A paper monetary standard means there are no restraints on the printing press or on federal deficits. In 1971, M3 was $776 billion; today it stands at $8.9 trillion, an 1100% increase. Our national debt in 1971 was $408 billion; today it stands at $6.8 trillion, a 1600% increase. Since that time, our dollar has lost almost 80% of its purchasing power. Common sense tells us that this process is not sustainable and something has to give. So far, no one in Washington seems interested.
About this quote
- What does it mean?
- Paul claims that a paper monetary standard leads to unchecked money printing, massive debt, and loss of purchasing power, which he sees as unsustainable.
- In plain terms
- Printing money without limits inflates debt and erodes currency value.
- What can you take from it?
- Monitor monetary expansion to avoid long-term inflation.
Where it applies
Putting it to work
Questions to consider
- Is high debt always harmful?
- How does money printing affect different sectors?
Another view
The relationship between money supply and inflation is complex and not solely causal.
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