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TheStreet.com on Ron Paul and the Gold Standard

In the past, Simon Constable from TheStreet.com has done some mildly positive, mildly misleading stories/articles on Ron Paul and his idea of "returning to the gold standard." I critiqued one of his earlier articles here, and did a followup critique here.

The gist of my criticism is this: Mr. Constable tries to make it appear that Ron Paul wants to "go back" to an inflexible system that was abandoned in the 19th century. Nothing could be further from the truth. Dr. Paul himself has said there were flaws with the past system, and he would in fact like to move forward to a new, commodity-based, honest money system. A 100% reserve gold standard has never, in fact, existed in the United States.

After my first critique, Mr. Constable emailed me, thanking me for my interesting perspective. Recently, he again emailed me with a link to a new video/story that he's done on Ron Paul and the gold standard. In this new video, Mr. Constable interviews random people in front of the New York Stock Exchange. The first question he poses is whether they know what the gold standard is. Woefully, no one does. He then goes on to ask the same ignorant people, "Presidential candidate Ron Paul wants to abolish the Fed and reintroduce the gold standard. Do you think that is a good idea?"

Certainly, there is no point in asking ignorant people for advice on a topic, and certainly Mr. Constable knows that such advice worthless. So why ask it? It appears that Mr. Constable prefers to use their words to subtly ridicule the idea. For example, the first person he shows responding to this question says, no it is not a good idea, but that it's irrelevant since "we don't have to worry about Ron Paul."

Another man responds, "19th century...1800's? I would hope that we've advanced quite a bit since then."

This is a fallacious argument that easily plays among the ignorant, and Mr. Constable does nothing to correct it. Not once in his video piece does he attempt to explain 1) What the gold standard is, or 2) Why Dr. Paul is so adamantly opposed to the Federal Reserve System.

Certainly we have come a long way in our thinking, ideas, science and technological capabilities since the 19th century. However, human nature remains much the same. As such, bankers, governments and politicians still have the same desires that they had in the 19th Century: Bankers to make more money using money alone; governments to exert more control over citizens and property; and politicians to spend more money without raising taxes. The fiat money system of the Federal Reserve allows and promotes all three of these while at the same time surreptitiously saddling citizens with the hidden tax of inflation. As the supply of fiat dollars is increased, each existing dollar is worth less, thus eroding the buying power and saving ability of citizens.

On the other hand, a gold standard contains inflation, enforces fiscal discipline on government, and makes it much more difficult for government to fight needless wars. Under a gold standard, money is worth increasingly more each year as citizens reap direct benefits from increases in efficiency. This is a nearly impossible concept for most citizens to grasp, since all we have ever known in our lifetimes is a currency that is worth less and less each year.

You can watch Simon Constable’s video here.

Please let me know what you think of it by posting your comments below.

To his credit, Mr. Constable says at the end of his piece, "I suspect we're going to see a lot more of Ron Paul, and when we do, I'll be covering. So stay tuned..." What worries me is that Mr. Constable will continue with more misleading pieces about Dr. Paul (such as this one) that promote more disinformation than truth. If Mr. Constable is to continue reporting on Dr. Paul, I for one would like to see him give Dr. Paul's ideas a more serious and thorough examination. It would be great to even see an interview of Dr. Paul by Mr. Constable.

At the same time, the video does reveal how woefully ignorant the general public is regarding the Federal Reserve, money and gold, and how this affects them on a day-to-day basis. It is said that the Chairman of the Federal Reserve is more powerful than the President of the United States, because his decisions on monetary policy (though interest rate decisions) affect the average citizens’ house payment, car payment, and whether or not he will have a job. But most people never give that a second thought. This ignorance can easily be manipulated to serve the current powers that be - the government and the MSM.

An educated, fully informed populace is much more difficult to manipulate and fool. As such, I encourage each of you to do your own research on the subject of money, gold, the Federal Reserve, Ron Paul and the MSM. There are many, excellent, independent websites that are not beholden the standard-quo bias of the MSM. A partial list includes:

Bull! Not bull
Daily Paul
Gold Eagle
Gold Seek
Financial Sense
Fall Street
Fiend Bear
Free Buck
Safe Haven
24 Hour Gold
321 Gold

Your comments on this piece are welcome below. If you are so inclined, let TheStreet.com know what you think about its coverage of Ron Paul and the issue of the gold standard.

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Simon Constable is a moron

He is clearly trying to ride the coattails of Dr. Paul's popularity by doing mildly positive stories with passive aggressive undertones. In this piece he doesn't try to understand, explain nor educate - it is simply a waste of everyone's time. Don't waste any more energy on him.

Why bother, when there are so many more positive things going on with Dr. Paul? He's really starting to break into the mainstream in publications that *really* matter - the New York Times, the LA Times, the Economist, etc. The Scam.com isn't of that caliber.

time to get on Kramer

Dr. Paul should get on the screamer's show and set the record straight for the financial community on exactly what he believes in regards money, the fed and fiscal policy. While we all have a fairly clear idea, they seem not to and it was do him a great service to clear the air.

rant.st views on finance, politics and science

gedankenexperiment.dk views on finance, politics and science

Because Kramer really is --

Because Kramer really is -- as you call him -- "the screamer," I'm not at all sure the forum would be correct to best show Dr. Paul's views. It was great seeing the crowd cheer when he told what I thought would be the uncomfortable truth about money and inflation. A Kramer show would have to be really good to beat part 7 of the YouTube video of the Spartanburg rally.


"A 100% reserve gold standard has never, in fact, existed in the United States."

EXACTLY RIGHT (I need to meet you in person & buy you a good beer for saying that!!). It is important for people to remember that governments, especially big ones but even small ones like America used to have when we had a SOMEWHAT-honest for a while "gold standard," are NOT properly suited to the honest issuance of money.

Why? They get pulled in too-many directions in what should be a very singleminded business. Because governments are suited to the application of force and settling disputes ONLY, and money issuance is a very dangerous business morally. It is therefore best suited to the already flourishing market in privately issued currency alternatives which have naturally sprung-up on the 'net. Big government right now is trying to get away with


wholesale jury manipulation in the e-gold attack, by attempting to take credit for e-gold's excellent work against criminals (which is a bit inconvenient for their bogus-ass case against the company). The good news is, the news media outside the somewhat obscure Informationweek blog above might be about to take notice of the scandal. If so, i'll keep y'all informed, but the thing to remember is that government is NOT "good at money." The analogy to draw is the USPS and FedEx/UPS. If you're old like me, was your stuff-sending experience better or worse before the postal monopoly had that competition? Think about it, and the same will be true for dollars as the rest of the planet (esp. China) slowly begins to understand the Federal Reserve's unsustainable scam.

It's just vitally important that Dr. Paul keep talking SIMPLY as he has about this issue, because people are finally getting it, which is amazing me. Oh, and I'm not a financial professional so you should take this non-advice with a shaker of salt, but....Go buy silver US coins (the post WW1 "Peace Dollar" is especially beautiful and appropriate!) & "junk" bullion from a reputable dealer like Liberty Coin Service in Frandor Michigan (I like them but I am not connected with them, and again I *am* connected with e-gold, and for the fullest of full disclosure, I love Bernard Von Nothaus like a brother and I think he's absolutely hilarious & his Liberties are beautiful!).

thanks for the intro into

thanks for the intro into e-gold. I've been looking at investing into gold, and that is a much more liquid way of holding gold. Although I would prefer the company wasn't based in the US for obvious reasons. The liberty dollar is interesting, but I don't want to pay such a premium for the coin vs the price of gold.

I've been watching the money masters video, i'm about 1/3 the way through (slow internet) and so far they seem to be making a case obviously against the fed, but FOR fiat money, just not private bank control of the money. I will watch more and see where it leads, but so far it hasn't been advocating the gold standard. I know the push for commodity backed money is to pin the value to something real and keep the government honest, but I'm seeing the fed as the real evil here that needs to be destroyed.

Maybe instead of advocating for commodity backed money (returning to the gold standard as its reported) the real push should be disolving the fed and taking back the power to print money. What the money is backed with is secondary to that point. That way we could bring to light the problems with the fed instead of discussing whether or not the gold standard is a good idea...

Ideally, government should

Ideally, government should only have a role as a neutral (for a change...) referee in disputes, and money should be issued privately. Then various issuers can compete in a money marketplace and the preferences of everyone can sort it out. The government can not be trusted to issue money because the temptation to do what they've done right now is simply too great.

As it turns out, despite my personal preference for silver & gold backed "real" currencies, the simple fact online is that various completely-unbacked (in a traditional sense) currencies are now incredibly popular. Sony's "Everquest" game, for example, has a huge internal economy, and for years Sony tried very hard to keep it separate from the outside economy, since virtual items within the game are in high demand among those who play. They finally gave-up and now people just sell virtual items. A totally-unbacked Chinese cellphone-related currency also became very popular because it was very easy to use.

The control freak lobby is trying to totally-control all money and all transactions. The Bible warns us what'll happens when they get away with it, and that's part of why this fight is very important -- we're fighting against pure evil.