Ron Paul hates the Federal Reserve but loves gold (GLD, XOM, USO)

As detailed in a previous article on, Republic presidential contender Dr. Ron Paul wants to abolish the Federal Reserve.  Rather than a central bank with a fiat currency, Dr. Paul would replace this with a gold standard. 

Dr. Paul’s contention, as outlined in an op-ed in USA Today, is that paper money is always debased over time.  In the op-ed in USA Today, “Fed causes booms and busts,” Dr. Paul wrote that, “Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar.  Since 1913, the dollar has lost over 95% of its purchasing power, aided and abetted by the Fed’s loose monetary policy.” 

To many, the fact that Dr. Paul has never received a single co-sponsor from any other member of Congress for this legislation is ample testimony to the wisdom of these ideas. 

However, whatever is done to a fiat currency can be done to any replacement. If the US dollar were replaced by gold (GLD, quote) or a basket of commodities, that too could easily be manipulated by the public or private sectors. 

An example here is the way oil (USO, quote) fluctuates. 

According to Rex Tillerson, CEO of Exxon Mobil (XOM, quote), about half the price of oil is due to speculation as it should be trading around $70 a barrel based on economic demand.

The rest of the price reflects speculation.

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