Have any of the candidates, besides Ron Paul, explained how they would STOP inflation, as in higher prices?

Ron Paul feels that competing sound currencies would eventually eliminate higher prices, explaining that inflation didn't begin in earnest until the U.S. severed its connection to a Gold backed currency in August 1971.

My question is do any other candidates have any idea how to prevent high prices?

Update:

My understanding of Ron Paul's small business is; they should be entirely de-regulated from government control, but follow the good neighbor rule,,,,,as do unto others as you would have them do unto you.

Disputes would be settled in impartial courts.

Update 2:

A short synopsis of how the founders prevented higher prices for 130 years.

Everything was priced in metal which had a fixed relationship, with everything else.

1 dollar was 371.25 grains of Silver. {480 grains in an ounce} 20 dollars was about 1 ounce of Gold.

The founders couldn't regulate the laws of supply & demand, so the fixed metal prices did work but were not completely accurate.

The bankers argument is:

The economy can not expand under a metallic money standard, which is false because the American economy did expand much faster than Englands during the Gold standard.

Currently with computers the supply/demand factor could be quickly calculated to give a slightly flexable value to a metallic based currency. We see prices flucuate everyday at the gas stations, already.....what would not put us, as a nation into bankruptcy, would be a stop or limits on fractional reserve lending,,,,regulated by congress using the U.S.Treasury department as an issuer of currency.

Update 3:

Disclaimer: Ron Paul has NOT suggested this plan!

Update 4:

To Amnesty, Ron Paul has written a 334 page book about this very subject. He and Senator Jesse Helms pushed legislation to allow the U.S. Mint to mint & distribute Gold/Silver coins once again. {Roosevelt had outlawed Gold ownership for Americans in 1933, partially causing the severe depression of that era.}

Update 5:

RTO Trainer, I agree with many of your points, and would enjoy debating these issues with you. I'm assuming these were gvt. statistics you looked up.

First, an expansion of the money supply is caused by The Fed!

They lower intetest rates, people, banks & business borrow more, which dilutes the value of the existing money supply.

You'll notice on your inflation figures {higher commodity prices} they almost always coinside with a build up to a war or the aftermath to a war, because the Fed has injected more dollars into the system to pay for the expense of war.

1970-Viet Nam.

1776- 1778 Revolutionary war {unbacked Continental dollars}

1862-1864 Civil war {Unbacked Greenbacks}

1917-1920 WW I The Fed put unbacked dollars into circulation, which caused the roaring 20's and subsequent 1929 crash when it was discovered by investors that all the dollars were not backed by Gold. Which started the depression.

Roosevelt made it WORSE by confiscating all the peoples Gold money.

Update 6:

In 1933.

The depression didn't end until about 1946,or 47.

Currently they don't add in retail food prices or retail fuel prices into their equasions. Rents & Mortgages & property valuations, I don't know.

The point I'm trying to make is:

The Fed is responsible for controlling the unbacked money supply, and except for wars the Gold standard was much more stable....No Matter What Your Professor Tells You!

1980 the Fed interest rate was 21% causing the Japanese and others to BUY U.S. debt to collect an extremely high rate on their investments.

Thanks for your input, I just wish the American public was better informed.

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  • 1 decade ago
    Favorite Answer

    Inflation is not higher prices.

    Higher prices can be a result of increasing inflation, but it is not a direct correspondence.

    Inflation is an expansion of the amount of money in circulation. Deflation is a contraction of the amount of money in circulation.

    The primary reason for inflation is credit. When you buy something on credit (with money you don't have) you create that money from nothing. This expands the money supply. Those dollars deflate when you pay off the loan.

    Ron Paul, if you are attributing his statements correctly, is wrong about inflation's impact on the US historically. The highest inflation has been since 1971, when we abandoned the precious metals standard, was 13.52% (1980). In 1947, the rate was 14.33%.1917, 20.49%. 1918, 17.47%. 1919, 14.87%. 1920, 15.84%. Earlier than this, 1862. 14.17%. 1863, 24.82%. 1864, 25.14%. 20.02% in 1813, 14.38% in 1795 and 1776 in 14.17%, 1777 in 21.87%, 1778 in 29.78% also. Every one of those dates were under the gold standard.

    Notice that 1921 a major depression had an inflation rate of over -10%, and 1929, the year of the Great Crash, the inflation rate was 0.00. Both these years were marked by extremely high prices.

    The measure that works best to control prices is supply side economics--encourage business through deregulation and tax incentives to increase production and build up surplus inventories.

    UPDATE: You got your cart before the horse on Roosevelt.

    FDR banned gold ownership and pulled all the supply intot the US treasure in order to increase US gold stocks and allow for a rapid expansion of the money supply (in addition, he redefined the dollar to 13.71 grains of gold, down from 23.22 grains, in order to combat the depression that had begun 4 years earlier and deepened the year before. Prior to that inflation rates had been negative, and inflationary pressure was the cure, not the disease.

    UPDATE: Most historians mark the end of the Great Depression in the US in 1939.

    The FED can influence, primarilly by setting the Prime Interest Rate, the expansion and contraction of the money supply, but cannot cause it directly. If they raised the rate and that did not induce people to save more and borrow less, inflation would not decrease.

    Inflation is not higher prices, either of commodities, or of consumer goods.

    You are right about the increase of money during times of war. I'll argue about Vietnam though--that increase was due to the abandonment of the gold standard and the Fed not knowing the right way, yet, to adjust to the new system.

    I don't think you can find a single responsible historian, which is what I am (My professor doesn't tell me these things--I am the professor), I have little faith in economists as they tend to ignore the other social sciences, that will agree that FDR's gold policies made the depression worse.

    Good read on this: http://www.federalreserve.gov/boarddocs/speeches/2...

    "Except for Wars, the Gold Standard was more stable." Sure, no argument. But the problem still exists that the Gold standard is so rigid, that it cannot respond to rapid changes in the markets. As such abandoning it for a war is nearly a requirement. Or in the case of deliberate speculation in the gold market itself.

    Foreign investment has the potential to do similar damage to the current system, however, the doomsayers who point to this neglect to mention that anyforeign country that did try to dump US equity would harm themselves in the process. It'd take the actions of individuals to do that, (like a stock market sell-off) where governments are too large and move too slowly and aren't as subject to the passions of individuals. In addition the flexibilty of the credit based system is, I believe (it's not been tested) sufficient that proper timely decisions made can mitigate damage should it come to pass anyway.

    In addition the damage possible would be deffered in time anyway--The US is not required to buy back sold treasury notes. The damage would come, only if no one bought new notes.

    And the old notes would be a boon to someone--cheap notes sold below face value--someone would buy them.

    The bottom truth is that economy is the world's largest faith-based institution no matter what standard we decide to use.

  • Anonymous
    1 decade ago

    No.

    Congress in general is in love with Keynsian economics.

    The Fractional reserve banking touted by the Federal reserve has allowed them to spend way beyond the countries ability to pay.. That is why we have a 9 trillion dollar national debt.

    You wont hear anything from any of the other candidates

    other than what little presents they have for you under the tree if elected!...

    Sadly the American public votes for who will hand them the most.. Not by who touts sound economic principals.

  • 1 decade ago

    Addressing the federal reserve is the only way our country could become economically stable......

    In our personal life's, if a local bank gave people unlimited credit, and spending power....then those banks would cease to exist!

    I haven't even heard any candidate besides Paul address this! Or at least anyone higher in the "polls"

  • Anonymous
    1 decade ago

    Only Ron Paul has told voters how he would stop inflation

    ,if he were elected to the Presidency.

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  • 1 decade ago

    How does Ron Paul feel about corporations and small business?

    Should we be economically dependent or independent? Why?

  • Anonymous
    1 decade ago

    Kucinich and Gravel

  • Anonymous
    1 decade ago

    Ummmm, you mean Paul has explained this? I don't think so!

  • Anonymous
    1 decade ago

    Ron Paul has not made his case. That is why the Republicans will never endorse him as their candidate for 2008. Even if he could explain in detail what he wants to do, the party doesn't like him. He is not representative of their values. Paul is the only candidate who has not put forth a real way of stopping inflation, his attempts are flawed.

  • 1 decade ago

    omg ron paul, ron paul, ron paul, ron paul, ron paul, ron paul, ron paul

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