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.

  • That’s the video I saw. I checked out Bernie Sanders’ website but couldn’t find the report.

  • Gary.Johnson.Won’t.WIN. Get over it!

  • We now have Gary Johnson and Jim Gray as our Liberty Voice.
    RP could not openly endorse them because the GOP would have used that against the Liberty Movement.
    But RP said on Leno, “What will people do when they realize there is no real difference btween the 2 Parties? What will they do then?”

    That should ring in people’s ears. RP is telling us to vote with the LP. But he can’t openly say it.

    Vote Gary Johnson/ Jim Gray. Vote Libertarian.

    I am sure that is what RP would like. Not Robamney.

  • i just experienced a romney type take over of my local grocery store. specifically, “value plus” was taken over by “el super”. my joke was el super – es mas e menos. but- the first change was a uniformed guard at the entry. next- they ran out of oranges. day 3 no apples. now today i bought tangerines that looked nice – and paid over 5 dollars for 6 or seven. timing is terrorist.

  • Mr. Ron Paul if our Polticians had listened you since you been in our government, this nation would never have came to this point. A Nation will wake up when they fall, but it will be too late. Once your nation falls you will never be same. I guess others don’t care how you are trying to save our nation. They are deff, dumb, mute. Only our creator can open their hearts. Dear, Mr.Ron Paul, if it is meant for our nation to be saved it will, if not I guess every nation learns a lesson by falling.

  • Will have to check that out. I know the previous Audit the Fed Bill that basically got gutted in committee did reveal a hint of the magnitude of bailout funds going to Europe/European Union members.
    Yep, that’s what Mary is referencing in the article she focuses that vid on. Europe bailout comparable to aggregate US debt. From the GAO audit performed as required in legislation passed last year. Sen Sanders posted Jul 2011

    btw user channel is Marygreeley1954, found the vid


  • Ron Paul, Nations will fall when they don’t agree each other. Enemy could never bring someones nation. Only their own people will, by fighting each other instead of working together what is good for their people & for their nation. I don’t believe our Politicans anymore. U.S. Politicians always accused other nations for their Corruption. Corruption is always with in your self. Americans need to wake up they are the one dragging this nation to suicide. Ron Paul, Destiny will show what is coming.

  • Dear Mr. Ron Paul, I wish everyone in U.S. government listens you carefully that only you will save our nation. Americans will regret it badly for not listening you & not supporting you. Regrets never brings back the pass. My teenage son he said what will happen to our nation after a decade? I wish I could tell my son it is going to be okay. I cannot lie to my child. I said I wish we have many Ron Paul. My son said I wish I was 18, I could vote for Mr. Ron Paul.
    Our kids know, you are the one.

  • That would be awesome!! I just would hate to see him get hurt or killed.

  • Ron Paul is not going to run third party you boobs.



  • Its kind of sad i think that idiot romney is going to be president smh and you the media is goong to keep putting lies od ron paul so he wont be president people need to vote for ron paul but tooo many americans sleepin on him

  • Agreed !

  • Romney is the one millionth candidate or nominee who claims he will change, restore, alter, revive, resuscitate, move, bring back, revitalize, or transform America back to greatness again. Funny how his policies tell a different story. The only man, at least in my opinion, who can “Restore America” is Ron Paul. Gingrich had no real plan, Santorum is out of his mind, and Romney is just an idiot. RP is the only candidate with a detailed plan to restore the economy that I’ve heard thus far. Go Ron!

  • Ron, PLEASE run & give us someone to vote for with pride and hope.

  • amen to that!

  • You are my president win or loose! Electable or not, I will always know you won 2012!!!!

  • To me it is sad that the one individual in the political arena who stands for what the United States is supposed to stand for cannot be elected President. The stupidity spread by the public education in America is astounding. It seems that if logic is not re-introduced in to this system then things like Bush, Obama and Reserve and whoever else dumb enough to take that office then the stupidity shall reign king of all things .

  • I don’t think Ron Paul should call the Federal reserve note the( Dollar ), people who are just turning in may get confused , the Dollar ‘s physical description has it’s origin in the physical description in silver , the Federal Reserve note has its description based in debt

  • senator ventura, look him up