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Ron Paul's monetary policy

Ron Paul is generally a good guy but some aspects of his monetary policy are quite dangerous.

He talks about sound money and going back to a gold standard. Sound money is OK, but tying the value of the currency to gold is very definitely not OK.

Some of the biggest stockpiles of gold are in the possession of the international bankers, and they can manipulate the price of gold. Indeed, until very recently, the world price of gold was fixed twice daily at the London offices of N M Rothschild & Sons. Any country that is on the gold standard risks having its currency manipulated.

A better alternative would be to link the value of currency to a basket consisting of a very large number of commodities, goods and services. This had in fact been suggested by the Nobel prize winning economist Milton Friedman. The basket could conceivably contain commodities like oil, wheat, sugar and steel. Labour should also be an important component of this basket. One would need to judiciously choose what should go in the basket, and how much weight each item is to be given. Then the value of the currency should be fixed in terms of the basket.

Money will need to be pumped into the economy when the cost of the basket falls, and sucked out of the economy if the cost of the basket increases. The money supply could be adjusted so as to maintain zero inflation.

The advantage in such an approach is that it would be difficult for anybody to manipulate the supply of ALL the commodities in the basket. A single commodity, like gold, might be manipulated by those who have large reserves of it.

Comments

You're dead right; I knew there was a policy of Paul's that I didn't approve of, but I'd forgotten what it was.

Again, I urge people to watch The Money Masters for more information on why going back to the gold standard is a bad idea.

to kick the khazars out of the mint, and print our own money.

I still believe Paul is the best man for president hands down.

His monetary policy is no worse then the current policy. Money is backed only by oil and the "fascinations of the mind" today.

They print, they burn, they print, its no more then monopoly money .

"I may not agree with what you say, but I'll defend to the death your right to say it"...Voltaire

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"I may not agree with what you say, but I'll defend to the death your right to say it" Voltaire

"Hey you, Whitehouse. Ha ha,.. charade you are" Pigs/Animals/Pink Floyd

there may be some well meaning people who truly believe that it's the solution - but insofar as it is promoted with any urgency by powerful people, i.e., those with money, it is a trap - designed to take us out of the frying pan and into the fire.

I think your idea of using a basket of commodities is a good one - but, I'd like to hear you elaborate on how you would incorporate labor into this "basket."

In my estimation, labor is a key component in the equation as it is the only thing that anyone truly and absolutely "owns" - a man and his labor is inseparable without inducement. Thus, it requires no law to establish it (except one against slavery or forced labor). Every other "ownership" is a hybrid between metaphysics and law and is therefore vulnerable to monopoly.

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"Money" has no value - people do.

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"Money" has no value - people do.

How might labour be incorporated? I'll give a simplistic example:

You decide that your basket consists of say 100 grams of steel plus 15 minutes of work by someone with a high school diploma.

Then, you say that you want the value of this basket to equal some predetermined, fixed amount, say one dollar.

Now, you measure the present value of this basket. Getting the cost of 100gm of steel is easy. To evaluate the value of 15 minutes of work by someone with a high school diploma, you would have to conduct surveys - but economists are good at surveys and statistics.

Once you have got the present value of the basket, you would either pump money into the economy or suck money out of the economy, until the value of the basket reaches the target value, which is one dollar.

In real life the basket would contain many more things, and you would consider the labour of people with various levels of qualifications - store clerks, bus drivers, doctors etc.

I totally agree that labour is something very fundamental and should play a central role in monetary policy.

Critiques of my example are welcome.

is not just the facets of many systems, but the criminals who are in charge of them, and who continually corrupt them into the beasts of today.

Kicking the private bankers out of the mint would be a very good first step.

The Bank of America scum seem to have a sense of humor about their own greed! (funny ad)

http://www.capitaloneexterminator.ca/

Notice the number of banks with the name 'first'.

http://en.wikipedia.org/wiki/List_of_bank_mergers_in_United_States

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