Ron Paul would ruin the economy

[tmg19103]

http://youtube.com/watch?v=abV9tgbG-bA

http://youtube.com/watch?v=XaxdUPNYj2s

 

[DRV45N05]

Firstly, that guy is completey ignorant to history. The US was NOT on a strict gold standard before FDR; the Federal Reserve could manipulate the money supply back then just how it does now, and it most certainly did do it. The dollar, instead, was just REDEEMABLE for a certain amount of gold; the money supply was not equal to the amount of gold.

Secondly, there was NO backing of the dollar by gold under the Bretton-Woods system. Rather, the system was just established more as a system of international fixed exchange rates: again, the supply of money had absolutely nothing to do with the supply of gold, not even a semi-amount to do with it.

Thirdly, Ron has not said he would go completely back to the gold standard. Rather, he has said he would allow gold and silver to compete with the dollar as legal tender. Furthermore, even IF we went to a completely gold-backed currency, the idea that there would not be enough gold in the world to sustain the economy is just flat out stupid. Assuming we would start with an exchange value of the dollar for gold at current levels, it would mean that the gold in the world would be equal to the amount of dollars in the world.

However, he does raise issues. His big problem, though, is that he assumes a certain implementation of a gold standard and bases his argument of the effects that would result on that. Clearly, going to a full gold standard with a trade deficit and massive budget deficits would be foolish; the whole point of a gold standard is to keep government spending and money supply in check so that the harmful effects that would occur if the government got out of control DON'T happen. Clearly, putting it back in when the government is already acting irresponsibly would be suicide.

The way I would do it is to start with the amount of money currently and to stipulate that any new creation of money must be equal to redemption of gold.

 

[hard@work]

1. The economy has been in decline for a century. You should ask why it is that fewer and fewer families can support themselves without both parents working.

2. Competitive currencies is not elimination of the feds.

3. Funding our economy through elimination of wasteful spending and special interest subsidization will create an economic boom.

my input.

 

[ronpaulitician]

Please help me refute this idiot!

My understanding is that Paul doesn't want us to go back to the gold standard but to a gold standard. I think he believes that the gold standard of the past was flawed, and advocates a standard that is not backed just by gold but also by hard assets.

 

[ronpaulfan]

This thread is trollish on so many levels

 

[Ironslave]

The thread is not trolish, the person who said the comment is.

 

[matthylland]

if anyone else has good points to say, please do, nearly the exact same quesiton/response was posted to me on my local GOP's website.

 

[matthylland]

here is the post exactly:


Matt, I’ve been thinking about the gold standard/Fed issue that Paul and a number of the Libertarians have been pushing for some time. I have one or two problems. As to the gold standard: Do we have sufficient gold in reserve so that when the Chinese come calling and wish to cash in their trillion dollars in paper for actual gold we can give it to them? If not, the system crashes at that point and we are back on a fiat system that day after a great deal of confusion.
Gold miners and gold mining companies will be able to play with the value of our money by hoarding/flooding the markets. Many of these companies are foreign. We have no way to limit or control the amount of gold on the market and it can come from any source. We will basically be allowing anyone with a shovel and a pan to create their own money/legal tender.
Those are just a few points off of the top of my head. As to Fed: It isn’t always right but it is right more often than it is wrong. The ability to control the flow of funds has worked effectively to control panic and wild swings. The Fed will be useful in the current housing/interest rate debacle by controlling credit and working with the banks and lenders to hammer out a solution to the problem.
They are like the Supreme Court of money. We have accomplished economic academicians making long-term plans. They are not subject to the whims of the market or (with long terms and personal job security) fear of reprisal for unpopular decisions. It’s a good system that has worked well.

 

[Paul.Bearer.of.Injustice]

1. The economy has been in decline for a century. You should ask why it is that fewer and fewer families can support themselves without both parents working.

The college scam... and the collusion between the government(corporations) and the schools to dumb down the curriculum and make college 'mandatory'. $10-30K per child that families didn't have to pay 40 years ago to get a decent paying job.

 

[austin4paul]

Why Ron Paul wants to end the Federal Reserve

It's a bit long, but it's an interesting history lesson.

Part 1 - http://www.youtube.com/watch?v=RKtoA7ezx_Y

Part 2 - http://www.youtube.com/watch?v=lk4xQDryLVw

Part 3 - http://www.youtube.com/watch?v=uuUBfqITQmQ

Part 4 - http://www.youtube.com/watch?v=ZXF6Kpo8lyY

Part 5 - http://www.youtube.com/watch?v=OXmWPeL_-Gc

 

[SeanEdwards]

Steve Forbes wants a dollar backed by gold. Ron Paul is kind of half way and would allow competing currencies.

No, Forbes wants a dollar whose rate of inflation is linked to the inflation rate of gold.

Edit: The fundamental problem with fiat currency for me, is that I don't trust the bastards. The politicians can not resist "monetizing" their budget shortfalls. They don't deserve that kind of power over our fortunes. So for me, money needs to represent some item of real value. Historically the item chosen by people over and over is silver and gold. There could be new stores of value in our high tech society. I think shares in certain kinds of high stability capital investments, like roads, bridges, power plants, could also be used as money. But really, the best thing is to let the genius of the market figure out optimal mediums of exchange.

 

[weatherbill]

wow. this guy really is ignorant, or he's a gossip listener who does'nnt do his own DD.

 

[austin4paul]

As to the gold standard: Do we have sufficient gold in reserve so that when the Chinese come calling and wish to cash in their trillion dollars in paper for actual gold we can give it to them?

Dr. Paul is proposing that we have competing currencies, and that gold and silver be one of them. If your friend would prefer to keep his notes from the Federal Reserve instead, he'll be free to do that. The Chinese are owed Federal Reserve notes, not gold. Yes, those are increasingly worthless, so basically -- the Chinese get screwed, but currently we're ALL getting screwed. Dr. Paul's plan is to at least give us an alternative.

Gold miners and gold mining companies will be able to play with the value of our money by hoarding/flooding the markets.

Oh come on, like the Fed doesn't do this now with the money that it prints out of thin air?

Many of these companies are foreign.

Have you looked at the owners of the FED?

We have no way to limit or control the amount of gold on the market and it can come from any source. We will basically be allowing anyone with a shovel and a pan to create their own money/legal tender .

We have no way to limit or control the amount of fiat dollars on the market either. The FED controls that! So, how is his concern different if it relates to gold vs. Federal Reserve notes that the FED creates out of thin air now?

As to Fed: It isn’t always right but it is right more often than it is wrong. The ability to control the flow of funds has worked effectively to control panic and wild swings. The Fed will be useful in the current housing/interest rate debacle by controlling credit and working with the banks and lenders to hammer out a solution to the problem.

I will address the housing debacle seperately. It deserves a post of its own. In short - his comment that they will be useful gave me a great laugh. The FED CREATED the housing/interest rate debacle!

They are like the Supreme Court of money. We have accomplished economic academicians making long-term plans. They are not subject to the whims of the market or (with long terms and personal job security) fear of reprisal for unpopular decisions. It’s a good system that has worked well.

Yes, it has worked well for the private bankers that it serves. It has robbed the American people. More on exactly how they've done that in the next post.

 

[austin4paul]

The Housing Bubble as an example

Matt, your friend is correct that the private bankers of the Federal Reserve do indeed have control over our money supply, and thus they can either increase the money supply or decrease the money supply as they see fit. The mistake that your friend makes is in thinking that these people - who by the way operate in secret with no accountability to Congress - are serving "we the people." In a nutshell, Dr. Paul objects to the fact that a private group of bankers controls our money supply when our Constitution specifically grants that power to Congress (refer your friend to Article 1, Section 8 - Powers of Congress).

Since your friend brought up the issue of the current housing bubble and the resulting credit crisis now coming in its aftermath, let's take a closer look at the cycles of prosperity and depression in our country. The central bank causes inflation by creating debt/money for loans and credit and making these funds readily available. When this happens, the economy booms. The most recent example of this is the "housing boom." The FED lowered interest rates to historic lows, which made it attractive for builders to borrow money to build new houses. At the same time, the FED increased the money supply. The increased money supply causes the value of the already-existing dollars to decrease (inflation).

The combination of low interest rates and inflation encouraged irresponsible investing as investors sought alternative ways to increase the return on their money were led to higher and higher degrees of speculation -- the lower the interest rates went, the more speculation increased. Lending standards were basically thrown out the window and loans were issued to people regardless of their ability to repay the loans, including people with sub-prime credit using "No doc" loans. In the words of a mortgage broker friend of mine it eventually got to the point that "if you had a pulse, you could get a loan."

Then the FED used the inflation which they created as an excuse to shut off the loans/credit/money. The resulting shortage of cash caused the "credit crisis" as the loans were called in, but the borrowers began defaulting on their loans (many of which never should have been made in the first place.) Historically, tightening by the FED leads the economy to falter or slow dramatically and large numbers of business and personal bankruptcies result. This is beginning to happen now as we see the foreclosure rates rising.

What happens then? The central bank seizes the assets used as security for the loans! So -- what exactly is happening in this process? The wealth created by the borrowers during the boom gets transferred to the central bank during the bust. And you always wondered how the big guys ended up with all the marbles!

Now, who do you think is responsible for all of the ups and downs in our economy over the last 85 years? Think about the depression of the late '20s and all through the '30s. The FED could have pumped lots of debt/money into the market to stimulate the economy and get the country back on track, but did they? No -- in fact, they restricted the money supply quite severely. We all know the results that occurred from that action, don't we?

Why would the FED do this? During that period, asset values and stocks were at rock bottom prices. Who do you think was buying everything at 10 cents on the dollar? I believe that it is referred to as consolidating the wealth. How many times have they already done this in the last 85 years?

Do you think they will do it again?

(Credit for much of this to Greg Hobbs)
http://www.federal-reserve.net/whatisthefederalreservebank.htm

 

[Carole]

<<<Moreover, the reason there's not enough gold to back all the dollars is indicitive of the issue itself: there's simply too many dollars on the market, courtesy of the Federal Reserve.>>>

Question here...I am not an economist, just a serf...so,

Does it still hold true that there is not enough gold to back all the dollars today if the dollar is only worth 2-4 cents? Or do you re-value the dollar back to its full dollar worth as soon as you back it by gold. Is it gradual?

Then again if all the gold was hustled off to the Rothschilds in Europe...

Remember when they confiscated all America's gold, silver, and I guess jewelry?

I think Dr. Paul wants to introduce competing currency backed by gold, which would eventually destroy the Feds fiat paper money, which they so "richly" (pun intended) deserve.

Can anyone elaborate a bit on all this? I would really like to understand better. I know it is a good idea. The way I grew up, credit was a last resort. I still feel that way.

Thanks

 

[sickmint79]

your friend is completely misinformed, as paul would introduce gold as a competing currency, which is friggin genius.

 

[idiom]

If you are worried about the physical supply of gold, send NASA out to get some more. There's more floating around in NE asteroids than has ever been mined on Earth. Where do you think it all comes from anyway?