Archive for February 6th, 2012

Admittedly, I took me way too long to finally read Dr. Paul’s End the Fed. But the least thing I can do is to recommend it, especially if you haven’t thought much about the relationship between central banking (fiat money) and financial crises.

One of the most astounding figures in the book reveals the development of the purchasing power of gold and selected currencies (US Dollar, British Pound, DM, Yen, Swiss Franc, etc.) since 1913. You can find it here. As we see, the only fiat currency with a somewhat acceptable path has been the Swiss Franc. All the other currencies have devalued greatly, with the US Dollar having less than six percent of its 1913 purchasing power.

Ron Paul (2009). "End the Fed", Grand Central Publishing

There is no denying that the subject of gold is central to the issue of restoring sound money. That’s because gold emerged from within the structure of the market economy as the most important guarantor of the quality of money. It was not chosen by governments but by the market. The reason is easy to understand. Gold has all the qualities that we associate most with good money: divisibility, portability, high value per unit of weight, durability, and uniform quality.

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