[Razor]

Originally Posted by steel71

Please don't take this as disrespectful but your understanding of the gold standard is unfortunately lacking in Constitutional and monetary history. According to our Constitution, only gold and silver should be used as legal tender. That doesn’t mean we have to use metal for exchange, but the certificates/ notes/ paper money has to be backed by gold and silver, not fiat creations backed by nothing. We did have a “gold” standard until 1971, since then it’s been fiat currency.

I don't take your post as disrespectful at all, but rather as remarkably (and incorrectly) presumptive. You may be surprised to learn that I actually do understand the difference between specie and fiat monetary systems, and that I did not take Mr. Paul to be advocating a specie-based currency rather than a gold-backed exchange system.

For all intents and purposes, the international gold standard system ended shortly after WWI when Britain's war debt forced the government to liquidate a large percentage of its gold assets, prompting other international powers (France, Russia) to end their paper-for-gold exchange policies in order to prevent a run on their respective national gold supplies. It ended in the US in 1933 when FDR outlawed the private ownership of gold and unilaterally raised the price of an ounce of gold from $20 to $35, where it remained until 1971 when Nixon ended the portion of the Bretton Woods/IMF agreement that allowed holders of US dollars to redeem them for gold.

Take a wild guess when our federal debt started to skyrocket?

I suppose the answer depends on how you interpret 'skyrocket'. According to my International Business text from last term, from 1958 to 1971, the US trade deficit increased by $56 billion, its gold reserve shrank from $24 billion to $12 billion, and its liabilities to foreign central banks rose from $13 to $62 billion. By 1971--the year you set as the beginning of our skyrocketing national debt--the US only held 22 cents of actual gold per US dollar. I'm no economist, but it appears to me that the US faced significant balance of payments deficits decades prior to 1971.

Ron Paul has written extensively over the last 25 years about economic and monetary policy. No other politician can match his knowledge and intelligence of the subject. He schools Alan Greenspan and Ben Bernanke, and makes them out to be a bunch bumbling idiots squirming in their seats.

You don't earn points on this board through extravagant use of hyperbole, in case you weren't aware.

While the simplicity of the gold standard theory may seem appealing on its surface, its many flaws (e.g., a government's inability to adjust its money supply, the system's reliance on the rate of mining to determine the price of gold, its deflationary bias, and its very low actual supply vs. global economy ratio) outweigh its single advantage over free-float currencies. Then again, that's based on my opinion, which lacks a basis in monetary history, right?