Ron Paul: Why Governments Hate Gold and Love Fiat Money

by Ron Paul

Last year the Chairman of the Federal Reserve told me that gold is not money, a position which central banks, governments, and mainstream economists have claimed is the consensus for decades. But lately there have been some high-profile defections from that consensus. As Forbes recently reported, the president of the Bundesbank (Germany’s central bank) and two highly-respected analysts at Deutsche Bank have praised gold as good money.

Why is gold good money? Because it possesses all the monetary properties that the market demands: it is divisible, portable, recognizable and, most importantly, scarce – making it a stable store of value. It is all things the market needs good money to be and has been recognized as such throughout history. Gold rose to nearly $1800 an ounce after the Fed’s most recent round of quantitative easing because the people know that gold is money when fiat money fails.

Central bankers recognize this too, even if they officially deny it. Some analysts have speculated that the International Monetary Fund’s real clout is due to its large holdings of gold. And central banks around the world have increased their gold holdings over the last year, especially in emerging market economies trying to protect themselves from the collapse of Western fiat currencies.

Fiat money is not good money because it can be issued without limit and therefore cannot act as a stable store of value. A fiat monetary system gives complete discretion to those who run the printing press, allowing governments to spend money without having to suffer the political consequences of raising taxes. Fiat money benefits those who create it and receive it first, enriching government and its cronies. And the negative effects of fiat money are disguised so that people do not realize that money the Fed creates today is the reason for the busts, rising prices and unemployment, and diminished standard of living tomorrow.

This is why it is so important to allow people the freedom to choose stable money. Earlier this Congress I introduced the Free Competition in Currency Act (H.R. 1098) to permit people to use gold as money again. By eliminating taxes on gold and other precious metals and repealing legal tender laws, people are given the option between using good money or fiat money. If the government persists in debasing the dollar – as money monopolists have always done – then the people would be able to protect themselves by using alternatives such as gold that are both sound and stable.

As the fiat money pyramid crumbles, gold retains its luster. Rather than being the barbarous relic Keynesians have tried to lead us to believe it is, gold is, as the Bundesbank president put it, “a timeless classic.” The defamation of gold wrought by central banks and governments is because gold exposes the devaluation of fiat currencies and the flawed policies of government. Governments hate gold because the people cannot be fooled by it.

  • I can tell you in one word why governments hate gold, silver, and other precious metals..


  • yee germany still the rock, to many idiots here tho as well, we will go the same inflation-road.

  • To bad he played the political game and threw the whole thing to get his sons foot in the door. How can people NOT see Dr. Paul simply gave up and let them steel it all from him? All the evidence is there.

  • What you need to do,is grab a shovel and locate your self in the gold mining region, to get your self some FREE gold from the earth.counterfeit man energy will get you kill. counterfeit is robbing ,unless the one of exchange is aware of this counterfeit. counterfeit is not fake if it can union(transfer) it with confident.

  • What you need to do is print counterfeit money to buy gold with, that’s what the Fed does.

  • Put a fork in Romney, he’s done. Fiat money is an accounting scam just like the one that collapsed Enron.

  • Do you think Dr. Paul would of been up there if he had gone 3rd party? He would of had 15% in polls I am sure of.

  • Keep buy gold. Obama death panel is coming(Sarah Palin spoke of it),You might be able to bribery the administrators of the death panel..

  • It’s disturbing why a third party or major independent candidate is never allowed in these so called debates. Saw a bit of it, and could never tell the difference between Romney or Obama. America should’ve ended this 2 party monopoly travesty as early as 50 years ago. It’s still not too late for Americans to fight for their liberty and constitutional rights, if they just organize and band together in large numbers. In a way that even the controlled mainstream media can’t ignore them.

  • God Bless Ron Paul!

  • So sorry to have not seen you last night. God speed.

  • Surfisher

    The “DEBATE” — here is the condensed to 6 minutes video.

  • Thank you, Dr. Paul!

  • Thank you, Dr. Paul!

  • Vote Gary Johnson! Yes, there are differences, but he’s the best bet for a liberty-minded president who is already on the ballot in all 50 states.

  • abolish money ! the venus project resource based economy!

  • Obomber love to bomb innocents in Pakistan.

  • Poetry doesn’t do much…. now does it….. fag… get real.. Ron Paul needs to run independent and keep his campaign going! Pussies like you just sit back and talk some gay shit.. get the damn revolutionary ball rolling.. and stop with your homo shit while obama and romney are laughing their asses off deciding whose gonna be president… tool!

  • If he had any true concern for the American people, he would be running independent right now.. Yea yea… he’s republican.. fuck that, its push come to shove time…. the revolution needs a boost into hyper mode NOW!!! Ron Paul Independent, or this was all a scam to get the votes taken from the republican party and he was paid off… Ron Paul Independent! We NEED IT NOW!!! WRITE INS WONT WORK! RUN THIRD PARTY!!!

  • Machines will be more integrated as we move into the future yes but they can not completely take all of the jobs, they will simply create more jobs because machines can’t take care of themselves. The point of me saying machines can’t think is the reason why they won’t take over. The purpose for technology is to make the job simple and efficient for humans to perform. My point stands jobs will always be apart of human society. Honestly, this isn’t debatable I don’t know why you continue to argue.