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Candidate Views on Monetary Policy
The monetary policy of the United States is not often addressed by politicians, but Congressman Paul has made it one of the central themes of his campaigns. He routinely speaks about the faulty US system as the cause of a number of US economic problems.
Congressman Paul opposes the fiat currency system - a system where the currency is not backed by gold, silver, or another hard commodity. He asserts that the fiat system and the involvement of the federal reserve is the cause of inflation, market speculation, and mal-investment which causes the cycles of booms and busts. He states that the belief that the government and the federal reserve can control the free market through currency creation and interest rate manipulation is a fallacy that causes bubbles that negatively affect Americans.
The ability of the government to simply print more money is one of the facets of a fiat currency and one that Congressman Paul routinely cites when stating the need for currency reform. He notes that inflating the currency and lowering it's value is a hidden tax on Americans as it lowers the value of their savings. However, politicians favor this technique because it allows them to pay for their projects through the creation of currency while simultaneously telling their people that they did not raise taxes.
Congressman Paul has advocated for returned to a system where our currency is based on gold, silver, or a mixture of precious metals. He asserts that this will eliminate the need to constantly grow in order for the monetary system to function.
To help keep the monetary system in check and to help middle class Americans avoid the costs of inflation, Congressman Paul has advocated for allowing local currencies to compete with the US federal reserve note. These currencies would be city or possibly even state wide.
In March of 2001, Congressman Paul spoke about monetary policy, inflation, and fiat currency. Congressman Paul notes the flawed belief that the federal reserve can control the economy, and that some problems can be solved through inflation.
Greenspan and the Gold Standard
In February of 2005, Congressman Paul used his "Texas Talk" to discuss his questioning of Alan Greenspan and the gold standard for monetary policy.
The Maestro Changes his Tune
February 21, 2005
Nearly 40 years ago, Federal Reserve chair Alan Greenspan wrote persuasively in favor of a gold monetary standard in an essay entitled Gold and Economic Freedom. In that essay he neatly summarized the fundamental problem with fiat currency in a few short sentences: “The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value… Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
Today, however, Mr. Greenspan has become one of those central planners he once denounced, and his views on fiat currency have changed accordingly. As the ultimate insider, he cannot or will not challenge the status quo, no matter what the consequences to the American economy. To renounce the fiat system now would mean renouncing the Fed itself, and his entire public career with it. The only question is whether history will properly reflect the destructive nature of Mr. Greenspan’s tenure.
I had an opportunity to ask him about his change of heart when he appeared before the House Financial Services committee last week. Although Mr. Greenspan is a master of evasion, he was surprisingly forthright in his responses to me. In short, he claimed he was wrong about his predictions of calamity for the fiat U.S. dollar, that the Federal Reserve does a good job of essentially mimicking a gold standard, and that inflation is well under control. He even made the preposterous assertion that the Fed does not facilitate government expansion and deficit spending. In other words, he utterly repudiated the arguments he made 40 years ago. Yet this begs the question: If he was so wrong in the past, why should we listen to him now?
First, the Federal Reserve does not mimic a gold standard by any measure. The clearest example of this lies in our current account deficit, which our fiat currency encourages. Under a gold standard we would not have exchange rate distortions between the Chinese renminbi and the U.S. dollar, for example. True currency stability is impossible when fiat dollars can be produced at will and foreign lenders bankroll our deficits.
Second, inflation is a much greater problem than the federal government admits. Health care, housing, and energy are three areas where costs have risen dramatically. The producer price index is rising at the fastest rate in seven years. Bond prices are rising. To suggest that rapid expansion of the money supply and artificially low interest rates do not ultimately cause price inflation is absurd.
Third, Fed policies do indeed have adverse political ramifications. Fiat currency and big government go hand-in-hand. Without a gold standard, Congress is free to spend recklessly and fall back on monetary expansion to pay the bills. Politically, it’s easier to print new dollars than raise taxes or borrow overseas.
The Fed in essence creates paper reserves that enable Congress to undertake spending measures that far exceed tax revenues. The ill effects of this process are not felt by the politicians, who can always find popular support for new spending. Average Americans suffer, however, when their dollars are “confiscated through inflation,” as Mr. Greenspan termed it. It’s not enough to question the wisdom of Mr. Greenspan. Americans should question why we have a central bank at all, and whose interests it serves. The laws of supply and demand work better than any central banker to determine both the correct supply of money in the economy and the interest rate at which capital is available- without the political favoritism and secrecy that characterize central banks. Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution.
Rising Gold Prices
In December of 2005, Congressman Paul used his "Texas Talk" to discuss riding gold prices and what they mean for the monetary policy for the United States.
What do Rising Gold Prices Mean?
December 5, 2005
The market price for an ounce of gold rose to over $500 last week, a significant milestone for economists watching precious metals and commodities markets. The last time gold topped $500 was December 1987, in the wake of the “Black Monday” stock market collapse earlier that fall. Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from inflation. It’s interesting to note that while the U.S. dollar has regained some of its value relative to other paper currencies like the Euro, it continues to lose value relative to gold and other hard assets. This shows the folly of using one fiat currency to value another.
Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air. Governments by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. Expansion costs money, and politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now manage all of the world’s major currencies. Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold.
Even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception. President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Federal Reserve and U.S. Treasury have employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the money supply, and the financial markets. In other words, fiat dollars have no intrinsic value. What does this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses.
The Declining Dollar
In May of 2006, Congressman Paul used his "Texas Talk" to address how the declining dollar affects everyone's savings.
The Declining Dollar Erodes Personal Savings
May 15, 2006
A recent article in BusinessWeek magazine by James Mehring paints a stark picture of the ongoing decline of the U.S. dollar. The dollar has lost 5% against a blend of worldwide currencies just since April, falling to a 12-month low against the Euro and an 8-month low against the Japanese yen. Overall, the dollar fell 28% against other currencies between 2002 and 2004. It then rebounded slightly, but even the cheerleaders in the American financial press cannot shrug off this latest decline.
Of course the real measure of just how far the dollar has fallen can be found in the price of gold, which has reached a 25-year high of more than $700 per ounce. It’s much more accurate to measure the dollar against a stable store of value like gold, rather than against other fiat currencies. Gold has nearly tripled against the dollar since 2001, when the price was $250 per ounce. By this measure the dollar is losing value at an alarming rate. Remember, gold is static. Gold isn’t going up, the dollar is going down. And it’s going to continue until the American people demand an end to deficit spending by Congress and unrestrained creation of new dollars by the Federal Reserve and Treasury department. A sharply rising gold price is really a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
As Mr. Mehring suggests, the Federal Reserve may have no choice but to raise interest rates to maintain foreign enthusiasm for our dollar. It’s a serious problem that new Fed Chair Benjamin Bernanke must address sooner or later: propping up the dollar with higher interest rates without killing the U.S. economy in the process. The world financial markets are betting against the dollar and against Mr. Bernanke’s chances of correcting the imbalances caused by Alan Greenspan.
Our creditors, particularly Asian central banks, are losing their appetite for U.S. Treasuries. Our federal government’s huge debt and voracious appetite for deficit spending make our economy dependent on the actions of foreign governments and central bankers. Yet few Americans realize the extent to which their own government has sold out American sovereignty by borrowing money overseas. The consequences of a rapidly declining dollar are not yet fully understood by the American public. The long-term significance has not sunk in, but when it does there will be political hell to pay in Washington. Our relative wealth as a nation is measured in dollars, and the steady erosion of the value of those dollars means we will all be poorer in the future. The artificial stimulation of our economy through cheap money comes with a price. When dollars are abundant, they are worth less. This is the reality facing Americans today, especially older Americans who rely on savings to finance their retirement years.
Discussion on Monetary Policy
In January of 2007, Congressman Paul made a video to discuss the montary policy and the need to return to sound money.
Monetary Policy and the Federal Reserve
In March of 2007, Congressman Paul used his "Texas Talk" to address the need for a coherent monetary policy and how that involves the Federal Reserve.
Monetary Policy is Critically Important
February 19, 2007
Federal Reserve Chairman Ben Bernanke testifies twice every year before the congressional Financial Services committee, and I look forward to these opportunities to raise questions about monetary policy. I believe monetary policy is critically important yet overlooked in Washington. Money is the lifeblood of any economy, and control over a nation's currency means control over its economic well being. Fed bankers quite literally determine the value of our money, by controlling the supply of dollars and establishing interest rates. Their actions can make you richer or poorer overnight, in terms of the value of your savings and the buying power of your paycheck. So I urge all Americans to educate themselves about monetary policy, and better understand how a small group of unelected individuals at the Federal Reserve and Treasury department wield tremendous power over our lives.
The following are some excerpted comments from my opening remarks at the hearing with Mr. Bernanke:
Transparency in monetary policy is a goal we should all support. I've often wondered why Congress so willingly has given up its prerogative over monetary policy. Astonishingly, Congress in essence has ceded total control over the value of our money to a secretive central bank. Congress, although not by law, essentially has given up all its oversight responsibility over the Federal Reserve. There are no true audits, and Congress knows nothing of the conversations, plans, and actions taken in concert with other central banks.
We get less and less information regarding the money supply each year, especially now that M3 is no longer reported. The role the Fed plays in the President's secretive Working Group on Financial Markets goes unnoticed by members of Congress. The Federal Reserve shows no willingness to inform Congress voluntarily about how often the Working Group meets, what actions it takes that affect the financial markets, or why it takes those actions. But these actions, directed by the Federal Reserve, alter the purchasing power of our money. And that purchasing power is always reduced. The dollar today is worth only four cents compared to the dollar in 1913, when the Federal Reserve started. This has profound consequences for our economy and our political stability. All paper currencies are vulnerable to collapse, and history is replete with examples of great suffering caused by such collapses, especially to a nation's poor and middle class. This leads to political turmoil.
Government officials consistently claim that inflation is in check at barely 2%, but middle class Americans know that their purchasing power--especially when it comes to housing, energy, medical care, and school tuition-- is shrinking much faster than 2% each year. We look at GDP numbers to reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the higher standard of living that monetary inflation brings to the privileged few. Those few have access to the newly created money first, before its value is diluted.
For example: Before the breakdown of the Bretton Woods system, CEO income was about 30 times the average worker's pay. Today, it's closer to 500 times. It's hard to explain this simply by market forces and increases in productivity. One Wall Street firm last year gave out bonuses totaling $16.5 billion. There's little evidence that this represents free market capitalism. In 2006 dollars, the minimum wage was $9.50 before the 1971 breakdown of Bretton Woods. Today that dollar is worth $5.15. Congress congratulates itself for raising the minimum wage by mandate, but in reality it has lowered the minimum wage by allowing the Fed to devalue the dollar.
We must consider how the growing inequalities created by our monetary system will lead to social discord. How can a policy of steadily debasing our currency be defended morally, knowing what harm it causes to those who still believe in saving money and assuming responsibility for themselves in their retirement years? Is it any wonder we are a nation of debtors rather than savers? We need more transparency in how the Federal Reserve carries out monetary policy, and we need it soon.
In June of 2007, Congressman Paul spoke at a campaign rally in Iowa. He discusses the Continental Dollar and how the founding fathers prohibited the use of paper dollars and wrote into the Constitution that only silver and gold would be used as the backing for currency
In July of 2007, Congressman Paul made a video for his 2008 campaign run concerning monetary policy. He discusses the importance of monetary policy and the effect it has on inflation and the middle class.
In November of 2007, Congressman Paul appeared on CNBC and discussed monetary policy and the need to move away from the current system. He discusses the possible loss of confidence on the international market due to inflation.
On Money and Inflation
In March of 2008, Congressman Paul used his "Texas Talk" to address monetary policy and inflation.
On Money, Inflation and Government
These past few weeks have provided an unfortunate opportunity to discuss inflation. The dollar index has reached new all-time lows. The total money supply, M3, as calculated by private sources, is growing at a disturbing 17% rate. The Fed is pumping dollars into the economy at an alarming rate. Just recently the Fed announced new loan auctions totaling $100 billion. That is new money created from thin air. If these money auctions, combined with the bailout of Bear Stearns, continue to be the trend, we are in for some economic stormy weather.
The explanation lies in understanding the basics of money, and why it is dangerous to give government and big banks control over it. First, money is not wealth, in and of itself. You cannot create more wealth simply by creating more money. Wall Street bankers cry out for more liquidity, but what is really needed is more value behind the dollar. But the value, unfortunately, isn't there. You see, the Fed creates new money and uses it to purchase securities from banks. Flush with funds, these banks seek to put this money to use. During the Fed's expansionary period, much of this money went to home loans. Through a combination of federal government inducements to lend to risky borrowers, and the Fed's supply of easy money, the housing bubble took shape. Fannie Mae and Freddie Mac were encouraged to purchase and securitize mortgages, while investors, buoyed by implicit government backing, rushed to provide funding. Money that could have been invested in more productive, less risky sectors of the economy was thereby malinvested in subprime mortgage loans. The implicit guarantee from the Fed is quickly becoming explicit, as those institutions deemed "too big to fail" are bailed out at taxpayer expense.
Wall Street made a killing during the housing bubble, reaping record profits. Now that the bubble has burst, these same firms are trying to dump their losses on the taxpayers. This approach requires more money creation, and therefore debasement of all dollars in circulation. The Federal Reserve, a quasi-government entity, should not be creating money or determining interest rates, as this causes malinvestment and excessive debt to accumulate. Centrally planned, government manipulated economies always fail eventually. The collapse of communism and the failure of socialism should have made this apparent. Even the most educated, well-intentioned central planners cannot plan the market better than the market itself. Those that understand economics best, understand this reality.
In free markets, both success and failure are options. If government interventions prevent businesses, like Bear Stearns, from failing, then it is not truly a free market. As painful as it might be for Wall Street, banks, even big ones, must be allowed to fail. The end game for this policy of monetary inflation is that the money in your bank account loses purchasing power. So, by keeping failing banks afloat, the Fed punishes those who have lived frugally and saved. The power to create money is a power that should never be granted to government. As we can plainly see today, the Fed has abused this power, and taxpayers are paying the price.
Faith Based Currency
In July of 2008, Congressman Paul used his "Texas Talk" address to discuss the fiat currency in use by the federal government.
The Latin term “fiat” roughly translates to “there shall be”. When we refer to fiat money, we are referring to money that exists because the government declares it into existence. It is not based on production or earnings, and not backed by any commodity. It is solely based on trusting the government. Fiat money is exchanged in the economy as long as there is faith in the government that issues it.
Some are blaming the recent shakeup in the markets to “whining” or financial fear-mongering, which misses the whole point. History has shown that fiat money, or “faith-based currency” always fails, because when governments claim this power, they always behave irresponsibly.
When government has the ability to create and spend all the money it wants, priorities shift, and the concept of budgeting, as most Americans know it, loses all meaning. Hand a teenager a credit card, and tell him there is no limit and no accountability for what he spends, and the effect would be the same. You see, this problem is not unique to our government. It is a predictable outcome based on human nature, and we’ve seen variations of what we are experiencing now happen over and over throughout history. I didn’t have a crystal ball or a fortune teller when I predicted this 3, 7, or even 30 years ago. Actions have logical consequences. The government becomes the reckless teenager with the credit card, and in the end, the taxpaying citizens get the bill. What happens after that is never pretty.
This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less. Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.
Hard currencies, on the other hand, force governments to remain in check, strictly limited to the revenues they can raise from the country’s economic health. This is also an incentive for government to stay out of the way of productivity. The hyper-regulation in today’s economy demonstrates that this is no longer the case. What does it matter if the economy is crippled and the tax-base eroded, if government can create whatever dollars they need to keep the special interests happy?
We have been building economic castles on the sand, and the tide is coming in. The answer is not to bring in more sand, but to move to more solid foundation.
So yes, it is true that many are complaining about our economic trouble, but our economic trouble is not caused by their complaining. Many are being forced to wake up to the predictable troubles associated with faith-based currency. As more people notice the hardships, more will lose faith.
We are long overdue for a course correction and I can only hope that this awakening translates to a solid approach to currency reform.
In Government We Trust
In September and October of 2008, Congressman Paul used numerous "Texas Talk" addresses to discuss the concept of sound money and it's effect on the economy of the United States.
In Government We Trust? Part 1
Many who agree with me on a lot of other issues, do not understand my enthusiasm for gold and sound money or why I spend so much time studying and talking about monetary policy. It's true that I talk about money differently than most, but the fact is sound money offers many benefits. For example – peace.
Can sound money really bring about peace? Actually, it plays a big part in peaceful international relationships. Money based on commodities, rather than paper, is not subject to government manipulation, and is a key component to free and honest trade. History shows that if countries engage in trade with each other, their governments tend to find ways to get along for the same reason you do not kill your customers at your place of business, even if they occasionally annoy you. If someone outright cheats you, however, you may engage in “war” by taking them to court, for example, and the relationship will sour. Governments and central banks with unfettered power to manipulate currency also have the ability to cheat their creditors. One way they do this is to simply create enough currency to pay off debts. This devalues the currency and “cheats” the recipient out of what they are owed. It would not be fair if you watered down your product the way our government waters down its currency, so it is not hard to understand, in these simplified terms, why loose monetary policy contributes so much to ill will and war around the world.
Sound money, on the other hand, simply is what it is. Removing governmental power to manipulate money, removes the temptation for government to spend, print and cheat. Sound money ensures that our government’s spending priorities would be brought into sharp focus and reduced to only what we can afford.
Sound money also limits the ability to wage wars of aggression. Imagine how much more careful Washington would have to be about starting a war if they did not have this financial sleight of hand at their disposal! Fiat currency allows government do expensive things they should not be doing while paying the bills with cheap money. The Federal Reserve has lately been auctioning off large amounts of treasury bills as a way to finance the wars in Iraq and Afghanistan, and our crushing entitlement burden. The resulting devaluation of the dollar is quickly eroding our image as a good trading partner in the world. As a consequence, there is therefore more talk of economic isolation and war.
This vicious cycle of spending, fighting and inflating is not what Americans want. It is what the government wants, and it has had to deceive the citizens into allowing and supporting it. Sound money curbs the government’s ability to engage in these shenanigans and reduces the wars we fight to only truly defensive ones, for which Americans are more than willing to stand and fight. So in these ways, sound money is very conducive to peace.
In Government We Trust? Part 2
Last week I discussed how sound money contributes to peaceful relationships around the world. It is not gold, in and of itself that excites me, but the many benefits of sound money. Another benefit is financial security.
Can sound money give you financial security? There is something very comforting in knowing that what you earn today will retain its purchasing power in the years to come. Indeed, the same silver dime that bought a loaf of bread in the 1960's can still buy a loaf of bread with its precious metal content – which is worth about $1.00 today. An ounce of gold has always been about evenly exchangeable for a finely tailored men's suit, which these days is roughly $800. And in these days of fluctuating gas prices, when priced in gold, oil has been stable. Meanwhile, since the creation of the Federal Reserve, the fiat dollar has lost 94 percent of its purchasing power. The erosion of purchasing power rapidly accelerated when it was completely uncoupled from gold in 1971. This sort of fluctuation in the medium of exchange creates a lot of uncertainty in the marketplace and necessitates that you either take extraordinary defensive maneuvers, or face financial ruin. Trusting in government for financial security in retirement is not a safe option. Indeed, a recent study by the Consumer Bankruptcy Project shows that bankruptcies among those 75 and older has more than quadrupled since 1991. This represents wealth and savings that have been eroded by inflation, and trust in entitlement promises that were more fantasy than reality. Even with the pittance that social security pays to seniors, it is bankrupt and bringing the economy to its knees. It is no wonder that many in the younger generations want no part of it, and they should not be forced into a failed system.
On the other hand, holding physical gold can defend against aggressive government monetary policies that threaten to inflate away the value of your life savings. During the hyperinflation in post WWI Germany, what used to be a comfortable nest egg was suddenly the value of a postage stamp. If one held just a portion of their savings in precious metals, the crisis was greatly softened. Gold will never be worth nothing, even if the exact price fluctuates. There is a famous photograph, however, of a German woman during this time period burning piles of tightly bound banknotes to keep warm.
Imagine if the money you earned had honest, stable value, or even appreciated like an investment! No such special measures, like converting dollars to gold, would be required to ensure that your savings would sustain you in your golden years. That is the way it could be and is supposed to be. However, the government's thirst for power will not be easily, or cheaply, quenched. Fiat currency is one tool governments have to extract wealth quietly from the working class. It is time for the people to wake up to this ruse and look to the Constitution to restore sound currency.
In Government We Trust? Part 3
I’ve discussed just a few benefits of sound money in the last two weeks, and contrasted them to the perils of fiat currency. Sound money keeps government spending in check, keeps trade fair and honest, which reduces the temptations, and many underlying causes, for governments to wage wars. It also gives you the peace of mind of knowing that your savings will be able to sustain you in your retirement.
So if sound money is such a good thing, what is stopping people from simply trading with each other in gold and silver? Why are you still being paid in fiat dollars, and why can’t you pay for gas in gold? The answer is that the government has enacted policies that provide considerable stumbling blocks to such transactions.
One of the main stumbling blocks is Federal legal tender laws, which state that government-controlled fiat currency MUST be accepted for many kinds of monetary transactions. In light of this, Gresham’s Law takes effect. Gresham’s Law states that bad money drives out good money. Meaning, if someone is forced to accept your bad money, it is to your advantage to pass it off, like a hot potato, in exchange for something of value. Any good money you have, you will hoard. Eventually, real money is driven out of circulation and under people’s mattresses, so to speak. In the absence of legal tender laws, people are free to accept the medium of exchange of their choice, and are likely to insist on payment in something of real value.
Related to legal tender laws, contracts in gold are not enforced. Meaning if two parties agree to exchange goods or services for gold, and end up in a dispute, the courts will simply settle the dispute in Federal Reserve notes.* Governments should do very little, in my estimation, but it should enforce contracts and property rights through the courts. But in this instance it shirks this basic duty, when it comes to gold, as one way to keep control of our economy and the medium of exchange. One is also expected to pay sales tax on the purchase of gold. This is as ludicrous as if you paid sales tax at the bank when you converted dollars into quarters! The IRS also expects you to pay capital gains tax on gold, which is so backwards, since gains on gold really represent decline in the value of the dollar!
Legal tender laws should be repealed at the Federal level. Congress has the Constitutional duty to protect the integrity of our money. However, since it has passed this duty off, and the Federal Reserve has only debased our currency, Congress should no longer force Americans to do business in dollars if they would prefer to transact in gold, or silver, or cigarettes or seashells, for that matter. Free people should be free to associate and do business in ways that benefit them. Instead they are forced to use the unstable dollar to their own detriment, and the benefit the government.
*Clarification: Some astute readers took issue with this sentence. Because of space limitations for the weekly column, I was not able to elaborate on this further. While gold clauses have been legally enforceable since the late 1970's the fact remains that disputes over gold clauses might well be resolved in court with a dollar figure calculated in terms of Federal Reserve Notes. In the recently decided case of 216 Jamaica Ave v. S&R Playhouse, which reversed a district court decision, the court upheld the enforceability of a gold clause, but sent the case back to the district court to decide what obligations the gold clause imposed on the defendant. It is not inconceivable that this will result in a decision that the value of the "gold coin" referred to could be valued by the court in terms of Federal Reserve Notes, not in terms of ounces of gold. Furthermore, given the federal government's actions against Robert Kahre (the Nevada businessman who paid his employees at the legal tender face value of gold bullion coins) it is obvious that the government is still waging a war on gold. Whether either of these cases establishes a precedent remains to be seen. Additionally, because 31 USC 5103 establishes Federal Reserve Notes as legal tender, it would likely take a court challenge to determine whether a gold clause or legal tender law takes precedence.
Monetary Policy Hearing
On February 25, 2009 Congressman Paul spoke at a monetary policy meeting and questioned Chairman Ben Bernanke about monetary policy. He then made a video in response to a recent monetary policy hearing. He noted the need for a return to the gold standard. He also addressed how the current system creates inflation and encourages mal-investment and a false distribution of capital. He expresses his fear that monetary elites are planning a new system for the US.
Campaign for Liberty
In November of 2009, Congressman Paul made a video for the Campaign for Liberty concerning monetary policy. He discussed a recent purchase of 200 tons of gold by India from the IMF, and the power shift from west to east.
In January of 2010, Congressman Paul used his "Texas Talk" address to discuss his views that competing currencies should be legalized. Congressman Paul also spoke on the House floor about the subject and discussed legislation that he was introducing to allow competing currencies. He also notes the federal reserves role in this problem.
Legalize Competing Currencies
Much has been made recently about the supposed economic recovery. A few blips in a few statistics and many believe our troubles are all over. Of course, they have to redefine recovery as “jobless” to account for the lack of improvement on Main Street. But the banks have money, Wall Street is chugging along, and the administration would like to get on with other agendae.
They have even set up a commission to investigate the crisis as if it were all in the past.
The truth is that Americans are still losing jobs, the Fed is still inflating, and more regulations are in the works that will prevent jobs and productivity from coming back. We are on this trajectory for the long haul. The claim has been made many times that this administration has only had a year to clean up the mess of the last administration. I wish they would at least get started! Instead of reversing course, they are maintaining Bush’s policies full speed ahead. They are even keeping the Bush-appointee in charge of the Federal Reserve! They are not even making token efforts at change in economic policy. And for all the talk of transparency, we hear that some powerful senators will do all they can to block a simple audit of the powerful and secretive Federal Reserve.
We have been on a disastrous course for a long time. The money supply has doubled in the last year, our debt is unsustainable, the value of the dollar is going to continue its drop, and those Americans who understand where we are headed feel helpless and held hostage by foolish policy makers in Washington. When the bills finally come due and the dollar stops working we are in for some real social, economic and political chaos. That is, unless we take some major steps now to allow for a peaceful transition in the future. These steps are laid out in my legislation to legalize competing currencies.
First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money.
The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power.
Why Governments Hate Gold
In June of 2010, Congressman Paul used his "Texas Talk" address to discuss monetary policy and the problems in Greece.
Why Governments Hate Gold
This past week several emerging and ongoing crises took attention away from the ongoing sovereign debt problems in Greece. The bailouts are merely kicking the can down the road and making things worse for taxpaying citizens, here and abroad. Greece is unfortunately not unique in its irresponsible spending habits. Greek-style debt explosions are quickly spreading to other nations one by one, and yes, the United States is one of the dominoes on down the line.
Time and again it has been proven that the Keynesian system of big government and fiat paper money are abject failures in the long run. However, the nature of government is to ignore reality when there is an avenue that allows growth in power and control. Thus, most politicians and economists will ignore the long-term damage of Keynesianism in the early stage of a bubble when there is the illusion of prosperity, suggesting that the basic laws of economics had been repealed. In fact, one way to tell if a bubble is about to burst is if economists start talking about how the government and the Central Bank have repealed the business cycle.
The truth is the laws of economics are constant and real, no matter how inconvenient they might be to politicians and bankers. This reality is setting in and the bills are coming due. In the mean time, countries that have no money have bailed out other countries that have no money, except for the phony money created by politicians, bureaucrats, and their partners-in-crime at the central banks. This may be preventing big well-connected banks from having to take on massive losses, but it is all at the expense of the taxpaying citizen.
As governments and central banks continue the cycle of spending and inflating, the purchasing power of their currencies is constantly being degraded. These currencies are what the people are working for and saving. This inflation guts the savings and earnings of the people, who have very limited options for protecting themselves against these ravages. One option is to convert their fiat currency into something out of reach of central banks and government spending, such as gold or silver.
It is fairly typical in the midst of economic crises like these for gold to come under attack from Keynesians economists and their amen corner in the media. The arguments against gold are usually straw men, based on a fundamental misunderstanding of the purpose of buying gold. Gold is not a typical investment. It is a defense against the predictable behavior of governments to debase a fiat currency under its absolute control. The people who run the printing presses have trouble shutting them off. In order to limit one’s exposure to this reckless behavior, it is wise to exchange unsound assets for sound ones.
As the foundation of their power, their fiat currency, is rejected or avoided, government power is compromised. Fiat currencies trade the people’s freedom and security for the government’s freedom to squander the wealth of the nation on wasteful pet programs, wars, and corruption. This is why the freedom of the people is so intertwined with a sound monetary unit. This is also why the founders liked gold and silver, and supporters of big government hate them.
A Sensible Monetary Policy
In January of 2011, Congressman Paul used his "Texas Talk" to note that he would be chairing the Monetary Policy Subcommittee and a new monetary policy.
Toward Sensible Monetary Policy
Last week the 112th Congress was sworn in. I am pleased that I will be chairing the Monetary Policy Subcommittee of the Financial Services Committee, which has oversight of the Federal Reserve. Obviously, this position will facilitate my efforts to ensure the Fed provides the American people with more information about what they have been doing with and to our money. Not surprisingly, since my chairmanship was announced, apologists for the Fed have been recycling the old canard about how increased transparency threatens the Fed’s so-called political independence.
By independence, they are referring to the Fed’s ability to greatly impact the economy with virtually no meaningful oversight. We only recently learned that the bankers at the Fed were able to use the latest financial crisis to bail out Wall Street cronies and foreign central banks with billions of dollars that were created and wasted, instead of appropriated and voted on by representatives of the people. The Fed and its supporters in Congress vehemently fought even this small bit of transparency and without this one-time provision in the financial reform act forcing disclosure, we would still not have this information. Indeed, we are in the dark on so much of what the Fed has done. This is extremely dangerous for our country, yet this power and secrecy is defended as some kind of public good, which is patently ridiculous.
Our government is based on a system of checks and balances. With no check on the Fed, it is no surprise it has thrown the economy wildly off balance. The solution is not to re-inflate the bubbles the Fed created, or to continue to devalue the currency, or to throw billions at failing banks and corporations. The solution is to return sanity and freedom to monetary policy. Forcing the entire country to use a medium of exchange that is subject to the whims of elite bankers and their cronies on Wall Street is not sanity. Hoping that an unchecked, all-powerful, behemoth banking cartel will solve any economic problem is not sanity.
The problems the Fed was originally created to solve now look miniscule compared to the problems it has created. If “political independence” erodes the purchasing power of the currency by 98%, destabilizes the economy with radical booms and busts, all while increasing unemployment and tipping us ever closer to hyperinflation, perhaps it is time to try a little transparency and accountability instead. Better still – we should try giving the people true economic freedom.
Make no mistake: the Fed is not truly independent of political pressure. Its chair is appointed by the president, and it is a creature of Congress. Congress has a duty, albeit a neglected one, to exercise oversight of the Fed. However, even if it was politically independent, it is not independent of the influences of Wall Street. One only has to look at the revolving door between the Fed and the big banks to know that. Disclosures on TARP funds confirm this.
It is nothing short of cruel and criminal for Congress to stand idly by while the life savings of Americans are inflated away to nothing. It is high time Congress insist on getting complete information on what the Fed has been doing, and for whom. My hope is that exposing the truth will demonstrate the insanity of the status quo and more people will call for sensible changes, such as legalizing competing currencies.
Dartmouth Economic Debate
On October 11, 2011 Congressman Paul participated in a debate at Dartmouth college. He was asked about the federal reserve system and described its affects on housing the creation of bubbles resulting from financial policy. He later asks Herman Cain a question about the Federal Reserve and comments on Alan Greenspan and other Federal Reserve Chairmen. He eventually ties the economy into the monetary policy.
TUMULTY: So, Congressman Paul, where you come down on this?
RON PAUL: One thing I might - might say is, we have made some inroads on the Federal Reserve. We passed a bill last year. We got a partial, you know, audit of the Fed. We’ve learned a whole lot. They were dealing in $15 trillion; $5 trillion went overseas to bail out foreign banks.
But you know what? Congress did a lot. I’ve worked on it for a good many years. But Bloomberg helped and Fox helped. They had court cases, Freedom of Information Act. And there are some even at this table who didn’t think auditing the Fed was such a good idea, that we could call up the Fed and ask them and they would tell us what they’re doing. I’ve been calling them up for 30 years and they never tell me.
But we’re getting to the bottom of it. But if you want to understand why we have a problem, you have to understand the Fed, because the cause comes from the business cycle. We shouldn’t be asking what to do exactly with the recession - obviously, we have to deal with that - but you can’t solve - you can’t cure the disease if you don’t know the cause of it.
And the cause is the booms. When there are booms and they’re artificial, whether it’s the CRA or whether it’s the Fed, easy credit, when you have bubbles, whether it’s the Nasdaq or whether it’s the housing bubbles, they burst. And when they do, you have to have corrections. And that’s what we’re dealing with. And we can do this by building coalitions and not sacrificing any principles.
PAUL: Since the Federal Reserve is the engine of inflation, creates the business cycle, produces are recessions and our depressions, the Federal Reserve obviously is a very important issue. And fortunately, tonight we have a former director of the Federal Reserve at Kansas City. So I have a question for Mr. Cain.
Mr. Cain, in the past you have been rather critical of any of us who would want to audit the Fed. You have said - you’ve used pretty strong terms, that we were ignorant and that we didn’t know what we are doing, and therefore, there was no need for an audit anyway, because if you had one, you’re not going to find out anything, because everybody knows everything about the Fed.
But now that we have found and we have gotten an audit, we have found out an awful lot on how special businesses get bailed out - Wall Street, the banks, and special companies, foreign governments. And you said that you advise those of us who were concerned, and you belittled - you say call up the Federal Reserve and just ask them.
PAUL: Do you still stick by this, that that this is frivolous, or do you think it’s very important? Sixty-four percent of the American people want a full audit of the Fed on a regular basis.
GOLDMAN: Thank you, Charlie.
Mr. Cain, you disapprove of Fed Chairman Ben Bernanke, and we all know that your priority is 999. But one of the most important appointments that you’re going to have to make your first year, should you be president, would be Fed chairman.
So which Federal Reserve chairman over the last 40 years do you think has been most successful and might serve as a model for that appointment?
CAIN: Alan Greenspan.
CAIN: Because that’s when I served on the board of the Federal Reserve in the early 1990s. And the way Alan Greenspan oversaw the Fed and the way he coordinated with all of the Federal Reserve banks, I think that it worked fine back in the early 1990s.
Now, on that same point, I have already identified two candidates - which I cannot give their names - to replace Mr. Bernanke, in anticipation of having that responsibility.
We must narrow the mission of the Fed first. I don’t believe in ending the Fed. I believe we can fix the Fed by getting their mission refocused on monetary price stability. And I have candidates in mind that will help us do that.
GOLDMAN: So you have two appointments waiting in the wings for - for 2013, for - when his term is up, 2014?
CAIN: Yes, I have two candidates waiting in the wings...
GOLDMAN: How about a hint?
CAIN: ... to take that job. I’ve got to keep them confidential.
PAUL: Spoken like a true insider.
No, Alan Greenspan was a disaster.
Everybody in Washington - liberals and conservatives - said he kept interest rates too low, too long. Of course, the solution was, lower them even more, and they think that’s going to solve our problem.
But if I had to name one person that did a little bit of good, that was Paul Volcker. He at least knew how to end - or help, you know, end the inflation.
But, of course, with my position that I don’t think highly of the Federal Reserve, I think we should have sound money and we shouldn’t have somebody deciding what the interest rate should be and how much money supply we should have, I mean, nobody satisfies me.
But certainly, Alan Greenspan has ushered in the biggest bubble. And what did we do? We’ve continued the same thing, doing the same thing. We think the inflation under Alan Greenspan was bad so we’re trying to solve the problem by inflating even further. So Bernanke compounds the problem. He’s inflating twice as fast as - as Greenspan was.
But Greenspan caused so much trouble. And he used to believe in the gold standard. I think he’s coming around to that. Before he retires, he’ll write his - his biography and explain why he’s coming back to the gold standard.
Michigan Economic Debate
On November 10, 2011 Congressman Paul participated in the Michigan Economic Debate. He spoke there about international debt, US debt, and the housing industry. He also states that spending is a tax.
CRAMER: Congressman Paul...
(inaudible) to say, and I really get that. But I'm on the frontlines of the stock market. We were down 400 points today. We're not going to be done going down if this keeps going on, if Italy keeps -- the rates keep going up. Surely you must recognize that this is a moment-to-moment situation for people who have 401(k)s and IRAs on the line and you wouldn't just let it fail, just go away and take our banking system with it?
PAUL: No, you have to let it -- you have to let it liquidate. We've had -- we took 40 years to build up this worldwide debt. We're in a debt crisis never seen before in our history. The sovereign debt of this world is equal to the GDP, as ours is in this country. If you prop it up, you'll do exactly what we did in the depression, prolong the agony. If you do -- if you prop it up, you do what Japan has done for 20 years.
So, yes, you want to liquidate the debt. The debt is unsustainable. And this bubble was predictable, because 40 years ago we had no restraints whatsoever on the monetary authorities, and we piled debt on debt, we pyramided debt, we had no restraints on the spending. And if you keep bailing people out and prop it up, you just prolong the agony, as we're doing in the housing bubble.
PAUL: Right now, Fannie Mae and Freddie Mac are demanding more money because we don't allow the market to determine what these mortgages are worth. If you don't liquidate this and clear the market, believe me, you're going to perpetuate this for a decade or two more, and that is very, very dangerous.
(inaudible) Italy's too big to fail. It's great. I'd love it if we were independent. It would be terrific to say, "It's your fault. It's your fault. It's your problem." But if this goes, the world banking system could shut down. Doesn't that involve our banks, too?
BARTIROMO: Congressman Ron Paul...
BARTIROMO: ... you have said you want to close down agencies. Tell us about your tax plan as well as closing agencies -- federal agencies. Where do those jobs go?
PAUL: Well, eventually they go into the private sector. Then don't all leave immediately when the plan goes into effect. But what my plan does is it addresses taxes in a little different way.
We are talking about the tax code. But that's the consequence, that's the symptom. The disease is spending. Every time you spend, spending is a tax. We tax the people, we borrow, and then we print the money and the prices go up, and that is a tax.
So you have to address the subject of spending. That is the tax. That is the reason I go after the spending.
I propose in the first year cut $1 trillion out of the budget in five departments.
(CHEERING AND APPLAUSE) PAUL: Now the other thing is that you must do if you want to get the economy going and going again is you have to get rid of price- fixing. And the most significant price-fixing that goes on, that gave us the bubble, destroyed the economy, and is preventing this from coming out, is the price-fixing of the Federal Reserve, manipulating interest rates way below market rates.
You have to have the market determine interest rates if you want a healthy, viable economy.
BARTIROMO: So you think the economy would be stronger if interest rates were higher right now?
PAUL: You would have more incentive. You would take care of the elderly. They get cheated. They get nothing for their CDs. Why cheat them and give the banks loans at zero percent? And then they loan it back to the government at 3 percent. They are ripping us off at the expense of those on fixed incomes and retirees.
BARTIROMO: Even though higher interest rates would make it much more expensive to borrow, mortgages.
PAUL: But you want is the market to determine this. Whoever thought that one person, the Federal Reserve Board chairman, knows what the money supply should be? Just in the past six months, M1 has gone up at the rate of 30 percent. That spells inflation. That spells lower standard of living and higher prices and watch out. They are coming.
Sponsored and Cosponsored Legislation
This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.
Congresswoman Bachmann has denounced efforts to move the US from the Federal Reserve Note to an international form of currency. She noted that a constitutional amendment would be required to truly prevent the US from moving to an international currency. She has asserted that the increased spending by the Obama administration combined with policies such as quantitative easing are devaluing the dollar. When asked, Congresswoman Bachmann stated that she would consider a return to something like the gold standard if elected President.
In March of 2009, Congresswoman Bachmann released a statement noting legislation that she was introducing to bar the dollar from being replaced by any foreign currency.
Bachmann Demands Truth: Will Obama Administration Abandon Dollar for a Multi-National Currency?
Washington, D.C., Mar 25, 2009 - In response to suggestions by China, Russia, and other countries around the world calling on the International Monetary Fund to explore a multi-national currency, U.S. Representative Michele Bachmann (MN-6) has introduced a resolution that would bar the dollar from being replaced by any foreign currency.
“Yesterday, during a Financial Services Committee hearing, I asked Secretary Geithner if he would denounce efforts to move towards a global currency and he answered unequivocally that he would," said Bachmann. "And President Obama gave the nation the same assurances. But just a day later, Secretary Geithner has left the option on the table. I want to know which it is. The American people deserve to know."
Asked today about a currency proposal from China at a Council on Foreign Relations event, Secretary Geithner stated he was open to supporting it. Despite attempts to clarify his remarks later in the day, the unguarded initial response calls into question his true intentions.
Although Title 31, Sec. 5103 USC prohibits foreign currency from being recognized in the U.S., the President has the power to engage foreign governments in treaties, and the President is principally responsible for the interpretations and implementation of those treaties according to the Constitution. As a result, legislation prohibiting the President and Treasury from issuing or agreeing that the U.S. will adopt an international currency would need to come in the form of a Constitutional Amendment differentiating a treaty used to implement an international currency in the U.S. from other types of treaty agreements.
The Dollar is in Trouble
In September of 2009, Congresswoman Bachmann wrote an op-ed discussing the poor state of the dollar, and the possibility that the dollar was in trouble.
The Dollar is in Danger
9/15/2009 | Email Michele Bachmann | All Posts By Blogger
Kudos to my colleague Ed Royce (R-CA) for sounding the alarm on the international battle to downgrade the dollar. I've said for months now that our penchant for massive spending and our sky-rocketing debt will come back to bite us and Congressman Royce provides evidence seconding that notion.
As he mentions in his recent post, the U.N. Conference on Trade and Development has issued a report calling for the U.S. dollar to be replaced as the global reserve currency. This isn't the first we've heard of this. Other nations, such as China, Russia, India, and Brazil, have been beating this drum for several months now. But this marks the first time the U.N. has jumped on board.
Unfortunately, our government is giving them their best rationalization for these ludicrous proposals. After all, our nation's debt, which is the money owed by our government, currently sits at the highest it's been in our nation's history, at $11.7 trillion. Couple that with our rising deficit which has well exceeded $1 trillion (another record) and is on its way to $2 trillion fast, and our debt becomes a far less attractive purchase to other nations. China’s even voiced those concerns publicly. Higher interest rates will be necessary to sell our debt abroad. And we will soon be confronted with the growing threat of rising inflation - a devastating sign that our nation's economic fortunes are heading in the wrong direction.
This is real money we're talking about here, and your future. Fiscal responsibility must not be a campaign slogan. It must be a fundamental tenant of our governing philosophy and economic well-being. The welfare of our children and grandchildren depends on it.
In October of 2009, Congresswoman Bachmann made a video to discuss the possibility that the dollar may lose it's status as the reserve currency. She also discusses the affects of spending and debt on the value of the dollar.
Return to Gold Standard
In June of 2011, Congresswoman Bachmann participated in a bus tour whose sponsor listed a return to the gold standard as one of their objectives. Congresswoman Bachmann stated that she would consider such a measure is elected President.
I will take a close look at the gold standard issue, but I am taking part in the bus tour because we agree on a number of important principles, including spending restraint and strengthening the dollar.
Sponsored and Cosponsored Legislation
This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.
Herman Cain has expressed opposition to combining the US currency with that of other countries in a system similar to the Euro. He has stated that the US is stronger than any country it would combine with, and it's currency value would be lowered.
Herman Cain has repeatedly supported a return to backing the US dollar with real gold or other precious metal. However, he has stated that we cannot return to this state until the debt is mostly repaid and the sheer amount of money in play is reduced.
Support for the Gold Standard
On December 28, 2010 Herman Cain filled in for Sean Hannity on his radio show. He responded to a question by noting that he supports a return to the gold standard for the US dollar, but that this was not possible until the debt and spending was addressed.
Yes I believe in the gold standard. We never should have gotten off the gold standard because when we got off the gold standard, that then allowed Congress to inflate our currency whenever they overspent. Now look at the mess that we have. But we are not gonna get back to the gold standard or even close to the gold standard until we reestablish the strength of the US dollar.
You know the first step in doing that? Dramatically reducing the spending.
Opposition to the Amero
In May of 2011, Herman Cain was interviewed by the Nevada News and Views and stated that he opposed any attempt to establish a monetary system that would combine the currency of the US with that of Mexico and Canada to create a currency known as the Amero.
Reporter: What about the Amero? You know there’s talk about joining the Canadian, US, and Mexican currency much like they did over in Europe.
Cain: I don’t want an Amero; I want a strong dollar. I do not agree with this move to create a single currency for Canada, United States, and Mexico, and here’s why. The United States economy, even with its hiccups, is still the strongest and the most solid of those three countries. If we agree to an Amero agreement, that would drag down the value of our currency.
Secondly, Mexico’s government is becoming more and more unstable, and that means that their currency is going to become more and more unstable. Why would you want to enter into an agreement with a currency that’s declining in strength when we could very simply increase the strength of our dollar if we do things we need to do – get serious about lowering the national debt, stop creating a deficit every year, and really stimulate the economy. I don’t want to create a single currency with a nation that has allowed the drug cartels to confiscate the country.
Palmetto Freedom Forum
In August of 2011, Herman Cain participated in the Palmetto Freedom Forum in South Carolina. He was asked about the Federal Reserve and stated that he would remove one of the dual mandates of unemployment and sound monetary policy.
DEMINT: Let's talk about the Federal Reserve. The more I find out, the more worried I am about what they've been doing. We found out when we went through the legislative process for this TARP program which opposed, the Federal Reserve actually matched that and upped it as far as the amount of money they were sending to banks not only in this country but around the world. They've apparently bought nearly 90 percent of their own debt this year and now they're talking about another round of monetizing debt which is called quantitative easing. What would you do with the Federal Reserve, or do you think it's a problem?
CAIN: I believe we can fix the fed. The way we do that is ask Congress to limit their ability to limit their authority. One of the reasons they got into these programs like quantitative easing is because of the size of the debt and because the debt was just spiraling out of control and other countries were not buying it fast enough. They came up with these kinds of plans.
Secondly, the Federal Reserve has, unfortunately, a dual mission -- monetary stability and unemployment. That's like trying to hit two targets with one arrow. I would ask Congress to take away one of the targets. Get them back to what they were commissioned to do back in 1913, and it worked well until we got into this situation relative to the debt that we have. I believe that we can fix the fed by asking Congress to re-limit their authority to do those kinds of things.
Secondly, we have got to get back to sound money. Our dollar is suffering. It's similar to when we wake up in the morning, an hour is 60 minutes. We don't have to go look in the paper to see what it's worth. We've got to get back to a dollar is a dollar is a dollar.
DEMINT: Do you need a gold standard to do that?
CAIN: Yes, we do need a gold standard to do that. We can work our way back to a standard. That's the only way we'll make our currency the dependence -- the currency that people around the world depend upon. So yes, I do support establishing standards and there are many ways to do it in addition to a gold standard.
Caffeinated Thoughts Interview
In October of 2011, Senator Santorum was interviewed by the website Caffeinated Thoughts. He was asked about monetary policy and the Federal Reserve bank. He stated that he supported the Federal Reserve system and a return to sound monetary policy. He stated that he did not believe that ending the Federal Reserve Bank was necessary to accomplish that task.
Sponsored and Cosponsored Legislation
This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.
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