Thomas Greco on Ron Paul’s money policies


Richard Moore

From: "Thomas Greco -- thg" <•••@••.•••>
To: <•••@••.•••>

Subject: A Comment and Critique of Congressman Ron Paul's Statement on Competing

Date: Mon, 18 Feb 2008 13:32:50 -0700

A Comment and Critique of Congressman Ron Paul's Statement on Competing 

Thomas H. Greco, Jr. - February 18, 2008

My recent 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. There are several good reasons I did not mention in my 

I intended from the start to write a detailed critique of Congressman Paul's 
monetary agenda, but I did not want to delay its circulation. 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 are these:

1. 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.

2. 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.

3. 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 revenues. Chronic 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 amended constitution.

4. 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.

5. 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 exchange media.

Anyone who seeks to establish community currencies or other alternative exchange
processes, needs to be cognizant of these potential hazards.

Now, for my critique:

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

The traditional 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 presentation on The Evolution and 
Transformation of Money (,  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 sellers.

This approach has the added advantages of bypassing all the sales tax issues 
associated with using commodities, including gold, as exchange media.

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 

The local, 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.

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