Ron Paul - The Dangers of the Fed and the Importance of Sound Money

[Travlyr]

http://www.youtube.com/watch?v=LjOEU...ature=youtu.be

http://paul.house.gov/

Congressman Paul Subcommittee Hearing "The Federal Reserve System: Mend It or End It?" PART 1

http://www.youtube.com/watch?v=GXRaJRQVPSk

Congressman Paul Subcommittee Hearing "The Federal Reserve System: Mend It or End It?" PART 2

http://www.youtube.com/watch?v=eU3yg...feature=relmfu

[rpwi]

I have not watched the hearing...but did read Ron's summary here:

http://ronpaulnews.net/2012/05/fed-m...or-end-it.html

He focuses too much on competing currencies. Good thing...but tricky.. This means the treasury would have to accumulate gold and and other kinds of money from tax receipts...and then has to find a way to spend this.

A much better way to focus on the Fed would be to strip it of its assets, it's ability to accumulate assets and its ability to meddle in the banking sector. Truly, the most important focus should be to get it out of private banking...then maybe we can focus on alternative currencies.

[Travlyr]

The most important focus should be to get the government clear out of the money business altogether and let us have our peace & prosperity. Bankers should sink or swim on their own business plan just like all other business. Sound money tomorrow would be just fine with me.

[PierzStyx]

Good stuff!

[hazek]

I have not watched the hearing...but did read Ron's summary here:

http://ronpaulnews.net/2012/05/fed-m...or-end-it.html

He focuses too much on competing currencies. Good thing...but tricky.. This means the treasury would have to accumulate gold and and other kinds of money from tax receipts...and then has to find a way to spend this.

A much better way to focus on the Fed would be to strip it of its assets, it's ability to accumulate assets and its ability to meddle in the banking sector. Truly, the most important focus should be to get it out of private banking...then maybe we can focus on alternative currencies.

You miss the bigger picture. Competing currencies would singlehandedly destroy not just the FED but also the very notion of a need for a central bank which in the long term is invaluable.

[Bern]

Direct link to Paul's official gov page:

http://paul.house.gov/index.php?opti...talk&Itemid=69

rpwi - I think you missed the whole point. He's referring to HR 1098 (see link in my sig). It offers a free market constraint on the Federal Reserve that is simpler to implement and likely to be a whole lot more effective than any commission of beaurocrats or easily bendable "rules".

[rpwi]

Direct link to Paul's official gov page:

http://paul.house.gov/index.php?opti...talk&Itemid=69

rpwi - I think you missed the whole point. He's referring to HR 1098 (see link in my sig). It offers a free market constraint on the Federal Reserve that is simpler to implement and likely to be a whole lot more effective than any commission of beaurocrats or easily bendable "rules".

I've read HR 1098. It's important to understand why legal tender law is important as it is now. It does not prevent private commerce with alternative currencies...it just largely prevents you from paying taxes in anything but dollars. This seriously props up the dollar and keeps down the competition. If we have competing currencies...then what else do we accept for tax payments...and how do distribute non-dollar assets once accumulated by the treasury department? Basically, for Ron's bill to matter...the government (or individual states) would HAVE to start accepting non-dollar tax payments for there to be any difference (yeah...the tax changes are nice...but aren't the big factor).

If we accept tax payments from non-dollars...how do we narrow what we accept? Do we accept gold, silver, copper, but not say cattle? How do we determine how much silver = how much gold if you owe 10k in taxes to the government? Tricky issues... I would prefer to unhinge the Fed from the banking system first, then liquidate assets, then concentrate on competing currencies (good thing but complicated).

[Bern]

I've read HR 1098. It's important to understand why legal tender law is important as it is now. It does not prevent private commerce with alternative currencies...it just largely prevents you from paying taxes in anything but dollars.

*sigh*

http://www.ronpaulforums.com/showthr...=1#post4392531

This seriously props up the dollar and keeps down the competition. If we have competing currencies...then what else do we accept for tax payments...and how do distribute non-dollar assets once accumulated by the treasury department? Basically, for Ron's bill to matter...the government (or individual states) would HAVE to start accepting non-dollar tax payments for there to be any difference (yeah...the tax changes are nice...but aren't the big factor).

If we accept tax payments from non-dollars...how do we narrow what we accept? Do we accept gold, silver, copper, but not say cattle? How do we determine how much silver = how much gold if you owe 10k in taxes to the government? Tricky issues... I would prefer to unhinge the Fed from the banking system first, then liquidate assets, then concentrate on competing currencies (good thing but complicated).

It's actually very simple. Tax burden on non-FRN transactions can be calculated as the FRN value of the transaction at the time the transaction takes place. If Joe Blow gets paid two ounces of gold every month, the income for tax purposes would be the FRN denominated market rate for gold at the time of payment. Same for sales tax on retail etc.

However, that's not really where the power of HR 1098 comes into play. Gresham's Law will see to it that Gold and Silver don't actually circulate much. People will still use FRNs. They will use gold and silver for savings as a hedge against Federal Reserve malfeasance with the money supply. The more the Fed drives people to save with gold and silver, the more money is withdrawn from the banking system. It's a free market constraint.

[rpwi]

It's actually very simple. Tax burden on non-FRN transactions can be calculated as the FRN value of the transaction at the time the transaction takes place. If Joe Blow gets paid two ounces of gold every month, the income for tax purposes would be the FRN denominated market rate for gold at the time of payment. Same for sales tax on retail etc.

However, that's not really where the power of HR 1098 comes into play. Gresham's Law will see to it that Gold and Silver don't actually circulate much. People will still use FRNs. They will use gold and silver for savings as a hedge against Federal Reserve malfeasance with the money supply. The more the Fed drives people to save with gold and silver, the more money is withdrawn from the banking system. It's a free market constraint.

I guess I don't understand the direct tax benefits of HR 1098...

If I get paid 10k in dollars or 10k in gold...I currently would owe the government roughly the same in taxes, right?

You're saying with Ron's system, the value of taxes would be the same, except the amount could be payable in gold?

The only other direct tax benefit would be capital gains...but does HR 1098 then exempt currency speculation from capital gains? If I buy 10k dollars worth of Euros...then later sell them for 12k in dollars...do I have to pay 2k in capital gains?

[Bern]

Your tax burden would be the same regardless of the medium of exchange. The real benefit would be the ability to store wealth in a "competing currency" (gold/silver) with a level playing field (no capital gains or sales tax on converting savings from one currency to another). The constraint is then realized as the free market (American citizens) can choose to withdraw money from the FRN/credit dependent banking system if the Fed abuses the dollar.