Normally, I don’t follow political coverage in financial publications.

But this week, I found Jim McTague’s column — he writes the political coverage for Barron’s — rather fascinating. He looks at the financial holdings of Ron Paul via congressional financial disclosures:

“Gold-mining stocks, where Paul has the bulk of his money, have also hit pay dirt, albeit rising at a slower pace. Gold is up about 28% this year, through Thursday, to $1,823.80 a troy ounce, and 106.8% since 2009. In the same periods, the NYSE ARCA Gold Miners Index is down 2.9% and up 78.6%. The S&P 500 is down 9.3% and up 26.3%.

In his most recent financial disclosure, which covers the year 2010, Paul had $1.6 million to $3.5 million in gold- mining stocks. He also has a stake in three bear-market funds—and has for many years.

In all, Ron Paul’s portfolio amounts to a super bearish bet against the U.S. economy. If the country had defaulted on its debt earlier this month, he likely would have made a bundle. The congressman voted against House Speaker John Boehner’s plan to lift the nation’s $14.3 trillion spending cap.”

Rather intriguing.


Pot of Gold: Ron Paul’s Top 10 Holdings

Return* Return* Size of
Company/Ticker 1-Yr 3-Yr Holding
Goldcorp / GG 19.13% 17.00% $500,001 – $1,000,000
Barrick Gold / ABX 12.24 15.49 $250,001 – $500,000
Newmont Mining C Stock / NEM 1.12 12.02 $250,001 – $500,000
Agnico Eagle Mines / AEM 1.13 5.88 $100,001 – $250,000
AngloGold Ashanti / AU 2.02 19.33 $100,001 – $250,000
IAM Gold / IAG 3.69 52.07 $100,001 – $250,000
Mag Silver / MVG 39.97 9.75 $50,001 – $100,000
Pan American Silver / PAAS 22.72 4.71 $50,001 – $100,000
Silver Wheaton / SLW 74.51 49.54 $50,001 – $100,000
Virginia Mines / VGMNF.OTC 28.05 31.11 $15,001 – $50,000
Gold 48.34 31.61
S&P 500 6.04 -1.25
*All returns are as of 8/18/11; three-year returns are annualized.

Sources: Bloomberg;


Note that the inverse funds are not designed for long term positioning, and suffer from slippage and drift from the underlying index.


Candidate of Doom and Gloom
Barron’s AUGUST 20, 2011

Category: Gold & Precious Metals, Investing, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

69 Responses to “Ron Paul: Über Bear ?”

  1. Rouleur says:

    …i say main stream BS by the author…”super bearish bet against the U.S. economy”…”defaulted on its debt earlier this month, he likely would have made a bundle”…WTF does he think is going on here?…and didn’t Ron Paul call to End the Fed, or at least audit the fed?…BTW, Ron Paul has been making a bundle already…and should continue to do so…

  2. HEHEHE says:

    I sincerely hope the Barron’s writer isn’t implying Ron Paul voted against the debt ceiling increase because it would make him a bunch of money. If so he should be sued for defamation. Just because Paul’s one of the few people in Congress who understands basic economics and how his colleagues are ruining this country and destroying the middle class on behalf of their corporate overlords doesn’t mean he has to be stupid and not invest accordingly.

    Ron Paul has voted against nearly every spending increase that’s ever been presented to him not just the latest debt ceiling increase – I’d argue against some of his votes too but he is principled. He’s voted against every military action that the rest of these crooks have trotted out for a vote. He’s one of the few carbon based life forms in D.C. who actually gets it. No country in the history of the world has borrowed and spent itself to prosperity. No country has ever debased its currency and achieved prosperity. I’ll chalk this up as another hit piece by the MSM in its attempt to discredit somebody who wants to give the American people a peek behind the curtain. The worst thing that could happen to this country would be if Ron Paul gets elected – he’d be dead in a mysterious accident or illness within weeks.

  3. DeDude says:

    Ron Paul is one guy who I would say is nutty enough that I would give him the benefit of the doubt and think that he voted against the debt celling plan thinking it would be better for the country, not just trying to line his own pockets.

  4. ga082003 says:

    eurobonds may be a reality without Germany and this is what is holding euro against the dollar.

    Once it is executed, gold and silver rally should be over

  5. HEHEHE says:

    Speaking of Bank of America and layoffs I am wagering this guy isn’t one of the many about to lose their jobs, from Zero Hedge:

    When he says “we will help you out” I don’t think he means with a new mortgage or credit card;)

  6. lunartop says:

    “Rather intriguing”

    Not really, it would only be intriguing if this hadn’t been in line with his intellectual position for the last 50 years.

  7. Ron Paul is one of the only intellectually consistent politicians there is

    Whether you agree with his views or not, he is simply a straight shooter, not a poll taker

  8. MayorQuimby says:

    Paul is the ultimate Austrian goldbug. He TRULY believes in gold and puts his money where his mouth is.

    I detest goldbugs but respect most of his other views.

    He is spot on about a LOT of things in politics such as:

    The Federal Reserve is a political tool which allows politicians to deficit spend (ie hand more money back to the people than they earned which gets them elected) by forcing thieving inflation to persist in perpetuity.

    On the other hand – gold bugs are looking to prosper at everyone else’s expense as gold is not an answer for a great many reasons.

    Now that our monetary system is collapsing we are going to have to contend with the cries of those who have chunks of golds in their basement. Their cries might sound noble but in the end all they are saying is:

    “Make me rich”.

  9. bmz says:

    He is simply putting his money where his mouth is.

  10. Moss says:

    It is totally consistent with his beliefs. While he may be considered eccentric he certainly is not a hypocrite like most other politicians.

  11. rktbrkr says:

    Ron Paul is a man of principles which is more than enough to get him labeled a “nut” in these times.

  12. rktbrkr says:

    ga082003 Says:
    eurobonds may be a reality without Germany

    Eurobonds without Germany is a Big Mac without meat,an admission of failure.

  13. lunartop says:


    Which is why I questioned your use of “intriguing”. I guess I misinterpreted you I though you were implying there was something fishy about it.

    This from zero hedge on the other hand definitely is “intriguing”


  14. maybe, Jim McTague should write a Column about…

    “…Congressional Portfolio Outperforms Average

    All of this might help explain why congressmen are so much better at picking stocks than you or me. One study showed that during the 90′s U.S. Senators outperformed the average market gains by more than 12%, while average households barely held their own. A 2004 Georgia State University study similarly revealed that Senators received annual investment returns 25% higher than that of average households.

    Congressional members have many opportunities to obtain nonpublic information that could affect a stock’s price. They may, for example be aware of impending tax legislation that will pass and which will affect a company’s stock positively or negatively. Similarly, they may be aware of imminent approval of a new drug or the award of a new government contract.

    Ah, Ethical Shmethical

    Congressional staffers are subject to ethical rules prohibiting them from profiting off of any information confidentially received in the course of their duties. In one year, for example, the top aide to then Republican Majority Leader Tom DeLay was criticized for reportedly engaging in a flurry of stock trading, greatly increasing his net worth.

    Some members of Congress feel guilty about their privileged status. In 2006, a bill was introduced in Congress to prohibit congressional insider trading. It went nowhere fast. Again in 2009, a bill, the “Stop Trading on Congressional Knowledge Act,” was introduced by three members of Congress to prohibit lawmakers from profiting off of insider trading. The bill only gathered seven co-signers and was referred to seven different House Committees, never to be heard from again…”
    Stuart P. Green, JD, Professor of Law and Justice Nathan L. Jacobs Scholar at Rutgers School of Law, wrote in his May 13, 2008 email to
    “People in many fields of endeavor are privy to valuable confidential information before it is made public: For example, business executives, investment bankers, and lawyers have access to information about impending corporate mergers and acquisitions; Judges, juries, and court personnel have access to information about the probable outcome of court decisions; and officials at the FDA [Food and Drug Administration], EPA [Environmental Protection Agency], and other administrative agencies have access to information about the likely outcome of regulatory proceedings. All of these individuals are prohibited by law from using such confidential information in the purchase and sale of publicly traded stocks. Likewise, members of Congress and their staffs are also privy to valuable confidential information not yet made public. They have information about the likely outcome of various votes, committee proceedings, and investigations. Such information can be extremely valuable to investors. Those who buy and sell stock on the basis of such non-public information will have an obvious advantage over those who lack such information. This is not the sort of information that even the most savvy and sophisticated investor would be able to obtain legally. From a moral perspective, such informational advantages are indistinguishable from those enjoyed in more familiar forms of insider trading.”

  15. number2son says:

    I disagree almost entirely with Paul on most things, but I respect him completely. I wish more American politicians were worthy of respect from those who oppose their ideas.

    In any case, as many here have noted, Paul is only walking the talk. Nothing wrong with that at all.

    I reflect that I myself gave up on gold miners about 2 years ago. Same as I gave up on my housing shorts about a year before they all imploded. Such has been my recent track record… sigh

  16. jacobsk says:

    i wrote on my blog in May on the coming downtrend

    My guess for the current downside target
    S&P(futures) has a downside target of 1017-1020

  17. Haigh says:

    This post deserves to be celebrated with a contribution to Ron Paul’s birthday money bomb, now doing quite well (August 20) on his web site:

  18. What he made by investing in his beliefs he probably lost ten fold in lost campaign finance bribes…,…. I mean,……contributions

  19. rootless says:

    I don’t understand why “acting on principle” is seen as such a virtue by many here. The ones who act “on principle” are often the fanatics, and they are more dangerous than the ones who act on pragmatic self-interest, particularly if the “principle” is rooted in some ideological extremism.

    If Paul voted against increasing the debt ceiling “on principle”, he either doesn’t understand how macroeconomics work, or he wanted the collapse of the US economy, or at least he doesn’t mind it as long as it serves his “principles”.

  20. Bill Wilson says:

    If Ron Paul’s policies were enacted, would he flip his investments bullish? I tend to think he would, so I don’t believe he is trying to destroy the economy in order to make himself rich.

    In general, I don’t think our elected officials should be allowed to do much more than put their money in the bank. Equity investments cause too much conflict of interest long or inverse.

    We already give them generous pensions. I’ll trade my 401(k) for a congressional pension any day of the week.

  21. Darkness says:

    Political policy or talking your book? Ehem, looks like the latter.

  22. Strasser says:

    ” Ron Paul is one of the only intellectually consistent politicians there is…”,
    amen to that. Amazing that Ron Paul’s coming in as number two in the Iowa Straw Poll had little or no coverage?
    PS: I wish Barron’s could have done this well on BHO when he was running.

  23. VennData says:

    You can be sure that Ron Paul doesn’t have any of those pesky Federal Reserve Notes lying about.

  24. AtlasRocked says:

    Ron Paul has done the math, and studied the history:

    -Keynesian stimulus has little or no history of success, where are the success stories? They’re non-existent. If you only found 1 or 2, it is still of no match for 30 years of failure here in the US, and all of Europe. Need more evidence?: Is Europe calling for more benefit spending in Greece?

    -All western democracies, now focused on benevolence rather than economic hygiene, are failing, while asia-pac nations, not focused on benevolence, are much lower in taxes and debt.

    -Pure democracy, started in 1917 in America, was a known, obvious failed form of government 240 years ago: ‎”From this view of the subject it may be concluded that a pure democracy, by which I mean a society consisting of a small number of citizens, who assemble and administer the government in person, can admit of no cure for the mischiefs of faction.” Federalist #10. This is why a true senate was established at the founding, because democracies always fail once the rabble realizes they have the power to gather other citizens’ belongings. Why are we still talking about how to fix our democracy? It should be considered a cockamamie premise.

    -The math of repaying $14 trillion is around a trillion a year for 20 years at 3%. It is going to be massively painful to repay, and we are now at the precipice where not repaying it is equally painful to choosing to pay up.
    (And, note the $14 trillion is the “lowball” number that is based on the governments’ cooked books. That number goes much higher if you add in what Obama called the “contract with the people” items like SS and Medicare, future obligations are MASSIVELY larger than $14 trillion. If it is a contract, add the debt to the debt total, bro. )

    -The banks are still a bubbling cauldron of falsely-valued securities, they must be reconciled one way or another, and it will be a train wreck.

  25. Atlas:

    How about the post Depression stimulus — did that help ?
    – and the 1937 austerity — how did that work out?

    WWII ? Did that have any impact on global economies?

    And the 1950s Interstate Highways? What about NASA? Darpanet?

    Ayn Rand was writing about the communist Soviet Union, and it only took a small group of clownish school boys to elevate her to a false deity. You guys would be hilarious if you weren’t so motherfucking dangerous.

    -Living comfortably on a small island in Puget sound away from you loons

  26. ga082003 says:

    What is Indian IT telling of EU and US economy?Armageddon!!!

  27. ga082003 says:

    What is Indian IT telling of EU and US economy?Armageddon!!!

  28. FS says:

    “If the country had defaulted on its debt earlier this month, he likely would have made a bundle.”

    The hypothesis appears incorrect. The US struck a deal to not default, markets are going down, and gold up.

    It appears that it is more likely to have been a positive if the debt ceiling had not been lifted, and real progress on reducing our debt had begun.

  29. Greg0658 says:

    ditto everything HEHEHE Says at 6:56am
    WITH this
    which one of you – if you had control over the lever to deliver more AIRcash to your stream .. wouldn’t?
    we have a seriously messed up system of levers in the 21st century (hopefully beyond)

  30. Transor Z says:

    So he’s intellectually consistent AND makes good investments?

    A witch!

  31. WaveCatcher says:

    Ron Paul is not “Talking his Book” rather he’s “Booking his Talk.”

    I would call into question the motives of the other politicos who support QE in order to reflate the price of their assets. Especially those that own stock in the money center banks.

  32. RW says:

    Any policy maker must be judged by the consequences of their policy; their principles or lack thereof is largely irrelevant.

    Ron Paul joined forces with those attempting to crash the American economy and extend the pain of the un-/under-employed. That is all I need to know.

    The fact that most of those engaged in that attempt expressed a desire to show up and weaken a president while Paul and a few others, apparently, did not is of some interest possibly but it has no relevance to the consequence(s) of the act.

    FWIW though, I agree with those who argue Ron Paul was probably not being venal and was following the logic of his rather simple-minded beliefs. That might be laudable in the case of a neighbor or priest perhaps but not so much for someone charged with policy development in a complex, globally interconnected and often conflicted nation; a bit more intellectual nuance and self-critical reflection would frankly be preferable even if it led to the appearance of self-contradiction now and then.

    “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do. He may as well concern himself with his shadow on the wall.” – Ralph Waldo Emerson (Essay II: Self-Reliance).

    NB: If Paul was invested in the same sectors in the last two decades of the 20th Century he should be about at breakeven now.

  33. louis says:

    If he wins and implements real change then he can rebalance.

  34. Bill Wilson says:

    The policies that Ron Paul advocates are actually terrible for his holdings of gold miners.

    Why hasn’t the FED started with QE3? In part, it is because of political pressure from politicians like Ron Paul. What would QE3 do for the price of gold?

    If Ben Bernanke owned physical gold or stock in gold miners, that would be a conflict of interest.

  35. RW,

    @11:34, esp. w/ the RWE Quote..You should be Sure(?), that you aren’t “Hoist(-ed), on your own Petard..”

    hoist with your own petard, also hoist on your own petard
    –to be harmed by something that was intended by you to harm someone else

  36. constantnormal says:

    Treasonous? Where does one draw the line?

    Can you say “Conflict of interest”, boys and girls?

    Should we force elected officials to divest themselves of pre-existing portfolios and place the proceeds into blind trusts composed of equal portions of US index equity funds and Treasury bonds, and allow any savings to be placed only into those trusts for so long as they remain in office?

    Or should we allow our elected officials to bet against the dollar and then to follow that bet up by voting in a manner so as to encourage its failure?

    Should former Tennessee Senator Bill Frist, whose family had a Very Large interest in the Hospital Corporation of America, have been permitted to vote on health care legislation? Should former Indiana Senator Evan Bayh have been permitted to own positions in small drug companies, with his wife a paid official (closet unregistered lobbyist) of that company, and then have him lean upon the FDA for an accelerated approval of one of their new products?

    These are not isolated examples. These practices are too widespread to treat them by uprooting the instances of corruption, we need to change the rules that our government operates by. Getting our government to regulate itself is a losing proposition, as that works no better there than it does in industry or anywhere else.

    Something to think about. Just another facet of our corrupt Bananamerican goobermint.

    I am not criticizing Ron Paul’s politics not his investments, only the combination of the two. Same with the other examples cited.

    Just as elected officials are supposed to set aside their own beliefs about religion and provide a government that is blind to religion, so ought our officials never allow their own finances and their voting to influence each other. I see no other way to accomplish this than by separating their finances from them and from their beliefs and control, for the duration of their terms in office.

    It’s not as if we pay them so little that this would severely hurt them. Lifetime salaries and free health care are worth a lot, and should provide adequate incentives, even if their patriotism does not.

  37. constantnormal says:

    one more log on the fire …

    Now THERE’s a guy who is clearly destined for Washington D.C.

    Not quite the track record of Hillary Clinton, commodity futures trader extraordinaire, but clearly not cut from the same cloth as mere ordinary honest folks. He should get along just fine with our million-dollar-a-year lobbyists …

  38. seneca says:

    Ron Paul reminds me of a baseball player who bets against his own team. He’s not only long gold shares but short the broad stock indexes and has been for years. If America loses, he wins. Is he out to INTENTIONALLY screw the country? Well, there’s no getting around the fact he spawned Rand Paul.

  39. Greg0658 says:

    umm .. how many posts dropped in by approval from the editor .. & into their time post of drop .. can we get an asterisk next to the time stamp PLEASE

  40. HEHEHE says:

    For all you Kenseyian geniuses – I present for you the words for FDR’s Treasury Secretary Henry Morgenthau, Jr.

    “”We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot.”[8]”

    So how exactly did that post-Depression spending work again? I am just trying to figure that one out. Apparently it did nothing. The same unemployment rate eight years later than you had when the Great Depression began.

    End the Fed and you end the resulting free money, reckless speculation, misuse of capital and all the bubbles and crashes. It isn’t complicated unless you decide to make it so.

    Another thing, the Gold standard is not a panacea but it is better than floating Fiat currencies. If there was another means to prevent the whimsical debasing of currencies I am willing to listen.

    One final thing – I don’t agree with everything Ron Paul says, (I think government is a necessary evil and support social safety nets and would even prefer a nationalized health care system over the lousy system we have now) but he is right regarding the ridiculous amount of money this country spends maintaining its empire to the detriment of its own citizens.

  41. AtlasRocked says:

    Amendment 28: The federal government is now granted the powers of
    benevolence spending: All retirement and health care benefits for the US
    citizens are now a power granted to federal government. Each month, the
    cost of all gov’t expenditures shall be directly pro-rated into the income
    tax rates for the following month, thereby insuring no deficits.


    Amendment 28: As clearly stated by the constitution, the federal gov’t only
    has powers iterated within. Since there is no granted power of benevolence
    spending stated in the Great Document, then the federal gov’t has no such
    authority, and that power is left to the states. All powers currently
    exercised by the federal gov’t are to be reviewed, and if not supported by
    specific language in the constitution, are to be removed. Federal
    intervention in schools, healthcare, and retirement programs, specifically,
    are to be transferred to the states by 2013.

  42. funkright says:

    best comment of the day, re Ayn Rand “You guys would be hilarious if you weren’t so motherfucking dangerous….” so true.. so true.. true laissez-faire capitalism and we’d be back to serfdom.. come to think of it, allot of us are there right now :(

  43. rootless says:


    -Keynesian stimulus has little or no history of success, where are the success stories? They’re non-existent. If you only found 1 or 2, it is still of no match for 30 years of failure here in the US, and all of Europe.

    For the last 30 years, there has been a systematic shift of the income distribution from low incomes to high incomes both in US and in Europe. Main stream economic theory and government policies have been dominated by neo-classical supply side thinking. The demand side in the economy has been systematically weakened. How are the last 30 years supposed to disprove Keynesian policies, then? Your assertion presumes something non-existent, and therefore, fails logic, independent on whether one thinks one can or can’t solve the problems of capitalism with Keynes.

  44. rootless says:


    End the Fed and you end the resulting free money, reckless speculation, misuse of capital and all the bubbles and crashes. It isn’t complicated unless you decide to make it so.

    Right, since we all know that before the Federal Reserve as the root cause of all the problems was created in 1913, there weren’t any such phenomenons like reckless speculation, bubbles, crashes, or financial crises, recessions or depression. Things were just great in the 19th century.

    Btw: How is it supposed to work in a modern society after the central money authority has been abolished? Every bank issues its own currency? Or how?

  45. RW says:

    That little decontextualized snippet from Morganthau has been making the rounds but Morganthau is a poor choice for conservative talking points generally even if he did dislike Keynes theory so it is understandable most of what he had to say is left out.

    I make no claim to genius but hate to see a good man’s memory abused so here’s a bit of context:

    Morganthau was a progressive thinker, an honorable man and vigorous prosecutor of corruption, but he was also a classical economist and opponent of Keynesianism. He believed in balanced budgets which is why, as the architect of the Social Security system, he insisted the program have its own tax base. To keep the deficit in line he insisted on increased taxes too, especially on the wealthy; e.g., “We have never begun to tax the people in this country the way they should be….. I don’t pay what I should. People in my class don’t. People who have it should pay.”[8]

    Here’s a timeline for the Great Depression. Distilled to essentials:

    When FDR took office in 1933 unemployment was 23.6%. After FDR’s first 100 days and a huge infusion of stimulus the free-fall of GNP and unemployment dramatically slowed and then reversed so that by the following year, 1934, GNP rises 7.7% and unemployment falls to 21.7%

    This trend continues until 1936 which has the astonishing growth rate of 14.1% and an unemployment rate of 16.9%. A politically weakened FDR rejects Keynes advice and allows austerity policies to be introduced largely at the behest of folks like Morganthau. The economy enters recession but GNP still rises 5% and unemployment falls to 14.3%. In less than a year (1938) GNP falls 4.5%, and unemployment rises to 19%.

    When Morganthau made that quote the country was on the eave of war and although unemployment was not as high as when FDR entered office it was high enough that he was only slightly exaggerating in his comments. Whether he understood that his own policy choices helped lead to the situation he lamented is a task I leave to historians.

    The facts of the case however are as they are so perhaps the consequences of Keynesian policies during an economic contraction vs the consequences of austerity policies in that same scenario are a little more clear now.

  46. brianinla says:

    Well rootless the biggest difference was panics and crises before the Fed didn’t let the same people stay in power and get taxpayer bailouts in the same fashion since LTCM (the bezzle since 1998). The Fed has failed at their mandates – price stability and maximum employment, but you want this private club to continue enriching their shareholders?

    Private bankers have completely captured Congress and here you are defending them. The owners of the Fed will not willingly choose to do what’s in the best interests for the working class.

  47. Bill Wilson says:

    I don’t agree with Jim McTague’s assessment of Ron Paul’s portfolio.

    He writes, “In all, Ron Paul’s portfolio amounts to a super bearish bet against the U.S. economy.”

    It could easily be described as a “super bullish bet” on gold mining equities with a bearish hedge against the market as a whole. Maybe that’s why he’s held those inverse funds for several years even though it is unwise to do so. He’s making a hedge which is supposed to cost you money.

    If Ron Paul was invested in physical gold that would be one thing. If there had been no debt agreement and Armageddon had happened, those gold mining stocks would have taken a big hit with everything else.

    Why was Ron Paul so against QE2 last November? QE2 was the best thing to happen to gold mining stocks in a long time?

  48. rootless says:


    Private bankers have completely captured Congress and here you are defending them.

    To which one of my statements does this refer? Thank you.

    I’m questioning the merits of the idea according to which eliminating the Federal Reserve will lead to an economy w/o reckless speculation, bubble, crashes, financial or economic crisis, recessions or depressions. These phenomenons have been recurring and universal features of capitalism, since capitalism came into existence in Europe in the 16th century and has been spread all over the world since then. The existence of the Fed is not the cause of these features, and, hence, the allegedly simple solution for these problems, which is being advocated by some is none.

    I also would like to know what the idea is how it is supposed to work in a modern society w/o any central money authority. This was a question I have had.

    The other statements you have read into my comment against which you argue, well, they are just in your own head.

  49. HEHEHE says:

    I get a real chuckle when the commenters try to dismiss people with the old Ayn Rand boogie-woman comment then pat themselves on the back and continue to bloviate their idiotic theories that “managing the economy” is something that can actually be done with any success. What happened in 2008 didn’t have anything to do with “laissez faire” capitalism. It had everything to do with Greenspan’s attempt to prevent the recession that was to follow the bust of the internet stock bubble (which he created in part by allowing people to trade stocks on ridiculous amounts of borrowed money) by keeping interest rates insanely low for an insanely long time to spur the housing bubble. This is completely against anything that would have been espoused by anybody who actually read Ayn Rand and agreed with her writings – which I don’t.

    The economic business cycle has always existed. It existed before the FED and it will exist after the FED. The FED is an unnatural entity that through its mandate seeks to manage the business cycle through the management of interest rates. This has never worked throughout history as no centralized authority has had the wisdom of knowing when to turn off and on the tap at the right time. Consequently you get idiots like Alan Greenspan, that in their attempt to prevent recession, exacerbate malinvestment through ridiculously low interest rates thus insuring that the next bust is twice as big as the one that was avoided and lasts twice as long. It is that simple. Alan Greenspan was an idiot. Now you have Bernanke who rather then let the system clear is going to destroy the currency and take the entire ship down with him.

    Do we need the FED as it is currently constituted? No. Would there be some other entity that could be created to assist with the management of banking crises? Perhaps. Do banks need to be regulated for fraud etc? It would be nice. Is it possible? Not completely. Would the size of frauds be greatly reduced with a return to the gold standard and an end of fractional reserve lending? YES. Would the system be 1000 times more stable? YES.

    BTW Morganthau said what he said and it was not taken out of context. Secondly read Mises if you want an alternate viewpoint of what FDR’s administration did or did not do wrong.

    Finally don’t go slapping that stupid conservative label on me either. I am a realist. You think that a big government will solve a bunch of problems. It will never do so. It will always become what it has become in this country which is a tool for the wealthy and connected to fill their pockets with the taxes that are taken out of your wallet all the while building temples to themselves that they hope will stand the test of time so that their ancestors will know the bloviated esteem with which they held themselves.

  50. brianinla says:

    The Treasury can be in charge of the money supply. Why do we need a private group of bankers in command of it? The Fed cannot be audited. Who are the shareholders that make up the Fed? Geithner was the president of the NY Fed and now moved into the Treasury position – thereby in direct control of the spigot to funnel money.

    And I told you the first time that in times of crises the flailing bank(s) could be left to sink rather than be bailed out by taxpayers. The bailing out of AIG to payoff their derivatives bets was one of the biggest heists during the crisis.

    It’s pretty easy – if the investment banks (and derivatives) are regulated correctly, and the banks know they won’t be bailed out for leveraging 40-1, this crap would stop. But nothing has changed since 2008. Those in charge of the Fed only want more and so far are getting it.

  51. wally says:

    “I sincerely hope the Barron’s writer isn’t implying Ron Paul voted against the debt ceiling increase because it would make him a bunch of money.”

    Here’s the deal: everybody holding a political office where they vote on policy should move all assets into a blind fund, managed by somebody else, as long as they hold that office.
    Ron Paul is no exception. Whatever you may think about the man, his morals, his ethics or his ‘straight shooting’, the fact is that he has also voted his pocketbook and nobody can ever know what is really in his mind. The appearance of detachment is important and every US official should know that.

  52. GG says:


    Why are the holdings of Ron Paul intriguing? What do you expect him to hold, the SandP 500 that has done nothing the last 10 years? Banks that are wards of the state, Government Motors, or perhaps Fannie and Freddie that are STILL being fed taxpayer dollars? No, I’d leave that to other members of congress who can’t hold a candle to Dr. Paul’s understanding of economics and fiat money.

    Dr. Paul has been warning us for years what would happen with profligate spending, socialized losses and meddling with interest rates. Now that his warnings are painfully correct the media is is angry at the messenger as their own 401k’s languish. Lovely.

    If the government acted on Ron Paul’s advice, he would not need to own gold. Now, that . . . . is intriguing.



  53. rootless says:


    Dr. Paul has been warning us for years … Now that his warnings are painfully correct the media is is angry at the messenger as their own 401k’s languish. Lovely.

    Paul’s warnings have been correct? Somehow I must have missed the dollar collapse, hyperinflation, or the financial bankruptcy of the US government in this universe. Because the impending economic Armageddon and collapse of society is what Paul has been predicting for years. But maybe that explains some of his actions like voting against the debt ceiling increase or the proposal to cancel the Federal debt holdings of the Federal Reserve. These actions would probably have had some of the effects he has been predicting. Not raising the debt ceiling and enforced government spending cuts by more than a $100 billion a months due to this would have crashed the US economy. And canceling the treasury holdings of the Fed would have been the same as if the Fed had suddenly printed $1.6 trillion w/o any asset swap and destroyed the confidence in the US dollar, internationally. If the predictions aren’t fulfilling by themselves as fast as said why not helping along a little bit with making them true? It wouldn’t be the first time that a guru of a religious cult tries to actively further his own predictions.

  54. Freestate says:

    Yes, Ron Paul is consistent, but that does not mean he is not foolish. Just watch his performance during Beernanke’s last congressional testimony. It was embarrassing. He does not even even understand how the Federal Reserve works. No, it doesn’t give away money. I would say that Ron Paul has a “foolish consistency” and Emerson summed up his approach quite well when he said: “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.”

    Given his worldview, his investment holdings are no surprise.

  55. Joe Friday says:


    -Keynesian stimulus has little or no history of success, where are the success stories? They’re non-existent.

    Only to the ignorant.

    All western democracies, now focused on benevolence rather than economic hygiene, are failing


  56. Joe Friday says:


    So how exactly did that post-Depression spending work again? I am just trying to figure that one out. Apparently it did nothing. The same unemployment rate eight years later than you had when the Great Depression began.

    Except you got it WRONG.

    GDP rose to +13% and the Unemployment Rate fell to 9%, from the minus 13% GDP and a 25% Unemployment Rate that incoming President Roosevelt inherited. His “New Deal” worked spectacularly.

    Reality bites:

  57. HEHEHE says:

    “Except you got it WRONG.”

    Sorry Joe, nice try. I am still around. You got it wrong.

    That’s just the highlights. Read the underlying article.

  58. Joe Friday says:


    Let’s recap.

    I presented OFFICIAL DATA from the Bureau of Economic Analysis division of the U.S. Department of Commerce and the U.S. Department of Labor.

    YOU responded with a hack OPINION piece, which is BUNK, not “debunk”.

    So you got NUTHIN’ ?

  59. HEHEHE says:

    Joe, Joe, Joe, Joe When Will Your Ever Learn?

    First you provided a graph with no explanation of where your data came from – which doesn’t surprise me in the least.

    Second the reason DiLorenzo references the Census Bureau Data because prior to 1940 there was no Current Population Survey kept by the BLS:

    You can view that data here:

    So please quit spreading misinformation.

  60. romanmir says:

    If USA defaults on the debt then gold would go DOWN as interest rates would skyrocket (just like during Volcker service in 1981). Ron Paul invests against USA Fed, but Ron Paul’s policies are AGAINST HIS OWN INVESTMENT.

    In over 10 years that Ron Paul owns these stocks they are ALL UP:

    GG up 1000 percent

    ABX up 300 percent

    NEM up 300 percent

    AEM up 700 percent

    AU up 300 percent

    IAG up 1000 percent

    MVG up over 1000 percent

    PAAS up 1000 percent

    SLW up over 2000 percent

    Excuse me who does this author think he is, talking about Ron Paul’s investment?

    Which other candidate can boast the same economic foresight? Wouldn’t you want one that CAN?

  61. Joe Friday says:

    Try putting down that goalpost you keep moving around.

    What does the Bureau of Economic Analysis state was the GDP during the 10-year depression ?

  62. Joe Friday says:


    Since you can’t handle the truth, here’s what the ‘Bureau of Economic Analysis’ states was the GDP:

    – 13.1% > 1932
    – 01.3% > 1933
    + 10.4% > 1934
    + 08.9% > 1935
    + 13.1% > 1936

    Therefore, just as the chart I posted illustrated, GDP exploded after the enactment of FDR’s “New Deal”.

    Now on to the second half of your ridiculous assertion.

    Why would you rely on a faulty inaccurate census report for unemployment data ? You do realize that prior to 1940 they counted the millions of people working for the WPA and other government jobs programs (who were performing work and getting paid for it) as ‘unemployed’ ?

    Once again, I’m afraid your “debunk” is just more BUNK.

  63. HEHEHE says:


    First, you clearly are making things up because you did not get those unemployment numbers from the BLS because they only keep the data back to 1940. You must have pulled those numbers out of thin air.

    Second, here is link to the GDP information from the BEA:

    That doesn’t look like anything in your graph either. Where’d you come up with that stuff?

    Finally, the point of the article that the review was about that I posted was the money spent by the government in the 1930′s did little if anything to improve the economy. It played well politically which is fine and FDR may have believed it to be the right thing to do and/or that it would work but the facts are it did little if anything to improve unemployment and did nothing to improve the underlying economic problems. His Treasury Secretary Morgenthau said as much.

    My entire point is not to call FDR a clown. My point is that his policies were a complete wash economically. They may play as well politically as they are today but playing everybody gets a free pony is never going to lead to a sustainable recovery. That will require shared pain by everyone – higher taxes, less entitlements, less defense spending, more personal bankrupties and foreclosures and more corporate bankruptcies. Essentially you have to let things get much worse before they get better.

  64. Joe Friday says:


    Finally, the point of the article that the review was about that I posted was the money spent by the government in the 1930′s did little if anything to improve the economy.

    Except it was a SPECTACULAR economic success.

    That will require shared pain by everyone – higher taxes, less entitlements, less defense spending, more personal bankrupties and foreclosures and more corporate bankruptcies. Essentially you have to let things get much worse before they get better.

    Why would the pain need to shared by everyone when our debt is overwhelmingly as a result of numerous rounds of tax cuts for the Rich & Corporate ?

    There was no shared benefit, why should their now be shared sacrifice ?

  65. HEHEHE says:

    “Except it was a SPECTACULAR economic success.”

    Yes it was a spectacular success if you post a graph that has no basis in reality and that clearly wasn’t derived from the economic data that you calim it was derived from.

  66. Joe Friday says:

    Unfortunately for you, the independent non-partisan Congressional Budget Office, the U.S. Treasury Department, and the Bureau of Economic Analysis of the Department of Commerce, ALL disagree with you.

  67. HEHEHE says:

    Just keep making them up Joe. Why don’t you name a few more government agencies the next time?

  68. Joe Friday says:

    Ya got NUTHIN’.