US federal government will end up like Detroit, sending gold to 'infinity': Ron Paul

In some of his harshest language yet, former US congressman Ron Paul claimed that the fiat dollar system will result in more city bankruptcies, similar to the one we've just witnessed in Detroit, eventually leading to the demise of the federal government in its current form.

"We're going to see more Detroits, and eventually the government of the United States will be somewhat similar to Detroit, because people will give up their confidence in us, they'll give up confidence in the dollar, and eventually they'll give up confidence in our military."

"There's a limit to what the markets will tolerate, but there's an end point, and nobody knows when that'll come, but I suspect we're getting closer and closer to it every day."

Paul contrasted what he sees as the fleeting nature of fiat currency with the historical robustness of gold and suggested that a crumbling dollar will make way for an 'explosion' in the gold price.

"After these corrections sometimes you see an explosion."

"As long as we have excessive spending and excessive computerized money, you're going to see gold go up. And eventually, if we're not careful, it could go to infinity, because the dollar will collapse totally."

Check out the full interview with CNBC: