Ron Paul in Gold, Peace, and Prosperity, by Ron Paul

On Budget & Economy: Depreciating currency is greatest threat to middle class

The greatest threat facing middle and working class Americans is our depreciating paper currency.

All aspects of the interventionist system threaten freedom and social peace, but money is the major issue, since it is the life-blood of all economic transitions. If we are to reverse the trends of the past six or seven decades, honest money and monetary debasement must become top concerns of ordinary Americans.

Fifty years of systematic monetary destruction now threaten the existence of our constitutional republic. The American people are frightened by what they see, and they are demanding that the inflation stop. More citizens are realizing that Congress and the Federal Reserve have generated a flood of paper money with no intrinsic value.

It is rare to find anyone today who believes that wealth can come out of a printing press. The corporate bailouts, guaranteed loans, government contracts, and welfare gimmicks all have failed, and the people can no longer be duped.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 15-16 Dec 31, 1981

On Budget & Economy: Gold standard avoids need for government promises

During most of the 19th century, we had a functioning gold standard. Combined with classic liberal economic policies and limited government, this set the stage for the greatest economic growth in history.

Although many Americans today see sound money as the exception, and paper as the rule, the opposite is true. Even the American dollar had a connection with gold up until 1971. Since the severing of that tie, the debasement of the dollar has accelerated, with the money supply doubling. Prices have more than doubled in the last ten years, not to mention the economic distortions that accompanied this inflation.

There is no law of economics stating that only gold can be used as money in a free society. But gold has served as the principal medium of exchange throughout history because its value does not depend on a government fulfilling its promises, especially in times of crisis.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 20 Dec 31, 1981

On Budget & Economy: Gold standard means minimal inflation

The gold coin standard, although imperfectly adhered to, permitted startling economic growth combined with falling prices in the 19th Century. In the 67 years since the abolition of the gold standard, the Consumer Price Index has gone up 625%. In the previous 67 years, under an imperfect gold coin standard, the CPI increased 10%. In his 1848 Communist Manifesto, Karl Marx urged: “Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” Sixty-five years later, the United States followed his advice, and passed the Federal Reserve Act of 1913. Source: Gold, Peace, and Prosperity, by Ron Paul, p. 23 Dec 31, 1981

On Free Trade: IMF empowers politicians by causing inflation

The monetary reforms drawn up at Bretton Woods N.H. in July 1944, were supposed to be permanent. The agreement lasted barely 27 years.

At this UN Monetary and Financial Conference, the gold bullion standard was altered. Although the new system was hailed as an improvement, it was a way to institutionalize long-term inflation and transfer power to politicians and bankers. It was also the means to finance interventionist foreign policy, by creating money and credit out of thin air. Political pain and economic disruption at home were to be eased by exporting much of the inflation.

44 nations agreed to the establishment of a World Bank and an International Monetary Fund, which began operations in 1946. This permitted dollars--said to be “good as gold”--to be substituted for gold as the international reserve currency.

With this agreement, gold ceased to flow back and forth to settle balance of payment differences, thus eliminating an essential feature of a sound monetary system.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 27-28 Dec 31, 1981

On Budget & Economy: Dollar as fiat currency only benefits politicians

When Nixon declared that foreign holders of dollars could no longer exchange them for gold, the gold exchange standard came to a miserable end. It had made possible the inflation which financed the Vietnam War and the Great Society, as well as massive business malinvestments. But the worst was yet to come.

The dollar died on August 15, 1971; after that date, it had no independent value for anyone. The new rules, with the dollar now simply a managed fiat currency, ushered in even greater inflation, economic turmoil, and set the stage for total loss of confidence in the dollar This will happen eventually, and perhaps in the near future, though no one knows exactly when.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 31-32 Dec 31, 1981

On Corporations: Big business demand for easy money causes inflation

only an indication of efficiency and service to consumers. Legitimate profits have nothing to do with inflation. But big business’ demand for “easy money” certainly has been a significant reason for monetary expansion. $600 billion in federally guaranteed loans, all of which are for the benefit of business, is the most significant contributing factor to our inflation. Since 1970, 80% of the inflation may have been for “stimulation” of the economy to aid big business and big banking. Source: Gold, Peace, and Prosperity, by Ron Paul, p. 33-34 Dec 31, 1981

On Government Reform: Spending without taxation causes inflation

not his own. [Each Member] knows that the money for pork-barrel spending bills would either have to be taxed or printed up.

Liberals we expect to be big spenders, but it’s disheartening to see conservatives who should know better voting for business and farm subsidies. Without a far-reaching change of attitude, the budget won’t be balanced, the printing press will continue to run, the dollar will be further debased, and prices--as a consequence--will continue to rise relentlessly.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 33-34 Dec 31, 1981

On Budget & Economy: Friedman monetarist policy is better, but still inflationary

malinvestment as those getting the new money put it to uses that only later recessions show to have been unproductive. The Friedman approach may produce milder booms and recessions, but it nevertheless is inflationary and a product of the old discredited idea that government, rather than the market, should be planning the economy.

The politicians and many bankers, union leaders, businessmen, and bureaucrats who profit from inflation are glad, of course, to have the intellectuals justify their fraud.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 37-38&43 Dec 31, 1981

On Tax Reform: Inflation is a form of taxation on poor & middle class

Not only is inflation the result of the political demands of special interest groups, the career desires of politicians, and the ill-conceived motives of economists, it was also clearly unconstitutional.

Money of real value, gold or silver, was clearly intended by the Founding Fathers.

If for no other reason, inflation should be rejected on the basis of morality. Inflation is taxation by deceit. Government deceives the people as to the tax burden, and who is bearing it. The working and middle classes are gradually impoverished, while the poor are ground further down.

Wealth is transferred to the rich, from the hardworking and thrifty to the conniving & foxy. Monetary and economic decisions are increasingly taken from individuals and transferred to politicians, bureaucrats, and central bankers. To enforce the transfer, government officials accumulate power through legislation and regulation.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 41 Dec 31, 1981

On Free Trade: Allow Americans to own gold; end large-scale foreign sales

The minting of U.S. gold medallions has emphasized the importance of the people’s right to own gold.

Historic Congressional hearings have been held on the gold standard and an amendment to establish a gold commission passed both Houses unanimously. The commission, composed of public and private sector representatives, will specifically study the role of gold in the domestic and international monetary systems.

We must also work on halting massive gold sales at below market prices to European central bankers and Arab sheiks. If the administration is still intent on “demonetizing” gold with gold sales, let’s at least sell it only in sizes that Americans can afford--one, one half, and one quarter ounce coins.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 49 Dec 31, 1981

The above quotations are from Gold, Peace, and Prosperity The Birth of a New Currency, by Ron Paul (published 1981; re-released 2007). Click here for main summary page. Click here for a profile of Ron Paul. Click here for Ron Paul on all issues.
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