Simon Constable says we're 'fringe dwellers' but somehow Ron Paul isn't

8:49p ET Wednesday, January 9, 2008

Dear Friend of GATA and Gold:

TheStreet.com's Simon Constable lately has done some valuable service for the gold cause and he continues doing so today with, as you'll see below, a report on his interview with U.S. Rep. Ron Paul, the honest-money candidate for the Republican presidential nomination.

But somehow Constable dismisses GATA adherents as "conspiracy theorists" and "fringe dwellers" even as he acknowledges that Paul isn't one of the latter, despite Paul's having just told him exactly what he finds nutty coming from GATA.

Oh, well. ... If GATA has been put on this planet to make Paul look sane, it is a far, far better thing we do than we have done before, and in any case Constable's merely calling attention to the gold issue is worth his weight in Federal Reserve notes. And if Constable ever can be persuaded to review the public records often cited by GATA -- as in http://www.gata.org/node/4279 -- documentation of the central bank gold price suppression scheme, he might be worth his weight in precious metals as well.

For we don't mind being considered nuts. That's part of hanging out with miners and aspiring economists. We just would prefer to be considered "public record nuts" instead of "conspiracy nuts." Besides, it wasn't always so presumptuous to suggest to journalists that they look at the public record before drawing their conclusions. Maybe someday this again will be considered a basic part of their work.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Ron Paul: Get Back to Gold

By Simon Constable
TheStreet.com
Wednesday, January 9, 2008

http://www.thestreet.com/s/ron-paul-get-back-to-gold/markets/marketfeatu...

If Ron Paul is correct, monetary authorities around the globe have been conspiring to suppress gold prices for decades.

Not convinced? Don't tell that to his followers. Because partly as a result of this view, Paul, a Texas congressman and Republican presidential hopeful, has become the champion of gold bugs, who see him as the best friend of their precious metal, and, they hope, the next occupant of the White House.

"Our central banks around the world colluded over the last 10 to 20 years and have been dumping gold to keep gold down," Paul said in an interview with TheStreet.com when he met with voters in Concord, N.H., late Tuesday. "But finally, [the price] broke loose, and gold is soaring again to historic levels."

For those of you out there who are unfamiliar with Paul's contention, understand that he is not alone. His comments echo the beliefs of fringe dwellers who for years have speculated that a multinational consortium of government banks, including the Bank of England and the Federal Reserve, have deliberately manipulated gold prices in an effort to downplay inflation.

One would be hard-pressed to characterize Paul himself as fringe dweller. But he does have a promise, if he is elected, that would have considerable repercussions for the U.S. and global economies.

His plan? Bring back the gold standard and eliminate the Fed.

Many observers use the price of gold as a bellwether for future inflation -- if it's rising, then inflation could be a threat. For that reason, conspiracy theorists believe that governments everywhere have been trying to stymie the historic rally in the metal in an effort to keep such worries dormant.

For gold investors, the good news is that even if such a cabal exists, it hasn't prevented the metal from hitting a record high of roughly $894 an ounce this week. Gold spent last summer hovering around $670, and it has surged three-fold in the past seven years from its 2001 low at $257.

Away from the outer margins, most mainstream gold analysts believe that central banks have simply used price rallies as a opportune moments to sell what is a non-yielding asset. It costs money to store gold, and the metal produces no dividends.

Paul wants to move away from a system of fiat money where central banks have the discretion to print currency at will, and instead move back to the gold standard in which the money supply is limited by the quantity of the metal available.

He says that the surge in bullion prices has come as a result of the steadily deteriorating value of the greenback brought on by deficit spending by the federal government in general and the Fed parceling out too many new dollars specifically.

In the interview, the congressman also said he thought different currencies backed by precious metals should be legalized and allowed to compete with each other. In particular, he suggested that the exchange-traded funds that hold inventories of bullion, streetTracks Gold Shares (GLD) and iShares Comex Gold Trust (IAU), could issue certificates that could be spent as money.

Competing currencies would also legitimize Liberty Dollar, an Evansville, Ind., company that got in trouble with the FBI and the U.S. Mint for making its own solid silver coins, some stamped with the image of Paul. The firm was raided just before Thanksgiving and all materials were confiscated, including the Paul dollars.

Paul acknowledged that competing currencies could occur only with substantial changes to the criminal law and the tax code. Currently it's illegal to try to spend precious metals coins as if they were currency, he said. The tax code also means that the changing dollar price of gold creates taxable capital gains. That's something that would need to be repealed, he says.

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