What the Price of Gold Is Telling Us

Submitted by Bill St. Clair on Thu, 2006-04-27 05:03.

Ron Paul at LewRockwell.com - long speech on the importance of commodity money given before the House of Representatives on April 25, 2006. Note especially his concluding paragraph (quoted below) which tells you why the Busheviks like inflation and want to do everything they can to increase it. [lew]

Quote:
Particular things to remember:

  • If one endorses small government and maximum liberty, one must support commodity money.
  • One of the strongest restraints against unnecessary war is a gold standard.
  • Deficit financing by government is severely restricted by sound money.
  • The harmful effects of the business cycle are virtually eliminated with an honest gold standard.
  • Saving and thrift are encouraged by a gold standard; and discouraged by paper money.
  • Price inflation, with generally rising price levels, is characteristic of paper money. Reports that the consumer price index and the producer price index are rising are distractions: the real cause of inflation is the Fed’s creation of new money.
  • Interest rate manipulation by central bank helps the rich, the banks, the government, and the politicians.
  • Paper money permits the regressive inflation tax to be passed off on the poor and the middle class.
  • Speculative financial bubbles are characteristic of paper money – not gold.
  • Paper money encourages economic and political chaos, which subsequently causes a search for scapegoats rather than blaming the central bank.
  • Dangerous protectionist measures frequently are implemented to compensate for the dislocations caused by fiat money.
  • Paper money, inflation, and the conditions they create contribute to the problems of illegal immigration.
  • The value of gold is remarkably stable.
  • The dollar price of gold reflects dollar depreciation.
  • Holding gold helps preserve and store wealth, but technically gold is not a true investment.
  • Since 2001 the dollar has been devalued by 60%.
  • In 1934 FDR devalued the dollar by 41%.
  • In 1971 Nixon devalued the dollar by 7.9%.
  • In 1973 Nixon devalued the dollar by 10%.

...

Economic law dictates reform at some point. But should we wait until the dollar is 1/1,000 of an ounce of gold or 1/2,000 of an ounce of gold? The longer we wait, the more people suffer and the more difficult reforms become. Runaway inflation inevitably leads to political chaos, something numerous countries have suffered throughout the 20th century. The worst example of course was the German inflation of the 1920s that led to the rise of Hitler. Even the communist takeover of China was associated with runaway inflation brought on by Chinese Nationalists. The time for action is now, and it is up to the American people and the U.S. Congress to demand it.

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Gold has been the prime
Submitted by ounce of gold (not verified) on Tue, 2008-12-02 12:17.

Gold has been the prime commodity since the earliest of civilizations. It's constant value has nothing to do with economic collapses; those collapses are brought about by mismanagements of the governments.

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