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Free competition in currency is needed now more than ever


Ron Paul, Currency

Would you buy a stock that you believed would be worth less in the future?  To most, that is a silly question with an obvious answer.  But what if I asked, would you agree to be paid in a currency that would be less in the future?  To most, that is a question they have never pondered, although the answer would seem just as obvious.  The difference between the two scenarios is choice.  You have a choice when purchasing a stock, or whether to purchase at all, but no such choice when it comes to money.  But what if you did have a choice?

It has become increasingly apparent that the United States has accumulated more debt than can ever be paid back through direct taxation.  Sustainability of the current policy of endless budget deficits is completely dependent on currency debasement – the now official stated policy of the Federal Reserve.  This is nothing more than a massive indirect tax on the savings and standard of living of those who use dollars.
To some degree you can opt out your savings by converting to a non-debase-able form of money such as gold or silver, although the government will still claim part of the dollar debasement you avoided by taxing your “gain.” But how do you opt out your standard of living from this wealth confiscation system if you’re paid in a fixed amount of ever depreciating dollars?  The answer is: you can’t.  The law prohibits it.

The solution is Ron Paul’s Free Competition in Currency Act.  It has three primary provisions that break the government’s monopoly on money:

  1. Repeal the unconstitutional legal tender laws which require that dollars be accepted as payment for all debts.
  2. Eliminate all capital gains and sales taxes on exchanges between dollars and gold.
  3. Allow private minting of money.

It’s really as easy as that.  We as individuals can’t save the government from its self-destructive habits, but we need to be able to protect ourselves.  For the “gold is a barbarous relic” crowd, that feels “gold as money” is a horrible idea, no problem. That’s what free competition is all about.  There is absolutely nothing that prohibits them from continuing to use Bernanke’s infinitely dilute-able virtual dollars as their monetary means of choice.  For the rest of us, sound money would do nicely thank you.

2 Responses to “Free competition in currency is needed now more than ever”

    • cmiadmin

      No, Gresham’s law would not come into play if gold (and silver) were used as money.

      Gresham’s law comes into play when the government mandates that coins, regardless of their metallic content, have the same legal tender status. A perfect example is US coinage. Pre-1965 US 90% silver coins and post-1964 US coins have the same face values (dimes, quarters and half-dollars), yet the pre-1965 coins ceased to circulate almost immediately with the minting of coinage with no silver content. In short, Gresham’s law says that bad money (post-1964) drives good money (pre-1965) out of circulation.

      If gold and silver were used as money, transactions would be denominated in ounces, grams or grains of the metal. There would be no face value attached to the metals.

      Further, there is no reason that government should be involved in money at all, other than to prosecute fraud should a producer of the units being used attempt to defraud users with debased units.


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