Tuesday, October 2, 2012
Ron Paul on "Gold is Good Money"
Ron Paul continues his decades-long assault on the Federal Reserve creating money out of thin air, saying on his congressional website that gold is in fact, "good money," against the anemic quality of paper or digital money.
According to Paul, "Fiat money is not good money because it can be issued without limit and therefore cannot act as a stable store of value."
Also of significance is Paul's exposure of the central banks, government/media axis, which continues to speak badly of gold because the "defamation of gold wrought by central banks and governments is because gold exposes the devaluation of fiat currencies and the flawed policies of government. Governments hate gold because the people cannot be fooled by it."
Paul has had other allies for years, including those associated with the Austrian school of economics, but he cites others who are apparently starting to get the message, such as the Bundesbank president, who recently stated that gold is "a timeless classic."
Also noted are a couple of analysts at Deutsche Bank (DB), which also said gold is good money.
According to Paul, gold should be considered good money because it offers everything the market (people) demand, "it is divisible, portable, recognizable and, most importantly, scarce - making it a stable store of value. It is all things the market needs good money to be and has been recognized as such throughout history," says Paul.
Contrary to the assertions of central banks around the world concerning gold not being real money, they continue to acquire more gold holdings in response to the outrageous boost in fiat money into the global economy.
Ron Paul concludes this on the evil of fiat money: "A fiat monetary system gives complete discretion to those who run the printing press, allowing governments to spend money without having to suffer the political consequences of raising taxes. Fiat money benefits those who create it and receive it first, enriching government and its cronies. And the negative effects of fiat money are disguised so that people do not realize that money the Fed creates today is the reason for the busts, rising prices and unemployment, and diminished standard of living tomorrow."
He is right. Among other things, as mentioned above, inflation is always the hidden tax associated with the creation of money out of thin air.
It has already been shown to be ineffective to boost the economy, as evidenced by the anemic results of QE1 and QE2, and will be the same results of QE3 and beyond.
People should have the option to choose what money they want to use for transactions, savings and investing, and the central banks and governments around the world fight this because it knows if that were to happen, it would expose the negative effects of fiat money, as those holding gold would wildly prosper in contrast to those using paper and digital funny money.