Ron Paul: "The Destroyer of the Dollar"

Written By Adam English

Posted December 17, 2013

If only Milton Friedman were alive to see one of the most exciting and disruptive developments of the modern era.

You’d be hard-pressed to find someone more influential on modern economic theories and policies.

Like many gifted men, he was often forced to make decisions that saw necessity trump his convictions.

As a Treasury spokesman during the height of World War II, Friedman advocated Keynesian-style taxes because the wartime government was struggling to fund massive wartime spending. This resulted in his helping invent the payroll withholding tax system.

When asked about it later in life, Friedman said: “I have no apologies for it, but I really wish we hadn’t found it necessary, and I wish there were some way of abolishing withholding now.”

A similar compromise born of necessity for Friedman came with the Federal Reserve. He opposed its very existence, but eventually had to accept that it wasn’t going to be shutdown. Ultimately, he had to advocate using the Fed to create a steady, small expansion of the money supply.

Instead of invasive government involvement, Friedman wanted a real, non-government gold standard where money is produced by the private market. This proved to be out of reach.

As Friedman noted in 1961:

If you could re-establish a world in which government’s budget accounted for 10% of the national income, in which laissez-faire reigned, in which governments did not interfere with economic activities and in which full employment policies had been relegated to the dustbin, in such a world you might be able to restore a real gold standard.

A real honest-to-God gold standard is not feasible because there is essentially no government in the world that is willing to surrender control over its domestic monetary policy.

As we know today, the U.S. government and the rest of the world strayed far from the Nobel prize winner’s ideals.

Yet in the twilight of his life, decades after he retired, he started to see signs of change…

In 1999, seven years before his death, he saw real promise in the disruptive forces of the digital age, stating: “I think the Internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing, but that will soon be developed, is a reliable e-cash.”

 

A Currency for All

If only Friedman held on for several more years, he would’ve seen the rise of currencies that could fulfill so many of his ideals.

Over the last four years, and in 2013 in particular, a non-governmental, free market currency has taken root. And it isn’t just appealing to a conservative economist with a libertarian streak.

On the contrary, this new currency is bridging otherwise impossible divisions between drastically different economics and politicians.

The Fed cannot manipulate it to suit domestic policies, and its monetary base is being slowly expanded at a set rate.

Ben Bernanke openly acknowledges this in a letter to Congress, in which he states that the Fed “does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market.”

Yet the architect of some of the most profoundly radical monetary policies in history believes that it “may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”

As for politicians on opposite sides of the spectrum, Ron Paul said, “There will be alternatives to the dollar, and this might be one of them.” If enough people start using it more, “it’ll go down in history as the destroyer of the dollar.”

Al Gore stated: “I’m a big fan… Regulation of money supply needs to be depoliticized.”

Good luck finding something else these polar opposites would agree on.

Rapid Adoption

If you haven’t figured out what I’m referring to yet, you’re in the majority. What Friedman referred to as e-cash has taken root in the form of “cryptocurrencies.”

We’ve been living in a digital age for years; and digital money has been foreseen by science fiction writers for many decades.

The reason it has taken so long for cryptocurrencies to catch on, lagging far behind Internet-based commerce?

Fundamentals.

First, the system has to be secure.

This problem has been solved by using extremely complex algorithms to guarantee that all new money created is legitimate. Counterfeiting is impossible, along with spending the same money multiple times.

Part of the reason this is possible is thanks to a unique approach to recording transactions that eluded developers as they tried to address the second problem…

Instead of using a single ledger that is prone to being hacked and falsified, a digital currency can use many independent people to automatically maintain ledgers. By comparing many of these ledgers against one another, erroneous or fraudulent entries cannot exist.

The encryption for private account information needed for withdrawals and deposits is ironclad as well.

Finally, the transactions had to come from personal and private accounts that would still appear on the ledger. This was handled by using a public digital key and a private one. The public one will appear in the ledger; the private one is always encrypted and hidden. Only the account holder can initiate payments.

With the security virtually guaranteed, digital cryptocurrencies are rapidly and radically creating an alternative to fatally flawed, government-issued and manipulated currencies.

It is also rapidly gaining the attention of investors, consumers, and merchants alike…

It provides a far faster and cheaper system than traditional payment methods through credit and debit card companies and banks. 

An automated payment processing system for digital currencies that was started a little over two years ago has already logged over $100 million in transactions. Over 15,500 merchants use it in over 200 countries.

The number of new merchants listed through it has increased over 50%, and its transaction volume has tripled in November alone.

A website that tracks user-submitted reports of physical stores that accept digital currencies saw an 81% surge in listings just in November.

And ATMs that will exchange digital currencies for your cash on the spot are popping up across the globe. On October 30, 2013, the first machine went live. By its 29th day, it had already logged over $1 million (Canadian) worth of transactions.

The Only Remaining Flaw

The only remaining problem with digital currencies has nothing to do with the new currencies themselves.

We’ve been living in a world where each nation has a stranglehold on currencies. Only the fiat paper notes they issue have been acceptable… until now.

People are accustomed to the use of banking systems and the rules and regulations of credit and debit cards, because there have been no other reasonable options for us. The only other option would be expensive check-cashing services and severely limited access to goods and services.

It is hard for any of us to start to break habits and a culture of money that we’ve built over an entire lifetime.

In all honesty, I was profoundly skeptical of digital currencies up until recently. Once these new independent currencies began gaining a foothold, they started drawing the attention of the editors here at the Outsider Club…

It wasn’t until I was urged to take a detailed look at how elegantly simple, secure, and independent they are that I realized how complacent and biased I was after decades of solely working with the overly expensive, slow, complex, and taxing system designed by the Fed, government, and banks — all for the benefit of the select few they choose to enrich.

Nick has taken the lead in our office and researched some options for those interested in learning more about and investing in these currencies. He has compiled a new comprehensive report for his Like Minded People readers.

Trust me when I say you’ll never find a better resource heading into a new era for currencies.

In his report, you can learn everything about the best cryptocurrency to use — from its history and evolution… to how it is created and managed in a decentralized system… to the best tools to use and the easiest way to get started.