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Source link: http://archive.mises.org/7662/the-political-and-economic-agenda-for-a-real-gold-standard/

The Political and Economic Agenda for a Real Gold Standard

January 17, 2008 by

Ron Paul explains his position on gold money:

One of the basic insights of the great Austrian economists, both Carl Menger and Ludwig von Mises, is that money emerged by evolution from the market process. It was not invented by governments. There are basic economic forces today that are contributing to the further evolution of the monetary system, and there is a political strategy that I believe will make it possible to liberate those forces and restore the monetary role for gold. Because of the current economic and political climate, it is important to understand what we can do — and what we cannot hope to do in the short run.

I believe the goal of a market economy, not paralyzed by government sabotage on behalf of vested interests and pressure groups is an ideal worth fighting for. FULL ARTICLE

{ 57 comments }

Matt January 20, 2008 at 11:41 am

The reason politicians took us off the Gold standard was to be able to create paper money (assets) at will. An individual doing that would be called a counterfeiter…Of course we all know that is theft pure and simple.
Going back onto a gold standard would prohibit government being in the theft business legally. The banks too profit greatly by being in on the take (fractional reserve banking) . At present there are other special interest groups that benefit greatly at the expense of the public at large that is being ripped off legally…

You want a Gold Standard ?, you want honest money? Forget about it !.

Person January 21, 2008 at 2:59 pm

Mike_Sproul: Did you count the governments other “debt” in your calculation, like promised Medicare and Social Security obligations? I don’t think it’s debt ratio looks so good then.

jp January 21, 2008 at 3:28 pm

Mike, I’m a bit confused. In the past you’ve said that the Fed’s policy of overpaying for assets and the passing off of its interest income to the government have resulted in less backing relative to notes issued, and therefore the long term drop in the purchasing power of the dollar.

Now you’re saying that the loss and destruction of notes has resulted in a vastly overbacked dollar. Do you really think note loss by the public overcompensates for the effects in the paragraph above?

Mike Sproul January 21, 2008 at 3:38 pm

Person:

True, but you haven’t seen my personal debt ratio.

Mike Sproul January 21, 2008 at 3:51 pm

JP:

Loss of backing can account for loss of value, but as you said, if paper dollars are in fact being destroyed at a faster rate than assets are lost, then the dollar should be rising, not falling. Since nobody has done significant empirical work to determine how many dollars have been destroyed, that’s just an open question. (Memo to Graduate students seeking a dissertation topic: If actual data could be found on the Fed’s retirements of paper dollars, which serial numbers were retired, etc., you might be able to get an estimate of how many paper dollars really exist.)

Anyway, suppose the dollar is significantly overbacked. If the Fed’s assets are sufficient to maintain convertibility at 1 oz./$, there is nothing to stop the Fed from maintaining convertibility at .5oz./$. (The fed would be stealing, but that’s for another thread.) Of course the Fed does not maintain physical convertibility, but it does maintain financial convertibility, and if it is, for some reason, maintaining financial convertibility at a lower rate than its assets could support, that could explain how we could have inflation despite the dollar being overbacked.

Person January 22, 2008 at 12:04 am

Mike_Sproul: No, I haven’t seen your personal debt ratio … remind me what that has to do with the question I posed to you?

Linda, Richmond, VA September 4, 2009 at 11:04 am

Pray tell a rank amateur, what one does with a few spare dollars while waiting for the DC crowd to agree with you. they do not want a control on the “money”, just like the upcoming inflation, sadly like Germany’s situation?

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