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The end of June marked what is hopefully the end of
the Federal
Reserve’s policy of quantitative easing. For months the Fed
has purchased hundreds of billions of dollars of Treasury debt, enabling the
government to fund its profligate deficit spending, push the national debt to
its limit, and further devalue the dollar. Confidence in the dollar is
plummeting, confidence in the euro has been shattered by the European bond
crisis, and beleaguered consumers and investors are slowly but surely
awakening to the fact that government-issued currencies do not hold their
value.
Currency is sound only when it is recognized and accepted as such by
individuals, through the actions of the market, without coercion. Throughout
history, gold and
silver have been the two commodities that have most fully satisfied the
requirements of sound money. This is why people around the world are flocking
once again to gold
and silver as a store of value to replace their rapidly depreciating paper
currencies. Even central banks have come to their senses and have begun to
stock up on gold
once again.
But in our country today, attempting to use gold and silver as money
is severely punished, regardless of the fact that it is the only
constitutionally-allowed legal tender! In one recent instance, entrepreneurs
who attempted to create their own gold and silver currency were convicted by
the federal government of “counterfeiting”. Also, consider
another case of an individual who was convicted of tax evasion for paying his
employees with silver and gold coins rather than fiat paper dollars. The
federal government acknowledges that such coins are legal tender at their
face value, as they were issued by the U.S. government. But when it comes to
income taxes owed by the employees who received them, the IRS suddenly deems
the coins to be worth their full market value as precious metals.
These cases highlight the fact that a government monopoly on the
issuance of money is purely a method of central control over the economy. If
you can be forced to accept the government’s increasingly devalued
dollar, there is no limit to how far the government will go to debauch the
currency. Anyone who attempts to create a market based currency–
meaning a currency with real value as determined by markets– threatens
to embarrass the federal government and expose the folly of our fiat monetary
system. So the government destroys competition through its usual tools of
arrest, confiscation, and incarceration.
This is why I have taken steps to restore the constitutional monetary
system envisioned and practiced by our Founding Fathers. I recently
introduced HR 1098, the Free Competition in Currency Act. This bill
eliminates three of the major obstacles to the circulation of sound money:
federal legal tender laws that force acceptance of Federal
Reserve Notes; “counterfeiting” laws that serve no purpose
other than to ban the creation of private commodity currencies; and tax laws
that penalize the use of gold and silver coins as money. During this Congress
I hope to hold hearings on this bill in order to highlight the importance of
returning to a sound monetary system.
Allowing market participants to choose a sound currency will ensure
that individuals’ needs are met, rather than the needs of the
government. Restoring sound money will restrict the ability of the government
to reduce the citizenry’s purchasing power and burden future
generations with debt. Unlike the current system which benefits the Fed and
its banking cartel, all Americans are better off with a sound currency.
Ron Paul
www.house.gov/paul
Copyright Dr. Ron
Paul
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