Book Snippets: Gold, Peace, and Prosperity

Select snippets from: "Gold, Peace, and Prosperity" ^[1] written by Congressman Ron Paul in 1981.^[2]

How the Fed Breeds Abuse of Power, Corruption and Factions:

“[The Federal] Government’s only legitimate reason for existence is to protect innocent life and property from aggression, foreign or domestic. When it deliberately destroys the money, government is acting perversely, by harming innocent life and property. Short of intentional [unjust] war, inflation is the most immoral act political leaders can commit.”

“Let us put it this way: give any man or group power, and it will tend to use that power. If the power is inherently abusive, then that power will be abused. Our present system gives to the federal government and its Federal Reserve System the unlimited power to counterfeit. The problem is that if the Fed has the power to counterfeit, it will inevitably use that power.”

“It means that the counterfeiter can pay his debts, spend more money, [and] give more money to his friends and associates. In the case of government, the power to counterfeit means that government’s debts can be paid without levying taxes, that government spending can increase, and that political allies can be purchased and maintained.”

“Whoever gets the new money first benefits the most. But the favored industry becomes dependent on new injections of government credit, and therefore forms a powerful special interest lobby to argue its viewpoint in Washington. Thus does inflation encourage the breakdown of society into warring factions.”

Why The Gold Standard Constrains the Abuse of Power:

“People fight the gold standard, because they want to substitute national autarky for free trade, war for peace, totalitarian government omnipotence for liberty.”

“If a country inflates under a gold standard, gold flows out of the Treasury, hamstringing the government. Since a gold standard enables the average person to restrain the government’s attempts to inflate, control the economy, run up deficits, and fight senseless wars, the central planners had to eliminate this fundamental American freedom to own gold. [therefore] it was in the interest of power-hungry politicians to destroy the system that gave the people, not the politicians, power over the monetary system. As a result, control was handed over to the bankers and bureaucrats, as well as the politicians themselves.”

“But the foundations have been laid for a new monetary order. The spirit of freedom, and the desire for honest money, still run strongly among our people. In 1974 we reversed the unconstitutional 1934 law that barred private ownership of gold. In 1977, gold clause contracts were legalized. In 1979, a bill to repeal the Treasury’s power to seize privately held gold was passed by the House.”

Is it Possible to Return to the Gold Standard?

“Congress made the Greenback notes redeemable in gold in 1879, and the effect of this action can help us plan for a similar action in the future. […] Late in 1875, Congress passed a law saying that on January 1, 1879, Greenbacks would be redeemable in gold on a one-to-one basis. And the notes were to be retired.” ^[3]

“By 1868 it only took $138 in greenbacks to buy $100 in gold. As the date approached, the price of $100 in gold in greenbacks declined from $111.50 in 1876 to $104.70 in 1877 and $101.10 in 1878. On December 17, 1878, two weeks before the official specie resumption day, the price of $100 in gold reached $100 in Greenbacks.”

– end of snippets –

Blogger’s notes:

^[1] You can download a free electronic copy of Ron Paul’s book here (it's a short read): Kindle users can use the excellent Calibre conversion software to convert Nook (ePub) to Kindle (mobi) … or download a Kindle version here.

^[2] “Gold, Peace, and Prosperity” Copyright © 1981 by the Foundation for Rational Economics and Education, Inc., Post Office Box 1776, Lake Jackson, Texas 77566. Permission to quote from, or to reproduce liberal portions of, this publication is granted, provided due acknowledgement is made.

^[3] Keep in mind that gold and the dollar were link and closer in purchasing power in 1879 than they are today, but the concept is workable today at a different initial exchange rate. The key to making this work is peg the dollar to a fixed weight of gold.

See also ""