Audio of GATA chairman''s speech at Vancouver gold conference

11:30p ET Tuesday, June 11, 2002

Dear Friend of GATA and Gold:

Our hero, U.S. Rep. Ron Paul, R-Texas, last
week delivered to the House of Representatives
what probably was the most relevant speech of
the year there. While GATA does not necessarily
endorse his call for returning to a strict
metallic monetary standard -- we figure that a
truly free market in gold and silver will prove
their historic monetary worth -- Paul spelled
out what is actually happening in the world
economy.

All this is something that is almost impossible
to talk about in respectable circles, but it is
appended here, and it is on the record in
Congress.

Thank you again, Representative Paul.

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

* * *

Gold and the Dollar

By U.S. Rep Ron Paul

(Remarks to the U.S. House of
Representatives, June 5, 2002)
a href=http://www.house.gov/paul/congrec/congrec2002/cr060502.htmhttp://www.hou...

Mr. Speaker, I have for several years come to
the House floor to express my concern for the
value of the dollar. It has been, and is, my
concern that we in the Congress have not met
our responsibility in this regard. The
constitutional mandate for Congress should
only permit silver and gold to be used as
legal tender and has been ignored for decades
and has caused much economic pain for many
innocent Americans. Instead of maintaining a
sound dollar, Congress has by both default
and deliberate action promoted a policy that
systematically depreciates the dollar. The
financial markets are keenly aware of the
minute-by-minute fluctuations of all the fiat
currencies and look to these swings in value
for an investment advantage. This type of
anticipation and speculation does not exist
in a sound monetary system.

But Congress should be interested in the
dollar fluctuation not as an investment but
because of our responsibility for maintaining
a sound and stable currency, a requirement
for sustained economic growth.

The consensus now is that the dollar is
weakening and the hope is that the drop in
its value will be neither too much nor occur
too quickly; but no matter what the spin is,
a depreciating currency, one that is losing
its value against goods, services, other
currencies and gold, cannot be beneficial and
may well be dangerous. A sharply dropping
dollar, especially since it is the reserve
currency of the world, can play havoc with
the entire world economy.

Gold is history's oldest and most stable
currency. Central bankers and politicians
hate gold because it restrains spending and
denies them the power to create money and
credit out of thin air. Those who promote big
government, whether to wage war and promote
foreign expansionism or to finance the
welfare state here at home, cherish this
power.

History and economic law are on the side of
the gold. Paper money always fails.
Unfortunately, though, this occurs only after
many innocent people have suffered the
consequences of the fraud that paper money
represents. Monetary inflation is a hidden
tax levied more on the poor and those on
fixed incomes than the wealthy, the bankers,
or the corporations.

In the past two years, gold has been the
strongest currency throughout the world in
spite of persistent central bank selling
designed to suppress the gold price in hopes
of hiding the evil caused by the inflationary
policies that all central bankers follow.
This type of depreciation only works for
short periods; economic law always rules over
the astounding power and influence of central
bankers.

That is what is starting to happen, and trust
in the dollar is being lost. The value of the
dollar this year is down 18 percent compared
to gold. This drop in value should not be
ignored by Congress. We should never have
permitted this policy that was deliberately
designed to undermine the value of the
currency.

There are a lot of reasons the market is
pushing down the value of the dollar at this
time. But only one is foremost. Current world
economic and political conditions lead to
less trust in the dollar's value. Economic
strength here at home is questionable and
causes concerns. Our huge foreign debt is
more than $2 trillion, and our current
account deficit is now 4 percent of GDP and
growing. Financing this debt requires
borrowing $1.3 billion per day from overseas.
But these problems are ancillary to the real
reason that the dollar must go down in value.
For nearly seven years the United States has
had the privilege of creating unlimited amounts
of dollars with foreigners only too eager to
accept them to satisfy our ravenous appetite
for consumer items. The markets have yet to
discount most of this monetary inflation. But
they are doing so now; and for us to ignore
what is happening, we do so at the Nation's
peril. Price inflation and much higher
interest rates are around the corner.

Misplaced confidence in a currency can lead
money managers and investors astray, but
eventually the piper must be paid. Last
year's record interest rate drop by the
Federal Reserve was like pouring gasoline on
a fire. Now the policy of the past decade is
being recognized as being weak for the
dollar; and trust and confidence in it is
justifiably being questioned.

Trust in paper is difficult to measure and
anticipate, but long-term value in gold is
dependable and more reliably assessed.
Printing money and creating artificial credit
may temporarily lower interest rates, but it
also causes the distortions of malinvestment,
overcapacity, excessive debt and speculation.
These conditions cause instability, and
market forces eventually overrule the
intentions of the central bankers. That is
when the apparent benefits of the easy money
disappear, such as we dramatically have seen
with the crash of the dot-coms and the Enrons
and many other stocks.

Now it is back to reality. This is serious
business, and the correction that must come
to adjust for the Federal Reserve's mischief
of the past 30 years has only begun. Congress
must soon consider significant changes in our
monetary system if we hope to preserve a
system of sound growth and wealth
preservation. Paper money managed by the
Federal Reserve System cannot accomplish
this. In fact, it does the opposite.

--------------------------------

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--------------------------------

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