Before discussing presidential candidate Rand Paul’s opinion of the gold standard, a short definition and history of the gold standard might be helpful. When a country’s currency is fixed to a gold standard, it simply means that each unit of currency is valued at a specific weight of gold. For example, if the United States was still on the gold standard, the government might decide to set the value of gold at a certain price. As a simple example, the value of gold could be set to $1,000 an ounce. That means that each dollar in currency would be worth 1/1000 of an ounce of gold.
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Brief History of the Gold Standard in the U.S.
In fact, the United States did use a sort of gold and silver standard at its inception. In 1900, the Gold Standard Act put the U.S. on a true gold standard. This ended in 1933 when President Roosevelt outlawed most private gold ownership. At that time, the government still fixed the price of gold, and that didn’t end until 1971. In 1971, President Nixon ended fixed prices, so the dollar and most world currencies became what are known as “fiat currencies.” In other words, any rules about links between money and the value of a commodity became severed, so money is worth what the market values it at. Today, the worth of a dollar is usually stated in terms of other global currencies like the Euro or GBP.
Presidential Candidate Rand Paul and the Gold Standard
Rand Paul is considered a libertarian-leaning candidate, but his libertarian leanings don’t seem to go quite as far as his father’s did. Of course, Ron Paul is Rand Paul’s father, and he was also a presidential candidate in the past. Rand agrees with other Republican candidates on many things, but it is interesting to note that he is open to the idea of considering a return to the gold standard.
The Washington Post published an article called “What Rand Paul Actually Believes.” The article summarized some of his thoughts about one of the possible benefits of returning to tying money to precious metals. That is, it might help ensure price stability because the dollar’s value would be fixed to an actual commodity. To be clear, the candidate did not advocate a return to the gold standard. However, he did believe that a commission should be set up to study the idea.
Ron and Rand Paul’s Personal Gold Holdings
According to the Center for Responsive Politics, both Ron and Rand are fans of holding gold as an investment. While Ron Paul, the father, is believed to have invested 75 percent of his assets in gold-related investments, his son’s strategy seems to be more mainstream. His investment in gold is part of a mix of other types of financial products, like stocks and bonds. Candidate Rand Paul holds gold as a store of value and hedge against inflation, but he’s not as close to being “all in” as his father. This presidential candidate’s gold investment strategy is closer to what a typical investor’s might be.