By Brian Doherty
He's now chair of the House subcommittee responsible for domestic monetary policy--but that doesn't mean Ron Paul now has the power to abolish the Federal Reserve. Anyway, he tells NPR that he thinks positive action in that direction might not be necessary:
"What I'm really asking for is competition, to get rid of the monopoly power of the Fed, because they don't have legitimate power to do what they do."
Paul says he wants to abolish the current legal tender laws and allow Americans to use gold and silver as currency....
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"You can't have inflation without somebody artificially creating money and credit out of thin air." He blames the Fed for creating inflation by adding too much paper money to the economy....
Paul adds that he may not have to do anything himself to bring the Fed down. "I believe that the Fed will eventually end itself, because they're working on a monetary system that is not viable."
As Paul critics will point out, if you and a debtor/creditor want to use gold or silver as money between you, you are not legally forbidden from doing so. However, existing tax rules regarding the exchange of hard metals give it a legal competitive disadvantage compared to paper federal reserve notes--as does paper's status as legal tender. Details on Ron Paul's Free Competition in Currency Act that would change this situation.
My Reason feature on Ron Paul's role in the still burgeoning anti-Federal Reserve movement from November 2009.