Ron Paul on Stossel: ‘Bitcoin Offers Competition’ Against the Fed

Last night, John Stossel dedicated an episode of his show on Fox Business to exposing the flaws of the Federal Reserve System. Just a few years ago, virtually no news programs would have aired content critical of the Fed. In fact, it was once a subject that few cared about at all, given the fact that it is mired in heavy jargon and confusing to the average non-economist.

Naturally, Stossel had libertarian icon and monetary policy expert Ron Paul on the program to discuss his view that the Federal Reserve should be phased out via competition in currency. Though Dr. Paul once expressed skepticism about bitcoin, he seems to be warming up to it as an alternative to the Fed, considering his statements on the show, “Hayek had suggested that maybe the best transition would be just to legalize [currency] competition… maybe bitcoin offers competition.” Check out a video clip of Ron Paul’s appearance on Stossel below and let’s discuss the details after the jump.

Ron Paul Warns That the Feds Might Crack Down on Bitcoin

When John Stossel pointed out the legality of bitcoin, Ron Paul warned that the government might try to whack the cryptocurrency with the ban hammer, “Well, but the government doesn’t like it either, so we have to wait and see what they do about it. They’ll probably crack down on it.” Considering the government’s recent efforts to shut down Silk Road, it seems that policymakers are looking for excuses to meddle in the growing bitcoin craze. That said, bitcoin is anonymous, encrypted, and very difficult for governments to ban.

Ron Paul also mentioned the fact that gold has held stable values for thousands of years, a mathematical reality that has caused countless societies throughout history to use it as a form of money. The Fed’s fiat dollar, on the other hand, has lost 97% of its purchasing power since the Federal Reserve was chartered in 1913. If other instruments such as bitcoin, gold, and silver were legally permissible as full-blown, un-taxed currencies, Americans would have the option of phasing out of the dollar. Ironically, this would be deflationary and might strengthen the Fed’s debt note, thus improving its viability for those who still have them.

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The Fed Funds the Top 1%

Ron Paul gave a nod to the Occupy Wall Street crowd by addressing the core problem that allows a wealthy few to maintain control over disproportionate quantities of money, “When you destroy the currency by printing a lot of money, you ruin the middle class, you really punish the poor, and you help the wealthy. The money goes to the wealthy class, and, right now, today, the money is in the top 1% or 10%, and it’s not because of free markets. It’s not because of capitalism. It’s because of this distortion in the currency.”

Stossel’s entire show was dedicated to holding the Fed to account. His program on Fox Business gives the liberty movement a chance to advocate positions to America’s young, hip investor class. Hopefully, this episode reached new people, as the Federal Reserve’s quantitative easing scheme is nearing the end of its rope, and Rand Paul is set to push for an audit of the Fed during potential future chair Janet Yellen’s nomination hearing.

As an aside, I have been a self-described libertarian since my senior year in college back in the ’90s, when I first saw a John Stossel documentary on the War on Drugs. Maybe some new people will similarly join the End the Fed movement today after seeing Stossel’s show last night on Fox Business.

Also, watch out for Silver Circle‘s holiday packages, which go on sale on Monday. Purchasers who find a Silver Ticket in their package will have a chance to win a copy of the Silver Circle graphic novel, signed by Ron Paul.

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