Ron Paul, a United States representative from Texas who is running for president for the third time, is the founder of Campaign for Liberty. He is the author of “The Revolution: A Manifesto” and “End the Fed.”

No asset has intrinsic value. An object is only valuable insofar as it is able to satisfy the wants and needs of individuals, and its value is determined by the subjective judgments of individuals. No other commodity has been as universally valued over time and across as many societies as gold.

There is no need for the government to hoard gold as backing for currency; gold itself should be the currency that circulates.

Gold satisfies all the properties of money. It is durable, portable and easily divisible into bars and coins that share uniform properties. It is easily recognizable through visual, tactile, chemical and other means. Gold's value and purchasing power are stable over time, as its supply grows slowly and it cannot be created ad infinitum as paper or digital currency can be.

Because of these properties, gold has always been considered an ideal store of value and medium of exchange, and central banks have always sought to hold it because it is the ultimate monetary backstop. When society and the monetary system break down, even if nothing else is accepted as a medium of exchange, gold still will be.

Associated Press

The Federal Reserve does not actually own gold; it only holds gold certificates as an asset. It is the Treasury Department that claims ownership of United States gold reserves. Historically, gold itself circulated as money, in the form of coins. Paper currency began to circulate for the sake of convenience, but these were only promissory notes that could be redeemed in “lawful money,” i.e. gold, on demand. Once the use of paper currency was established and most gold was held in bank vaults, the government seized the gold and left the people holding paper that could no longer be redeemed for gold. The paper currency was immediately devalued by 40 percent, reducing Americans' purchasing power by an equal amount.

I would prefer to see the government not hold the gold it does. It should be returned to the people from whom it was taken. There is no need for the government to hoard gold or to keep gold in vaults as backing for currency; gold itself should be the currency that circulates.