Congressman Ron Paul: “It just looks like we may well come to a ’79, ’80. Do you anticipate that there’s a possibility that we’ll face a crisis of the dollar such as we had in ’79 and 1980?”

Chairman Bernanke: “The Federal Reserve is committed to maintaining low and stable inflation, and I’m very confident we’ll be able to do that.”

Mr. Paul: “You’re not answering whether or not you anticipate a problem.”

Mr. Bernanke: “I’m not anticipating a problem like ’79, ’80. No.”

* * *

That exchange, between Congressman Ron Paul and the chairman of the Federal Reserve board, Ben Bernanke, took place on July 18 in a hearing of the Joint Economic Committee. It can be viewed on YouTube.com – and has been by tens of thousands. The London fix on gold that day put the value of a dollar a bit less than a 666th of an ounce of gold, according to the Kitco charts. Four months after Mr. Bernanke said he was not anticipating a crisis like that of 1980, when the dollar collapsed to 1/850th of an ounce of gold, the dollar has reached just such a crisis, with the greenback trading Friday at less than 1/837th of an ounce. So much for Mr. Bernanke’s anticipatory powers.

Now it will be said that the crises of 1980 and 2007 are not the same. In 1980, the inflation rate calculated from the Consumer Price Index averaged more than 13%, according to a chart at inflationdata.com; the average this year has been but 3.23%. But the dollar crisis comes at a most inconvenient time for the Fed because it comes amid a credit crisis as well. So far, Mr. Paul is looking a lot more prescient in respect of monetary policy than Mr. Bernanke. The Wall Street Journal, in an editorial last week, reached back 30 years to one of its famous editorials from 1978 to warn of a crisis over the dollar. It reckoned another such crisis wasn’t inevitable, but that at least we’re getting “a reminder of what such a thing looks like, and it isn’t pretty.”

Our own view is that Mr. Paul’s prescience on the dollar is one of the reasons he’s showing what the pundits are calling surprising strength on the hustings. The New York Times attributes it to the way the Internet is impacting the campaign. But we’re of the view that it relates to the substance. We have a lot of differences with Mr. Paul, but on monetary matters, we’ve been covering him since his days, in the early 1980s, as a member of the United States Gold Commission, when he coauthored, with New York’s own Lewis Lehrman, a minority report favoring a return to a version of the gold standard. What can be said about Mr. Paul is that he’s not only ahead of Mr. Bernanke but also of his fellow Republicans, and he will eat into their standing until they address the question of the soundness of our currency.