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Without the ability to create money out of nothing, governments tend to run tight financial ships. Banks are more careful about the lending when they can't rely on a lender of last resort with access to a money-creation machine like the Fed.

Bingo. libertarian or not, Rep. Paul is right ;o) Greenbacks are just paper - a promise to pay something in return (more paper, and IOU?) Gold & silver certificates were promises to repay in Gold/Silver - which have intrinsic value. If any doubt it, please send me all your gold and silver in exchange for the paper I will send you. I'll even go "twofers".

By taking us off the gold-standard, the government can mint all the money it wants. The August figures I can find cite about 8,149 tonnes of gold (of which only 58% are actually gold reserves - not including gold certificates). As of today gold was trading at $319 per ounce, and there are 32,151 troy ounces in a metric tonne). 8149*32151*319 = $83,577,521,181 => 84 Billion in reserves possible *.58 => 48,474,962,284.98 or 49 Billion in actual reserves.

Just allowing for the SS debt (25 TRILLION) the US has less than .2% of the debt backed by gold. Or to put it another way, gold would have to be trading at $95,420 per oz to cover the SS debt.

There is no intrinsic worth in gold other than in its utility as a soft metal.

Money, whether gold or paper, is simply a method of easily and quickly exchanging goods and services (the true wealth of a society)--present and anticipated future. Each dollar held is pregnant with innumerable potentional transformations. But its value is in its potential transformations--not in its utility per se.

If there is an argument to be made that Federal Reserve policies are artificial, needlessly meddlesome, and counterproduictive, that is a legitimate argument--one that Ron Paul appears to be making. But much of the anti-Federal Reserve rhetoric comes off as an irrational divining of witches.