On Tuesday, November 8th, Presidential candidate Ron Paul spoke on CNBC regarding the dollar, gold, and his overall forecast of the economy. In the course of the interview, Paul explicitly told the American people that if we stay on the course we are currently on, and do not change that status quo of economic destruction and debt cycles, then the purchasing power of the dollar could drop to infinity, and gold could reach heights opposite of the dollars decline.
Ron Paul in response to question from interviewer on how high gold could go:
“well, the question is how much lower is the dollar going to go in purchasing power? and i said to infinity unless we change our ways. because if you look at the gold/dollar in 1913 when the fed started, we've lost about 98% of its value. so if we continue to do what we're doing, it could go to infinity. it's the best measurement of the value of the currency. there's no advantage to anybody to have a weak currency. the gold tells us that we have a weakening dollar and a weakening currency, but the whole world does, so it's hard to sort out. so it's going to go up a lot more, which is virtually saying the dollar has a long way to go down on purchasing power. that's why the middle class gets wiped out and that is why the standard of living is going. down for the people, they already know it, and that's why there's people very unhappy in this country and they'd like to blame a few people. for all of the problems rather than looking at the philosophy of government, the monetary system, and the spending. because that's where you can find the answers to our problems.”
Ron Paul's assessment of the problem, that being the destruction of the dollar versus the consequential result of higher gold prices, is the correct observation of our current economic problems. Historically, hyperinflation of a currency, not the ownership of gold, has had the most destructive impacts on a nation's people. All one has to do is look at Weimar Germany in the 1920's, and the nation of Zimbabwe during the early part of this decade. Already in America, we are seeing what a devalued dollar can do to the economy and for prices such as food, energy, and other necessities, which are up more than 50% in just the past three years alone.
Gold is important as a wealth protection more than it is an investment. When the dollar devalues, and inflation is in the economy, gold moves up to supplement the falling currency. When the dollar strengthens, and purchasing power improves, gold falls accordingly and the dollar becomes more powerful.
The business world looks at assets and valuations, but seems to have little care for the dollar and its impacts on inflation, purchasing power, and what it represents for the American people. Presidential candidate Ron Paul is one of the most important spokesmen on sound money and a strong dollar, and once again he has used the platform of CNBC to express this need to the Ameircan people.
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