, as we tolerate the imposition of a Second Great Depression. I am now even more worried about our financial future, unless we advocate Mathematically Perfected Economy (MPE) in which we mathematically have proven the above, but are also offering a real immediate solution to the current terminal system.

    perfecteconomy dot com

  • As I have described, the fatal fault of the imposed monetary system is interest; and all further faults merely result from further failure to solve inflation and deflation. The Austrians, and Mr. Paul in particular, not only advocate interest; they advocate ELEVATED RATES OF INTEREST.

    Effectively, what they want is to remove the embossed letters which now say “Federal Reserve Bank,” and replace them with “Ron Paul’s ‘COMPETING’ Bank(s)” — a principle which he refuses to debate, further define, or justify. Of course, any ostensible “competition” would ostensibly, on the contrary, drive interest rates down. But Mr. Paul tells us that we wouldn’t have borrowed ourselves into this debt mess if higher rates of interest had discouraged excessive/reckless borrowing.

    Mr. Paul has never done the math: he tells you that all of you are going to benefit somehow therefore — oh and we so willingly believe this preposterous notion, don’t we? — he tells us we will benefit paying perhaps 17% interest on our homes than 5%. Sounds really like a good idea, doesn’t it? Especially since the rate of interest is the rate of multiplication of artificial indebtedness — higher rates of which instead necessitate greater rates of borrowing to maintain a vital circulation.

    Unfortunately, most people who exalt Austrian “economics” hardly know the first thing about it. They reject math — most of which is little more than counting — as if you could understand otherwise; and they could have possibly determined solution otherwise. In no legitimate discipline or walk of life does such reckless abandonment of principle hold.

    But Mr. Hayek, God of the Austrians tells us why they advocate interest and the current banking model — which are our very problem. See Hayek’s article at Mises org: “A Free Market Monetary System,” I think it’s called. Anyway, he thus justifies interest, that it makes banking “an extremely profitable business.”

    That’s right. There IS no justification, just an outright confession of the motive.

    We stand for real solution.

    perfecteconomy dot com
    endtheecb dot ning dot com

  • openURmindsEye

    I don’t FBN Channel in my area, can you upload Freedom Watch with the Judge?? Please?