 This is Mises weekends with your host Jeff Dice Ladies and gentlemen welcome once again to Mises weekends. I'm glad to welcome back my my old friend and former boss Congressman dr. Ron Paul Ron. How you doing doing well Jeff good to be with you? Well this week. We're talking about money I know money has always been an animating issue for you It's one of the reasons you first got involved in politics and and I would argue that second only to maybe war and peace It's the most important libertarian issue Did you ever imagine that you would have all those exchanges with Greenspan and Bernanke and that and that the Fed would become a populist issue? No, I never thought about that. I always thought that I would speak out in some campaign But never have to go to Washington, but it turned out differently then when I went I thought well The money issue is going to be a big issue and I want to speak out and set a record for what I think should be done So it it was always much bigger than I anticipated if I had made plans It probably wouldn't I worked out as well But we had a gold commission that came up But the one thing for sure is I never set my goal as to become the chairman of the banking and the financial services Committee so that I could play an important role. I looked at it quite differently I thought the money issue was B and it is a An issue dealing with peace because I see that the fight and the financial system is so important in financing You know the warfare state as well. So I was My goal was just to speak out emphasize the issue of monetary policy and it got a lot further along and to the point where we had those presidential campaigns and I was getting spontaneous support from audiences from Campuses that I thought were very very liberal and they were already thinking about the Fed But I give the Mises Institute and other groups like that the credit for introducing these ideas to a lot of young people and I was sort of on the receiving end of some of the work that Others have done. Well, you know, you've always talked about war finance If you you know if you recall go back to the early 2000s, you were taking a lot of heat Amongst conservatives for opposing this run up to the Iraq war. Now we look back on it before we got into Afghanistan and Iraq We had about six trillion dollars worth of debt now We have 18 trillion dollars in debt and if Bush had had to finance that war by raising everybody's taxes It would never have happened That's absolutely the case, but it wasn't not and wasn't anything new because most wars are fought on inflated money they Either dilute the gold in the old days or they clip the coins or they steal the gold But they always end up with inflation with war and that is the case but today it isn't printing of money is just Using a computer and we have license to steal because we issue the reserve currency of the world and Most of the country still accept our dollars Even though we're currently witnessing these last few days a pretty steady attack on the dollar Which I think is is going to continue and of course I get much worse But financing war through inflation is traditional and you're absolutely right if the people had to pay For the war as we went along this would it wouldn't happen That wars you don't get enough taxes and you don't get enough borrowing To to fight these wars and certainly in my lifetime the world war two I remember that very well about saving nickels and dimes and buying bonds and pretending that we were financing the war and yet They were printing most of the money for the war. So this is this has been around for a long time But money issues is a freedom issue because if you don't like the welfare state You have to understand about money if you don't like the warfare state You have to understand that about money. If you in if you care about in individual personal Liberty you would have to be his supporter of a commodity currency Of course history shows that gold has always been along with silver the most preferable type of money Well the shocking thing of course is that that's what the Constitution calls for to be used for debts by the states You know one of the ideas you always promoted as a member of Congress was this idea of competing currencies And you had some legislation to that effect which has been Forwarded now by some some various people in Congress since you left You know, I'm not sure people understand that the terrible tax treatment of any kind of track transaction gold and silver It's it's treated as though you sold a stock and you have capital gain or loss And in fact, it's treated worse than that because the IRS Treats gold as a collectible rather than an ordinary investment like a stock And so they actually charge a 28 percent capital gains tax rate instead of the ordinary 15 or 20 percent So your your effort was to get rid of this this taxability of these transactions and let people use gold and silver or other metals as money Yeah, if we wanted the Constitution to work and allow gold and silver to be money That shouldn't have that shouldn't be the case but but taxing money gold and silver is like saying well, okay I have a hundred thousand dollars CD. I'll put it in the bank and I keep it for a year and during that year I have to report to the IRS that the value of the dollar or whatever currency was in went up and they say well It's a worth a hundred and ten thousand dollars now not not for interest But just the value of the you know in real-time they would tax you on that anyway with it People would think that's crazy, but that's that's what they do and my effort was to get competing currencies Legalized competition legalized the Constitution Realizing that turning the switch off of a system that is rotten to the core You know, it's not all that easy. It's sort of like turning off government medicine and all of a sudden substituting it And they're finding out that's a problem too But turning off the Federal Reserve system and the dollar standard is in spite of the value long term You just can't walk up to the Federal Reserve and say well here are the keys We're locking it just get out of the way everything will take care of itself It does invite some problem So I thought the transition should be just legalizing choices legalizing competition And that's why I was always promoting laws that would repeal legal tender laws And that would allow people to Use other things But the issue of taxation is very important in some of the states now are speaking out and I love this Because they're it's sort of state sovereignty living up to the Constitution sort of nullifying federal law and Just recently I was in involved a little bit in the Changing of the taxation in Arizona and taking and getting rid of the capital gains tax But there shouldn't be ever a sales tax or a capital gains tax on money on coinage and the precious metals, but The the Big government people who can't stand this of course They don't want anything to interfere with this a whole idea that we our special friends at the Fed Will make sure there's enough money to cover the debt And that's continuous, you know because we run up these huge debts 18 approaching actually actually approaching 20 trillion dollars that If if we can't borrow the money And the people Just won't buy our debt. Then what do they do they they resort to the federal reserve buying the debt And where do they get the money out of the thin air? So this is this is the way the system works, but uh on on the money issue You need competition. I don't think that's going to work I don't think people are going to accept this idea and all of a sudden legalize competition as much as This thing is going to come down. It's amazing to me How many things in the ordinary media today are talking about the foolishness of central banking? They talk about central banking how bad it is. It's not just a few of us that Have studied austrian economics. There's a lot of people just out there in the financial community thinking How can you listen to these guys at the federal reserve and the central bank for all the harm they've They've they've caused and uh, you know green span is no hero. They say well, he was started all the problem He kept interest rates too low too long. And so what happened when he left they made him even lower They took him to zero and the real interest rates taking them below zero and they wonder why things are confusing Well, the the legislation you mentioned in arizona It's basically the state of arizona saying we're not going to apply capital gains Taxes at the state level to transactions with with gold or silver Were you pleased that they that the sponsor of that bill invited you to come out and that now the governor signed it And I wonder if you think the power if these kind of small measures at the state level make the powers that be nervous Well, hopefully hopefully we do but I know uh, I see things, you know from the educational viewpoint believing that Not being naive and going to washington thinking. Oh, you know, I believe in gold standard And I'm going to be chairman of the bank committee and we're going to have a gold standard It wasn't that and but this all has Important so what we did in arizona and what the arizona instead is very significant because he he got some news We're talking about it right now and other states are doing it. There's another state Uh, I think it might be wyoming that wants me to come up and you know promote Promote the same thing because it does get their attention that uh, see that bill had been passed before but the governor never signed it So, uh It's just the pressure public pressure. So that's the way I think education works. It's a prevailing attitude that counts So I work on the assumption this system is going to collapse this monetary system won't work But what is the prevailing attitude of the people? they have to say well, maybe paper money is the problem and uh, although We all recognize I think that uh ideas have consequences And you only need about eight or 10 of the people promoting the right ideas to influence the rest But eventually you have to have uh, you know a consensus the people have to say, you know We endorse what they say and come around to saying well Yes, paper money is bad and we ought to listen to what the founders told us and the lessons they learned with the continental dollar So, uh, I think what the states are doing is not automatically in six months You know going to see the total revolution accomplished, but those are seeds that are being planted And it does two things the monetary issue as well as the power and the strength of the states And emphasizing this whole idea that when the uh, federal government oversteps the states have an obligation to step in and do something about it Well, I would also mention in terms of what states are doing Texas now has a bullion Depository which to me is just a sign that states are starting to recognize that there could be a problem with the dollar And that they might want to uh, to move towards a different kind of system of real money now We're we're about out of time Ron, but you know, you had some exchanges some back and forth over the years with ben Bernanke and alan greenspan And of course greenspan wrote that famous article golden economic freedom Which he signed for you and i've noticed since he's now out of office. He's been speaking more favorably About gold, you know, what do you think of of alan greenspan in in hindsight and you know him a little bit Yeah, and he's interesting I've had conversations with him about his relationship with murray rothbard because they were both randians at one time And he just usually would just chuckle a little bit But I uh, I recall very vividly when I had a uh, a short meeting with him and I knew about it So and it was a one-on-one and I took that original copy of rand's book and the objectivist Whose letter and I took it in and and I showed that to him. I said, do you remember this? He said, yeah, I sure do I remember that and uh, I And he says I said, would you sign this copy for me? And so he said sure he signed it and I said do you want do you want to put a disclaimer on it? He says no, I don't want to put any disclaimer on it He said I just read this the other night and I still agree with everything In there he was still, you know, uh, you know the chairman of the federal reserve But I think he still has those sympathies But I've tried to get him on the liberty report my little program But we haven't been able to do that because it'd be interesting if he would come clean And just have a frank discussion about uh, you know where he's been and what he's thinks of and he still has respect for the Gold standard, but um, I guess he's not likely to come on Well, I'll never forget one of his great attempts to placate the ron paul movement was when he told you that Under his chairmanship the fed tried to mimic a gold standard, which I thought was very interesting last question for you A long time ago and I would argue a better fit here. Did you know uh, paul volker much and did you ever have conversations with him? Yes, I liked him on a personal basis. I thought he was more intellectual and more upfront And I think it was the monetary Monetary act I think 1980 or something that came in which was a big deal It was enhancing the power of the fed and we had a public disagreement on You know giving the fed too much power to manipulate interest rate and buy foreign debt as collateral for our money And he kept saying well, you misunderstood that so he invited me to breakfast one day So we went over Lou Rockwell went with me and we remember this very well because it was just with volker and it must have been in 1979 when that occurred because We got there early and volker staffer was there his chief of staff was there and uh, we talked in gab just You know socially and then volker came in and volker, you know spotted us there But he came right over to where we were talking, but he didn't look at me Uh because he looked immediately to his staffer and said what's the price of gold this morning? That's when gold had gone from 35 up to 800 So he was thinking about gold But uh, and there's been some stories that he was not super excited about 1971 You know and and actually spoke out about it But but he he was not an Austrian economist for sure, but uh, it was he was a little more dignified matter of fact, uh, the the uh, mises institute had Function up in In washington one time and there was a member of the board there by the name of walley who was very very Dignified person he would come out and he was a good friend of hyax and I remember meeting the three and the two of them at one time And uh, I was very impressed about how they treated each other they treated other other people like You know an academician and they talked about it and and yet they were on different viewpoints And that was the time I had dinner with hyax. I was very it was very interesting. So, uh, the the um, The whole the whole thing there is that uh, there there is still a lot of interest and it's going to happen because uh This what we have today on the monetary system just can't continue. So, uh, yes, I've been exposed to a couple of them But uh, the answer to your question is yes, I did know vulgar and tend to like them Well as uh, jim grant says we've gone from a gold standard to a phd standard So with that ron, it's great to see you and thank you so much for your time ladies and gentlemen. Have a great weekend Subscribe to mises weekends via itunes you stitcher and soundcloud or listen on mises.org and youtube