Saturday afternoon Ron Paul addressed a crowd of about 500 people in front of the Fed building in downtown Houston. They had come together for one of many End the Fed demonstrations throughout the country.
Here’s a partial transcript of Ron Paul’s speech (slightly edited for clarity):
“It is a great event, and I understand that there are a lot of events like this throughout the country. And this should be very significant. We won’t be on the evening tonight, I’m quite sure of that around the country. But we are on the evening news every single night, every single day, and we’re on the minds of the people every single day because there is a crisis in this country that is as bad as, if not worse than the crisis of the Depression of the 30s. That’s on endlessly [on TV], and we know who caused it. It was the Federal Reserve that gave us all this trouble.
Concern and interest about monetary policy comes and goes. When things are in the boom phase of a cycle, everybody loves it, and they ignore it and they don’t care because they’re getting a free ride. We’ve had an especially good free ride for decades now, because we’ve had a system that was devised where the dollar could act as if it were gold. This occurred since 1971 and it was absolutely beneficial to us because we were printing the world gold, in essence.
The rest of the world was willing to take our dollars. We knew they were building this huge financial bubble, and we knew it would come to an end, so now, the economic crisis is the top agenda in the whole country. Our job is to make sure the people come to the full realization and understanding of the relationship of who controls the money and why we have the economic crisis. That is what the job is of campaigns and organizations and rallies like this, so I complement you for coming and joining in and understanding this issue.
When the Bretton Woods agreement broke down on August 15th, 1971, it brought about loud cheers in the marketplace. Stock markets soared, Nixon closed the gold window, put on wage and price controls and he raised taxes.
The business community loved it, until a few days later they realized it was a disaster. The 1970s turned out to be terrible… inflation and recession. But it brought about a new economic system. And since that time we’ve been able to spend beyond our means, live beyond our means, print money beyond our means, and all live much better than we really had earned.
On the surface we had an appearance of great wealth. But it was doomed to fail, and that is what the announcement has been in this past year: the failure of the dollar reserve standard that was set up in August of 1971. It has ended.
The only question that is to be answered right now is, what is it going to be replaced with? And believe me, they’re working very hard to devise a new system, and they’re talking about an international fiat currency paper system with the loss of U.S. sovereignty in total. Our goal has to be not only to restore the integrity of our money and our dollar and our Constitution; we have to stop this move towards one world government and a one world currency!
Periodically, the money issue soars to the forefront. It’s there right now today, but there’s a lot of work and lot of danger because if we don’t win, we lose our liberties and we further lose our Constitution. At the time of the Constitutional Convention this was one of the key issues. It was a monetary issue. They had gone through runaway inflation with the Continental Dollar, so that is why the Founders knew and understood that they had to put prohibitions in the Constitution.
They said, no admitting of bills of credit, no paper money, only gold and silver is legal tender, and no authority for a central bank. And of course the hard money people won that argument. The Constitution was written in such a way that we knew that gold and silver were to be legal tender and that there would be no central bank.
But immediately after that the Federalists changed it all, established a National Bank. The big argument between the Jeffersonians and Hamiltonians started right of the bat because throughout all history there has always been a fight over who can control the money. So what we’re facing today is not brand new.
It is the power of government that wants to control the money [so] it can control the people. The freer the country, the more likely it is that you will have a sound currency with no national control of the currency whatsoever.
But, that didn’t last long. Of course we do know that when Jefferson had the chance to deal with the first National Bank, what did Jefferson do? He got rid of the National Bank… only for the Second National Bank to be established. Then along came another hard money man who said he didn’t like the bankers and he didn’t like government power designed and worked around the monetary issue.
So who came along to get rid of the Second National Bank? That was Andrew Jackson, and he got rid of it. But lo and behold, in 1913 the American people were complacent and the Congress was complicit in it went along and said, we have to have a National Bank once again, so the Federal Reserve System was set up. And so we’ve been struggling. We’ve been struggling since 1913. The dollar was linked to gold up until 1971. But the erosion continued, and now we’re seeing the erosion of our prosperity.
What we are now seeing, which is to our benefit, is the writing on the wall, and the end of this system that we have today. They cannot patch it up, they can’t up it back together again. They know it and we know it. The only argument is what is it going to be replaced with?
The other day Bernanke was before the Banking Committee, and I asked him explicitly, because he had just been in Europe, whether he had talked to the other central bankers. Had they any plan whatsoever for an international reserve currency? He said no. But you know, he’s on the side of the law, not the side of the Constitution, and the law is written that he has no obligation to tell us anything of what he does. Monetary policy, any kind of conversations with other central bankers, the law explicitly says that he does not have to reveal anything that he does.
So I pressed him a little bit further and said, does the subject gold ever come up? And he said no, and then he quickly corrected himself, because he really wanted to destroy the concept that might someday move in the direction of having a commodity standard. So he quickly said, oh yeah, it comes up when we talk about selling gold.
But what he’s saying there is very, very important. He he admitted that the central banks do get together, they do talk, and they do dump gold for a very precise reason. They do that to pretend that the dollar is still more valuable than it really is. In the 1960s up until ‘71 Nixon and the Republicans and Democrats alike, because the law said the dollar, after Bretton Woods was established in 1944, the dollar was as good as gold at 35 dollars an ounce.
So foreigners started coming in. They knew we had printed all this money, and they started sending the dollars back. And we had given away [a large quantity of] gold at 35 dollars an ounce. We were running out of gold because we had abused the system, and that’s why that had to come to and end.
But in a way they were giving away this gold at this artificially low price to try to prove the dollar was really strong. Well that broke down, and the dollar was devaluated, and we’ve had all the inflation that came.
But they’ve done this now in the last 10 or 15 years I’m convinced, because they do admit it. Central Banks in the West especially have been dumping gold to artificially lower the price of gold, in order to artificially pretend the dollar is of great value.
And they’re still doing it, but they’re running out of time and they’re running out of gold. The gold is getting into the hands of the economic powers who are stronger, and those are the ones who have been working hard, saving money, loaning the money back to us, and are ready to buy up America if we continue to do this.
The Asian banks are buying the gold the Europeans and the Americans and others are dumping gold, so the other nations, including Muslim nations, even before the Banking Committee I did point out to Bernanke that the Iranians had just bought 75 billion dollars worth of gold and put it in reserves.
So, it is a contest, there is no doubt, it is a contest between [fiat] money and hard money, and that is such an important issue. To me the money issue has been key.”
November 23, 2008