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.



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198 Comments:

  1. Acton - that someone could be you! Go for it!

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  2. Ron Paul is nothing more than a huge idiot. And Ron Paul's supporters sicken me. Flame me if you want, I'm being truthful here.

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  3. Im from Ireland, Now that RonPaul is out of Presidential race,will he still remain as a voice within the American Government? I shure hope he does.. Im a huge fan of his, His son is involved in politics too?.. And only wish we here in Ireland had someone like him in our Government...We have zero leadership Our country too is on its knees...Mass unemployment, Mass Emigration, Massive household debt..Our GLOBAL day will come...Slan agus go maith.

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  4. only if we let em trample it

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  5. One problem with gold: the gov'ment has and can confiscate gold in the future if it so declares. The gov'ment could also take your firearms as well, under whatever penalty they choose to prescribe. The gov'ment has and can trample on the Constitution with impunity as evidenced by NDAA and the "patriot" act.

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  6. Write-in Ron Paul for president, the intelligent voice crying in the wilderness.

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  7. Write-in Ron Paul for president, the intelligent voice crying in the wilderness.

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  8. 1. No and 2. Why would we care?

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  9. I hate that it's come to this, why couldn't you keep fighting Dr. Paul? I like Gary Johnson & all but lets face it, he's no Ron Paul. I doubt Gary will become our next President, it's only downhill from here & I'm sure as hell ain't waiting for 2016 or 2020. When will we stop talking & for once when will the people actually take control?

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  10. wRONg Paul is a fuckin' jackass. As for his Paultards, well the old saying is true .........."there are more horse's asses than there are horses.

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  11. Don't vote, revolt.

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  12. "but they can not completely take all of the jobs" Wrong. 50% of jobs in the world (2 billion people) can be replaced by 2030. What about the year 2050? or 2100, or 3000?

    "My point stands jobs will always be apart of human society" No, there will be no jobs in the future; instead there will be hobbies and volunteers.

    "this isn't debatable" Zeitgeist movement has been debating for almost half a decade.

    You didn't even bother to watch the 'Jobs are Obsolete Jason Silva' I linked. Try again.

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  13. you sound like the racist one. I bet you don't even like your self

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  14. Ron Paul 2016: Restore America Later.

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  15. I wouldn't dignify these criminal debates by watching them.

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  16. U FUCKING IDIOTS NEVER RESEARCH ANYTHING....this country is this way because of naive white people....for 50+ years white people have voted this country into the ground and enslaved their own children to the coorporation...you have fucked up enough...go sit down somewhere.

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  17. o here i did the legwork for you....voting is an illusion anyway...and why the fuck would i vote

    csmonitorDOTcom/USA/Elections/President/2011/1229/Racist-newsletter-timeline-What-Ron-Paul-has-said

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  18. ron paul is racist.

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  19. I have no reason to believe there is any gold in Ft. Knox.

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  20. WRITE IN RON PAUL
    no matter who is on the ballot, no matter what party you are
    WRITE IN RON PAUL
    even if you in your heart believe that it wont' matter
    WRITE IN RON PAUL
    don't kneel to the establishment, go down fighting
    WRITE IN RON PAUL

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