Will a Gold Bust Bring Down Ron Paul?

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The Washington Post this morning reports that libertarians’ favorite congressman, Ron Paul, has in the past few years dumped hundreds of thousands of dollars into gold investments, even as he sits on committees that oversee the gold mining industry. That conflict of interest isn’t much of a surprise. The Post analysis found that plenty of members of Congress are heavily invested in the industries they oversee. But what’s interesting about Paul, who has long called for a return to the gold standard, is the extent to which he has put his money where his mouth is.

A big-time promoter of gold as a hedge against a falling dollar, Paul now owns up to $1.5 million in shares of gold-production companies and about $200,000 in silver companies, according to the Post. Such investments make up nearly half of Paul’s portfolio. But as with the people who take Glenn Beck’s advice to buy gold now, when its price per ounce is at a record high, Paul isn’t showing tremendous investing savvy. After all, any good financial advisor could tell him that his portfolio is not adequately diversified. Presumably, Paul also bought high given that he’s made many of these investments relatively recently, so a burst in the gold bubble could hurt Paul’s net worth considerably. And the bust is probably coming.

In May, several analysts predicted that gold will return to the $800 to $900 an ounce range within the next year, down from the $1,220 it is today, for a variety of reasons. Among them: Business is booming for all those “we buy gold here” companies and eventually the “scrap” metal market is going to be glutted. Gold also isn’t used for much other than jewelry, and the demand for jewelry is way down thanks to the recession. There’s no way to predict when the bust might happen, but unless Paul has the investment chops of George Soros and sees it coming in time to unload his loot beforehand, he’s likely to end up like the condo developers of 2007: much poorer and saddled with a bunch of junk no one wants anymore.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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