Presidential Contender Ron Paul Speaks Out for a Return to the Gold Standard

Republican presidential contender Ron Paul has always been a very vocal person when it comes to expressing his beliefs. He has a reputation for addressing issues directly, whether his views are popular or otherwise and often goes against the majority of public opinion. One issue where Paul is speaking against the grain once again is concerning the removal of the current fiat currency system and a return to the gold standard. As it is one of the chief elements of his presidential campaign, it has attracted a seemingly endless series of criticisms.

Paul argues that fiat currency has been proven, historically, to collapse every time it is utilized as an economic system. Therefore, it is only a matter of time before the U.S. dollar becomes worthless, which would necessitate a return to the standard regardless. He desires an end to the Federal Reserve and the resultant propping-up of failing companies, as was seen to happen during the recent government bailout.

He goes on further to explain the advantages of moving away from fiat currency. Under a hard-currency standard, governments will no longer be able to manipulate the value of money by simply printing more or using other methods. This would mean that money is not endlessly available for the government to use as they see fit and will lead to a reduction in spending. In addition, precious metals remain more stable in value across international boundaries and throughout time.

Historically, the standard was removed during the Great Depression due to it having a worsening affect on economic recovery. Statistics, however, show that during periods where the standard was used over fiat currency, there has been consistently higher economic growth.

Critics argue that requiring banks to back currency with gold will cause economic havoc. They state that interest rates will fluctuate too much based on the availability of the precious metal and that the finite amount of it will limit the growth of economies, particularly in industrializing nations where a supply is not already established. Though Ron Paul may have his fair share of supporters in switching back to a standard, the expert confidence in his plan is very limited.

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