Skip to comments.Ron Paul Calls for Competition in Money
Posted on 12/13/2009 10:00:52 AM PST by FromLori
Many years ago, John D. Rockefeller, Sr. famously stated, Competition is a sin. He preferred a monopoly, the very antithesis of economic freedom, in order to increase profits.
A monopoly accomplishes for its creator the opportunity to gouge the public, a consequence generally well-known, and generally despised. There is, however, one commodity existing as a monopoly that the public does not loathe, the creation of money. This monopoly seems to most Americans to be the only way to proceed. They are unaware that our nation once had competing currencies and this competition led to honesty in the field of money.
Several Spanish coins made of precious metal were circulating during colonial days, even after the Declaration of Independence. In 1792, the U.S. Mint began its constitutionally authorized operations and the people brought their gold and silver to be stamped into coinage of a fixed size, weight, and purity. Also, there were private mints issuing precious metal coinage; the government did not have a monopoly in the field of coining money. As a result, the nation thrived, as one always will when there is sound money. But, today, the only legal money is fiat money issued by the Federal Reserve that is deemed money by law. Its value continues to decrease because there is virtually no limit on how much of it can be issued. If our country were on a gold or silver standard, inflating the supply of those precious metals would be impossible.
Congressman Ron Paul has become well-known and equally well-admired for his advocacy of sound money and his opposition to the Federal Reserve. In addition to his bill calling for auditing the Fed, he has now introduced the Free Competition in Currency Act of 2009. He notes that, to be useful and honest, currency has to be durable, portable, divisible, uniform, stable, reproducible, and scarce. And he notes that mankinds history demonstrates that gold and silver, not paper bills, have been the choices arrived at for money throughout the millennia.
The congressmans new measure calls for three steps. The first is to repeal legal tender laws that give paper bills issued by the Fed the monopoly always sought by thieves and tyrants. The only legal tender in our nation today is the paper currency issued by the Fed. But Congress has constitutional power to coin money, not to monopolize paper.
The second step in this new bill would eliminate laws that prohibit private mints from creating coinage to be use as currency. If numerous mints were producing gold and silver coins and bars, the public would cease relying on the increasingly less valuable paper issued by the Fed. Would some mints possibly defraud customers by adding base metal to supposedly pure gold or silver? Thats a possibility and the recourse would be to take the mint owner to court and sue for fraud. What exists today is a Federal Reserve that defrauds everyone.
In his final step, he calls for eliminating capital gains and sales taxes on gold and silver coins. The congressman provides a clear explanation of the absurdity and injustice of taxing the purchase of gold and silver coins by noting how stupid and unjust it would be if a sales tax were charged every time a person exchanged a ten dollar bill for a roll of quarters.
The Texas legislator also makes the realistic assertion that a return to competition in money would see an end to inflation, even an end to unconstitutional wars financed by the Feds paper bills. Deficit spending for numerous other unconstitutional programs would also be phased out.
Let us ardently hope that this very sensible and very much needed measure receives the kind of support that 317 members of the House of Representatives have given by co-sponsoring H.R. 1207, the bill calling for the General Accounting office to audit the Federal Reserve. America needs competition in money as in the production and use of any commodity. Competition is a sin only in the eyes of monopolists or would-be monopolists who want to control the market.
I’d rather see a competition for ideas.
Our nation is manipulated by a media with only one political viewpoint.
At any rate, I've heard all this stuff before.
The book was published in 1996, it does not directly address today. At the time it appeared that Paul Volcker and Ronald Reagan had cured inflation. What I found interesting about the book was how inflating or debasing currency is as old as the issuance of currency but does not always lead to inflation. There are times when external deflationary pressures allow a government to get away with inflating the money supply while avoiding inflation. I would make the argument that Greenspan returned to the same policies of inflating the money supply but was able to avoid the appearance of inflation due to the deflationary effect of Chinese imports. The result was repeated asset bubbles.
Some say the Greenbacks were what got Lincoln shot.
Take a look at the United States Notes released in 1963 before Kennedy was shot.
One of LBJs first acts was to take the United States Notes out of circulation.
That link is for those tolerant of conspiracy theories.
I'm aware of that as well. I just don't see the difference between pieces of paper printed by the mint and pieces of paper printed by a bank, other than the fact that theoretcally (and please notice that I said theoretically) the bank has "real money" on hand to cover the paper while the mint doesn't.
Honestly, I don’t know either. Back in the day, banks and the Fed were said to be “responsible”. It seems to me that the US Government can simply print money to pay its bills. Debt, what debt? Here’s money, fresh off the presses. No more debt.
That would be inflationary.
I don’t get why the Fed needs to be a part of this at all.
Back in the day, yes, bankers had gold and I guess governments didn’t. Money was “real” - backed by gold, or gold itself.
Now it seems that the US Dollar is backed by our willingness and ability to use the military to make sure that oil producing nations take the US Dollar in exchange for oil.
Bankers have nothing to do with our military. Bankers have gold, the US Government has the military.
The problem is that I'm a history buff, and I've always looked to Washington, Hamilton, and the other Federalists as the "good guys" in the first party system while the Jeffersonians were dangerous radicals. And Hamilton and Washington created a bank that, as I understand it, helped our young country stand on its feet. Perhaps a reconstituted central bank exactly as Hamilton conceived it would be better?
PS: Ironically, none other than Pat Buchanan, aside from his anti-bank bias, seems much more Hamiltonian than many conservatives are nowadays. If it weren't for his problem with Jews and Israel I'd have no problem with him.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.