Dear sjkted,
I like many things Ron Paul promote, however I see problems in his monetary ideas and let me explain why.
Idea of backing the money by gold or anything else has to do with the idea of controlling amount of money that circulate in economy and thus keep the economy steady without too much inflation.
Its an idea that doesn’t work because inflation IS NOT caused by “too much money chasing too few goods” In fact the real world support just opposite. We have all the places full of “stuff” but no one to buy them.
Amount of money in our world has grown about 15-20% every year still there is not much inflation because of that.
What comes to popular quantity theory is incorrect also. It says that prices go up because it “absorb excess” money in economy in order to inflation keep steady and moderate.
Fault in this idea is that prizes can go high or down unlimited way without consideration of debt or money available.
Money based in gold is also FIAT money or money by law.
Any society need a medium of exchange in order to function.
Big question is who controls it ? Who creates it? Who owns it?
We could base our money in gold but problem is that its piled up in the hands of few. The quatity is issue and therefore gold as base have never worked
execpt promote the intrest of few.
Ron Paul speaks that “market should determinate” what currency we use.
Have you though what that means? What is a market ?
Does it mean example that you go to town market place where a man shouts “potatoes, potatoes”! costs only ten shoelaces!
And you say to him “Sir, I only have hairs in my head as currency today”!
“Sorry” says man……
Obviously he means something else than common people.
How about these guys who are charge now? Bankers, investors, big industry ? THE CAPITAL !
At least they are the ones that so far has been charge in “market”.
You really want that they continue in different disguise? Don’t think so.
So, real problem is WHO create money and controls its flow in economy ? How much money circulate in system ?
These are DUTIES of sovereign government not privet citizens, bankers,
investors, big industry...
Government can create its own money which eliminate the real problem THE DEBT MONEY that is real cause of inflation and ups and downs in economy.
I agree that we may need a crash in economy system in order to place it.
Reality of many “things” has been lost in humanity and our monetary and banking system is big one. I still hope that we could learn more easy way that school of hard knocks………..
Peace and love
kf
