Ron Paul Should Learn From Bernanke's Heroism

What is bravery? Is it fighting a lion? Rescuing a princess? Saving the world from flesh-eating cockroaches bent on the destruction of Earth?

Hollywood would have us think so about all those things, but the truth is, none of those acts is very brave if the main character is invincible. After all, even a coward would save Earth from flesh-eating cockroaches if he or she were made out of Raid.

Bravery comes from doing the right thing even when it is very frightening to us. The more afraid we are of something, the braver we are when we actually do it. Bravery cannot exist without first being afraid, and we can never be heroic if not brave.

And by that measure, Federal Reserve Chairman Ben Bernanke is a very brave man. And, I reckon, a hero.

Consider the recent showdown between Bernanke and his arch-nemesis, Rep. Ron Paul (R-Texas). Paul challenged Ben Bernanke over whether gold is money.

Voice noticeably quivering, Bernanke went ahead and told the truth. It isn't.

Why gold isn't money
For something to be money, it has to be commonly exchanged for goods and services. Last time I checked, I couldn't take a gold coin into McDonald's and receive their oh-so-golden French fries in exchange.

Similarly, stocks -- as much I love them -- are not money or currency, either. If I want money for them, I'd have to sell shares. Furthermore, I couldn't get a direct price quote on, say, my Dell shares in terms of ounces of gold. I’d have to exchange my shares for dollars first and then, if I'm so inclined, exchange those dollars for gold.

But no matter how right he is, Bernanke had reason to be fearful in answering Paul. Bernanke was reappointed in 2008 by the thinnest margin ever, and the man challenging him was a politician who is a stone's throw away, as chairman of the Domestic Monetary Policy and Technology Subcommittee, from being his de facto boss. (The nearest would be President Obama.)

When was the last time you told your boss -- on national television, no less -- to stick it where the sun don't shine? That's brave.

Keep in mind that Bernanke didn't have to answer that way. He could have weaseled out of the question by saying, for example, "Well, it depends on how you define money." Or he could have explained it in Greenspan-speak that would be unrecognizable to the human ear. He even could have agreed with Paul but offered some caveats. Instead, Bernanke mustered his courage and explained his (correct) position in no uncertain terms.

Please stop it, Ron Paul
I don't doubt that Bernanke's opponent is sincere in his gold evangelism. Congressman Paul's personal portfolio is practically a gold-mining ETF unto itself, with a beefy $500,001 to $1,000,000 stake in Goldcorp (NYSE: GG  ) , $250,001 to $500,000 stakes in Newmont Mining (NYSE: NEM  ) and Barrick Gold (NYSE: ABX  ) , a $100,001 to $250,000 stake in IAMGOLD (NYSE: IAG  ) , and $50,001 to $100,000 stakes in Pan American Silver (Nasdaq: PAAS  ) and MAG Silver (AMEX: MVG  ) . If I were looking for a comprehensive list of gold-mining stocks to buy, I could hardly do better than the congressman's own positions.

Although I give him credit for putting his money where his mouth is, there are two problems with Paul's gold-stock ownership:

  1. It's clearly a conflict of interest with his chairman position. The man who wants to bring back the gold standard owns the stocks that would most benefit from doing so. I do think Paul is a true believer in gold, but it still gives the appearance of impropriety.

    Speaking of which, there's also the congressman's position, albeit a small one, in the Prudent Bear Mutual Fund, a dedicated short-bias mutual fund. It's a bit distressing to see that the Domestic Monetary Policy subcommittee's chairman, and a presidential candidate, is betting against American business. Since it's such an insignificant position, I recommend that he do away with it simply to avoid such an appearance.
  2. His advocacy of gold, no matter how sincere, could cause real harm to real people. It may be OK for a multimillionaire congressman to bet most of his life's savings on gold, but it's probably not suitable for his supporters living paycheck to paycheck. What if he's wrong? Can Paul live with seeing his supporters lose their paychecks, invested almost entirely in gold-mining stocks as he his? I would imagine such a scenario would make Paul, or any man, feel enormous guilt.

Maybe Congressman Paul -- who is retiring from Congress at the end of his term -- can be brave and admit that although he loves gold, it's probably not appropriate for his supporters to confuse political ideology with sound investment strategy. Now that would be heroism on a Bernanke scale.

Fool contributor Chris Baines is a value investor. Chris' stock picks and pans have outperformed 89% of players on Motley Fool CAPS, and he's a Dell shareholder. Motley Fool newsletter services have recommended buying shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Comments from our Foolish Readers

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  • Report this Comment On July 19, 2011, at 9:19 PM, michnow wrote:

    Gold may not be money but with the Bernk on the job soon the dollar will not be money either, it will be toilet paper, but wait tp will be worth more because it won't chafe.

  • Report this Comment On July 19, 2011, at 9:30 PM, mtf00l wrote:
  • Report this Comment On July 19, 2011, at 9:35 PM, mattjudy wrote:

    First of all, Ron Paul is not Bernanke's boss. Neither is Obama. The Fed operates independently and its chairman is selected from a list the Fed itself produces.

    Bernanke is the one with the power to enact monetary policy, not Ron Paul. Bernanke is the 'boss.'

  • Report this Comment On July 19, 2011, at 9:55 PM, doncoyoteok wrote:

    Well gold has been money for a lot longer than the dollar has been money. And I suspect it will still be money after the dollars have all biodegraded.

  • Report this Comment On July 19, 2011, at 10:11 PM, DoctorLewis4 wrote:

    Great article! Bernanke is a hero. And Ron Paul is on another planet.

  • Report this Comment On July 19, 2011, at 10:23 PM, cbaines2 wrote:

    "First of all, Ron Paul is not Bernanke's boss. Neither is Obama. The Fed operates independently and its chairman is selected from a list the Fed itself produces."

    That's why it says "de facto boss" as opposed to just "boss".

  • Report this Comment On July 19, 2011, at 10:45 PM, whereaminow wrote:

    ROFL

    This has to be the least informed, most nonsensical anti-Ron Paul pieces I have come across in a long time. If this is the best you've got, we're going to do just fine.

    The bankster puppet, Ben Bernanke, is heroically fighting for us! OMFG I cannot stop laughing over this. By shoveling billions to overseas bankers? By giving preferential loans to the wives of big bank CEO's? By being wrong about every single major economic event of the past decade? Oh boy, thank GOD in Heaven for Ben Bernanke!

    Ron's gold positions are a conflict of interest? LOL, what is his "interest"? His interest has only been in fighting for liberty and restoring the gold standard for the last 40 years. Ron is the reason Americans are even allowed to own gold. Smart man, that Ron Paul. His portfolio hasn't changed much in decades. Buy and hold.

    You've got billions in PAC money getting shoveled to one scumbag politician after another to support the warfare/welfare state that bombs, tortures and murders people all across the globe, but this author is not worked up about that. Nope, Ron Paul supporting sound money on the other hand.....

    OMG, you are too cute for words.

    David in Qatar

  • Report this Comment On July 19, 2011, at 10:56 PM, SigmaChi1855 wrote:

    What is heroism? How about Ron Paul voting consistently with the Constitution for over 30 full years in the House side of Congress only to have the bandwagon tea party candidates steal his message when things came true like he said it would. His humility while being right all along predicting this crisis is true courage. Here's some food for thought, if Bernanke was truly brave he would allow Congress to AUDIT the Federal Reserve. What else do they have to hide other than eroding the value of our dollar every day with "quantitative easing" while the value of gold is driven up? I would expect more from the Motley Fool to be more motley than foolish, but I stand corrected in this article!!!

  • Report this Comment On July 19, 2011, at 11:19 PM, flyingwombat wrote:

    http://www.usgwaste.com has a review of this article today and gives Baines some credit for monitoring Paul's gold stocks, but slams him on calling Mr. Establishment Bernanke heroic.

    It really is laughable to think of the Fed chief as the brave one when Paul's been standing up for what he believes in for so long, and been mocked for it.

  • Report this Comment On July 20, 2011, at 12:25 AM, Rosco1776 wrote:

    I'll keep my my metals with paper as long as I can. The dollar falls and the metals rise. :-)

    Vote Peace, Prosperity and Liberty, vote Ron Paul 2012!!

  • Report this Comment On July 20, 2011, at 12:26 AM, Rosco1776 wrote:

    Oops, I stuttered! LOL! I'll buy my metals with paper is what I meant to say. :p

  • Report this Comment On July 20, 2011, at 12:45 AM, BoilerroomEd wrote:

    Bernanke a hero? Maybe to Joe Stalin or Mao. Certainly to the Red Star (Rothchild) family.

    So Ron Paul's personal investments in gold are due only to his own greed? Or is it due to his understanding of economic laws? I’m guessing that 6000 plus years of gold holding its value is meaningless. Green paper with no intrinsic makes sense?

    Keep backing the statists. (Sadists?) They’ll hang you too when they get the chance.

    Peace!

  • Report this Comment On July 20, 2011, at 12:48 AM, travaler67111 wrote:

    the only reason you would have to trade gold for money then buy a stock is because the federal government has made it illegal.

  • Report this Comment On July 20, 2011, at 1:44 AM, ReverePaul wrote:

    Bernanke a hero? More like a worm in an apple.

    What's worse than finding a worm in an apple...

    Finding half a worm in an apple..

    Boys and girls our apple is not rotten, it is just full of worms...

    don't mistake his posturing for bravery ... vampires hiss when exposed to the cross...

    by the way the constitution clearly states what money is, the author knows this...what color has this fool painted himself?...quit spewing!...go get 'em RON...drag these guys into the light of day...the wind will clean up the mess

    Ron Paul 2012

  • Report this Comment On July 20, 2011, at 3:56 AM, Numis19 wrote:

    I think the author has money confused with currency.

  • Report this Comment On July 20, 2011, at 4:16 AM, Numis19 wrote:

    If you really want to know if gold is money and what people would prefer to have today, just ask the Chinese if they would rather us repay our debt with fiat paper us dollars or would they rather have our gold.

    As Ron Paul said if gold is not money then why do the Central Banks keep it. Benanke said tradition. Then why are they buying more now? Tradition? Central Banks have bought more gold in the first half of 2011 than all of 2010.

    This is really not about the definition of money or about whether gold is a good hedge against inflation. This is about supply and demand. The demand for gold is higher today than it has ever been. That is why the price is at an all time high. The next question should be do you believe demand will go up or go down?

  • Report this Comment On July 20, 2011, at 5:29 AM, floridasandy wrote:

    if i worked at mcdonald's, they would get fries for the gold coin.

  • Report this Comment On July 20, 2011, at 9:40 AM, XMFSinchiruna wrote:

    This might be one of the more bizarre articles I've read in a while. If Bernanke were a 5-year-old kid, I might be impressed that he stood his ground in front of that uber-imposing Congressman with the grandfatherly demeanour. As an adult, and particularly as one in a position of power over our nation's monetary policy, he must be expected to hold his ground on philosophical differences. If it requires heroism to conduct that simple act, then perhaps the notion of heroism, like our fiat currency, has been dilluted to the point where it no longer holds value.

    Speaking of which, by denying gold is money because of its limited scope currently as a medium of exchange as a result of political actions, the author ignored another requisite function of money: money must perform as a store of value. Given its modern track record, then, must we also question whether the USD is actually money. Of course not. Furthermore, the author can not go into a McDonalds with a handful of British Pounds and expect to come out with a single coveted fry.

    As another reader points out above, displaying openness and transparency by submitting to an audit of the Federal Reserve would exhibit at least a modicum of bravery, but instead he resists vociferously.

    Point #2 above is a straw man, since Ron Paul has never advocated for folks to invest their entire life savings in gold or gold mining stocks. Meanwhile, the author could just as easily cause "real harm to people" by villifying gold amid this powerful generational bull market.

    Potraying Ron Paul as some sort of uber-imposing, fearful figure that makes central bankers quake in their boots is kid's stuff. Adults must be expected to

    The conflict of interest portion

  • Report this Comment On July 20, 2011, at 9:42 AM, XMFSinchiruna wrote:

    I was not finished when I hit "Post Comment", but it's just as well... time to move on.

  • Report this Comment On July 20, 2011, at 9:52 AM, catoismymotor wrote:

    After reading this I realize I picked the wrong day to stop sniffing glue.

  • Report this Comment On July 20, 2011, at 10:04 AM, SN3165 wrote:

    So, Ron Paul owning gold and gold stocks is a conflict of interest but half of our nations politicians owning shares in Goldman Sachs is not?

  • Report this Comment On July 20, 2011, at 10:19 AM, SanityChecker wrote:

    Bernanke's a hero? You're kidding, right?

    The economy is in a shambles. Official unemployment is at 9.2%. U-6 unemployment is at 16.2%. The dollar is in trouble. The Euro zone is in trouble. Japan is still recovering from the aftermath of the earthquake and will be for quite some time. Gasoline has gone through the roof. Food costs are way up. Retail inflation is hitting the stores.

    Meanwhile, Bernanke keeps telling everyone that all is well.

    Your analysis is making me ill.

  • Report this Comment On July 20, 2011, at 11:16 AM, caracres1 wrote:

    Bernanke a hero??? I put a lot more trust in Richard Russel's definition of Bernanke:

    When Bernanke was asked if gold was money, he answered "No." When Bernanke was asked why the US held the largest hoard of gold of any nation on earth, he answered, "Convention." My take -- Bernanke is either dishonest, a liar or ignorant. Take your choice. My pick -- he's up against the wall and dishonest. The Federal Reserve is all about fiat money. Is it any wonder that the Fed Chairman had to deny that gold is money? - Richard Russell

    Tom Hammes

  • Report this Comment On July 20, 2011, at 12:08 PM, gorgsngar wrote:

    What planet were you born on?

    Since the beginning of civilization GOLD and SILVER have been the main legal tender! It is MONEY!

    Ron Paul is the Hero to inquire as to where OUR GOLD IS! How much is there LEFT and how much has Bennie boy sold off WITHOUT OUR KNOWLEDGE!

    Ben is a fraud and he has bankrupted OUR COUNTRY by giving out Trillions of Dollars to Billionaires

    Wake up and smell the coffee bro because you SURE DON'T know what you are talking about!

  • Report this Comment On July 20, 2011, at 12:44 PM, freshjiva wrote:

    Two quick points:

    1) A return to a true gold standard would actually work against anyone who is long gold. Why? Because no one is advocating a dollar/gold exchange rate of $2000/oz or anything greater than what we have today. Excess liquidity, or inflationism, has been the hallmark of Fed policy for over 12 years now. A return to sound money wouldn't occur until government deficit spending is reigned in and taxes and regulatory burdens are reduced. In the meantime, he'd legalize free competition in currency. This would send gold price falling hard, as demand for dollar liquidity would mop up all the cheap credit the Fed has created. See Ron Paul's writing, "The Case for Gold" for more information on how he'd actually implement the significant changes to our monetary system a true gold standard would require.

    2) Recommending average Americans to buy gold and silver is probably the best advice anyone could give, so long as the goal of reinstating sound money is not achieved. An ounce of silver could buy you, roughly speaking, a full tank of gas in your average 4-door sedan. Today, an ounce of silver would buy you the exact same thing. What has changed? Paper dollars. Silver and gold hold their purchasing power because you are looking at the economy in real terms, not paper which is constantly debased.

    Sound money, or a gold standard or free competition in currencies, would be one of the greatest blessings for the Middle Class, because it protects the purchasing power of your savings over the long term horizon.

  • Report this Comment On July 20, 2011, at 4:30 PM, jenerec wrote:

    Helicopter Ben's voice was quivering because he was lying Chris and he knew it! Ron Paul is the real hero for the common people like retirees on fixed income or folks with low wage jobs. Ben is the hero for the banksters and wallstreet so I guess you are partially right, haha

  • Report this Comment On July 20, 2011, at 4:56 PM, myingling wrote:

    Are you kidding me? This is the most foolish piece on the gold standard and Ron Paul I've read before.

    Ironically fool.com (appropriately named this time, it seems) links the stocks you bashed Ron Paul for owning: they're all green. Ron Paul's investments are hardly secret. He realizes that every second you hold onto a dollar it becomes worth less, so he puts his money where his mouth is and invests. According to his investments, it looks like he's right.

    The only gold can't be used as money is because the government has a monopoly on money. If you as a seller are forced to accept the paper the government prints endlessly, why would I (as a customer) pay you in a more valuable means (like gold)? Competing currencies is the answer, so that sellers can say "I don't accept US dollars, only X, Y or Z." If you'd listened to Dr. Paul's explaining this before, that would also be pretty clear.

    And calling Bernake heroic? QE1 didn't work. QE2 hasn't worked. QE3 is around the corner. Fool me once shame on you, fool me twice shame on me. Fool me three times and you're heroic? I don't think so. The bailouts haven't helped the average tax payer, but rather the CEOs who were responsible for their respective companies collapsing, and their deep-pocketed friends who were careless enough to invest in failing businesses. There's a risk in any market, and removing the natural selection process from it only creates artificial markets at the cost of the victims of the collapses -- the tax payers who now have tens of thousands of dollars in debt thanks to the Fed.

  • Report this Comment On July 20, 2011, at 5:25 PM, learningTim wrote:

    I suppose you disagree with Steve Forbes declaring that the US will return to the gold standard within 5 years, also?

    http://www.moneynews.com/Headline/Steve-Forbes-Gold-Standard...

  • Report this Comment On July 20, 2011, at 6:42 PM, Deefburger wrote:

    Well, the only "money" mentioned in the Law, which to remind you is the Constitution of the United States, is.....wait for it....

    Gold and Silver.

    Now, boss or no boss, Lawful Money, which is what the Fed notes are redeemable in according to Title 12, 3, 12, 411 is Money. Not more legal tender, but real lawful money minted in gold or silver.

    Bone up bonehead and read the dang LAW!

  • Report this Comment On July 20, 2011, at 7:05 PM, Borbality wrote:

    I like how we're all investors but can't even agree on what money is.

  • Report this Comment On July 20, 2011, at 7:25 PM, likingliberty wrote:

    Hmm after reading all the above, I would agree with the fact that Ron Paul has stood his ground and he's been relentless for the past several decades.

    I came across this video on youtube, it says it quite nicely in a song version.. LOL

    http://www.youtube.com/watch?v=PZSvKWVp-kY

    liking my liberty

  • Report this Comment On July 20, 2011, at 7:58 PM, RDCATTY wrote:

    God Bless Ron Paul. He has my vote in 2012!!

  • Report this Comment On July 20, 2011, at 9:59 PM, wasmick wrote:

    "I suppose you disagree with Steve Forbes declaring that the US will return to the gold standard within 5 years, also?"

    He's not lying or delusional, he's just a politician.

    He can safely say it despite how ridiculous it is because he knows better than anyone that no one believes anything a politician says.

  • Report this Comment On July 20, 2011, at 10:42 PM, bhessel wrote:

    I suppose one can fairly argue that striving mightily in the face of hopeless odds—say, sweeping sand back into the sea, railing against the dark at twilight, or succoring a doomed and fiscally and morally corrupt cabal—is “heroic.”

    It does not logically follow that such behavior is smart, socially useful, or ethically sound.

  • Report this Comment On July 20, 2011, at 10:55 PM, mrudolph7 wrote:

    There's only two ways an article like this gets posted.

    Either he's a good troll, trying to rile the feathers of Paul supporters, or:

    There's a Bilderberg agent holding a gun to his head telling him to write a smear piece that sanitizes Bernenke while making the true threat to the private, unconstitutional foreign bank look bad.

  • Report this Comment On July 20, 2011, at 11:07 PM, platinum321 wrote:

    Chris Barnes must not have read the constitution he sounds as far out of touch with reality as Bernanke.

    Aligning himself with Bernanke makes him a shill, liar, and an enemy of our forefathers and the constitution as well as all patriots of freedom.

    He is carrying the torch that is going to turn our children into debt slaves.

    Give them both some more rope. ;)

  • Report this Comment On July 21, 2011, at 12:56 AM, lnardozi wrote:

    Wow. Fool is right.

    Gold isn't money.

    Ron Paul isn't right.

    What's next, 1+1=3?

    That's okay, name calling doesn't work against The Man With A Spine.

    Vote Vertebrate - Ron Paul 2012!

  • Report this Comment On July 21, 2011, at 6:34 AM, JRothchild wrote:

    The question of "is gold money" is moot. The question should be is gold tangible? Who really cares what Bernanke thinks, obviously his innate financial wisdom has done wonders thus far for the US economy...NOT! Bernanke is a political game piece that is part of the system that has placed the USA in this dire financial situation. Is gold money? Who cares? All that is important is knowing that gold offers very good financial insurance against poor financial decisions by Bernanke and the US government.

  • Report this Comment On July 21, 2011, at 10:18 AM, jilly4liberty wrote:

    hahaha Normally I would come back with all of these informative, logical arguments.. but I am laughing to hard!!!!! hahahahahahahahahahahahahahahahahahahahahahahahahahahaha

    Dude, anyone who agrees with your article isn't looking for facts, they're looking for a way to support what they've already decided is right

    (ps. scientific method. hypothesize, test, conclude. not conclude, scramble for ANYTHING to support the conclusion and vomit it onto paper as "proof")

    If you reverse your little process there^ you might become WORTH the intellectual energy to argue with.

  • Report this Comment On July 21, 2011, at 4:19 PM, killingwarren wrote:

    There are SO many things wrong with this incredibly ignorant article. First of all, gold is money, it's just not fiat money. Second of all, Ron Paul doesnt suggest we buy gold stocks, he suggests we revert to the gold standard. Third of all, Bernankesnkeynesian policy has helped drive our country farther into a hole I'm not necessarily an advocate of reverting to the gold standard, but it certainly would get rid of the hidden tax of inflation. Get your facts straight so you can stop misinforming people, you slimebucket.

  • Report this Comment On July 21, 2011, at 4:39 PM, catoismymotor wrote:

    Bernanke is a hero?

    If I pull a pin on a grenade, drop the grenade and throw you on top of the grenade to spare your buddies from the explosion would that make *me* the hero?

  • Report this Comment On July 21, 2011, at 10:32 PM, Sketch71 wrote:

    Bernanke a hero? Was this article written by a Fool or a Goldman Sachs board member?

  • Report this Comment On July 22, 2011, at 10:52 AM, DanHoelck wrote:

    "Heroism" is a stretch. Bernanke's the chairman of an ethically corrupt organization, but this comment isn't about the Fed, it's about all this blind Ron Paul fanaticism.

    I like Ron Paul's resolve, his commitment to preserving personal liberties and limiting the ever-pervasive federal government, but his policies are extreme and potentially dangerous. It's a fact that needs to be acknowledged, especially by his supporters.

    Would he make a good President? I think so.

    Would he make a good President if there weren't checks and balances to keep him from getting everything he wants? Absolutely not.

    While I agree with Paul that the majority of the regulating, lawmaking, and taxing that done by the Federal Government should be left up to individual states, I also have very little faith in the ethical integrity of capitalist entities.

    Ron Paul would like to keep government out of policing the private sector - but we've seen what happens in a self-regulating market. We saw it with Enron, we saw it with sub-prime lending, and we'll almost certainly see it again - as soon as the market figures out another ripe shortcut to unjustified profit.

    If the FDA or the FTC or OSHA were suddenly kicked to the curb, every person in this country would get the short end of the stick, one way or another. Yes, they're all inefficient money pits. Yes, they're always finding new ways to make business complicated. But take away the oversight, and we're back to the 1800's in terms of quality of life and public safety. Profits matter more than people to publicly-traded corporations.

    Sure, consumers would steer clear of companies that got caught selling super-harmful products... but first they'd have to be caught. And said products would have to be extremely harmful. Like, radium-in-your-hot-dog bad for you, or it'd just fly under the radar and the public would forget about it in a few months.

    So yeah, Ron Paul's got an exemplary dedication to the Constitution. But he's not infallible. And he's a little over the top on some issues...

    ...And that's why we have the Legislative and Judicial branches. They'll keep him from going too overboard.

  • Report this Comment On July 22, 2011, at 3:07 PM, entp3869 wrote:

    This article is a joke. The Bernank is a liar or fool, it's your choice. Go back and ask yourself which Presidential candidate of 2008 was right about most things?

    Answer-Ron Paul

    Which school of economis was right about most things?

    Answer-Austrian

    The dollar has lost 50% of it's purchasing power in the last decade and over 85% since we went off the gold standard to allow Americans to have their cake and eat it too. Wake up FOOL. Your government is lying to you each and everyday.

    How are those green shoots growing now after squandering trillions bailing out banks and autos that should have been splitup. About 87% of the banking assets in this country are controlled by the top 10 banks, the remaining 13% are shared by about 7650 firms that didn't create or use the derivative time bomb.

    If gold isn't money WHY IS JP MORGAN allowing it as collateral?online.wsj.com/article/SB10001424052748704422204576130192457...

    No wonder the country is such a mess. People like you are given an audience to babble about things you know nothing of. The majority of the world would rather be paid in gold/silver than another paper curency. Every FIAT currency has failed.

    Who am I kidding, I just waisted my time. If you can't see that the emperor has no clothes by now it is probably too late for you. The government run schools have succeeeded in programing your mind-DRONE.

    VOTE OBAMA 2012

    "More government, less jobs, more war, more poverty"

    Ron Paul / Jessie Ventura 2012

  • Report this Comment On July 22, 2011, at 4:21 PM, financeguy85 wrote:

    Chris--

    I know I have criticized you before, and I doubt you will even see this comment. But.....WELL DONE.

    Gold is 100 percent NOT money. These gold nuts simply confuse money with value. Of course gold has value because as Bernanke said, it is an asset. You can convert gold into money because it has value. That does not mean it is legal tender. An ounce of gold is not backed by the U.S. government. It is not a federal reserve note. You cannot pay debts with gold, except maybe in Utah (but who cares what those nut jobs do anyway).

    GREAT JOB CHRIS. I hope you read this comment sooner or later. A dose of sanity amongst a legion of morons.

  • Report this Comment On July 22, 2011, at 5:45 PM, ne12call wrote:

    Nice work. You did what your article clearly was written to do, bring in readers to argue on your page and increase your ranking... If Bernake is the "Hero" you claim he is then why won't they open the books of their "bank?" That takes courage, answering a question "truthfully" under oath isn't courage. Especially when you aren't responsible for your actions...

    What does take courage is standing up against the same people who print the money and putting them to the fire to answer for their mismanagement of the economy. It also takes courage to vote with your principals time and time again... Ron Paul is the only person I know of that has done just that.

    And if the worst thing you can think of is that Paul owns gold stocks, then you must not believe in investments that show a return, because even if gold dropped 25% in a month, the money I have made listening to Paul and the "Golden Oldies" allow me the time to write this comment. Sorry I'm too stupid to realize that I am just blindly making money because I am fool...

    And if you think it's a bad thing for a congressman to make money investing wisely then you will love our current congress, most of them don't invest, mainly because they don't have a clue how to budget their own lives or the government. Love your article, it proves how weak the Gold haters arguments really are... A congressman makes money so he is evil, lol love it.

  • Report this Comment On July 22, 2011, at 6:23 PM, RLoder wrote:

    Good article. Gold used to be the purest form of money but then bankers realized they could lend more "gold deposit notes" that they had physical gold deposited in the bank. Everyone started to carry around these "notes" instead of bags of coins. Today when a bank makes a loan for $1000 it will have $100 in deposits backing the loan but the $900 difference is created out of thin air which is registered with a central bank . The entire monetary system (backed by gold or not) is an illusion, it works when everyone believes in the system and pays their loans back.

    The gold nuts here sound crazy to me. Ron Paul holding a bunch of mining stocks is clearly a conflict of interest and I find it is quite shocking actually. Every person in a position of power in the government should have their investments in a blind trust (mainly congress/president but there are others like the fed chair).

    My only hope is someone figures out how to manufacture gold for about $50 an ounce so these religious gold nuts go away and stop yammering about the greatness of gold. I'll take my hits of FCX and Southern copper in exchange for that bit of humor.

  • Report this Comment On July 22, 2011, at 6:31 PM, baseballguy56 wrote:

    Rep. Paul's investments are listed in the article, is there some place were you can look up Senators/Reps. investment positions?

  • Report this Comment On July 23, 2011, at 12:10 AM, LongTime108 wrote:

    "Not worth a Continental Dollar" still resonates after 221 years. As Secretary of Treasury, James Madison put the United States on a Gold and Silver Standard in 1790, and we had a sound, strong currency that attracted foreign investment and slow steady deflation (which boosted peoples spending power and standard of living) for 140 years until the 1930's when Roosevelt devalued the currency from $20 to $35/ounce of gold, and made criminals of citizens who held gold coins and bullion. Nixon severed the Dollars connection to gold because inflation was approaching 2% in the 1970's (and we were hemorrhaging gold to foreign central banks who were redeeming dollars for gold) and unleashed 20%+ interest rates, and we continue to suffer misguided government policies.

  • Report this Comment On July 23, 2011, at 1:02 AM, AncientCoins wrote:

    The hidden tax is inflation caused by endless printing i.e. DEVALUATION or as known in the stock world DILUTION. At what point is enough? Don't fool yourself. Look at the dollars value over the last 200 years. Enough said. Meanwhile compare it to gold over the last 5,000 years. As bankers print more with ever rising "debt ceilings" at some point the gig will be up. Things with hard value whether it be gold, porkbellies or oranges are all of more worth than the dollar and many other fiat currency backed on little more than faith in a already failed system. We all have bills to pay and debts to be accountable for when will your governments "bill" be due? When it is, I would rather rather be sitting on a mounation of gold than fire kindling.

  • Report this Comment On July 23, 2011, at 1:04 AM, AncientCoins wrote:

    I bought gold at 300. What did your CD give you? Who's laughing now?

  • Report this Comment On July 23, 2011, at 1:08 AM, AncientCoins wrote:

    Gold was legal tender thousands of years before there was a thing called paper.

  • Report this Comment On July 23, 2011, at 9:59 AM, simplepleasure wrote:

    Ron Paul has asked that the dollar be backed by gold not to be the national currency. The Federal Reserve is not an arm of the Federal government and if they were so honest why won't they allow an audit as Ron Paul has requested. They print money backed by nothing so that Bernanke can buy U.S. Bonds so that the American people can pay real interest on. This country is slowly being destroyed and as long everyone has a TV, cell phone and their welfare check life is good. The last time someone tried to take on the Federal Reserve he was killed (remember JFK and the silver certificate). I wish Mr Obama would allow me an hour debate with him Poloski and Reid on what the American people want. It won't happen because they don't care. Any way thanks for the article I needed to vent. PS would someone Pleaseeeeeeee tell our elected officals that this isn't a Democracy but a Republic and a very corrupt republic at that

  • Report this Comment On July 23, 2011, at 12:52 PM, mountain8 wrote:

    Gold is not backed by the US government. However, it is backed by the whole world.

    Anything that is traded for goods/services is money, I don't really care about the financial technical definations. If I have a dozen gold eagles I want to "trade" for a car, how many "sellers" would I find that would would turn that away.

    I just traded $138. worth of "silver money" for about $8,000. It was a great barter! Money is what people say it is. The "money" we use is nothing special or we wouldn't talk about it 'weakening".

    People the world over value gold. A lot of people the world over spit on our dollar.

  • Report this Comment On July 23, 2011, at 1:43 PM, investingNideas wrote:

    The Fed could end the wars and force the selling of overseas military based in Japan, Germany and Cuba for exchange of some value. He will never do it and therefore NOT a hero. NIST Photo of Jet not seen on TV on 9/11 however it does show up in one photograph watch?v=RlunVf1CX30 witness mark burbank goes on national TV to describe it, so its not photo edited in anyway.

  • Report this Comment On July 23, 2011, at 2:18 PM, Eerkes wrote:

    Who is Chris Baines and why did I read that article? Please send me a refund check for my time lost reading this. Hopefully this comment will heal me from the intelligence that bled out while I read that. Dear god man.

  • Report this Comment On July 23, 2011, at 2:19 PM, mdrnsamurai wrote:

    Why isn't Gold money? Because the Federal Reserve can instantly collect Interest on it? Because the Fed can't control the Interest Rate? Because the Fed can't just print more worthless garbage? Bernanke is a Pawn for a corrupt system. Probably One of the many reasons we have the Debt we have now? Why? Because of Interest owed to the Federal Reserve. You want a Hero like Bernanke I suggest you go to Subway and buy one of there. Abolish the Federal Reserve.

  • Report this Comment On July 25, 2011, at 11:00 AM, wasmick wrote:

    "I bought gold at 300. What did your CD give you? Who's laughing now?"

    Me!

    I bought Apple < 10.

  • Report this Comment On July 25, 2011, at 12:03 PM, jpdal09 wrote:

    Here is a wonderful anagous story about how damaging fiat currency is to an economy. It is fiction but spells out the issue very very well.

    http://mises.org/daily/4796

  • Report this Comment On July 25, 2011, at 1:13 PM, Atheist4816 wrote:

    So to those that think gold is the answer.

    Gold is no more useful than paper money. You cant eat it, build with it, or do any of the essentials in a financial breakdown. Exactly the same as paper money. So it's really worthless.

    If all countries were tied to the gold standard then a) there wouldnot be enough gold - stifling growth and b) exchange rates would be non existent.

    The latter point may seem like a good thing however on of the handles by which you can steer an economy is buy fiddling with the exchange rate using tricks like the fed does. Remove this and it is like driving a big rig with a 2 inch steering wheel.

    International trade is a thousand times more prevalent than it was pre-war. Gold was popular in part because you can carry it from one place to another and foreigners would recognise it. This is no longer necessary. Who wouldnt recognize a euro or dollar?

    The main factor that is important is that countries would be dependent upon how much gold the added to their economy to grow. This removes inflationary controls and at the same time restricts growth. South Africa would rule all of us. - however it would also mean countries had to keep buying gold (what do you give to the mining company to buy gold when you are tied to the gold standard???? answer: nothing - it becomes unbuyable - just minable. gold would buy gold - a defacto swap)

    Yes there is a bubble (or a repeat of a cycle) and yes it may be a long term one (although I give it 12 months max).

    For those hoping gold wuold soar by everybody switching from fiat money again I repeat - what do you use to buy gold if all your money is gold? You barter. That's progress! (not)

  • Report this Comment On July 25, 2011, at 1:38 PM, lctycoon wrote:

    Who is better off today? The guy that bought gold in 2000 or the guy that bought an S&P 500 index fund in 2000? Maybe the guy that bought tech stocks in 2000 beat the other two?

    This is the most nonsensical article I've ever read from Motley Fool. The average person shouldn't put all their money in gold? Anybody that knows anything about basic investment theory could tell you that. Gold absolutely does have a place in a well-diversified portfolio, however.

    Bernanke is a hero? Take a look at his record. This man has been wrong on absolutely every economic question that he's been asked for the last decade! If that's the best that America has then the country is seriously screwed.

  • Report this Comment On July 25, 2011, at 2:23 PM, JeanDavid wrote:

    "For something to be money, it has to be commonly exchanged for goods and services. Last time I checked, I couldn't take a gold coin into McDonald's and receive their oh-so-golden French fries in exchange."

    From this, I infer that the Swiss franc, the Euro, the British Pound, are not money either, yet they obviously are. If you argue that you can convert these into dollars to buy stuff at McDonalds, I can argue that you can do the same with gold. And as conditions change, you get more or less dollars for your Swiss Francs, ounces of gold, etc. So it seems to me that gold is just as much money as the stuff generally recognized as money is, no more, no less.

    I imagine if I went to Borsheims with a dozen or so U.S. gold eagles or arts medallions and wanted to buy a very expensive piece of jewelry, they would find a way to accomodate me.

  • Report this Comment On July 25, 2011, at 3:42 PM, dcrednek wrote:

    There's so much to dislike about Bernanke, can't believe this subject was OK'd by the TMF editorial board to be published on the site. Closer to a blog diatribe. No doubt Ron Paul is a bit eccentric. I don't want to abolish the Fed or allow states to print their own currency, as Paul has endorsed in separate missives. But to say that Bernanke is a brave person to confront Paul on the relative merits of the gold standard, or precious metals as currency? Really not worth the read and certainly not worth the time it took for me to compose this comment.

  • Report this Comment On July 25, 2011, at 4:33 PM, bullmusth wrote:

    "Even if it's been money for the past 6,000 years, somebody reversed that, eliminated that economic law?" Obviously, Dr Paul knows something about finance that you do not. In 1971, the U.S. Dollar became a Fiat Currency. How many fiat currencies, prior to 1971 are still in existence? Zero. Gold is only about halfway through it's Bull Market. "Paper money eventually returns to its intrinsic value -- zero." - Voltaire - Go out and buy yourself some gold, son.

  • Report this Comment On July 25, 2011, at 5:02 PM, CluckChicken wrote:

    "Furthermore, the author can not go into a McDonalds with a handful of British Pounds and expect to come out with a single coveted fry."

    Actually I believe they could:

    http://www.mcdonalds.co.uk/restaurants/restaurant-locator.sh...

  • Report this Comment On July 25, 2011, at 5:54 PM, cdb5556 wrote:

    Bernanke is re-arranging the deck chairs on the Titanic. How many QE's does it take before the Fed's house of cards policy of "print-baby-print" result in 1920's Germany style inflation? Hero???I think not.

  • Report this Comment On July 26, 2011, at 8:32 AM, CluckChicken wrote:

    "Ron is the reason Americans are even allowed to own gold. Smart man, that Ron Paul."

    The bill that "Repeals the prohibitions on purchasing, holding, selling, or otherwise dealing in gold in the United States or abroad" was signed into law on 8/14/1974.

    House Bill:

    http://thomas.loc.gov/cgi-bin/bdquery/z?d093:HR15465:@@@P

    Senate Version:

    http://thomas.loc.gov/cgi-bin/bdquery/z?d093:SN02665:@@@L&am...

    Ron Paul became a Congressman in April of 1976. The reason Paul went into politics may have been because of the end of the Gold Standard but he had nothing to do with this bill. Stop drinking the Cool Aid.

  • Report this Comment On July 26, 2011, at 9:31 AM, NYCDOG wrote:

    In a perfect world, Ron Paul WOULD be Bernanke's next boss (for the 15 minutes it takes for the latter to clean out his desk). However, I fear the worthy Paul will fall short. Therefore, Bernanke's "courage" is that of the Phillies bravely facing the Chicago Cubs-except Bernanke lacks the Phils competence and Ron Paul is no doormat.

    Like many who responded, I have both gold ETFs and physical gold in my portfolio and despite the mindless cackles of some other posters' who love Washington funny money, and the pols who debase it,we're not lunatic hoarders but savvy investors.The proof of the pudding etc.

    True, I can't take the physical gold to McDonalds, however the 40 yr old firm whom I purchased it from, will, and has, bought gold back from me. Their check, by the way, will find me able to dine at Gramercy Tavern rather then at the Golden Arches due to the appreciation of the metal.

    Conflict of interest? Funny the author's research didn't uncover Hillary pushing the first foray into socialized medicine while holding a portfolio of hedge funds that were shorting the health profession. Unlike her, though Paul is not trying to "protect" us but asking daily "who will protect us from our protectors?"

  • Report this Comment On July 26, 2011, at 9:55 AM, CluckChicken wrote:

    "In a perfect world, Ron Paul WOULD be Bernanke's next boss"

    Sorry but that would not be a perfect world. Paul has some sound bites that sound good but what most see as his strongest feature is by far his greatest flaw. Everybody likes to say that Paul votes for liberty and the Constitution which I am sure in some light it appears that way. Saddly the problem with Paul is that he views the Constitution as the limit of what the government can do and not as a guide of what the goverment is able to do, as the founding fathers said was their goal.

  • Report this Comment On July 26, 2011, at 10:20 AM, surfgeezer wrote:

    Great article, completely true. Gold buffs will not be discouraged as they are more evangelical than informed and mostly just afraid of the unknown.

    Anyone wishing to be truly informed of how, why the FED was formed and why a "fiat" currency is neccesary in todays highly trade dependant world should read "Exorbitant Privelage" by Prof. Barry Eichengreen.

    The FED is not the problem with America, it is the politicans and the easily manipulated voters.

  • Report this Comment On July 27, 2011, at 3:00 AM, NYCDOG wrote:

    Well, I'M Sorry but the Founding Fathers hardly saw the Constitution and Bill of Rights as some fuzzy or rubbery launching pad for big government to debase the currency, be our Nanny, and have their appointed hacks legislate from the bench. Then again you had no specific attribution for your expansionary premise. On the other hand, I do have a quote or two: Franklin: "Those who would trade freedom for safety shall obtain neither" Jefferson: "The government that governs least, governs best" Such men, not to mention Madison, Paine, Henry etc.would feel a lot more at home with Ron Paul than the QE crowd...count on it

  • Report this Comment On July 27, 2011, at 3:08 AM, Riskysam wrote:

    @nycdog

    absolute piffle. GTFTB!

  • Report this Comment On July 28, 2011, at 12:08 PM, therealboona wrote:

    >It's a bit distressing to see that the Domestic Monetary Policy subcommittee's chairman, and a presidential candidate, is betting against American business.

    Anyone betting on a financial product or company that is dependent on the strength of the US economy is completely out of touch with the financial reality there.

    The fact that Dr. Paul is placing his investments in products that are safe in the event of a collapse only goes to show that he recognizes that the fundamentals of the US economy are unsound.

    >Maybe Congressman Paul can be brave and admit that although he loves gold it's probably not appropriate for his supporters to confuse political ideology with sound investment strategy.

    Gold is not so much of investment where one can expect growth so much as investing in something with intrinsic value as to not be wiped out.

    This is a very disappointing article in my opinion, especially coming from a website that offers investment advice.

  • Report this Comment On July 29, 2011, at 3:19 PM, baselineace wrote:

    Gold may be a store of value, but that does not mean it makes a good investment.

  • Report this Comment On July 29, 2011, at 3:35 PM, NOTvuffett wrote:

    "Why gold isn't money

    For something to be money, it has to be commonly exchanged for goods and services. Last time I checked, I couldn't take a gold coin into McDonald's and receive their oh-so-golden French fries in exchange."

    I will cook you a burger and fries for a gold coin, or I could fetch it from MickeyD's if you really want a sad burger with salad dressing on it, lol.

  • Report this Comment On August 09, 2011, at 6:16 PM, brettsocc3 wrote:

    A Hero huh? Bernanke represents the establishment of modern economic policy. He represents the popular belief of Washington, Ron Paul however is a small minority opinion that is fighting this majority opinion that is currently failing the United States. How can someone standing up for popular opinion be a hero? Bernanke is a big boy he should be able to handle himself in front of a person who has no direct power over him except for some spotty press coverage of Bernanke's wrongdoings. The fact that this man can't keep himself together represents he is scared for his job, reputation, and future. Like so many politicians, chairmen, and CEO's, Bernanke is trying to spend his way into a good legacy and leave the problem for the next leader. That is piss poor in my view of heroism. Chris Baines, you should be ashamed for calling Bernanke anything else other than what he is, a thief. Its like calling Goliath a hero because he stood up to David, we all know how that one ended.....

  • Report this Comment On September 24, 2011, at 11:41 AM, botfeeder wrote:

    Well, I can see the pro US Dollar crackpots are out in force.

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