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Ron Paul on the transition to sound money

February 1, 2009
Western Standard
1/31/2009

One year ago, Ron Paul was little more than a running joke for the national media; the kooky old uncle of the Republican Party, shrieking about “fiat money” and perpetually prophesying economic collapse.

Today, he’s not so readily dismissed. As the governments of the world embark on massive new spending programs and additional money creation (what Keynesian macroeconomists call monetary and fiscal “stimulus”), many people are losing their trust in paper currencies. Though the US dollar has been strikingly resilient through the financial crisis and US Treasuries were among the best performing assets of 2008, there are strong signs that the era of the dollar as the reserve currency of the world are numbered: the treasury market is showing classic signs of a bubble, leaders and commentators around the world are heralding changes in the international monetary regime, and China won’t be able to pay for its $585 billion stimulus package while remaining a net purchaser of US government debt. In his speech at Davos on Wednesday, Russia’s Prime Minister Putin remarked:

The entire economic growth system, where one regional centre prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.

Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process of creating several strong reserve currencies in the future.

This following clip is amazing because of how different the world in which we live is from the one we lived in 12 months ago. Ron Paul appears on Fox Business and the host skips over any questions as to why a commodity-backed currency might be preferable to the existing system to ask detailed questions on how the US could transition to a sound monetary system:

The story continues …..

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