Thursday, August 4, 2011
Senator Ron Paul: History Says Gold Is Money
In a new interview on CNBC Newsline, Senator Ron Paul made some interesting comments about gold. Nothing revolutionary if you are familiar with gold investing and the problem of fiat currency. But interesting comments nonetheless. Some of his commments were as follows:
Obviously gold is money. And it`s not because I say it`s money, it`s because history says that gold is money.
This was in response to comments made by chairman of the federal reserve Ben Bernanke that gold is not money, after being asked by the Senator whether gold is indeed money. Senator Paul labelled the comments as humorous, since the historical evidence that gold is money is, shall we say, overwhelming.
After hearing Bernanke`s reply that gold is not money, Ron Paul then asked why the Fed has so much of it if it`s not money. The chairman`s reply was "Because it`s tradition".
Of course Bernanke could not publicly announce that gold is money, given that such an announcement could result in masses of people using their dollars to buy gold, resulting in an even weaker US dollar. By attempting to downplay the value of gold as money, he is trying to limit increases in the demand for gold in order to protect the perceived value and integrity of the US dollar.
Another interesting comment by Senator Paul was that "Gold is acting as a very strong currency right now because people are very very nervous. Guess what? They`re going to gold." Paul made the comment that he doesn`t want to dictate a gold standard but that he wants the market to dictate what currency reigns supreme, and that the federal reserve should have competition so that we would not be the slave to its monetary policy. Perhaps some competition would force the fed to maintain the US dollar`s integrity, to whatever extent that is now possible (it may be a lost cause at this point). Paul would make sure it remained legal in practice to use gold and silver as legal tender.
Indeed, gold is money as history proves and is continuing to prove this very moment.