Ron Paul: Fed ‘monopoly’ could be broken if Americans use gold, silver as currency
As the incoming chairman of the House monetary policy subcommittee, Rep. Ron Paul (R-TX) will hold the bully pulpit when it comes to the nation’s money woes.
He’s not wasting any time getting right to the heart of the matter.
The libertarian-leaning conservative has long been a critic of the US Federal Reserve and central banking as a whole, but this may be a new one: speaking with CNBC recently, Paul said he views the Fed as a “monopoly” that could benefit from the introduction of competition.
“We should start ending the Fed by allowing competition,” he said. “I don’t like the fact that they have monopoly control. It’s a cartel: they print the money. The Constitution really doesn’t give them that authority. The Constitution said that only gold and silver can be legal tender. I want to legalize competition and allow individual Americans to use gold and silver in competition, as money. Today if you do that, you can go to jail.
“I don’t like the idea that the power gravitates to the Federal Reserve. They literally can have a yearly budget bigger than the whole Congress, then what they do is kept secret. We don’t know where they spend the money. We’re just starting to crack that nut in order to get some of this information and we should continue to do it.”
An Indiana-based firm called Liberty Dollar — which produced “Ron Paul dollar” coins during his campaign for the Republican presidential nomination — was raided by federal authorities in 2007 and the company was shut down. The coins, sold for $25 apiece, were made of silver, and part of the proceeds from their sales were donated to Paul’s campaign.
The use of gold as money is not the same as reimplementing the gold standard for dollar valuations, which Paul has supported in the past. The US dollar was once backed by the price of gold, but President Richard Nixon decoupled the dollar’s value from gold markets in 1971. The move sparked a global financial panic until the rest of the industrialized world followed suit in implementing fiat currencies.
Gold is largely viewed as an archaic store of value, but Paul is not alone in seeing it as a potentially viable alternative to the dollar. World Bank President Robert Zoellick argued recently that in reforming the global financial markets, a debate should be held on returning to a gold standard.