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The Case for Gold: A Minority Report of the United States Gold Commission

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In 1982, Ron Paul served on the U.S. Gold Commission to evaluate the role of gold in the monetary system. In fact, the Commission was his idea. It was carrying forth a promise made in the Republican platform. Ron couldn't pick the members, so from the beginning, the deck was stacked. The majority was dominated by monetarists, who saw gold as too scarce and paper as just fine. Ron Paul's team was ready, however, with this marvelous minority report. Rarely has a dissent on a government commission done so much good! The result was The Case for Gold, and it was the greatest result of the commission. It covers the history of gold in the United States, explains that its breakdown was caused by governments, and explains the merit of having sound money: prices reflect market realities, government stays in check, and the people retain their freedom. The scholarship and rigor impressed even the critics of the minority. Ron and Lewis Lehrman worked with a team of economists that included Murray Rothbard, so it is hardly suprising that such a book would result. It still holds up as an excellent blueprint for moving beyond paper money and into the age of sound money. In particular, Ron favors complete monetary freedom to use any commodity as money, to make contracts in any money, and an end to the monopolization and printing power of the Federal Reserve. There is a strong piece of history in this book. Not since the 19th century has a political figure made such a sweeping and devastating case for radical monetary reform. This congressman ran circles around even the experts at the Fed. A dazzling performance indeed, and an inspiring and learned book.

227 pages

First published January 1, 1982

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About the author

Ron Paul

94 books534 followers
Republican United States Congressman from Lake Jackson, Texas, a physician, a bestselling author, and a former 2008 U.S. presidential candidate.
Originally from the Pittsburgh suburb of Green Tree, Pennsylvania, he studied at Duke University School of Medicine; after his 1961 graduation and a residency in obstetrics and gynecology, he became a U.S. Air Force flight surgeon, serving outside the Vietnam War zone. He later represented Texas districts in the U.S. House of Representatives (1976–1977, 1979–1985, and 1997–present). He entered the 1988 presidential election, running as the Libertarian nominee while remaining a registered Republican, and placed a distant third.

Paul has been described as conservative, Constitutionalist, and libertarian. He advocates a foreign policy of nonintervention, having voted against actions such as the Iraq War Resolution, but in favor of force against terrorists in Afghanistan. He favors withdrawal from the North Atlantic Treaty Organization and the United Nations, citing the dangers of foreign entanglements to national sovereignty. Having pledged never to raise taxes, he has long advocated ending the federal income tax, scaling back government spending, abolishing most federal agencies, and removing military bases and troops from foreign soil; he favors hard money and opposes the Federal Reserve. He also opposes the Patriot Act, the federal War on Drugs, No Child Left Behind, and gun control. Paul is strongly pro-life, and has introduced bills to negate Roe v. Wade, but affirms states' rights to regulate or ban abortion, rather than federal jurisdiction.

While Paul was a leading 2008 presidential candidate in some Republican straw polls, he saw substantially less support in landline opinion polls and in the actual primaries. Strong internet grassroots support was indicated by his popularity as a web search term, his lead in YouTube subscriptions, and, on December 16th 2007, the largest one-day fundraiser in U.S. political history, netting over $6 million in 24 hours through an independently organized effort. His book commenting on the presidential run, The Revolution: A Manifesto, became a bestseller immediately upon release and went on to be #1 on the New York Times nonfiction best sellers list.

Judge Andrew Napolitano calls him "the Thomas Jefferson of our day."

Ron Paul, the New York Post once wrote, is a politician who "cannot be bought by special interests."

"There are few people in public life who, through thick and thin, rain or shine, stick to their principles," added a congressional colleague. "Ron Paul is one of those few."

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Displaying 1 - 18 of 18 reviews
Profile Image for Peter Martuneac.
Author 8 books52 followers
September 10, 2019
An excellent report written by one of modern America's greatest statesmen. Paul lays out an intricate, detailed history of money in the US, backed by dozens of charts, graphs, and citations. While his most dire predictions of runaway hyperinflation did not come true, he correctly predicted the Great Recession of 2008 and the government's shameful response to it (providing hundreds of billions of dollars in bailouts to bad actors while average citizens lost everything).

The Case for Gold gives a strong argument in favor of returning to a gold standard, and I think all but the most devoted disciples of Keynes would find it hard to disagree after reading this book. Sadly, it's been almost 50 years since Nixon closed the gold window, and at this point it seems the only way we'll ever return to sound money is through an economic catastrophe that makes the Great Recession look like a day in the sun.
Profile Image for Paul.
Author 4 books129 followers
July 8, 2013
This thoughtful, well-researched examination of America's monetary predicament has only become more relevant in the 31 years since it was first published.

The book originally appeared in the Congressional Record as the minority report of the Gold Commission formed by the U.S. Congress at the prompting of Ronald Reagan shortly after he became president. The majority of the commission did not see a role for gold in the American monetary system, but Representative Ron Paul did. Along with coauthor Lewis Lehrman, his opinion, upon surveying the history of U.S. money and banking, was and is that the only path to the creation of a prosperous, just, and decent society in the United States would be to restore gold and silver to their original place as the foundation of the monetary system.

After all, this would appear to be the explicit intention of the framers of the U.S. Constitution, whose Article 1, Section 10 states that no state shall
make anything but gold and silver coin a tender in payment of debts

At the time the Constitution was drafted, everyone had had recent personal experience of the debasement and collapse of a paper currency--in that case, the Continental dollar. As a currency collapses through ever-greater printing of it by the monetary authority, inflation gives way to hyperinflation, with widespread panic, suffering, and injustice. If this provision for gold and silver coin had not been put in the Constitution, many of the states would not have signed off on it.

But the issue of how money is managed by a political authority is a complex one, with many players kicking the football. Most of this book, 125 pages, is taken up with the history of money and banking in the United States, and an interesting and little-known history it is. The authors show how the image of banks as bastions of sober, sound managers of money and risk is mostly contradicted by history (not to mention the more recent history of titanic bank bailouts). The history of banking has been largely a history of recklessness, bank runs, and busts, with depositors footing the bill.

The fundamental reason for this is the practice known as fractional-reserve banking: the ability of a bank to lend out more money than it has in its vaults. This is made possible by the substitution of metal currency by paper. Instead of carrying around gold and silver coins, the depositor could carry around more portable paper notes instead--notes that he could present to his bank to redeem for gold or silver whenever he wanted. Very convenient. And the bank, which makes its living by lending money, can now lend more of it than it actually possesses. It just needs to keep enough gold and silver on hand to satisfy those depositors who present their notes for coin. And as long as things are going well and everyone's calm, that is not very many. So the profits of a bank can accordingly be very large compared to its "reserve" of deposits.

The problems occur when things are not going well and everyone is not calm. As soon as people suspect that they might not be able to redeem their notes for gold, they rush to the bank to do so, and when a number of people do this at the same time, there is a bank run, and the bank often will collapse as a result. And because of the interrelationship of banks, lending to each other and honoring each other's notes, the collapse of one bank usually meant the collapse of more. In the process, depositors' savings would be wiped out.

The history of banking is largely a history of efforts to prevent these recurring disasters, while hanging on to the oh-so-profitable practice of fractional-reserve banking that is their cause. One of the main wheezes in this effort was the creation of a "central" bank: a government-backed or government-associated entity that would guarantee the banking system as a whole by providing emergency funding in the event of bank runs. The United States has experimented with a few of these, culminating in the Federal Reserve system, launched in 1913 and still operating today. But as the bank runs of the Great Depression showed, banking panics had not been altogether eliminated. As one of his first acts upon taking office as president in 1933, Franklin Roosevelt, trying to clean up the banking mess, made it a criminal offense for Americans to own gold, and ordered them all to surrender their private gold. He also devalued the dollar from 25.8 grains of gold to 15.25 grains.

Apart from domestic ructions in banking, another problem has been international flows of gold and silver. For in the course of trade American dollars have made their way abroad, and foreign countries holding these dollars, if they suspected that the dollar has been overproduced relative to the underlying supply of gold, have turned in the dollars in exchange for the gold. In the 1960s, with the massive printing of money to finance the Vietnam War and Lyndon Johnson's Great Society welfare programs, other countries were doing exactly this at an accelerating rate. For although Americans could no longer redeem their dollars for gold, foreign governments could, and did. The outflow was so great that in 1971 President Richard Nixon, alarmed at the hemorrhage, finally closed the "gold window", and suspended all redemption of dollars. The final link between the dollar and gold was severed, and the dollar has floated without backing of any kind ever since.

Paul and Lehrman ably narrate the twists and turns in this story. Then they turn to describing how the United States might be returned to a gold standard. It would require several legislative steps over a period of years, such as repealing the "legal tender" legislation that obliges Americans to accept paper dollars in payment of debts. The authors contend that such legislation is unconstitutional in the first place.

Why should we care? For one thing, the authors assert that much of the unpleasantness of contemporary economic life would be eliminated or greatly reduced, for booms, busts, and bubbles are all products of inflation--the practice of promiscuously printing ever more paper money. Beyond that, a proper gold standard forces discipline on governments, who can no longer spend beyond their means, and it also allows businesses and citizens to plan more rationally for longer periods, while also encouraging thrift: the saving of some of our earnings, so that the true wealth of society can grow.

I was surprised to discover that this book was a Congressional "report." For unlike most reports, it is passionate, well researched, well argued, and well written. The biggest obstacle to restoring a gold standard is probably that people regard the topic as dull and technical. We're not interested in monetary theory; we just like money and we want it to work. Unfortunately, this attitude has been a costly one, not just in vague social terms but in a reduced standard of living for each one of us, unless we happen to be members of those elites who actually profit from monetary inflation.

This book offers a pleasant and stimulating way to start healing that ignorance. And each of us would be well advised to set about this as soon as may be, for the fate of all paper currencies in history has been collapse and destruction. Ultimately it's not a question for experts, but a question for citizens. It's not an abstract issue, but a practical one, even an urgent one. The supply of dollars is exploding; the next currency is probably going to be gold. This book is a briefing for that new order.
Profile Image for Zinger.
242 reviews14 followers
April 20, 2010
U.S. Representative Ron Paul is a smart guy! In the area of sound money, he is someone you should listen to and learn from.

Rep. Paul explains why we should have complete monetary freedom that is not regulated by government, but by the the market (the some of all our individual choices). He is for the freedom of each of us to make contracts with any form of money we choose. Legal tender laws are nothing more than the government using compulsion to force us to use counterfeit money printed out of thin air by the thugs in the Federal Reserve.
37 reviews
September 9, 2011
Rather dry economic and currency material but then again I didn't expect it to be wildly exciting seeing as I don't have a currency or FX fetish. Perhaps the most intriguing part of the book for me was learning of our nation's past monetary issues including in the revolutionary period. The impact while significant on the states and the nation of the first failed central bank, and devalued state issued currency did cause me to think about the long term possibility of an ever decreasing value of the U.S. dollar in the global economy.
Profile Image for William.
82 reviews4 followers
March 5, 2020
Ooph. Tough read. Not for the faint of heart. Great report, however, and the historical account of money and banking from America's inception is thorough. The book was written in 1982, so one will need to find more up-to-date history of banking and money elsewhere.
Profile Image for Luka.
54 reviews3 followers
January 29, 2019
Very nice book, my only dislike is that the history part was a bit confusing at times, I think that "End the Fed" was more readable
79 reviews3 followers
May 10, 2021
Clear, informative, and relatively short. This would be an excellent book to give to someone who isn't versed in economics, money, or ideals of liberty. Ron Paul is an excellent communicator.
Profile Image for Clinton.
73 reviews20 followers
December 15, 2012
The Case for Gold completely obliterates the legitimacy and functionality of fractional reserve banking citing devastating historical evidence supplemented by the numerous boom and bust cycles induced by inflation while providing an overwhelming argument for the gold standard.
All forms of fractional reserve banking, whether the Federal Reserve, the Bank of the United States or the Post Civil War quasi-centralized banking system, are inherently inflationary systems that wouldn’t have occurred under free market banking. The government’s imposition of central banks is the sole reason for all recessions and depressions. Not only was private coinage in America successful by Christopher Bechtler from 1830 to 1849, but free market banking was successful in Scotland providing a stable banking system with no panics from 1714 to 1844 where there was no central bank, no legal tender laws, no banking regulations, no monetary policy and no restrictions into anyone forming a bank or issuing notes. The gold standard would re-establish economic stability, which would bring low interest rates, increased savings, full employment, real price stability and increased purchasing power along with instituting small government with low taxes and less regulations. The transition to gold would beneficially reform the real estate, agriculture, manufacturing, exporting and small business industries.
Overall, considered as part of the framework for the austro-libertarian philosophy, Ron Paul along with history proves that monetary freedom always thwarts failure whereas government intervention actuates failure. Gold is the true definition as to what was considered money because of its intrinsic value. Gold has a moral commitment to free choice and the symbol of honest trade. It is real money because free people chose it as their medium of exchange through the free market and not by government edict. Ron Paul’s message is powerful and impossible to refute. Anyone who believes in monetary freedom must read this book.The Case for Gold easily ranks among my top five favorite books.
Profile Image for Eric.
64 reviews
March 21, 2011
The content and format of this book reminded me a lot of G. Edward Griffen's book The Creature from Jekyll Island which I recently rated 5 stars for the truths it revealed and its perspective. Ron Paul's book was actually written 11 years earlier and contains a lot of similarities or should I say Griffin's book is similar to Ron Paul's.

No one is more of an authority on political and monetary freedom than Ron Paul. This book examines the US dollar's evolution from a precisely defined weight of precious metal (as authorized by the constitution) to a piece of paper issued by a central banking monopoly with no definition, intrinsic value or constitutional authority.

While I find it very hard to refute any of his arguments, I do wonder how he reconciles this philosophy with the unprecidented economic growth and prosperity (real or otherwise) of the Reagan, Bush 41 and Clinton years. Since this book was written in 1982ish, the answer isn't revealed here. I can only conclude that today (2011) he would argue that it was ephemeral mirage whose gloomy fate we were destined to experience as a matter of course.

In any case, as a champion of liberty and sovereignty of the individual, Ron Paul makes a crystal clear case here, that individual liberty and fiat money are incompatible.
Profile Image for John.
20 reviews9 followers
August 10, 2011
Amazing.

A bit of a difficult read but only at first. Some of the early history of the USAs banking system was a bit heady but it got much more interesting and easy as it went on.

More importantly I came away from reading this with a profoundly deep understanding of central banking, the gold standard and our current fiat currency. Paul outlines the good, the bad and the ugly about our current system (mostly bad and ugly) and the same with what a gold standard would do.

After reading I know that we will go to a gold standard - it is only a matter of time. It will either be due to our dollar failing and needing to quickly go to a system with some sort of commodity backing, or we do it now and save what is left of our dollar.

The founding fathers knew that central banking and control of the money supply was the number one way to control a country and therefore their primary concern. What the Federal Reserve is doing is actually anti-constitutional - that is, it actually outlines in the constitution that the Federal government CANNOT coin money. Coining money is a power reserved for the States.

Check this book out, skim the first couple chapters and amaze your friends with your knowledge of our (once?) fine Republic.
Profile Image for Jef.
38 reviews
May 19, 2017
This is not the sort of thing that would appeal to the masses as few are interested in monetary theory, economics, banking, and history. However, if the common man understood the benefits of having sound and honest money, rather than the fiat currencies used by Governments around the world at present, there would be an enormous outcry from Joe Citizen for restoring gold and silver as money, and we'd see much greater prosperity at all levels of society, and much less government hijinks.

To anyone who questions the role of precious metals as money, how this has played out historically, etc. there are ample graphs, well supported assertions, and otherwise evidence aplenty to persuade the legislators (the audience of this original report) to resume specie-backed currency, if not repeal the legal tender laws all together and permit competition in currency again. It is a well written, and quite academic tome.
Profile Image for Cormacjosh.
114 reviews3 followers
May 14, 2014
The version of this book which I read was actually the 2nd edition, and I don’t know why the co author Louis Lehrmann was not mentioned on the cover or the interior pages, but this is an amazing book which has further cemented my faith in sound money. Obviously, some of the projections into 1992 were a little off, but the present economic circumstances tell us that Dr. Paul will be right, as usual.

The whole thing is only 200 pages even ( plus charts ) but the print is small, and it is printed on what I call “bible paper” because it is the thin style of pages used by bible companies. There’s a lot of information to process, and I confess I did not fully understand ALL of it, but I have understood enough that my opinion of sound money is completely reinforced, and finishing it has given me a sense of accomplishment much like 1995 when I completed the unedited Moby Dick.
Profile Image for Shea Mastison.
189 reviews29 followers
July 24, 2014
Finishing this for a second time, I have to say I am a little less impressed with the analysis than before. Not to deny that there are dangers inherent in fiat currency; but many people who argue against it make such doomy forecasts, it's difficult to take them as seriously as their objective.

It would be excellent if our government fucntioned within its means. There's no excuse for the wealth redistribution possible by centralized banking; nor is there an excuse for the foreign adventurism that rests upon fiat currency.

This book is best read as a historical analysis than a contemporary one. Circumstances change so quickly in the world of finance that it's not exactly helpful to compare data from decades prior to the present,
16 reviews
April 18, 2011
An interesting history of the US dollar, banks, and economic growth/recession. As the title implies, this essay provides an excellent argument for reinstating a modern gold standard. Reading this book requires a certain level of interest in what some would consider a dry subject matter, yet I think that this book should be more widely read. In spite of having been written nearly 30 years ago, the principles of money and banking are surely just as pertinent to today's economic climate in the wake of the 2008 financial crisis.
171 reviews2 followers
August 12, 2011
Great history of the American banking and monetary system. Really makes you think regarding what really is legal tender? This is actually prophetic in many ways as it describes the devaluation of money because of inflation and debt, sounds a lot like 2008 United States to me.
5 reviews
January 3, 2010
Ron Paul gives an interesting history on the gold standard and why he believes it is needed. Gives good food for thought and is definately quite apt for our time.. Mr. Bernanke take heed!
7 reviews1 follower
November 14, 2015
This book was very informative, but somewhat dry. The history of money and banking in the US makes it worth the read.
Displaying 1 - 18 of 18 reviews

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