Ron Paul: Restore the Dollar

by Ron Paul

We frequently hear the financial press refer to the U.S. dollar as the “world’s reserve currency,” implying that our dollar will always retain its value in an ever shifting world economy. But this is a dangerous and mistaken assumption.

Since August 15, 1971, when President Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold, the U.S. dollar has operated as a pure fiat currency. This means the dollar became an article of faith in the continued stability and might of the U.S. government.

In essence, we declared our insolvency in 1971. Everyone recognized some other monetary system had to be devised in order to bring stability to the markets.

Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency with no restraints placed on it– not even a pretense of gold convertibility! Realizing the world was embarking on something new and mind-boggling, elite money managers, with especially strong support from U.S. authorities, struck an agreement with OPEC in the 1970s to price oil in U.S. dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence backed the dollar with oil.

In return, the U.S. promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup. This arrangement helped ignite radical Islamic movements among those who resented our influence in the region. The arrangement also gave the dollar artificial strength, with tremendous financial benefits for the United States. It allowed us to export our monetary inflation by buying oil and other goods at a great discount as the dollar flourished.

In 2003, however, Iran began pricing its oil exports in Euro for Asian and European buyers. The Iranian government also opened an oil bourse in 2008 on the island of Kish in the Persian Gulf for the express purpose of trading oil in Euro and other currencies. In 2009 Iran completely ceased any oil transactions in U.S. dollars. These actions by the second largest OPEC oil producer pose a direct threat to the continued status of our dollar as the world’s reserve currency, a threat which partially explains our ongoing hostility toward Tehran.

While the erosion of our petrodollar agreement with OPEC certainly threatens the dollar’s status in the Middle East, an even larger threat resides in the Far East. Our greatest benefactors for the last twenty years– Asian central banks– have lost their appetite for holding U.S. dollars. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks understand that American leaders do not have the discipline to maintain a stable currency.

If we act now to replace the fiat system with a stable dollar backed by precious metals or commodities, the dollar can regain its status as the safest store of value among all government currencies. If not, the rest of the world will abandon the dollar as the global reserve currency.

Both Congress and American consumers will then find borrowing a dramatically more expensive proposition. Remember, our entire consumption economy is based on the willingness of foreigners to hold U.S. debt. We face a reordering of the entire world economy if the federal government cannot print, borrow, and spend money at a rate that satisfies its endless appetite for deficit spending.

  • well these steps basically arent happening he should be coming out with more hardcore stuff by now! If he really thought this was a crisis for his family he would be saying that these scumbags should be sent to prison not just saying oh ben bernanke isnt the problem blah blah blah.

  • Rome is burning, and most are blind to it.
    Thats all I can think when I read/watch the news.
    Doomed to fail. Thanks 2 party system.

  • Don’t Quit, you have many many supporters. All of our district is voting for you! Go Third Party! Make the Republicans pay, if they won’t support you let them split the party and let Obama go on for a 2nd Term! Which is better?

  • Ron Paul, I love the Revolution!


  • No you retard, he’s explaining the wrong assumptions of the financial press. He’s for the gold standard dummy but one step at a time.

  • I cant believe Ron is still saying crap like this, news flash the dollar is dead! There is no reviving the dead it is time to move on to gold and silver.

  • Doctor Paul ~should~ run 3rd Party. He bust the Republicrats ass. But what if He wins??? Do you honestly think that the Elites will allow him to erode their Power!?! Of course not! He’d end up being a modern day JFK. We’ve tried to be civil and work within their system.. it hasn’t worked. Now we will have to destroy the system to rebuild it. EXPECT US

  • And the only one I can listen to without puking.

  • Why isn’t he talking about the audit of the Fed?

  • Watch Ron Paul on “The Tonight show with Jay Leno” September 4th. It is suspected that Ron Paul will announce a 3rd party Presidential Bid.
    Ron Paul 2012!!

  • Your the only transparent and trust worthy Man in the US government i can trust.

  • Ron Paul will be on Jay Leno tonight and it will be interesting to see what he has to say..ON PUBLIC TV DURING THE DNC…this IS, I remind you, after the RNC has pulled EVERY slimy trick that they could to keep US from even having the option..which is literally the REMOVAL of the last shred of autonomy that was hanging on for dear life..I hope he announces what I HOPE he will announce tonight!


  • The RNC is a major victory for Ron Paul. The clear corruption in the GOP was fully exposed to everyone. If Dr. Paul runs third party now, he’s instantly way more credible than the GOP and DEMS. Remember, the whole point of Dr. Pauls run via the GOP was to use them for the debates. We no longer need them. As a third party, we’d win the general election with Dr. Pauls honest credibility. It should be clear to all americans now that corrupt, “politics as usual” in america, just lost! RP 2012

    GARY JOHNSON / RON PAUL 2012 !!!!!!!!!!!!

  • I am watching it now..view count: 301

  • Ok come on it is not just the RNC ignoring the doctor look at the view c0unter Hear. all videos.

  • Anything to keep Ron Paul off of the front page! Perhaps they didn’t get the memo there is no reason anymore to hold back chatter about Dr. Paul…the RNC stole the nomination for Mitt Romney…they are pure jerks!

  • Ron Paul did his part very well. It’s our turn now!
    too sad is Rand is not like his Dad Dr.Paul

  • Not certain of the facts, but I heard Ron Paul may announce his Third party run on Jay Leno tonight. Could be a rumor, I hope its the truth.