Ron Paul Isn't Worried
About Falling Gold Prices By David Weigel
| Posted Thursday, April 18, 2013, at 11:06 AM
It was the steepest two-day decline in gold prices in 33
years, a 13 percent fall in two days of trading. After years
of surging value, of investors hedging against inflation,
there was a sudden sell-off that might have been a reaction
to... well, to inflation not actually increasing. Over at
Business Insider, Walter Hickey looked at Ron Paul's portfolio
and estimated that America's best-known goldbug was "personally
losing a fortune."
On Wednesday I joined the Paul movement for the launch
of the Ron Paul Institute for Peace and Prosperity, at the
Republicans' Capitol Hill Club, right near the House offices
formerly used by the congressman's staff. I asked Paul:
What was behind the gold tumble? Was he worried?
"That's a market phenomenon," Paul said. "That's
not unusual. It reminded me of shortly after gold was legalized,
in 1975, summer of 1976, gold went from $35 up to $200!
Now, $200 was really radical. From there it lost 50 percent.
Markets are like that. They're erratic. But I don't see
the price of gold as the issue as much as the value of the
dollar. The value of the dollar is a subjective thing, it
comes and goes, and there are a thousand different reasons
why the values go up and down. There's nothing unusual about
One unusual thing, maybe: "There's only one thing
I someday hope I can find out. There were 53,000 contracts
of gold sold immediately, in one sweep, the day that gold
really crashed. Fifty-three thousand is huge, because the
gold market is very small. Let's say we're a Chinese bank.
We want to dump our treasuries and our dollars; we have
$2 billion. You don't dump 'em in one day, because you lose
your investment. The person who was getting rid of 53,000
contracts, why would they do that? If they wanted to just
wean themselves off, they would have done it slowly."
Paul was going to hold his portfolio, unworried about a
repeat. "It was an abnormal market phenomenon, but
obviously the weak holders had to get out, and the strong
holders are back and buying."