Dr. Ron Paul was into sound money before it was cool.
Before he became an initiate in the Austrian school of economics, he served as a flight surgeon in the United States Airforce and as a private practice OBGYN in Texas. Proselytized by the works of Ludwig von Mises and Ayn Rand, Paul decided to run for Congress in the 70s following the termination of the Bretton Woods agreement an international pact that was the dollar's final, albeit tentative, tie to the gold standard.
Nixons decision to withdraw from this agreement would have lasting consequences on U.S. monetary policy and Dr. Paul launched his political career as a crusade against these changes and the danger he saw in the fiat economy that they created. In his on-again-off-again career as a politician which included Texas Congressional Representative terms from 1976 to 1977, 1979 to 1985 and 1997 to 2013 as well as presidential runs in 2008 and 2012 the godfather of the modern right-wing Libertarian movement made a name for himself with his zealous advocacy of the gold standard and his uncompromising critique of the Federal Reserve and the hazards of its monetary policy.
As a fledgling congressman, his position on the House Banking Committee gave him a platform to disseminate his Austrian ideals. Today, his 2009 bestseller End the Fed and his 2012 presidential run can be seen as career capstones which also encapsulated the core tenets of his political philosophy: liberty, revolution and sound money.
Its not shocking, then, that Ron Paul is privy to Bitcoin. He and his son, former presidential candidate and Kentucky Senator Rand Paul, accept bitcoin for their political foundation.
Dr. Paul attended this years Consensus conference as a guest of the Digital Asset Policy Network (DAPNet), a cryptocurrency policy and lobbying non-proft led by veteran campaign manager Jesse Benton and Bitcoin Center Founder Nick Spanos. During the conference, Bitcoin Magazine sat down with Dr. Paul to discuss his views on bitcoin as a disruptive and sovereign asset. Our conversation showed that gold bugs have more in kind with bitcoiners than not (and its also a good reminder that bitcoin is not age specific not every old bull is a salty no-coiner la Warren Buffet).
When did you first learn about bitcoin and what were your initial reservations with it?
There was no one time where I read an article and it struck me. I just heard a little about it, but I didnt pay too much attention to it. And then I finally got interested enough to watch what it was doing in the marketplace I love to watch markets and, you know, down to $0 up to $20,000, that was sort of fascinating. What does this mean? Im still trying to figure out what the endpoint is.
So that got me interested, and then I looked at the technology and Im not a computer person. If I had to explain blockchain technology, I wouldnt do well. Im interested in the issue of alternative currencies, Im interested in what happens when the market crashes and Im interested in preserving an environment where people can have alternative ideas that might help solve the problems we have. I think thats what bitcoin offers: an alternative. I want a free marketplace.
Ive heard you mention free markets in relation to bitcoin, in an interview with CoinDesk, for instance. I want to ask you about Congressman Shermans remarks on a ban of cryptocurrencies. What do you think this signals for Congress? Do you think were going to see hostility?
There will be hostility but it will be more dignified. They will work behind the scenes and put in roadblocks if they can. The more successful that cryptos are, the more the government will get involved. There are people like Sherman, but they wont be talking like that. I dont think that he has the clout since hes over the top. Theyre not [going to] all of a sudden pass this; I dont even think hell introduce a bill. It wont be a movement, it just got everyones attention.
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Do you think Congress is paying more attention to these things than its letting on? Because weve seen some incompetency from Congress when it comes to technical topics.
No, I dont think there are many [people in Congress] who are more knowledgeable than I am and [theyre] much less interested in the principles of the marketplace. And theyre less in agreement that big problems lie ahead, so they have less interest in Bitcoin. I dont think that if you did a poll for Congress about whether to ban it or tax it, they probably havent thought it through. Republicans I would think would tend more to be very tolerant, but lovers of big government like Brad Sherman they know what is going on. His reaction, his emotions are his belief, because he can see what could happen to the Federal Reserves monopoly over the monetary system. You cant allow people to talk about using alternative currencies. Usually, we punish people for that.
To your point toward the end there, it seems like Sherman has thought it through. Because if you listen to his argument, he basically says cryptocurrency poses a threat to the dollars dominance and the U.S.s international commerce.
That tells you a lot. Hes speaking for the deep state establishment, military people and everyone else in the banking system. Hes representing their position that You dont mess with the dollar. But I dont worry about that because the dollar is going to self-destruct.
Yeah, I want to touch on that. In End the Fed, you speak of the dollar like a ticking time bomb just waiting to go off. What do you think could accelerate it and do you see crypto acting as a sort of hedge as weve seen with gold and silver at times of market volatility?
I would think so, but someone else needs to answer that question. I just want to make sure that theres allowed to be a hedge. In our country, for a lot of years, we werent allowed to own gold as a hedge. I think that there are a lot of time bombs. We have difficulty figuring out what our foreign policy is. You know, the on-again-off-again with Syria and North Korea, Iran.
The John Boltons and Abrahams of the world and the senators that are wild as long as they are in charge, a bad accident can happen or a bad judgement made. That could change everything. That could change the dollar system; it could change the stock market.
In End the Fed, you talk about a financial crisis that is worse than in 2008 to 2009. Do you think that were starting to see the foundations shake? Is the writing on the wall?
I think so, but its been there a long time. I decided that this trend was established with our announcement that we no longer could honor the dollar. Which was really an announcement of bankruptcy, and its been steadily building up the problem. And the trust in the dollar has allowed the bubble to get bigger. Its held together for a long time and thats just going to make the crash worse.
Im glad you mentioned the word bubble because that gets thrown around a lot in this industry. What would you say about the volatility of bitcoin when taken in kind with the devaluation of the dollar through inflation?
Theres going to be volatility. The dollar is going to be volatile. You have the supply and demand of the dollar: how many people really want to use it versus how fast theyre printing the money. A lot of people look at prices in terms of supply and demand but they dont look at the purchasing power of the dollar, which is hard to calculate. The thing that I realized in 1971 was that, since Nixon took us off the gold standard, this is a different world. Now, we have the digital currencies and I think theyll follow the same economic laws, but there is going to be a subjective element to it. You cant deny that there was some subjectivity when bitcoin hit $20,000. But does that mean its worthless? No, I dont think so things do that. This is new, so its going to have ups and downs.
If we see a threat to it, when someone comes along and says, We need a law to ban cryptocurrencies to get rid of this uncertainty. That to me is going to be around and its going to be a lot worse.
Do you think that the best way to regulate this is to not regulate it at all? Or do you think that theres a way to let these bitcoin and blockchain companies grow organically while providing investor protections?
I believe in regulation and that it has to be strict, but who are the regulators? Ever since the Depression, weve had hundreds of thousands of rules and regulations regulating the financial system and yet we still had 2009. It didnt do any good. And then when they decided that they need to save the system, they went hog wild rewarding the people who had already been ripping us off: the mortgage companies. And the people who lost their mortgages didnt get rescued.
I want to return to gold really quickly. Have you seen Grayscales Drop Gold campaign? It is trying to make gold obsolete and replace it with bitcoin, which it says is a digital alternative.
Well, theyre missing the whole point. If its obsolete, the market will declare it obsolete. But in a crisis, even if people are using bitcoin in a crisis, gold is going to be used. Id think that youd be a very wealthy person if you had a bag of gold coins in Venezuela.
Bitcoin has gone on an insane uptrend recently while the DOW, S&P and other traditional markets are trending downward. Do you think that its a little bit early to say this shows a decoupling from traditional markets?
Yes, I think its too early to tell. I dont think anybody knows. Its hard to say, but theres obviously enough confidence in bitcoin for people to go and buy it. But did you have one million buyers or 15 buyers? That could be pretty important.
Last question: Do you own any bitcoin?
Do I own any bitcoin? No. We accept bitcoin at our foundation, but we immediately convert it because we need to pay our bills.
This article originally appeared on Bitcoin Magazine.
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