One Ron Paul Dream May be Coming True?

The Mainstream May Be Facing Multiple Punching Bags on Gold Standard

 
gold This morning I came across the following headline:

U.S. Government Will Adopt Gold Standard in the Next Five Years, Forbes Predicts

Return to the gold standard by the United States within the next five years now seems likely, since that move would help the nation to solve a variety of economic, fiscal and monetary ills, Steve Forbes predicted during an exclusive interview Monday with Human Events.

Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds and discourage reckless federal spending, the media mogul and former presidential candidate said. The United States used gold as the basis for valuing the U.S. dollar successfully for roughly 180 years before President Richard Nixon embarked upon an experiment to end the practice in the 1970s that has contributed to a number of woes that the United States is suffering now, Forbes added.

The only probable 2012 U.S. presidential candidate who has championed a return to the gold standard so far is Rep. Ron Paul, R-Texas. But the idea “makes too much sense” not to gain popularity as the U.S. economy struggles to create jobs, to recover from a housing bubble induced by the Federal Reserve’s easy-money monetary policies, to stop rising gasoline prices and to restore fiscal responsibility to U.S. government’s budget, Forbes explained.

ronpaulYou can read the rest of this article here, but what really got my attention was the irony. For years, if not decades, the mainstream media has been ridiculing Representative Ron Paul’s reasoned arguments on monetary policy, the pitfalls of fiat money and the urgency of returning to ‘backed money’-the Gold Standard. Even the idea of returning to the Gold Standard has been greeted with a gasp, the life-vest of irrational gangs- the labeling game and name calling, and foaming mouths spitting mockery and or profanity-filled adjectives:

“Soon every citizen will have the right to have their own pot of gold as we convert America to a Leprechauny! Here to advocate for this bright future, please join me in welcoming live via satellite, Congressman Ron Paul…”

Here is Megan McArdle, in 2007, ridiculing Ron Paul’s categorization of certain financial-banking institutions as ‘shadowy’ in defense of the Banking institution:

Fiat money inflation benefits those shadowy figures who receive access to artificially inflated money before the inflationary effects kick in [Ron Paul]. Those shadowy figures being the bankers who loaned it to you so that you could buy your house [Megan McArdle]

That’s right, and those shadowy figures were also the ones who brought about the massive foreclosures of your houses! McArdle, while foaming at the mouth, called Paul’s categorization of these banking institutions, the shadowy entities, wrong, ridiculous and with few or no support within the mainstream economist colony. Oh boy, only a year later, in a June 2008 speech, U.S. Treasury Secretary Timothy Geithner, then President and CEO of the NY Federal Reserve Bank, placed significant blame for the freezing of credit markets on a “run” on the entities in the shadow banking system by their counterparties!

Well, let’s see if the mainstream will be quick to get all over Steve Forbes and many others who have been joining the Gold Standard choir. For years they had a punching bag who remained consistent in his view of the desperate need for turning our sickly monetary policy upside down and considering a return to the Gold Standard. They called it wacky, nutty, a lone wolf howling …you name it. Now I want to see them take on the expanded group of believers in the face of the mess we’ve been sinking in deeper and deeper every day. Will it happen? You tell me.

# # # #


This site depends exclusively on readers’ support. Please help us continue by contributing directly and or purchasing Boiling Frogs showcased products.

FB Like

Share This

This site depends….

This site depends exclusively on readers’ support. Please help us continue by SUBSCRIBING, and by ordering our EXCLUSIVE BFP DVDs.

Comments

  1. avatar Blackflag says:

    Sibel,

    For the US to return to the Gold standard would require the destruction and death of the US$.

    The two do not coexist.

    The death of the US$ would undermine and collapse most of the world’s economies. They are -too- based on “financial” reserves denominated in the US$.

    The destruction of the US$ would be a cataclysmic event.

    It would stop transactions – globally.

    You live and survive based on a high division of labor economy that is completely and totally dependent on the ability to quickly and instant make transactions.

    This would stop.

    Without a division of labor, the economy collapse to local barter.

    You do not live on the production of your neighbor. You live on the production of persons hundreds and thousands of miles away – and they upon you.

    This would stop.

    You cannot barter oranges in Florida for oil in Texas.

    If the division of labor collapses, within 2 days there are no goods on the shelves. All the trucks stop. All the factories stop.

    Within a week, people will begin to panic. Within a month, there will thousands dead of. Within a 6 weeks, hundreds of thousands of a growing mass starvation scenario.

    No highly industrialized nation that has not lost a major war suffered the death of its money. The only examples are war-devastated nations and low industrialized nations. The latter gives us insight – they barely survived because they were mostly rural. We are not mostly rural.

    The death of the US$ would -as a consequence- leave in its wake destruction akin to a nuclear war.

    The banking elite know this. They are not stupid men. They know they are playing on a high-wire.

    I do not believe these men will allow the destruction of the US$, for they have the most to lose. They would be swinging from the lampposts by their necks first.

    They will allow the US government to default, creating a massive mega-Great depression – but they would save the dollar. Depressions are solved by productivity. The People can become more productive.

    But the death of the dollar, though would be fairly quickly replaced by something else, would result in millions of dead. This might probably end Western Civilization.

  2. avatar Blackflag says:

    PS:
    Buy gold.

  3. Going back on the gold standard is a pipe dream that will never happen. paul can hype this all he wants in his 2012 campaign. But the Powers that be will never allow it.

    At the moment, the dollar is THE GLOBAL STANDARD in the markets. Robert Fisk has reported that Russia, China and others want a “new currency basket” to replace it. However, that would take years to develop and implement. Meanwhile, global transactions take literally microseconds to do. The NYSE merged with another market. The TSX in Toronto is merging with another intl. market. Since Harper has a majority govt. in Canada, I really don’t see any huge obstacles to that going thru (despite the NDP being the Official Opposition).

    Here in the States, some people like using barter exchanges. On a local level, that’s one thing. But, globally it’ll never work. What would you possibly barter for a new computer that would be a comporable value?

    Some people keep hyping buying gold and silver as “market protection”. I disagree. How are gold and silver not suseptible to bubbles, manipulation and then crashes like everything else? There was the guy (in North Carolina?) who went to jail for minting his own money. The govt. said he’s a “terrorist”. Now, there are others online who are doing the same thing. These other people are trying to manipulate the price and put out their own silver coins. Their ads say stick it to the govt! Don’t let the Fed rip you off! Buy silver now and put JP Morgan out of business! At the same time, they’re trying to control the price. Will any of these people be prosecuted as “terrorists” as well? Since many live abroad, probably not (unless we have an extradition treaty with that country).

    Paul won’t win in 2012 because he has a huge credibility problem. He’s in Congress as a Republican. But clearly he’s a Libertarian. This tells me that that he doesn’t have the courage to run on his true beliefs. Therefore, why should I vote for him? The only reason he ran originally as a Republican is because just like Bob Barr, he knew he had no chance in hell of winning as a Libertarian. I’ve posted this many times in the past on various forums. And just like the hardcore Obama fans, the Paul fans absolutely refuse to face anything that might spoil their perfect image of him.

    Going to a gold standard would only devalue an already weak dollar. China is now trying to dump some of our national debt. A gold standard would only accelerate this. Another problem with buying gold? Now, many other countries are stocking up on gold as a means of protection against this hype. Just like oil and other commodities, gold is not an infinite product. Have any of these “buy gold now” experts thought about that? Where will you find new sources of gold? As the supply shrinks, this will in turn drive the price up and make it virtually impossible for the average person to own. Then, it’s a product only for the ultra wealthy.

    A gold standard won’t happen.

  4. avatar Blackflag says:

    test

  5. avatar ZicaTanka says:

    @BlackFlag and Yoshi: I’m curious why you say the gold standard will devalue and/or destroy the US dollar. I know you said a lot about what would happen if the dollar were destroyed, but why would it be destroyed by being backed by a promise of gold? Why would China drop more debt if it were backed by gold?

    In my limited understanding, a gold standard might put a damper on all the speculation and derivitive trading, which is causing trouble. What policy decisions do you think would need to be in place to allow the return of the gold standard?

  6. Somebody once told me that JFK had tried to do that.. we all saw how that ended…. @blackflag it may cause a devastation in the world economy, but this corrupt slavery system we are in has to end. we may not see it but we are slaves of this system. The banking industries getting richer and richer with the taxes we pay, while we suffer the crisis’ all around the world. We Work, we struggle, all for a piece of paper which value is equivalent to the amount of taxes we pay that year. its not that I’m against the taxation system, its just that i want to see my tax go to the improvement of healthcare, education and jobs, not to a few rich banks and corporates.

  7. avatar Blackflag says:

    Zica:

    I’m curious why you say the gold standard will devalue and/or destroy the US dollar.

    An economy has only one “money at a time.

    Money is defined as “the most valued commodity in a market”. It is valued because everyone want to trade for it and trade with it.

    Today, it is a colored piece of fancy paper.

    If this is replaced by a pretty shiny metal, the fancy paper is no longer money.

    Remember this fundamental economic law:
    The PEOPLE chose their money, not the government, because it is the PEOPLE who chose how to value their economic goods, not the government.

    Government can DESTROY money by corrupting it, which causes the PEOPLE to abandon that economic good that was money for some other economic good they will call money.

    I know you said a lot about what would happen if the dollar were destroyed, but why would it be destroyed by being backed by a promise of gold?

    Prior to 1970, the dollar was “backed” by gold. It was still destroyed.
    The English Pound was backed by gold. It was destroyed by 1919/1920.

    Backed by gold does not save the dollar money. Government only promises redemption but as Nixon did, can as easily renege on the promise.

    This is called “Third Party Risk” – someone holding your stuff on your behalf in exchange for a promise to give it back.

    What do you do when they say the will not give it back?

    What do you do when it is the government that says this?

    Why would China drop more debt if it were backed by gold?

    Let us be perfectly clear.

    China does NOT hold US$

    China holds US government Treasury Bills. T-Bills are not money. They are an IOU. They give US$ AWAY to buy T-bills.

    When they sell a T-bill, they are demanding US$.

    In my limited understanding, a gold standard might put a damper on all the speculation and derivitive trading, which is causing trouble.

    I always find it perverse the power of government propaganda that says men traded and buying are the cause of economic destruction of money, and not the government’s corrupt counterfeiting of it.

    Speculators make you rich, yet the propaganda vilifies them.

    What policy decisions do you think would need to be in place to allow the return of the gold standard?

    Simply, End the FED.

    Remove the “right” of the FED to manufacture money. Let the People choose their own money.

    The US was founded on the principle of financial freedom by refusing to create a Central Bank

    Jackson shutdown the 2nd Central Bank of the US. In less than a year, the economy of the US boomed. Jackson paid off all of the national debt – the only time in US history the US Fed had no debt.

    Ron Paul wants to end the FED.
    So do I.

  8. avatar Blackflag says:

    Yoshi,
    (seems there is a text limit per post)

    I agree with your assessment of the loss of the dollar and barter.

    Some comments, and some disagreement:

    However, that would take years to develop and implement. </blockquote

    …if ever.

    For a "new" reserve currency, it would have to be recognized as a global currency (thus almost every national currency but 3? 4?), with a large and broad economy to support it (thus, Swiss/Canada et al fails), freely traded (thus China's fails), and stable.

    This stability has a huge cost.

    Whatever nation holds this currency would need to place their large national economy into a deep recession/depression for they would be required to stop the fiat-inflationary process inside their own economy (or why would any one use it vs. the US$?).

    Thus, there is no replacement in any vision of the financial future for a new “reserve” currency.

  9. avatar ZicaTanka says:

    Thanks for your insights, BFlag.

  10. In response to Sibel’s concerns about the gold standard, I consider this very appropriate in light of Qaddafi’s 144 tons of gold bullion. I suggest that Catherine Austin Fitts be contacted since she has in depth expertise in this area. From following her blog it is my understanding that there IS NO GOLD in Fort Knox. Some is in an underground vault in London that cannot be verified (maybe NYC too). The gold you see in the vault of the Federal Reserve Bank of New York attracts more than 25,000 visitors a year. It is the world’s largest accumulation of gold and belongs to 36 foreign governments, central banks and official international organizations. ETF gold is thought to be inflated by about 50 times. Gold bonds that are linked to mining are a little better, but the whole thing is a shell game.
    Then China has tried to get out from under with purchase of offshore oil leases in South America. Grow grain. It is real gold. Don’t sell it for ethanol. Sell it for food.

  11. avatar Blackflag says:

    Adhur,

    Yes, the death of money will destroy the global economy, and quite possibly end Western Civilization as we know it.

    Money is the center piece of all economics. This is why government demands control of it, so that they have their evil hand on the heart of human action.

    But it is the PEOPLE who choose their money, not the government. When a money becomes corrupted, the people use something else for money.

    Salt, wooden nickels, playing cards – have all been money at one time or another.

    The country most certainly can change its money without killing it.

    The US moved from gold/silver certificates called money, to federal reserve notes called money. We even called them the same thing (even thought they are completely different things) – “US Dollars”.

    Indeed, we have SIX different currencies called “US Dollars”. But today, only one of them is money.

    its not that I’m against the taxation system,

    I am!

    But that is a huge hijack of this thread.

    The banking industries getting richer and richer with the taxes we pay, while we suffer the crisis’ all around the world.

    The Federal Reserve of the United States, who runs and operates the Fractional Reserve Banking System – the “FED” – is a privately owned bank whose sole existence is to protect the banking and financial interests of the largest banks in the United States.

    It is no surprise they are getting richer as you get poorer as their immediate interests are contradictory to yours at this moment.

  12. avatar Blackflag says:

    Simon,

    Buy gold, pay cash, demand delivery.

  13. avatar Blackflag says:

    China does NOT hold US$

    China holds US government Treasury Bills. T-Bills are not money. They are an IOU. They give US$ AWAY to buy T-bills.

    When they sell a T-bill, they are demanding US$.

    I wanted to expand on this a bit, because it explains why China sees the US government as economically insane, idiotic and two-faced.

    The government sends Clinton over to demand the Chinese open up their economy for US goods.

    This means China needs to have US$ to buy US goods.
    Which means they need to sell T-bills to buy US$ to buy US goods.

    Then the government sends Geithner over to demand that the Chinese do not sell T-bills, but buy more. Geithner wants the Chinese buy up US government debt to fund US government spending.

    The Chinese see: sell your T-bills but make sure you buy them back.

  14. @Simon: Concerned? Said who? My friend, I’ve been supporting Dr. Paul on this for a looooooonnnnnnngggggg time. I must have goofed with this post, if it gives the impression of ‘being concerned.’ I was trying to pound on the mainstream for ridiculing it (per their bosses instruction) for years…So did I really give the impression of ‘being concerned.’?! If yes, I need an editor! I need help!Help!!;-)

  15. avatar Black Order says:

    Yoshi – ” Paul won’t win in 2012 because he has a huge credibility problem. He’s in Congress as a Republican. But clearly he’s a Libertarian. This tells me that that he doesn’t have the courage to run on his true beliefs. Therefore, why should I vote for him? The only reason he ran originally as a Republican is because just like Bob Barr, he knew he had no chance in hell of winning as a Libertarian. I’ve posted this many times in the past on various forums. And just like the hardcore Obama fans, the Paul fans absolutely refuse to face anything that might spoil their perfect image of him.”

    BO – Excellent points, yoshi.

    As much as I’d like to believe in Dr. Paul, I cannot help but to notice several key inconsistencies with regard to claims of his Libertarianism.

    He’s no Libertarian. He is a Republican. He is a statist that has openly advocated coercion and violence for sake of an edict of law. He has demonstrated his lack of respect for the right of self determination.

    I remember watching him speak during the ’08 campaign about his experiences as a physician, and how he witnessed an abortion. He was talking about how disgusted he was and how it is fundamentally wrong to kill babies. He was obviously quite passionate about it, …genuinely against abortion.

    I agreed with everything he said up to the point where he stated that he would fight hard to legally prohibit it.

    This comes into DIRECT conflict with Libertarian core values. If I ever have the opportunity to do so, I will pin him down by asking him where he stands.

    I don’t trust him. I question his motives. My gut tells me that something is not right about him, that he is somehow not trustworthy, a smooth talking phony.

    Not that I would vote for him or any other statist anyway, as voting only lends legitimacy to state coercion. But I feel compelled to speak out in hopes that others will see what I do.

    And as Flag mentioned above, switching back to the gold standard would have enormous repercussions. Dr. Paul is a smart man that knows a bit about economics, and likely also knows this.

    So, I must wonder. What is he trying to do?

  16. avatar Blackflag says:

    Black Order:

    Paul wants to end the FED.

    Yes, he is a gold standard advocate as well, but I think he believes one will lead to the other, first the FED, then the standard.

    I do not believe gold will come back as money. The People do not see it that way anymore.

    I believe the dollar will be ‘reformed’, a zero or two knocked off, and reintroduced. This is the global and historical methodology.

    Gold is not money, but it is a very valuable thing to buy and store.

  17. One reform that could be implemented right now is to end legal tender laws which force people to use FRN’s to buy goods and services. This reform would help to end the FED’s monopoly on money creation, and open the door for other means of paying for goods and services.
    As far as Dr. Paul and his creditability problem, let’s face it. The Democrat and Republican monopoly on political power in this country forces Dr. Paul to run as either one of them.
    Unless he is a Ross Perot, he wouldn’t get any media coverage, and wouldn’t have ballot access to any of the states.
    But then again, over time, I’m come to the conclusion that solving the problems of this country thru the political process is a futile way of solving them.
    What motivates Dr. Paul is educating the people on his views, and letting people make up their own minds about them. I seriously doubt that the GOP would ever nominate him, but that doesn’t stop him from educating people on free markets, civil liberties, peace, and a foreign policy in which the US stops meddling in other countries affairs.

Speak Your Mind