Comment: Paul outlines a few systems

(See in situ)

In reply to comment: Ok, but he does critique (see in situ)

Paul outlines a few systems

There's pure fiat currency, which is a cabal of guys who get to arbitrarily buy anything they deem an asset, even if the asset is known to be otherwise illiquid. The funds to buy with are created out of thin air, by a ledger entry. Under this system government spending is unlimited. In the United States at this time, a huge chunk of the spending is funding the use of military force in numerous places.

Paul seems to be right to mistrust pure fiat currency. It has created a debt that will never be paid back, or will have to be paid at some terrible cost, not necessarily in money, but in some other unfavorable consequence that is yet to be suffered.

Then there's the gold standard as defined in the constitution. Dr. Paul prefers this version of the gold standard over pure fiat currency. This option is specified clearly in the constitution: No State shall [...] emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts. Paul believes this system is preferable to pure fiat currency because the government has to directly tax the people, which the people resist. The government cannot run large deficits very long. There is less militarism, less intrusion into the market economy compared to fiat currency regimes. Paul believes that in general the constitution is good advise that is wise to follow.

The critique you point out is that fixing the price between gold and silver is bad policy.

Then there's the Brenton Woods system, which ended in 1971, causing him to begin his long journey to eventually influencing this very conversation we are having.

He actually favors the Brenton Woods system over the fiat currency system, but still has his critiques of it. After all, this is the system gave the Fed the global reserve currency status, which is what enabled the USD to become a pure fiat currency in the first place.

He believes that a system permitting each individual to decide what to use to settle transactions results in better prosperity.

His beliefs come directly from the Austrian school, and a number of others such as Peter Schiff, Tom Woods, Gary North, and Lew Rockwell express in different ways.