Abolish The Fed's Money Monopoly: Legalize Competition
State-by-State the horrendous "Drug War" is finally coming to an end. It's never easy to being the first to do the right thing. Most wait until the coast-is-clear. But now the momentum is strong. Today Ron Paul talks about the states who are legalizing gold & silver as money once again. Wyoming specifically has started the ball rolling. Will sound money finally pick up steam?
Be sure to read Ron Paul's "The Dollar Dilemma: Where to From Here?" http://www.ronpaullibertyreport.com/archives/the-dollar-dilemma-where-to-from-here
State-by-State the horrendous "Drug War" is finally coming to an end. It's never easy to being the first to do the right thing. Most wait until the coast-is-clear. But now the momentum is strong. Today Ron Paul talks about the states who are legalizing gold & silver as money once again. Wyoming specifically has started the ball rolling. Will sound money finally pick up steam?
Be sure to read Ron Paul's "The Dollar Dilemma: Where to From Here?" http://www.ronpaullibertyreport.com/archives/the-dollar-dilemma-where-to-from-here
State-by-State the horrendous "Drug War" is finally coming to an end. It's never easy to being the first to do the right thing. Most wait until the coast-is-clear. But now the momentum is strong. Today Ron Paul talks about the states who are legalizing gold & silver as money once again. Wyoming specifically has started the ball rolling. Will sound money finally pick up steam?
Be sure to read Ron Paul's "The Dollar Dilemma: Where to From Here?" http://www.ronpaullibertyreport.com/archives/the-dollar-dilemma-where-to-from-here
Hello everybody and thank you for tuning in to the Liberty Report.
Co-host today is Chris Rossini.
Chris, welcome to the program.
Good morning, Dr. Paul.
Very good.
I'd like to visit today on the subject of competing currencies and the monetary system, something I've worked on and with for many, many years.
But there's been a few things come up recently at the state level that I have helped with, and it's very encouraging and moving in the directions of competing currencies.
And I always had legislation introduced in Congress moving in that direction because I realized as much as I'd like to abolish the Fed tomorrow, that's not going to happen.
But I wanted to get legislation passed or at least make the point, at least we ought to have competition instead of this monopoly of the Federal Reserve.
So in that, it involved taxes and involved, of course, the legal tender laws.
I know you've given a little thought to this legal tender laws because that's pretty important.
That's the law that gives the total power to the Federal Reserve and to the government to dictate what legal tender is all about.
Yes, legal tender goes way back.
I even have a quote from Thomas Paine.
That's how far back we're talking and even before him.
But he said, quote, as to the assumed authority of any assembly in making paper money or paper of any kind a legal tender or in other language a compulsive payment, it's the most presumptuous attempt at arbitrary power.
And that's exactly what it is.
It's no competition.
Government sets up a central bank.
They can create money and you're forced to use that money.
And Dr. Paul, as your career, your illustrious career showed, that you just want competition.
Just like with Nike sneakers, you could buy Nikes, but you also have access to Reeboks, Underarm, or whatever you want.
The same should apply to money.
If people want to stack up Federal Reserve notes up to their ceiling, they, you know, knock yourself out.
But there should be competition with gold, silver, or any other form of currency.
Yeah, no, I think the founders worked hard in the Constitution to try to establish a system that would give us sound money because they talked about that only Congress could deal with the monetary issue, not the president and not the executive branch and not the courts.
And it says, but the Congress had the power to coin the money and define the money.
And I always find that interesting.
In the same page, in the same paragraph that they talk about allowing Congress to coin money, they had the issue of maintaining weights and measures because it was always the assumption that money would have a weight and a measure.
But they did prohibit the states from literally printing dollars or coining dollars.
But they've also instructed the states, the states can't use anything other than gold and silver.
And they weren't like very precise.
They didn't say only gold and silver that was minted by the Treasury Department.
But they did say that only gold and silver could be used as legal tender.
So what we've seen and what prompted our conversation today is, you know, last year the Arizona legislature and the governor signed a bill that literally moved in that direction by allowing gold and silver to be used as legal tender.
And also necessary was to make sure that the money wasn't taxed.
So if they were going to use gold and silver, that you didn't have to pay sales tax and capital gains tax, because that would ruin the whole concept of money.
We just can't tax money because it goes up in value.
And so this is something the Campaign for Liberty worked on for years and were very instrumental in getting that bill passed both in Arizona and in Wyoming, Wyoming, which just passed this past week and went into effect.
And I think it's a step in the right direction.
I think it's emphasizing the point.
It's not going to solve all the problems and all the questions.
The Fed's going to come down hard on it because they don't want any competition with the fiat money.
But quite frankly, if you look at the Constitution, if you look at Goods Common Sense and Economic Policy, Payne and the other founders were absolutely right.
This whole idea of paper money, and that's why, you know, in Article 1, Section 10, it says that the states could not emit bills of credit.
Now, they didn't say the federal government couldn't emit bills of credit, but it was so obviously clear if you couldn't use anything else and the states couldn't do it, the federal government couldn't do it.
But some people think, well, they didn't say the federal government couldn't emit bills of credit, which is paper money, then they could do it.
This is the gross distortion that has done so much harm to us because they believe, the liberals believe, and big government people believe that the government can do everything, the federal government can do everything, and the executive branch can do everything other than that which has been prohibited by the Constitution.
But that isn't true.
They can't do anything unless there is permission in the Constitution to do it.
So there is no authority there.
And I'm sure you have looked at that, Chris.
There's no authority whatsoever in the Constitution for a central bank or anything other than gold and silver to be used as legal tender.
Yes, and there's a great reason for that because with a monopoly on paper money, they could create as much of it as they want.
And that's really what money boils down to.
It's purchasing power.
It's not complicated.
They try to make it seem complicated.
Oh, just listen to the experts.
You don't know what you're talking about.
But I want to just break it down to such a simple level.
Let's imagine, I don't even know if people collect baseball cards anymore, but they used to.
And a Mickey Mantle rookie card was very valuable because of its rarity.
There weren't many of them.
So imagine if you had one of them.
Your purchasing power, you could go out into the marketplace and get a lot of goods and services for them.
But then let's say one day you wake up and the news says, you know, 10,000 have been found somewhere.
So now your purchasing power goes down.
And, you know, you'd probably be a little bit sick.
But then let's say another day they found the whole warehouse full of Mickey Mantle rookie cards.
Now you could throw it in the trash because it loses its value.
That's how money works.
And the Federal Reserve creates trillions of dollars.
That's why our prices rise.
Because the purchasing power of what we have in our wallets in our bank account, it's constantly being taken away from us.
And what you're talking about is inflation.
And Austrian economics tells us that the increase in the supply of money and credit is the inflation.
And later on, after that money circulates, and we don't know how to how long it'll take to circulate or where it will go, but it pushes price and values up.
So right now, you know, things are happening in the economy.
The stock markets are very high and different things.
But it's a lot of activity that's going on and sort of the boom that is occurring is a reflection of the artificial stimulation with fiat money.
And that could be an illusion and a distortion because what it does is it builds up a lot of debt and a lot of malinvestment and people make too many mistakes.
But one Austrian economist tried to deal with this and is well known for this, and that was Hayek, wrote about the denationalization of money.
Just get the government out of it.
Sounds pretty good for a libertarian.
But if you're going to release the decision-making of money, I think you have to have one very strict rule, no fraud, because that's what governments do.
They're the ones who committed the fraud by debasing the gold and silver standard and just printing the money, but that's counterfeit money.
So if you're going to turn this over to private individuals, of course, they shouldn't be able to commit fraud either.
But right now, I'd like to see competing currencies.
And of course, I think 6,000 years of history is a good indication of what people choose when they're left to choose it.
Because most of the time, over all these centuries, they choose gold and silver.
Then the government takes over and they want control.
And then for the reasons you stated, they take control and they make sure that they can convert it into a fiat currency.
And that changeover from sound money, which was traditional for a long, long time, was destroyed totally and completely, more so than ever in 1971.
And that's why we're swimming in a world of fiat currencies and why there's so much uncertainty.
Sure, you might look at a statistic now and then say, oh, things look pretty good.
But things are really very rocky because there's so much debt and so much distortion and so much government that has been created by fiat money that something will be done.
I believe that there will be monetary reforms.
It's not going to come from those individuals I knew in Washington.
It's not going to come from the Federal Reserve.
It is more likely to come from the state level.
That's why I think it's delightful that these couple states have already moved in that direction, but the people have to pick it.
Because, you know, when the collapse comes, and the nature of the collapse will be unknown until it happens, but there's a collapse going on in Venezuela.
And I saw a picture the other day of a bazaar where people came with all kinds of bags of goods that they were just trading there.
And it was sort of like an auction.
What are you going to give for this?
What are you going to give for this?
It was a complete barter session.
And that's why there will be a tremendous pressure on restoring a sound currency.
The market's a better place to do that because I don't think that, you know, even if we had the authority to physically, you know, close the Fed down tomorrow, it would be very chaotic.
But what is even worse, though, is when this system collapses and it's closed down, and then what are we going to have?
So I think the better understanding people have about the nature of money, why it has to be honest, why it has to be something that people choose and know about, the better off we'll be.
And this is why when states start to do this, this is a good message.
And I hope this whole message spreads and more states will perform an act like this of taking away the taxes and getting rid of the regulations and allowing people to pay their bills.
I find it rather ironic.
The states now are trying to legalize competing currency.
But it's almost even more bizarre.
What they're doing is they're trying to legalize the Constitution.
All they want is the Constitution.
So we have to pass a law that says that we want to legalize constitutional money.
At the same time, the money we have is totally unconstitutional.
So it's just the breakdown of economic policy understanding, constitutional policy, and that is why we have this chaos now.
But I am very convinced that this cannot be maintained for long, long periods of time.
It's probably amazing that we've gone since 1971 and not have any anchor to any currency in the world.
But it's shifting.
There are some governments right now who are collecting more gold, and some governments who are worrying about this now are repatriating their gold.
They're taking it away from storage in New York and taking it back to their countries.
And that's a good sign that people know that ultimately a crisis is on the horizon.
We can't say anything.
It'll make the crisis wrong, worse.
But when they do this, what they're admitting is that when that crisis comes, you ought to have some gold and silver.
I think that's true about whether if a government wants to restore sound money or an individual.
I think people should think seriously about what history has taught us about sound money.
Yes, and it's wonderful to see this news from Arizona, Wyoming, because if you think, and you know, Dr. Paul, gold and silver have been bad-mouthed for a hundred years.
I mean, you could go on the mainstream media today, you'll find an article somewhere saying, you know, gold and silver are meant to be collars in the American mind.
That's it.
You know, you're never supposed to use this.
What are you going to carry sacks of coins around and big gold bars?
No, that's nonsense.
I mean, we could, we live in a technological era.
There's no reason why technologically we can't have gold and silver money that you use digitally.
There's no reason for it, but they don't even want to think that way.
They're collars in the American mind.
So it's wonderful to see states actually moving ahead, bringing gold and silver back into the mindset, and it's going to win ultimately.
In the end, it's just a matter of time, no matter all the bad talking that has happened over the last hundred years.
Yes, and I think that I like to compare this to money, the monetary unit being a measurement, a standard, a measuring rod like a yardstick.
And you and I can have a transaction and we may be, you know, buying and selling and transferring, but you measure the wealth by something that is sound.
And that is why the founders said we have to have sound weights and measurements and be able to define them.
And you can use a measuring stick many, many times.
You don't have to have bags of gold to carry around.
As a matter of fact, very early in our history, they had gold certificates, you know, to say, but the expectation was that if you had a gold certificate and said it was worth an ounce of gold, there had to be gold behind it.
And that's when the abuse came and they started to stretch it.
But I think that there's a growing interest and a growing need for sound money.
When you think about it and when you relate it to central banking, which the founders never authorized and fought over early on, you know, Jefferson and Hamilton fought over.
But nevertheless, the imperfect gold standard that lasted from our founding up until the establishment of the Federal Reserve in 1913, you know, relatively stable.
The Gold Standard Era00:03:06
A lot of ups and downs, but relatively stable compared to what's happened since then.
Because what was essentially at the beginning of our history of the country, gold was, you know, an ounce of gold was worth $20, essentially.
And that was what it was in 1913.
But just think, $20 an ounce and where it is now.
Where is it this minute or next minute or next week?
But it's $12,000, $1,300, $1,400.
It's been as high as $1,800.
And that has all occurred under the Federal Reserve.
And it was the destruction and the removal of any link to gold in 1971 that ushered in the age of fiat.
And of course, the climactic indication right now that I sense is the QEs, the QE1234, the massive creation of trillions and trillions of dollars put into the economy, but it has not yet been circulated enough to do all the damage it will do.
But believe me, it has set the stage and there will have to be an adjustment.
And that's why we should congratulate the states of Arizona and Wyoming for doing what they did.
But we also should give credit to the Campaign for Liberty because that was a major issue for them over many years to try to help the states get this passed.
And it's also an effort that we have to continue to put pressure on the Congress.
And there are a few there, but unfortunately, there's not enough effort in the Congress.
But ultimately, though, the opportunity will be there because this system will fail and then something has to replace it.
I hope it isn't massive bartering as we're seeing happening in Zimbabwe and Venezuela.
That is pretty rough, but it could become very chaotic.
So unnecessary.
A little bit of common sense would be is what we need to prevent that from happening.
Chris?
Yes, I'll finish up, Dr. Paul, echoing you.
You know, tremendous respect to Arizona and Wyoming because it's always scary to be first.
Most people, they wait until the coast is clear, they peek out, then they'll jump on the bandwagon.
And we see that with the drug war, state by state.
They've had enough.
This is a ridiculous war.
They're legalizing drugs finally.
But, you know, somebody always has to be first.
And Arizona and Wyoming are leading the way.
Will other states follow?
That's, I guess, yet to be seen.
But tremendous respect for them.
And that's my final word.
Very good.
And I want to thank our viewers for tuning in today and urge them to look into this issue.
Look up denationalization of money and also in competing currencies.
And then find out what you might do to contribute to this at the local level or even urging your congressman or whatever.
There's always some place you can go to spread a message.
But first, do your best to understand the issue and then spread the message.