Question: ...you believe the Fed shouldn't exist... make the case. Ron Paul: First reason is, it's not authorized in the Constitution, it's an illegal institution. The second reason, it's an immoral institution, because we have delivered to a secretive body the privilege of creating money out of thin air; if you or I did it, we'd be called counterfeiters, so why have we legalized counterfeiting? But the economic reasons are overwhelming: the Federal Reserve is the creature that destroys value. This station talks about free market capitalism, and you can't have free market capitalism if you have a secret bank creating money and credit out of thin air. They become the central planners, they decide what interest rates should be, what the supply of money should be... Question: How does the gold standard solves that? Ron Paul: It maintains a stable currency and a stable value. If the Fed concentrated more on stable money rather than stable prices... They push up new money in stocks and in commodities and in houses, and then they have to come in to rescue the situation. They create the bubbles, then they come in and rescue it, and they do nothing more than try to do price fixing. Capitalism depends, and capital comes from savings, but there's no savings in this country, so this is all artificial. It creates the misdirection and the malinvestment and all the excessive debt, and it always has to have a correction. Since the Fed has been in existence, the dollar has lost about 97% of its value. You're supposed to encourage savings, but if something loses its value, why save dollars? There's no encouragement whatsoever. [...] Gold is 6000 years old, and it still maintains its purchasing power. Oil prices really are very stable in terms of Gold. [...] Both conservatives and liberals want to enhance big government, and this is a seductive way to tax the middle class.

Economics·Monetary policy