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Comment And Critique Of Congressman Ron Paul's Statement On
By Thomas H. Greco, Jr. (February
message, which included the text of Congressman Ron Paul’s Statement
on Competing Currencies, drew a flurry of responses, some positive
and some negative. That’s fine because now I know I’ve got people’s
attention. Now I would like to explain why I think his message is so
important and why I decided to circulate it.
I intended from
the start to write a detailed critique of Congressman Paul’s
monetary agenda. I’ll include at least a portion of that critique
toward the end of this message. I will outline what I agree with and
what I disagree with, adding some points about implementation
strategies that I think have better chances of success than the
political approach which Congressman Paul and other monetary
reformers find it difficult to see beyond.
The truth of
Lord Acton’s warning that “power corrupts” becomes more evident
every day, so anything that enables the ever-increasing
concentration of power must be exposed and disabled. Although it is
not widely recognized, the monopolistic control of the money system
is primary among these.
So my reasons
Ron Paul's message has made the money issue, for the first time in
decades, part of the mainstream
political dialog. His candidacy for the
office of president, and his
demonstrated ability to raise significant
amounts of money from a grassroots
constituency have attracted some
mainstream media attention, enabling
his statements on money to get some major exposure.
Congressman Paul’s statement explicitly exposes the fact that we
have “a government-instituted banking cartel that monopolizes the
issuance of currency,” and makes the case that competition in
currencies is necessary to restoring democracy in America.
His statement calls for “eliminating legal tender laws.” People need
to understand that legal tender laws play an essential role in
empowering and enriching central governments and banking elites at
the expense of the people and democratic governance. Legal tender
laws amount to, quite simply, a license to steal. They enable the
federal government to spend virtually any amount of money for wars
and favors to crony corporations without regard to its limited tax
deficit-spending creates debt that will never be repaid. It takes
value out of the economy by diluting the money supply with legalized
counterfeit. Eliminating legal tender is the single most important
step in reining in abusive central government and restoring the
balance of power.
Do I believe
that repeal of legal tender is a likely prospect? Under the present
circumstances I put the probability at nil, as I do the chances of
getting any kind of political solution to the money problem. But we
must look ahead to a time when it will be possible to establish
truly democratic government in which people hold power at the local
level and the upward assignment of responsibilities is only
provisional and temporary.
Just as the
separation of church and state was a huge step forward, which was
enshrined in the United States Constitution, and is generally
accepted as a fundamental tenet of democracy, so too the separation
of money and state will need to be explicitly enshrined in a new or
He correctly states that, “In the absence of legal tender laws,
Gresham's Law no longer holds.” Under legal tender laws, which force
acceptance of “bad money,” “bad money” drives “good money” out of
circulation. In the absence of legal tender laws, the bad money will
be rejected or discounted in the marketplace leaving in circulation
only “good money,” money that people trust.
The Paul message includes some current and historical anecdotes that
provide additional insights into the dimensions of the money
problem. Specifically, he refers to various government actions that
were designed to eliminate free exchange by shutting down competing
seeks to establish community currencies or other alternative
exchange processes, needs to be cognizant of these potential
Now, for my
Anyone who has
been following my work knows that I have repeatedly made clear my
opposition to using gold as money. While gold (or silver) might
serve as an objective measure of value, there is no need to revert
to gold as a payment medium. But even in the role of value measure,
gold has serious shortcomings, not the least of which is the fact
that the market for gold is manipulated by the large holders of
gold. I made these points in my 2007 Malaysia presentation
functions which money is supposed to serve must be segregated. For
my brief recent statement on this see,
The exchange of
real value, which money is supposed to facilitate, has evolved
beyond money. This is the fact that the “gold bugs,” and almost
everyone else, fail to recognize. As I’ve described in my
and Transformation of Money (http://www.reinventingmoney.com/slides.html),
the highest stage of evolution in the exchange process is direct
credit clearing. This is a process by which accounts payable
(resulting from purchases) are offset by accounts receivable
(resulting from sales) within a circle of associated buyers and
has the added advantages of bypassing all the sales tax issues
associated with using commodities, including gold, as exchange
So, in brief,
all kinds of “money” are obsolete. All that is required now is a
system that provides for the democratic allocation and management of
credit. If we insist on using the term money, we must say that money
is nothing more than credit.
democratic management of credit and the establishment of networks
that connect those local credit clearing entities into regional and
global trading unions provides the means for establishing true
economic and political democracy and a dignified life for all.
You Have A Choice—Grow Or Go!
go—that’s the immutable law of biology and it applies to movements
and companies, as well as to organisms. Stripped of all the
rhetoric, five-year plans, financing schemes and grandiose marketing
ideas, your task as a business owner is a lot more basic.
organization must grow or go. And critical to your growth is a
positive cash flow because cash is the life blood of your business.
This is especially true in your formative years when your business
is rapidly expanding, because neither sales nor profits pay the
business owners operate under the misconception that if they can
guide their company to a profitable position they will “have it
There was a
time, not so long ago, when barter was seen as an old, primitive way
of conducting business. No more. Today it’s used by companies of
every size in our highly competitive marketplace. Worldwide it moves
almost a trillion (yes trillion) dollars a year in goods and
services. It’s been erroneously labeled “the world’s number one
growth industry”—having seen increases every year for decades. But
it’s not really an industry per se, it’s a business tool.
Are you aware
of its full potential? Do you know the variable cost of your
incremental or “barter” business? Are you using barter in your
the men from the boys in the business world is management. And the
greatest difference in management is not in brains, but in the
ability to see what really matters.
Push comes to
shove when your daily on-going expenses are higher than planned, and
your sales (more accurately your collectibles) are less than
anticipated. Therefore, cash flow really matters! The question is:
how can your company most efficiently build-up its cash flow? Those
in the know understand that it’s directly tied to where the money is
Every time you
can substitute a cash buy through barter you’re building your cash
flow, because a “saved” dollar goes directly to your bottom line.
Whereas a new sales dollar must flow through many “filters” or
“costs” (like rent, insurance, utilities, salaries, telephone,
taxes, cost of goods sold, advertising expenses) before a few
pennies of that dollar finally make it to the bottom line.
One of the
easiest and most efficient ways to grow your business is by
bartering. Make it a goal to learn as much as you can about this
proven business tool.
CPAs Offer Eight Steps Aiding Entrepreneurs In
Tough Economic Times
The AICPA (www.AICPA.org)
is the nation’s largest professional non-profit association
representing more than 340,000 CPAs that specialize in the area of
tax, accounting, and consulting services such as personal finance.
As one of small
businesses’ most trusted advisors, CPA’s offer these eight steps to
help entrepreneurs in tough economic times:
Focus on your balance sheet.
love to talk about sales and tell you how many millions of sales
they had this year, but as you get closer to the recession the focus
should be on your balance sheet. Make sure you’re managing your
cashflow well. It’s something you should be doing all the time but
it’s even more critical in a recessionary environment, because
there’s just that much less cash floating around. While the going is
still good, try to put cash aside to build a war chest.
Diversify and launch.
downturns have a benefit for business. A recession gives you the
opportunity to step back, rethink, and review all sectors of your
operation. Consider launching a new product or service offering not
currently offered in your market. Use the time for diversifying your
products, services, or industries so you don’t have too many eggs in
one sinking basket.
Start looking at your credit and debt.
begin looking at increasing your debt. Negotiating with a bank from
a position of power and good financial resources in a good economy
is a lot easier to do than trying to negotiate in a recessionary
environment. Don’t think of that extra credit simply in terms of
reserves to get you through cash-trickling times.
Review your accounts receivables.
When things are
starting to turn down, you want to keep a sharp eye out for someone
who is in to you for quite a bit, because if they go under and cash
is tight that could have a huge impact on your small business.
Similarly, review your agreements with suppliers. Maybe you don’t
have to pay in 30 days; maybe you can pay in 45. Again, it’s easier
to negotiate in a good economy than in a downturn.
Review your company discretionary spending items.
businesses are typically very lean, recession survivors often still
manage to trim some fat. Think of all the discretionary items. Take
whatever steps you can to reduce your debt. The less you have to pay
out on a regular basis during an economic slowdown, the less painful
it will be. Employ labor and time-saving technology to reduce
business costs. More effective use of the Internet can save on
travel, training, administration, and operations costs.
Review your customers.
about how a recession will impact your customers. If your customer
base is involved, for example, in the home-building industry, and
home building is down, then you know these customers are not going
to be demanding as much product, so you better get ready for that.
One way to do that is to search out alternatives. Somebody’s always
making money, even in a recession, so if you can find out where
those pockets are and if you have services you can provide to them,
maybe you want to expand those services.
Now is also the
time to take customer service to a new level. Get in touch and stay
in touch with your active customers. Take nothing for granted. Make
sure your pricing is competitive, your service exceptional and your
attitude reflects how much you value their business. Revisit dormant
customers and see what you can do to bring them back into the fold.
takes as little as just asking to restart a relationship. Other
times it can take some imagination, but resurrecting a past customer
can still be easier and less expensive than finding and breaking in
a new one. Ask your customers for referrals. While this is a good
practice at any time, it is particularly important in a down
Step 7: Keep
cannot afford to stop marketing, regardless of economic conditions.
New products are always sure revenue generators if marketed
properly. Determine what sets your business apart from the
competition and market it like crazy. Attend networking functions,
spruce up your Web site, send out post cards, put out a new sign in
front of your office.
however, doesn’t have to come from new customers. Many
small-business owners can find that their best prospects for new
revenue are their existing customers and clients—established
relationships mean an owner doesn’t have to spend time, energy and
money trying to make a good impression and knowledge of customers’
needs makes it easier to come up with new products or services
they’ll want to buy.
prospecting for new business or working with a long-standing
customer, success can turn on making a valid case that your product
or service will benefit the buyer, even if the economic times are
Step 8: Do
profession in the United States has created free resources and tools
to help small business owners with personal finance issues.
To learn more check out the CPA profession’s 360 Degrees of
Financial Literacy visit
www.360financialliteracy.org and check out the
Work With Audio/Visual
Vendor On Barter
Collect cash, as usual, from the guest accounts staying at
your facility that require the use of professional AV
services. And rather than shouldering your ongoing employee
costs, or your current vendor’s cash agreement for AV
services, here’s a much better alternative:
Work with a proven national vendor (a sterling 25-year track
record) who will provide all of the AV services for your
hotel on a 100% TRADE BASIS! (Payment to be in the form of
Your hotel’s annual AV billings must be a minimum of
$200,000, and this offer is available only in the
continental United States.
For a confidential introduction contact Bob Meyer via
Attention Trade Exchange Owners:
If your member hotel(s) have a minimum of 10,000 sq. feet of
meeting space and annual billings of at least $200,000 for
AV services this is a great opportunity to earn substantial
cash service fees on the hundreds of thousands of trade
dollars your hotel member will be paying the vendor. Contact
Bob Meyer at the above e-mail.
How To Get More Sales In
Our street-smart restaurant
marketing report shows proven ways to rapidly boost your
restaurant’s sales & profits.
Our Web Site Has A Search Tool For You
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The Growth and Use of Secondary Capital (New Money) Creates
Unprecedented Wealth In Today’s New Age Of Possibility
many forms of secondary capital—which can be defined as any
financial instrument that measures and communicates value in a
common language. Would you like to see and learn more about the many
forms of secondary capital?
We have 70
free, informative and inspiring, articles for you in our “Secondary
Capital Section.” Check it out...
New Money-Making Ideas And Valuable Contacts!
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useful, informative ideas and contacts in every available back-issue
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click through to our Global List
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