I agree with him on some things but am totally against him other things.
He’s seems like a regular pre-W. Bush conservative. After Dubya, anybody looks like a good candidate.
I wish the pre-W conservatives were like Ron Paul. They may have had the rhetoric, but their actions were nothing like it.
All the other republicans are Dubya imitations. On the other side, the only peace candidates are Gravel and Kucinich.
Ok, I think your argument finally just clicked for me. Are you basically saying that the worth of things/money is backed in gold, but other things can be used as currency? It seems so simple, but for some reason I wasn’t grasping it until now. I feel mildly dumb.
This gold standard is one of the main reasons I’m hesitant on Ron Paul, mainly because I don’t fully understand it.
The biggest problem with the US now is the gov debt
Well, actually it’s a public to stupid to realize they are being stripped naked by war profiteers. But maybe the next election will fix that. Leaving us with the debt (close to 700 bil just for Iraq so far ). We are many trillions in the red.
Getting rid of the income tax will cut gov income income tremendously. It will need to be replaced with a consumption (sales tax).Switching to gold and silver currency will cause deflation (it always has in the past, more goods and people bidding with a fixed money supply raises the value of the gold). The last periods where we had deflation was in the early 1930’s, and the 1890’s. Both periods of great suffering, mass unemployment, and greatly reduced consumption. This will greatly reduce gov income from sales tax, now at both a federal and state level.
I could see this leading to a point where the gov income will be less then needed to cover the interest on the debt. So all government programs will be ended. We end Medicaid, food stamps, and SS, shortly before we default on the interest payments of the government backed bonds that pay for private pensions and annuities. 
Everyone defaults on their mortgages, and the banks get all the land.
Conversely, inflation makes both personal and government debt cheaper to pay off. I am not recommending 100% inflation, but as a worst case scenario, it chops, in real terms, all government debt and mortgages in half.
You know what Gilby, I think you have done the impossible. I figured I would end up voting for Hill Dog in the big election, holding my nose and dreading it. Suddenly I am glad that the country looks well on track to Clinton 2. You have convinced me that things could indeed be much, much worse. I suddenly feel so rich that I don’t have to watch my neighbors starve to death while I guard my vegetable patch all day clutching a shotgun.
It may not limit but it does inhibit.
Especially fast-growing economies.
The central bank will not be able to get additional money supply into a growing economy fast enough if they have to back it with gold first.
It’s quicker and more immediate if they can ‘just’ print it. (Obviously with proper inflation-targets in place, blah-blah-blah)
This is one of the main arguments against the gold standard.
From a (hopefully even faster) developing country’s point of view anyway.
You say that as if it’s a bad thing. Why don’t we cut out a layer or two of middle-management in the gov’t at the same time… and a few three-letter agencies while we’re at it… and we might come out ahead!
Okay, that’s a very cynical view, but how about seeing things leading to a point where the debt becomes less than anything we’d need to worry about. If we begin our cuts by offing the IRS, DEA, ATF and a few others, pay off the debt, then cut income taxes, we’re home free, no?
The worth of something is denominated in gold. Just like right now if I go to Europe, I’d pay something in euros with my debit/credit card, but I don’t have euros in my account, so dollars are taken from my account and exchanged on the market for the currency they accept, the euro.
It could be anything. Let’s say I have a brokerage account, hook my credit card to that and when I make a purchase it could trade a share of stock (or any other equitable asset) for whatever asset the seller wants. None of us may need gold as an asset and therefore the actual transaction may not include gold, but the purchase could be denominated in gold since that’s the commonly known unit of value.
For transactions that are not electronic, using coins and warehouse receipts would be common. The reason gold and silver became common is because they were easy to coin in specific massed and they have a lot of value for a small amount. The value of the metal is based on what it can be used for, and the demand for it’s use, just like the value of gasoline has a value based on it’s supply and demand.
We are talking about getting rid of the central bank. At least in this country, the governments do not have the power to issue paper money. They can only coin money.
If the economy is growing fast, that means the supply of equitable assets is growing fast as well.
And when you have a system of money that is solely backed by debt, what do you think the incentives are?
If we bring the troops home and reduce other spending. We can reduce the spending. If we reduce spending to the levels we had in 2000, we could eliminate the income tax.
Technically, the buying power of gold increasing isn’t deflation. It’s simply appreciation. A deflation can only occur as the result of an inflation and it occurs with paper money. You print more money than you have the gold to back it and you get inflation. Then when you take those extra notes out of circulation, you get deflation, and many people that are screwed because they couldn’t get anything for their notes. That is the common trend in all the depressions.
Cool. Those things you listed aren’t constitutional anyways. What you need to grasp is that the federal governments main purpose is to protect our liberties from foreign threats. The states handle the rest. You want socialism? Keep it in your state and let people move to their preferred states. Though do your socialism without infringing on the life, liberty, or property or others.
Well, not really. The new credit bids up the prices for the assets being purchased, so the loan rate may be low, but the price is higher, which means you’re actually paying about the same depending on when you get in the market. The market assumes the same rate of inflation for this.
Hyperinflation would do that.
I hope we don’t have to see Clinton 2 bring that to us. We need someone who understands how money works to be in office when the the money system can no longer be sustained. I hope it doesn’t happen with Bush still in office.
I’m just curious, how would we convert to a gold dollar ?
So the gov abolishes the IRS and the Fed. We declare our dollar wealth no longer legal tender. Legal transactions will be expressed in fixed amounts of gold and silver, copper. Only hard currency will be issued.
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Our gov just lost it’s job of collecting taxes. We can’t tax barter. And we just declared our paper currency worthless. Plus we are 5 or 6 trillion dollars in debt. Can we just totally default and say STFU to everyone in the world who is owed money by the USA. ? Maybe, we have lot’s of Nuke’s, and are good at telling other countries to STFU. Let’s say Paul says, “Go for it, we must be free of paper money” !
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Where do we get all the metal to make all these coins? We will need the equivalent of half a trillion dollars worth of metal, at least. Who can we buy it from? Our gov has no income, and we just declared that we will no longer print anymore money. Why would the world sell us gold when our money is worthless, we just lost our income, we just defaulted on 6 trillion dollars in debt? I bet the world will say to us, “no way you get any gold or credit from us dudes, cause you a broke crazy guy.”
3 What if Kris wants to sell 1000 KH’s in Europe. Does he have the right to demand they pay him in gold ? What does he do when they say no ? What if they still use fiat currency ? If we must continue to except their paper Euro in order to do business, what have we gained dumping the paper dollar ?
4 The gov’s choice will be to back the dollars in circulation now, at some fixed exchange rate to the new gold dollar (metal from where ?), or abandon it. If we say we will exchange 2000 $ in paper dollars, for an oz of gold, we must continue to pay this gold for more then 30 years (as already issued bonds mature). What if we run out of gold ? We are trillions in debt now, and there is perhaps a few hundred billion in gold in the USA now at these prices. What if the world price of gold rises a great deal ?
5 What if the rest of the world doesn’t elect hard coin Paulites ? They think he’s crazy and act all Euro socialist on us, and go their own way. What if their fiat money economies continue the same path of exponential growth they have enjoyed for the last decades ? Yet we end up with a 3rd world rate of economic activity shared by other hard currency-barter economies ? Won’t that make us their bitch ?
Transferring from our present paper money system to the gold dollar will pose more then a few problems. I think Paul is taking a page from the great Reagan’s play book. Ron was big on the gold based dollar, and projecting a sense of old fashion common money logic. But once in office, he never mentioned it again.
Sales taxes (including things coming in and out of the country) will pay towards the debt, which should be sufficient if he pulls out of Iraq, end homeland security (which is absolutely useless), etc. Basically he spends way way way less, and so doesn’t need income taxes.
He is not going to make the money out of gold, but you can trade in your dollar if you wish for a fixed amount of gold. The money will still be transacted in paper form, but you can go to a government building and demand that your money be changed into gold. This stops the government from printing money (for if the value of the dollar goes down, people will demand their gold), and adds stability to the currency.
Is this a great idea?
“He is not going to make the money out of gold, but you can trade in your dollar if you wish for a fixed amount of gold. The money will still be transacted in paper form, but you can go to a government building and demand that your money be changed into gold. This stops the government from printing money (for if the value of the dollar goes down, people will demand their gold), and adds stability to the currency.” - Danni
So we set an exchange rate for the dollar, when we now are trillions in the red, and back this plan with the few billion in gold the gov owns now ? Is it not obvious that the gold will be gone in a few hours ? What would your next move be Danni ? You have cut some expenses from the budget, so what…you still have several trillion dollars in dollars and debt to convert to gold you don’t have.
Next plan?
You guys own the gold mines, you should be lobbying for this. 
If you speed up the economy by printing more money than you have assets (gold or something else) and for some reason that money isn’t turned into assets, then you end up with a problem. It adds a risk of instability, and that kills long term investments.
We suspect the mines are just about reaching the end of their lives anyway…
The instability risk is one that can be mitigated with good inflation controls. It doesn’t have to kill long term investments.
No risk - no profit.
Not all of our assets are in cash right now. I’m still not 100% convinced of the gold standard’s validity, but this point seems obvious. If everyone tried to turn their assets into cash right now, there would be a problem. “But”, you say, “that would never happen!”
Then why would it happen with the gold standard? People like their shiny, but they won’t all rush to the bank to sell their car for some chunks of gold the minute we change to the gold standard.
The paper money wouldn’t be declared worthless. You’d just allow competition to the dollar and make gold and silver legal tender again at the free market rate.
What happens when a borrower defaults on a loan? Their property is repossed or liquidated. In my opinion, the US should not own any land outside of the 10 mile square of DC. Sell all the property they hold, which I believe is about 1/3 of the land in the US, and repay the debt.
The US does have the power to tax imports, which is the main source of revenue for the fedeal government that the constituion allows. If they do a good job, they can keep this rate low.
Exchanges of one asset of real value for another of equal and real value.
KH is from Canada, but let’s assume this is a US transaction. He can work out the payment with his customers. He is free to accept euros and then convert them to whatever assets he wants to store his savings in. You are not required to accept their euro, it’s up to you on what you want to accept and what you want to store your wealth in. What we gain is a legal system that doesn’t force any paper currency on us. Today, if you owe me a dollar, the government forces us to accept the Federal Reserve notes instead of the real thing. A dollar is defined as a specific amount/weight of silver, about 0.72 ounces, but the government is allowing you to use something that is worth much less to pay me back. Greshem’s law says that you will pay me with the paper. The gov is impairing the obligation of contracts (a violation of the constitution).
After selling other liquidable assets, the government can then choose to sell it’s gold and silver. You’d take the total gold and silver reserves and divide it by the debt to get how much it can be redeemed for in these bills of credit. This essentially is selling the gold and silver.
With freedom would come great economic prosperity here. Their fiat money, as long as it’s not forced on us by our government at some fixed rate, would not be a danger to us. Their imperialism in which they try to force their fiat currency on us may be a problem, just like what we did to other countries with our US dollar to prop it up.
Was Reagan a sound money gold bug? I know it was during his Presidency that Ron Paul headed the committee that pushed a return to gold and silver. The banking interests won then.
The main purpose of using a commodity for the currency is that it can’t be manipulated easily by government. It’s value is because of what it can be used for, not because of the government forcing it’s use on us. As individuals, we can choose what we keep our savings and investments in and we can choose what our contracts are in.
Not Europe, China. And as it is, they’re getting closer with the collar and leash.
Gold and the USA debt
I noted today that my country is 9 trillion $ in debt. Congress voted today to allow the ceiling to be raised to about 10 trillion $. We were only 5.6 trillion in the red when GWB was put in office. Wow! The USA will have 10 trillion $ of debt obligations before any new hope arrives in 2009.
Since there is only 8 trillion dollars in gold, on earth, at it’s current price, someone please explain how we could move to the gold dollar now, without defaulting on our treasury bonds ? I’m not trying to convince anyone that it is not a bat shit crazy plan, I am curious if anyone will try to explain how it is even possible.
Please note that if we default on our debt, it is not just the poor old people dependent on social security that will starve. All private pensions will go tits up as well.
Many have expressed the delusion that if the gov must make coin to produce money, this will stop us from going into debt. The delusion is that the gov has been printing dollars all this time to cover the debt. It has not. The actual amount of printed wallet dollars in existence (called M1 by economists) is about a trillion dollars or so.
When the gov deficit spends, it sells a piece of paper with a promise on it that the Federal Reserve of the USA will redeem this note in 20 years for 100,000 USD (not gold). These notes are sold at auction for way less then 100,000 $. The catch is they can't be cashed in for 20 years.
Because the entire world trusts we won’t go all wing nut, and abolish the Fed and destroy our credit, these Fed bonds are counted as real money. The economist types can this M2 (the money supply that includes currency and bonded debt). This is a simplified explanation of M2. I hope it serves to explain how Ron Paul could take office with the USA 10 trillion dollars in debt, while there is only 1 ish trillion dollars of printed USD on earth.
To stop congress from deficit spending, we need a constitution amendment to prohibit that practice. They could otherwise go just as far in the red in a hard money system. As long as people buy the bonds, they will sell.
the fact that anyone would say that september 11 is the us governments fault makes me angry
Why Ron Paul is the darling of the left
He is very good at explaining 911 in the correct way. Focusing on our own anger, as a nation, is common. Bush and Gulliani wish to exploit this for personal political gain, and to shovel trillions to the military industry.
But the reasons Paul says Bin Laden did 911 look wise to me.
If you are content to be a part of the problem of war, focus on your anger. But to be part of the solution of peace, we must focus on the anger of our enemies.
We really can’t buy and kill our way out of terrorism. It is very true that US policy has greatly angered many foreigners. Bombing people has a way of doing that. Paul has been brave enough to say we should listen to our enemies and learn from them. He is not excusing Bin Laden’s behavior, but rather showing how we can avoid making more people like him.
Bush- Cheny is in fact a front for the war industry. They will not kill Bin Laden if they get the chance because they need him. If he dies, how much trouble it will be for them to find-make another.
but appeasment wont work either…i wish that there was some middle ground beetween the 2