Ron Paul on the Dollar, Gold, and Oil

January 9, 2008 at 1:03 am | In Economics, Libertarian Rants, Python, Ron Paul |

Everyone that drives a car knows that gasoline has gotten a lot more expensive over the last few years. But very few people seem to correctly understand why this is. Ron Paul, in his latest debate appearance, laid it out quite plainly, but it takes keen and willing ears to fully appreciate it:

The value of oil hasn't changed at all — instead, the value of our dollar has tanked. The value of oil, relative to gold, has sat unchanged since 2000 (and even well before that). This means that if you got your paycheck in gold instead of dollars you'd still be paying the same price for gas as you were a decade ago.

The gas prices are not the fault of greedy capitalists. No gas company is "gouging" you. On the contrary, seemingly high gas prices are not due to any free market force at all, but rather due to the fascist cooperation of a complacent, apathetic, congress and the Federal Reserve. Our government has an insatiable appetite to print money out of thin air to support a massive military industrial complex as well as a socialist, redistributionist, welfare state. This monstrously inflates the money supply — robbing the value of your dollar.

I decided to prove this for myself, that the golden price of oil is relatively stable. I downloaded historical gold spot prices, as well as historical crude oil prices. Using a bit of Python and matplotlib, I produced the following graph:

Oil Prices in Gold, Dollars, and Euros

I'm not an economist, so I was fairly pleased when I saw that what I came up with correlated fairly well with the graph that the Wall Street Journal published. This graph shows that oil costs 3.5 times as many dollars as it did in 2000, and yet the oil price in gold has barely changed at all in the past eight years.

Everyone should be putting their money into an account with interest of some kind, and not just letting their money sit around uninvested. But at the rate that the dollar is losing its value, even "high" interest investments aren't paying out faster than the current rate of inflation (and as the above graph shows, that inflation is a lot more than the 3% the government would tell you). If we simply legalized alternative, market based currencies (as opposed to raiding and plundering them), we could have much larger gains on our investments as well as not losing any value on any money left uninvested.

This issue has been the core of Dr. Paul's career since the 1960's. It has taken the American people a very long time to wake up to this issue, and so it is an immense credit to his character that he has shown an undying vigilance, these many years, to the pursuit of liberty. I too, have hope for America.

(If anyone is interested, here is the python code (as well as the data files) used for the graph. )


5 Comments »

RSS feed for comments on this post. TrackBack URI

  1. [...] Ron Paul had some interesting things to say about the Dollar, Gold and Oil in the last debate. Here they are visualized using a bit of Python code.read more | digg story [...]

    Pingback by The 0011 Blog » Ron Paul’s words visualized in Python code — January 9, 2008 #

  2. Ryan,

    Thanks for the great analysis and the comments over at my blog. I have to admit I'm not sure where the declining dollar value graph I used came from; I got it from another source and it fits with all the other data I've come across about the falling value of the dollar so I used it.

    You know, I'm thinking now that the falling value of the dollar could probably explain the rising costs of higher education in America, among other things, as well as gas…

    Keep up the good work!

    Comment by Chaos Motor — January 9, 2008 #

  3. Just a note: I don't know if you saw, but MSNBC was reporting that the majority of viewers of the GOP debate felt that the 'winner' was Ron Paul.

    Comment by Greg — January 25, 2008 #

  4. [...] Ron Paul has been explaining for years, the oil bubble we are experiencing has nothing to do with lack of supply and everything [...]

    Pingback by Rise in oil prices due to weak dollar, not supply « disinter — June 22, 2008 #

  5. One small note. The cultural background of my comment is scandinavian. Although this comment could indicate that I carry around a humanistic education, this is far from the case. I would like to dig a bit into your notion of 'socialist', which I feel is a bit biased of your cultural heritage. From the context in which you use the term (or label) 'socialist', I would conclude that you mean something exclusively negative, and furthermore there are traces of linking the term with the complete governance of the inhabitants of a state a la communistic regimes.

    While your political analyses are a joy to read, I feel that your conception of what socialist means are somewhat historically weigted. Socialistic inclines comes from individuals learning of their responsibilities towards those that share a part of their own sustainment of life. This means that for me to be able to live the way I do, I must have someone else to live i another specific way. This is not forced upon them by goverments, but on their socio-economic terms as well as to some extent their geopolitical and historic heritage. Thus, to be a socialist should not necessarily be linked to participating in state-controlled activities, be they malign og benign.

    And please, join the LP organisation again. I think that the struggle against power-mongers is better waged from the inside. If they really are that powerful, they'll just exclude you, which would prove your point much more than your current course of action ever will.

    Regards.

    Comment by socialistic-liberal — July 3, 2008 #

Leave a comment

XHTML: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Powered by WordPress.
Entries and comments feeds. Valid XHTML and CSS. ^Top^
XML Sitemap