Cryptocurrencies and Gold-Backed Currency Can Coexist in a Free Society, says Ron Paul

According to Ron Paul, who called for the legalization of the competition to the U.S. dollar, cryptocurrency can coexist alongside the fiat currencies. Ron is a former member of the U.S. Congress and a Distinguished Counselor to the Mises Institute.

According to Ron, the U.S. does not have a free market economy because there is a conglomerate of people that are both, in and out of the government with special interests that run the economy. And because of that, it is destined to crash.

He goes in detail in his post on the Mises Institute website where he promotes that idea that individual freedom and world peace is the way to have a stable, sustainable world economy.

 

Central Planners Continuously Make Mistakes

Paul argues that central planners manipulate the economy in a way that prevents the market forces from correcting the mistakes that they make. And that this manipulation is a deceptive policy which can only last for a limited amount of time.

Ultimately, the market will prove to be more powerful than the government. But the longer this economic manipulation lasts, the bigger the bubble burst will be.

The U.S. central planners want people to believe that the dollar is stronger than it actually is. The government publishes reports that claim that the inflation is low and that they should be working hard to increase it because somehow that will indicate that the economy is growing.

Paul points to the Consumer Price Index and the Gross Domestic Product as statistics that the government officials manipulate to show economic growth. But if you ask anyone who is paying the household bills, and they will prove to you that those reports are false.

During the Great Depression, the official policy was to control the dollar price of the gold and decide who gets to hold the gold. By doing that, the Federal Reserve was successfully able to achieve its goal of demonetizing precious metals.

But it didn’t take long for the market to override the artificial price of $35 per ounce of gold in the 70’s. And that the prices will continue to soar when the dollar is dethroned as the king of world’s currencies, Paul noted.

There is a false belief that the deficit does not matter. But this false belief is just setting the stage for an economic crash. And when that crash comes, the planners will realize that deficits not only do matter, they matter more than they think. And if a government denies the economic truth and common sense for a long period of time, it always ends badly.

 

How Is the Financial System Rigged?

According to Paul, the financial system is rigged by the prices of stocks and bonds artificially being kept high for the wealthy on the Wall Street. But to do that, the interest rates have to be kept below market rates which is a major factor that contributes to gross economic distortions and creating financial bubbles.

And if you keep that going for a long enough time, the bubbles are destined to burst at some point.

There is no one that will warn the citizens about impending trouble, even when it is imminent. And we saw that during the 2007-2008 crash. Paul says that the warnings never come because the central planners don’t know any better, even the chairman of the Federal Reserve. But even when trouble is imminent, they do not want to give out a warning and cause a nation-wide panic.

Paul also claims that the Plunge Protection Team (PPT), the president’s working group on financial markets, has been the team that’s been protecting the Wall Street money managers from stock and bond market corrections since 1987.

And because the interest rates are unusually low, they allow buybacks, mergers and direct involvement in buying bonds and stocks by the PPT. They use the funds that are provided by the Fed to manipulate the gold price.

Paul believes that the dollar has already begun to fall in value and that the race to find a replacement currency has already begun. And right now, the leading contenders are precious metals and cryptocurrencies.

He said that it is important that the central banks or the government have no part in coercing the people into making a certain choice.

The biggest challenge right now would be to offer a currency that can deliver enough confidence in a monetary unit that people can reliably use it to exchange it for something of value.

But Paul warns that none of it would be of any use if the government uses the blockchain technology to expand its power and uses it to support a value-added tax.

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