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GOP Considers Return to Gold Standard, Audit the Fed
New American ^ | 8/26/2012 | Alex Newman

Posted on 08/27/2012 4:18:31 AM PDT by IbJensen

The Republican Party looks set to adopt platform planks at the upcoming GOP national convention in Tampa to support an audit of the Federal Reserve and to call for a commission to study a return to the gold standard, according to news reports. Analysts had a range of reactions to the news, varying from excitement to disdain and disbelief.

Despite media claims that Republicans were seeking an end to centrally managed fiat currency and a return to gold-backed money, drafts of the platform revealed far less ambition. According to sources within the GOP cited in reports, the party is simply considering an inquiry into the possibility of re-establishing the tie between the U.S. dollar and the precious metal. What remained of the link was completely severed by President Richard Nixon in 1971.

After being signed into law by President Jimmy Carter, a previous gold committee examined the issue in the 1980s during the Ronald Reagan administration. Despite a vocal minority including Rep. Ron Paul (R-Texas) that dissented, the final recommendations advised against a return to gold-backed money to control wild inflation.

However, following decades of disastrous and unrestrained monetary gimmicks by the central bank, Republicans apparently want to re-examine the issue — or at least pretend to be concerned about sound money. And news reports indicated that the platform was all but guaranteed to include the new language.

"Now, three decades later, as we face the task of cleaning up the wreckage of the current administration's policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar," the draft platform says, according to a Republican National Committee official cited by Reuters. Final decisions on the exact contents of the GOP platform will be made next week.

Analysts said the language might be a nod to the decades-long efforts by Rep. Paul to restore honest money. The liberty-minded Congressman’s tireless quest was most recently highlighted during his term as chairman of the House Subcommittee on Monetary Policy, where he held multiple hearings on reining in the Fed, legalizing competition in currency, and more.

In recent years, Paul’s ideas have become increasingly popular and mainstream — at least among the general public, with more than 80 percent of Americans supporting an audit of the Fed. But true advocates of an honest monetary system were not entirely convinced about the GOP’s sincerity.

“In one sense, this is a tribute to Ron, and his endless efforts to educate us all about sound money, in the Austrian tradition,” explained Lew Rockwell, head of the liberty-minded Ludwing von Mises Institute and a former chief of staff to Rep. Paul. “He has been so successful with the people that the GOP sees a chance for another profitable lie.”

Rockwell was unimpressed by the overture, however. “In fact, of course, this plank is a bit of rancid cheese on the trigger to the rat trap that is the GOP,” he continued. “Still, if there is another gold commission, intended like the last one to promote fiat money and the Fed, may Ron [Paul] and Lew Lehrman get to write the minority report again. Their last volume is an enduring masterpiece.”

In an interview on CNBC, Rep. Paul himself did acknowledge that the GOP proposals may have been partly an effort to appease him and his legions of enthusiastic supporters, many of whom have so far refused to back presumed presidential nominee Mitt Romney. However, it is more than that, Paul added. “It’s a reflection of the effort we’ve had educating people about the return to gold,” he explained.

Reconsidering America’s increasingly flawed monetary system is also a good idea, according to Paul, who went to Congress after Nixon severed the dollar’s final, tenuous link to the precious metal. “We could avoid some of the horrendous swings in the marketplace with bubbles building and bursting and transfer of wealth from the middle class to the wealth,” he said.

Real solutions must be found soon, and the status quo will not suffice. “We’re deeply in debt and all that is being offered out of Washington is spend more money, borrow more money and print more money,” Paul concluded. “You can’t get out of a debt problem by creating more debt and printing more money.”

The other proposal being considered for the upcoming GOP platform is support for Rep. Paul’s “Audit the Fed” crusade. In the wake of the recent economic crisis, which saw the central bank secretly print trillions of dollars to shower on foreign and domestic financial institutions and governments, the bill was approved overwhelmingly by the House of Representatives yet again in July. It is currently being held up in the Senate by Sen. Harry Reid (D-Nevada).

Virginia Gov. Bob McDonnell, the chair of the platform committee, confirmed to reporters that the audit proposal had indeed been included. "It calls for an audit of the Federal Reserve on an annual basis, but it is very specific that it has to be done in a way with appropriate flexibility that it does not impair the independence of the Federal Reserve,” he explained. "Many of us believe that more sunshine more accountability of the federal government, and state government for that matter, is a good idea."

Lawmakers involved in drafting the GOP platform, however, downplayed Paul’s influence on the consideration of the proposals. "These were adopted because they are things that Republicans agree on," said Rep. Marsha Blackburn (R-Tenn.), who serves as the co-chair of the GOP platform committee. "The House recently passed a bill on this, and this is something that we think needs to be done."

According to the Financial Times, which first broke the news about the gold standard plank, the Republican platform in 1980 mentioned the “restoration of a dependable monetary standard." In 1984, the GOP expanded on the idea, adding that “the gold standard may be a useful mechanism.” More recently, however, the GOP platforms have failed to address the issue at all.

But following trillions in so-called “bankster bailouts,” wild money printing, and continued efforts to maintain a shroud of secrecy over the central bank and its operations, activists are speaking out. “There is a growing recognition within the Republican Party and in America more generally that we’re not going to be able to print our way to prosperity,” American Principles Project Chairman Sean Fieler, whose organization advocates a return to a gold standard, was quoted as saying.

FreedomWorks Vice President Russ Walker, who is also serving as a GOP delegate from Oregon, expressed support for taking up the issue as well. “We like the idea of looking at monetary policy and looking at what we call sound money,” he was quoted as saying by Bloomberg. Countless Tea Party activists have backed the plan, too.

A few opponents expressed concerns that returning to sound money could somehow contribute to depressions — adding weight to the arguments advanced by many sound-money advocates that the government should allow people to trade using whatever medium of exchange they prefer. Some opponents even falsely blamed the Great Depression on the gold standard despite the fact that even current Fed boss Ben Bernanke has acknowledged it was caused by the central bank and its policies.

Other critics of the monetary commission proposal worried that a return to the gold standard would remove the Fed’s ability to manipulate the economy, stripping some of its central-planning powers. Under gold, for example, the Fed would lose its monopoly control over the currency supply and its powers to bail out mega-banks at the public’s expense simply by creating new fiat dollars.

Hard money would also restrain government spending because the privately owned Fed would no longer be able to conjure unlimited amounts of currency into existence to fund perpetual runaway government deficits. The dollar, of course, has lost more than 95 percent of its value since the Fed was created in 1913.

Those are just some of the reasons the U.S. government should completely re-think monetary policy, advocates of sound money say. And the sentiment is catching on across America, with Utah recently legalizing gold and silver for use as legal tender. Numerous other states are considering similar measures as trust in the fiat dollar continues to plummet.

The GOP platform, of course, is non-binding. Virtually no analyst expects a Romney administration to seriously address the monetary problems that have plagued the U.S. economy for almost a century under the Federal Reserve System. However, the fact that the issues are even being discussed is a giant step forward, according to supporters.


TOPICS: Business/Economy; Constitution/Conservatism; Government; News/Current Events
KEYWORDS: 2012rncconvention; 2012rncplatform; fed; gogop; goldstandard; mcdonnell; newamerican; ronpaul
Slashing ALL tax rates, including lowering the corporate rate to less than any nation and then, after the audit, eliminating the FED would create an unbeatable America!
1 posted on 08/27/2012 4:18:41 AM PDT by IbJensen
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To: IbJensen

Are we to believe the U.S. Gov’t possesses enough gold to cover all the U.S. currency out there?


2 posted on 08/27/2012 4:25:54 AM PDT by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: F15Eagle

Many would be shocked to find Ft. Knox empty.


3 posted on 08/27/2012 4:31:25 AM PDT by IbJensen (Since light travels faster than sound, some people appear bright until you hear them speak.)
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To: IbJensen

Assign Ron Paul to the job


4 posted on 08/27/2012 4:35:18 AM PDT by ronnie raygun (bb)
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To: ronnie raygun

Second!


5 posted on 08/27/2012 4:40:00 AM PDT by IbJensen (Since light travels faster than sound, some people appear bright until you hear them speak.)
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To: F15Eagle

Does your question presume a price of +/-$1600/oz? At $16,000/oz. the answer is yes, there is enough gold to cover all US currency and it more accurately reflects the actual value if a US dollar.


6 posted on 08/27/2012 4:54:52 AM PDT by muir_redwoods (Legalize Freedom!!)
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To: IbJensen

I would not be surprised to discover that to be true and that it has been gone for a long time.


7 posted on 08/27/2012 4:55:18 AM PDT by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: muir_redwoods

“At $16,000/oz. the answer is yes”

Is that a typo or are you predicting an inflation 10 times or so the current amount? i.e., a devaluation of the dollar to 10% of what it is today.


8 posted on 08/27/2012 4:57:48 AM PDT by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: IbJensen

Although Ron Paul was the only proponent named, there are others. Steve Forbes writes frequently about the need to return to a gold standard. bert also favors the move.

The gold (silver) standard is normality. The current condition is anomaly


9 posted on 08/27/2012 5:06:54 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Present failure and impending death yield irrational action))
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To: F15Eagle

The point is not to cover all currency with an equal amount of gold (as in the old gold and silver certificates where the bearer could demand gold), the point is to link the American currency to a precious metal whose value is fixed by the amount of it in the world.

The real value of gold over time has not changed.


10 posted on 08/27/2012 5:15:34 AM PDT by cotton1706
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To: cotton1706

Well if the gov’t only holds even an optimistic 40% of the money they’ve put into circulation then the money is only truly worth 40% of face value. I didn’t think they would actually issue certificates, even if there was enough.

When push-comes-to-shove, and that won’t be long, they will be printing money. Just like crazy Greenspan said.

His solution?

The USA will never *not* be able to pay its bills because it can print money as it needs to.

No wonder he’s married to Andrea Mitchell.

And that will deflate the dollar just as I asked above.

Gold might be $16,000 an ounce then.

And a loaf of bread will be $20-$30.

And gas would be $40/gal in some states.

(at a dollar worth 10% of today’s value).

How long it would take to get there I don’t know. Just that their back is against the wall.

And they haven’t passed a budget in how long?

(I was hearing it’s been some time - is that accurate?)


11 posted on 08/27/2012 5:32:31 AM PDT by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: F15Eagle

Of course it does. At 20000 per oz.......


12 posted on 08/27/2012 5:44:27 AM PDT by Kozak (The means of defence against foreign danger, have been always the instruments of tyranny at home JM)
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To: F15Eagle

That’s not a typo. Having printed fiat currency for years with nothing but political pressure to guide them, the fed has inflated the dollar absurdly. Do I know that it’s a factor of ten? No. Is it larger than a factor of five? Almost assuredly. That’s the attraction of tying the dollar to metal, it restrains the fed. There is always enough gold or silver to back the dollar but it does tie the dollar to it’s real value.


13 posted on 08/27/2012 5:44:43 AM PDT by muir_redwoods (Legalize Freedom!!)
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To: F15Eagle

That’s In the range for a price of gold that would allow every dollar out there to be backed by gold owned by the US.


14 posted on 08/27/2012 5:47:28 AM PDT by Kozak (The means of defence against foreign danger, have been always the instruments of tyranny at home JM)
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To: muir_redwoods

I don’t disagree.

I’m expecting Zimbabwe-style inflation if ObaMugabe gets back in. Either way, there’s a storm coming; a big one.


15 posted on 08/27/2012 5:47:44 AM PDT by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: Kozak

You very well could be right.


16 posted on 08/27/2012 5:48:52 AM PDT by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: muir_redwoods

We think we are so sophisticated in this country, especially our “elites”. Supply & Demand, however, works as assuredly for us as it does for any other nation.

When we first went to Uganda in 1980, the exchange rate was 7.5 Uganda Shillings to the US Dollar. At one point, the Official exchange rate was 5,000 Shillings to the Dollar. The “street rate” was 25,000 to the dollar. However, a policeman or school teacher was still earning 6,000 shillings/month.

I had to exchange some dollars to buy a team of oxen & a plow. After leaving the bank with a briefcase packed full of bank notes, I was paranoid carrying this huge stash of dough! 2 MILLION shillings! When I walked into the bank I had $400 in my wallet and now I’m a multimillionaire! (If I’d changed it “street rate” I would have had 10 MILLION!)

When I was a kid, a haircut cost $0.25, Gas was $0.25 to $0.29, with Gas War prices hitting $0.17. When I was in college, IIRC, a 289 Cobra was $4,995, an XK-E was $6,300 and a 911 was $6,995. When we were first married, a Ferrari 275GBT4 was about $14,500. (our new Datsun 510 was $2,254)

Inflation, brought on by fiat money and our politician’s practice of buying our votes with our kid’s & grandkid’s money.

And we allow them to continue to do so. Payback is coming for all of us.


17 posted on 08/27/2012 6:21:54 AM PDT by BwanaNdege (Man has often lost his way, but modern man has lost his address - Gilbert K. Chesterton)
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To: IbJensen
Slashing ALL tax rates, including lowering the corporate rate to less than any nation and then, after the audit, eliminating the FED would create an unbeatable America!

Most wouldn't believe it, but going to the gold standard and eliminating the fed would be a great leap towards solving nearly ALL of our economic problems.

18 posted on 08/27/2012 6:28:36 AM PDT by AAABEST (Et lux in tenebris lucet: et tenebrae eam non comprehenderunt)
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To: IbJensen

We have Gov’t that has cut taxes, cutting taxes is not hard. The hard thing for Gov’t is to cut spending and Gov’t. Cut Gov’t and spending, then get around to cutting taxes. As of now, Romney nor Ryan make that the centerpiece of anything.


19 posted on 08/27/2012 6:30:58 AM PDT by Theoria (Rush Limbaugh: Ron Paul sounds like an Islamic terrorist)
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To: Theoria
I've noticed that a week or so ago Romney was talking about goobermint pulling out the stops on the development of oil, coal, gas and wind and solar. A few days ago he dropped the 'wind and solar' stupidity!
20 posted on 08/27/2012 7:06:26 AM PDT by IbJensen (Since light travels faster than sound, some people appear bright until you hear them speak.)
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To: AAABEST

...and slashing or ELIMINATING the tax on corporate profits.

Doing the above, plus eliminating most of the intrusive goverment watchdog and regulating departments would put the USA at the top of the world!


21 posted on 08/27/2012 7:08:26 AM PDT by IbJensen (Since light travels faster than sound, some people appear bright until you hear them speak.)
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To: F15Eagle; cotton1706

consider, if you will, the 1936 dollar.

Today its value is 5 cents.

In 1936 you could buy a 16 oz bottle of Pepsi Cola for 5 cents; today it costs over $1.00. (Just an example.)


22 posted on 08/27/2012 7:11:32 AM PDT by IbJensen (Since light travels faster than sound, some people appear bright until you hear them speak.)
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To: IbJensen

Placemark.


23 posted on 08/27/2012 9:30:01 PM PDT by little jeremiah (Courage is not simply one of the virtues, but the form of every virtue at the testing point. CSLewis)
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