Ron Paul: Fiat Money Experiment Will End Badly


Chairman: At this time, Mr. Paul is recognized for three minutes; your thorn in the flesh.

Ron Paul: Thank you, Mr. Chairman, and welcome, Chairman Bernanke. You know, I guess over the past 30 or 40 years, I have criticized the Fed on occasion, but the Congress deserves some criticism, too. The Federal Reserve is a creature of the Congress, and if we don’t know what the Fed is doing, we have the authority and we certainly have the authority to pursue a lot more oversight, which I would like to see. So although the Fed is on the receiving end, and I think rightfully so when you look at the record; I mean, the Fed has been around for 99 years, almost a few years before you took it over, and 99%, 98% of the dollar value is gone from the 1913 dollar. So that’s not really a very good record, and I think what we’re witnessing today is the end-stages of a grand experiment, a philosophic experiment on total fiat money. Yes, they’ve been debasing currencies for hundreds, if not thousands, of years, and they always end badly, they always return to market-based money, which is commodity money, gold and silver.

But this experiment is something different than we’ve ever had before, and it started in 1971 when we were actually given an opportunity in many ways to be the issuer of the fiat currency, and we had way too many benefits from that than people realized. But it’s gone on for 40 years and people keep arguing from the other side of this argument that it’s working, it’s doing well. And yet, from my viewpoint, and the viewpoint of the free market economist, all it’s doing is building a bigger and bigger bubble. And the free market economist are the ones who predicted the NASDAQ bubbles, the housing bubbles, but we never hear from the Keynesian liberal economist and the central bankers saying, “Watch out, there’s a bubble out there, there’s too much credit, too many problems there. There’s a housing bubble, we have to deal with it.” Usually we get reassurances from the Fed on that. But I believe there’s a logical reason for this, because the Federal Reserve is given responsibility to protect the value of the dollar, that’s what stable prices are all about. But we don’t even have a definition of a dollar.

You know, we ask about the definition of a dollar, and they say, “It’s whatever it buys”. Well, every single day, it buys less than the previous day. To me, it’s sort of like building the economy and having economic planning like a builder has a yardstick that changes value every single day, just think of the kind of the building we would have. This is why we have this imbalance in our economic system. But it was a system designed to permit debt, we have a debt-based system. The more debt we have, and the more they debt the Federal Reserve buys, the more currency they can print. And they monetize this debt, and no wonder we’re in a debt crisis. It’s worldwide, I think it’s something that we’ve never experienced before. And I think the conclusion will be a vindication either for sound money, or you win the argument and say, “Yes, we are great managers, we know how to do it, we want the credit for the good times and we want the credit for getting us out of the bad times.” I think within a few years we’re going to know. Of course, I’m betting that the market is smarter, commodity money is smarter, nobody is smart enough to have central economic planning. So I’m anxiously waiting for the conclusion, because reforms have to come. When you see Robert Zoellick talking about monetary reforms and talking about gold, our time has come for serious discussion on monetary reform. Thank you, Mr. Chairman.

This is a rush transcript. If you notice any errors please report them using the “Help improve this post” link at the bottom of this post.

  • It’s fucking ridiculous that Dr Paul has to be the only one in congress talking about this.

  • Because Americans are morons! Sad to see you think that way, Along with the other 49 that thumb-up your comment. A better comment would be. Most Americans are asleep, but wakening everyday. A rude awakening is coming fast. Hold on to your seat. Mr. Paul is a great man, indeed.

  • There is legislation in congress to implement the draft. People better think,young people especially… they can force people into war if it is implemented,is that freedom?.
    RP will end all this,no more wars…

  • The National media says very little about Ron Paul. But when you come to youtube you see nothing but support for the man. It doesn’t make sense.


  • was anyone else irritated by the “Mr. Paul” name plate?

  • I’m afraid for this man’s life, because if he does win somebody is gonna kill him.

  • I shook this man’s hand

  • more like sanatorium

  • Too much wisdom and logic for a politician to run modern day U.S.

  • One person voted for Santorum.

  • If Ron Paul could just become President,I would feel proud to be American again.But I don’t think ti will happen anymore.I’m keeping my hopes up and will support Ron Paul till the end,but I can’t help but be realistic and know that big corporations have this nation in its pockets too deep for there to be a honest,intelligent,and moral man in office.I am just absolutely despised of our country nowadays and will not be here as a citizen after 2012 if we have a Romney or Obama as POTUS.

  • you mean the car maker?

  • How can people not vote for Ron Paul? The American voters are so stupid, he just lost the Wyoming Caucus with 8%. This is ridiculous.

  • This man is truly the last hope of the people of the world.

  • Ron Paul is more like a teacher than a politician , ..politicians try to convince you what is right to benefit them, Ron Paul just teaches you what is right, no matter what, even if its not to his benefit !

  • Dr. Paul, fightin’ for the People!

  • One day they will quote Ron like they do Abraham Lincoln. Just a shame it will be to late when they do.

  • today on c.b.s news they were talking about the presidential candidates they spoke of mitler ricky jabba the newt but not one word about captian america better known as ron paul but they are not bias ?

  • He’s paving the way for Rand. Rand can do it…

  • Truth be told Ron won’t become president but future presidents will quote his wisdom.