In the GOP presidential debates, when Ron Paul talks about economics he is a giant among pygmies. None challenge him. The best his opponents can come up with is to rail about the need to balance the budget. But, when he brings up the issue of the business cycle, the other candidates look like they want climb under the podium. Further, no moderator has ever sought to question his economic positions.
Ron Paul’s grasp of economics comes from fifty years of studying economics and reading the best books from the Austrian School of economic theory. He read Ludwig von Mises, Friedrich A. Hayek, Murray Rothbard, Henry Hazlitt and Hans Sennholz, to name only a few but the most high profile. Further, he has rubbed shoulders with and discussed economic theory with many these giants of the Austrian School. Although his formal education is in medicine, Ron Paul also is an economist.
In his best-seller End the Fed, published in 2009, about the business cycle he wrote:
Rarely do we in Washington hear the real cause of the [housing] crisis, stated with full knowledge and without the usual hedging. Most don’t understand the business cycle and its relationship to Federal Reserve policy. What’s more, many of those who do understand how the monetary system operates are not anxious for the general public to find how it serves the interest of big government, big corporations, and big banks.
As far back as 1981, Ron Paul exhibited his understanding of economics when he wrote a short treatise on the links between gold, peace and prosperity. Appropriately, it was titled Gold, Peace, and Prosperity. This 83-page booklet provides understanding as to why a people’s right to own gold is linked to peace, which in turn is linked to prosperity.
In Gold, Peace, and Prosperity, Ron Paul lays ruin to the concept that wealth and productivity are somehow created by an increase in the number of monetary units. He predicted that there would be a “day of reckoning” for following the flawed notion that by expanding the money supply prosperity could be sustained. Is that “day of reckoning” upon us?
Of special interest to gold investors should be the chapter titled How Our Money Was Ruined. Ron Paul points out the Founding Fathers so despised unsound money that they “decreed death—in the Mint Act of 1792—for any officer or employee of the Mint who debased the coinage of the United States.” When you look at what Bernanke and the Fed are doing, you see how far removed they are from the Constitution and the Founding Fathers’ visions for the United States.
The Mint Act of 1792 gave us the Gold Coin Standard, which gave way to the Gold Bullion Standard, which fell to the Gold Exchange Standard (the Bretton Woods Agreement of 1944), which led us to the Managed Fiat Currency Standard, under which the Fed now prints (actually, electronically creates on silicon bubbles) all the money it wants.
In this presidential election year, our country is facing its greatest financial/economic crisis ever. With Ron Paul running for the GOP nomination, the Establishment has not been able to sweep those problems under the rug. Ron Paul keeps them on the forefront. Americans who read Gold, Peace, and Prosperity will become more knowledgeable about gold, money and economics, and in becoming more knowledgeable will play a part, albeit small, in keeping discussions of those problems on the front burner.