Sen. Rand Paul (R-Ky.) was in Iowa late last week for the same reason plenty of other Republican politicians are in the Hawkeye State: he’s laying the groundwork for a presidential campaign. The difference, of course, is that the Kentucky Republican’s message isn’t quite the same as other GOP aspirants.

Dave Weigel attended an event at “a wine bar packed with Iowa voters,” and noted Rand Paul “delivered eight minutes of remarks on the need to audit the Federal Reserve.”

That’s not surprising. The GOP senator, like his father, has taken a keen interest in the Fed and made monetary policy a centerpiece of his broader political message. The trouble is, this may be one of those issues Rand Paul cares deeply about, despite not understanding it especially well.

I haven’t seen a complete transcript of the senator’s remarks in Iowa, but the Wall Street Journal reported on the event. “Once upon a time, your dollar was as good as gold,” Paul reportedly said. “Then for many decades, they said your dollar was backed by the full faith and credit of government. Do you know what it’s backed by now? Used car loans, bad home loans, distressed assets and derivatives.” Wall Street Journal

Danny Vinik explained that the argument “ makes very little sense .”

When Paul asks what backs the U.S. dollar now, he’s effectively asking what makes it valuable. When the U.S. used a gold standard, it meant that a dollar was worth a certain amount of gold. Economists overwhelmingly agree that that was a terrible idea, but the connection seemed to explain why dollars had value. The real reason dollars had value is the same today as it was back then: It’s the only currency the government accepts to pay taxes. Businesses and consumers thus have an incentive to carry out transactions using dollars. Paul’s quip about dollars being backed by “used car loans, bad home loans, distressed assets and derivatives” may sound good to Iowa conservatives but it betrays an incredible ignorance about the economy.

Wait, it gets worse. Paul went on to say the Fed’s liabilities are leveraged 80 to 1 against its assets, which led him to compare the Federal Reserve to Lehman Brothers when it collapsed. As Vinik explained, this is plainly wrong , too.

Paul apparently can’t read the Fed’s balance sheets, because as of November, its assets were $4.487 trillion and its liabilities were $4.430 trillion. Where did the $57 billion figure come from? That’s its total capital. But as Cullen Roche, the founder of financial services firm Orcam Financial Group, points out, Paul also ignores the fact that the Fed remits most of its profits to the Treasury Department. In 2013, they gave Treasury nearly $80 billion. “The Federal Reserve isn’t just a profitable entity,” Roche writes. “It is perhaps the most profitable entity on the face of the planet.” As all this shows, Paul’s views on monetary policy are profoundly misguided. As long as he’s in the Senate, that doesn’t really matter. He can spout his nonsense without having any effect on the Federal Reserve. But if he became president, he would be responsible for choosing the next Fed Chair when Janet Yellen’s term expires in 2018 and for nominating board members to the FOMC….At least on the economy, that makes Rand Paul by far the most dangerous candidate in the 2016 field.

I can imagine some of Paul’s defenders arguing that the senator’s confusion is understandable – monetary policy is challenging. The Kentucky Republican can’t be expected to have a working understanding of every issue.

And that might even be compelling if Rand Paul hadn’t chosen the Federal Reserve as one of his signature issues. It’s a pillar of his “movement.” We all have policy blind spots, and presidential candidates can’t know everything, but this is one of the senator’s main areas of interest, which he seems to know very little about.

What’s more, this is hardly the first time he’s been confused about the Fed. In 2013, Paul was asked about his “ideal” chairman for the Federal Reserve, and he endorsed Friedrich Hayek. Asked to name someone alive, Paul said Milton Friedman “would probably be pretty good.”

The senator clearly didn’t know that Milton Friedman is both dead and someone who would disagree with him vehemently if he were alive. Matthew O’Brien explained at the time:

[Paul] knows the Friedman who championed free markets and tax cuts, but not the Friedman who championed an active central bank. Paul’s mistake is assuming that because he agrees with Friedman on spending, he must also agree with Friedman (and vice versa) on the Fed. That couldn’t be more wrong. But it’s one thing to be uninformed, and another to be unempirical. Paul doesn’t seem capable of processing information that contradicts his worldview. He saw the evidence that he was wrong about Friedman and QE, and … just went on living his life like it didn’t exist. Dogma won. The irony, of course, is that Milton Friedman was trying to save conservatism from people exactly like Rand Paul.

Clearly, the Federal Reserve belongs on the same list.

Again, these aren’t just random issues; these are the issue Rand Paul himself claims to care the most about. When a politician seems confused about his signature concerns, that’s not a good sign.