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.

  • You hit the nail on the head. I’m a Ron Paul supporter myself, but, many Paul supporters are hanging from his dick and are voting with their emotions. They need to utilize their grass roots momentum and take it to the Republican Party. Going up against the 2 party system is designed to fail. Rand has pulled off a great infiltration, and yet many Ron Paul supporters consider him a traitor. Rand’s position in the Rep Party will do more for the Liberty Movement than ever before.

  • Fuck that. We could possibly be in FEMA camps by then. We must write Ron Paul in. Fuck Romney and Obama. Fuck everyone who go’s against Ron Paul and the Constitution.

  • If you truly think voting for some no name will send a louder message than voting for Ron Paul, then you should see a shrink.
    Your attempt to derail a Ron Paul supporter is both futile and juvenile.
    There is a reason even the white house youtube staff will not engage me in conversation..
    I know wtf i’m talking about, you sir, do not.

  • Looks like this brick wall is still at it. Hey why don’t you go get yourself a hobby or job instead of spouting your dreams on the internet?

  • I’ve provided various links to you proving there will be little to no “jobs” in the future; or society will collapse before it happens. All you have done was speculated with no scientific evidence.

    “More technology = more jobs”

    I’m literally astounded by your logic.


  • I respect that you re standing up for your beliefs but your vote will be literally thrown in the garbage, most likely very few will see it and tell no one. Being realistic, Gary Johnson has zero chance of winning so there s really no risk of him being “bought out”. But by voting for him, you will send a clear, tangible message to the establishment. Your martyr like action is an immature, emotional response that serves no purpose but to make you feel temporally better about yourself.

  • Too bad Ron Paul didn’t run as an independent candidate, after the Republicans pushed him out of the race.
    At least he would still be on the ballot, and his votes would count.
    I support him 100% and was going to write him in, so that kind of becomes my dilemma (and of several other people that I know).
    There is ‘no way’ I’m voting for the lesser of two evils (Obama or Romney) because that’s what you’re ‘guaranteed’ to end up with either way.
    Having your teeth pulled is a more attractive option.

  • nope
    Ron Paul or nothing
    Ron Paul or bust
    I don’t know if Gary Johnson can be bought out
    I KNOW Ron Paul cannot be bought out

  • That’s kind of my dilemma…(and of several other people that I know).
    There is ‘no way’ I’m voting for the lesser of two evils (Obama or Romney), because that’s what you’re ‘guaranteed’ to end up with either way…
    Having your teeth pulled is a more attractive option.

  • I feel where you re coming from but shouldn’t you write Gary Johnson? I mean he has the same beliefs and will actually be on the ballot

  • Haha look at you, “No, there will be no jobs in the future”, lol what do you think you are some technological prophet? You haven’t listened at all, replacing jobs with machines will simply make more jobs. More technology = more jobs. You are unable to see logic, all you see is your optimistic desires. Simply just because you put a machine in place of a human doesn’t make the job done, now drop your childish dreams and grow up.

  • That’s government, not gold.
    The government can take anything of yours that it damn well pleases.

  • Dr Paul is retiring as a congressman after this election. America’s last flame is flickering out.


  • Ron Paul supporters need to come together and vote Libertarian this time around to show the two-party system that WE THE PEOPLE can pick our President and can change the way we live

  • Though I support Ron Paul wholeheartedly I never understood what writing in Ron Paul would achieve. Isn’t it better to make the X for Gary Johnson who – at least superficially – has the same positions as Ron Paul?

  • HAHAHA nice XD

  • Good one, I really needed a laugh today!! Honestly 🙂

  • Now, whatever would give you that impression?!

  • In order to better “flame” you, it would be helpful if you told us why you feel the way you do.