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First, we should all recognize that the monetary use of gold is not without itsflaws, no system can possibly be considered perfect due to the interactions ofhuman beings and the unforeseen consequences of their actions. However, theprimary flaw with all fiat monetary systems is that they always fall intomismanagement and abuse by those who manage the system due to the nature of thesystem itself. Every attempt at stabilizing fiat money is usually short-lived,because by its very nature the entire system must rely upon a consistent expansionof the money supply to continue economic growth. This major flaw, combined withmismanagement, will always end in the destruction of the monetary system, thereare no exceptions.Now equally, a gold specie system, administered by a central bank or under theheavy control of the government is not much more successful than a fiat systembecause of the simple reason that it can easily be abandoned by a stroke of thepen. The most successful monetary system would be one in which individual banks ofissue not only had the fiduciary responsibility of good business practices, butalso they would not have the ability to renege on the promises and demands of thatresponsibility to their depositors. Not only would this provide a much longerstability of prices, but also, as witnessed in history, a much more stableeconomy.It has empirically been shown that the tendency of inflation usually persist underall fiat monetary systems, but not under what could be considered a classical goldmonetary system where, through private banking, the promises of redemption areenforced by the sheer demand of the public. In order for the public to haveconfidence in such a system, it would, as always, have to have a crediblecommitment from the banks to maintain gold redemption of any bills of issue, andthat any breach of this contract would not simply be dismissed as it appears underour current fiat monetary system. Now, this does not preclude the fact that banksare businesses, and mismanaged businesses do fail and should always be allowed tofail. That being said, such businesses should always provide for independentaudits and publication of the findings of such audits to the public, especially tothe depositors.While I personally defend the use of gold as a monetary necessity, I do not defendit on purely ideological [i.e. Constitutional] grounds, but also on rationalgrounds as well. It is a very rational monetary system; it requires absoluteresponsibility on all parties, especially the government. Unlike fiat money, goldis not, nor can it ever be an inherent liability; by its very nature it is anasset.Today, we are accustom to and therefore inclined to think of gold in terms of fiatevaluation. We look at the fiat price of gold and therefore assume that it is theactual value of gold when it fact it is merely the fait price that reflects theinflated, therefore debased purchase value of our fiat currency. Likewise, ourentire economy is calculated in fiat terms, logically because at this time that isall we have, however, it is important to realize that the entire economy is basedupon a debased evaluation. In other words, the evaluation of our economy should berecognized in highly inflated terms, therefore the real economy minus thisinflation is substantially less than it appears in the numbers. I realize that isdifficult for some to wrap their minds around, but if you view the economy interms of a 1913 100 cent Dollar you will get the real economic evaluation. Thereason for this is that since our money has lost the majority of its economicpurchase power over the last 95 years, the economic evaluation is based upon farless purchasing power per dollar of value.Take, for instance, $1Million Dollars in today's fiat evaluation, under a 1913,100 cent Dollar evaluation that $1Million Dollars would equate to only $45,007.36
 
[*using government CPI figures]. As you can see, that is a massive denigration ofthe purchase value of our money over the last 95 years. Real economic activity isdistorted through the consistent long-term depreciation of the monetary system. Itshould also be apparent, that under this long-term depreciation of the monetarystandard, all economic contracts are also suffer from distortion, even futurebusiness projections suffer under the weigh of this distortion, thereby skewingany real possibility of accurate business models, especially when it comes toinventories, capital improvements, as well as profits and losses.Now apply that same principle to the fiat price of gold which, at the moment istrading around $823.00 per ounce, in a 1913 100 cent Dollar, the price is $41.77.Once again, if we abandon the rose colored fiat glasses we see the truth behindthe fiat system of serfdom, we are laboring for pennies. The illusion of wealth isstrong, especially in this country, but that is exactly what is provided by a fiatmonetary system: an illusion.As we have seen over the last several years, those who manage the fiat monetarysystem [i.e. The Federal Reserve] have succumbed to political pressures, eventhough the charter forbids such collusion. The Federal Reserve Act never reallystopped the Fed from doing what they wanted anyway; by 1922 the Fed began tomonetize debt by forming what we now know as the Open Market Committee to purchaseU.S. Treasuries though it was expressly forbidden to do so by the 1913 Act. Thepolitical pressure to inflate, therefore to mismanage the system, has increased aspoliticians forget that there is no such thing as a free ride, even under thepennies from heaven system of fiat money. The "Piper" will be paid!Of course, as we have readily seen over the years, the average person isbombarded, via the media and the politicians, with the ideal that the problemsassociated with inflation are due to natural price increases. It is far easier forthem to place the blame on things outside of their immediate control then toconfess that the real culprit is the monetary system imposed upon the People.From the 1890's, there was a major push to substitute gold-bullion, and thus gold-exchange standards for the traditional gold coin standards which were far toorestrictive on the government and the increasingly powerful bankers in thiscountry. It was extremely beneficial to both government and the bankers to extendand stretch their available gold reserves by any means possible. The real push, ofcourse, was to eliminate the restrictions that the old gold coin standards placedupon them, they wanted a free hand, and of course, as we know, they got exactlywhat they wanted at the expense of the People and the future welfare of thiscountry.As we know, by the late 1920s, the entire substrate that had been formed in theprevious decades by the government and the inter-central banks, with theirreckless issue of credit came crashing to the ground. While there have always beenthose who blamed gold for the problems, the real issue behind the crash was howthe banks economized the gold system and issued, with little restraint, easycredit policies.It should be relatively obvious that when you have a managed fiat monetary system,and therefore a managed economy, the political forces will always pull or pushmonetary policy toward the interests with the strongest political connections,thus distorting the system even more. These pressures, always politicallymotivated, will add a particular bias to all governmental monetary decisions madewithin the economy; in doing so, the ideals of a representative government areeffectively circumvented by the power of monetary policy and the consequences ofthat policy.
 
I believe it was Irving Fisher who stated: "illusionary and tantamount to openapproval of the government's power to manipulate purchasing power according to theappetites of powerful pressure groups", nothing could be more factual than thatstatement. There is absolutely no doubt in my mind that the creation of the fiateconomic system was purely politically motivated to induce a social outcomethrough the transformation of economic life in this country. The system wascreated to solely benefit those who created it and control it, for it provides noreal benefits to the People themselves. The system is, at its very heart, anattempt to defraud the People of this country of their Right to Private Propertyand their ability to gain wealth through honest means.There was a time in our country when our money was our property. It was more thanjust a medium of exchange or an economic instrument; it was, in a very real sense,property. When a man labored he received compensation in value equal to his work,his produce or his creativity; the money he earned was his property, just asanything else he owned. He could be assured that his money was a store of realvalue, he could spend it as he pleased, he could store in a bank, stuff it in hismattress or bury it in a mason jar in his back yard and it was no ones businessbut his own. He could be confident in the value of his money, that he could digthat Mason jar from the ground years later and still have money that kept anequivalent value as when he buried it, it was real money, sound money and it washis private property. He could be assured that his government could not confiscateit, track it or regulate it once it was in his hands; it was real property, hisproperty. He need not worry about whether he carried a suitcase full of it fromcity to city, state to state or country to country because it was, without anyequivocation, his property to do with what he wanted.That all changed in 1933, when FDR issued the Executive Order No. 6102 thatproclaimed the hoarding of gold and silver by the People [he called them subjectsof the United States] "posed a threat to the peace, equal justice, and well-beingof the United States; and that appropriate measures must be taken immediately toprotect the interests of our people. Therefore, pursuant to the above authority, Ihereby proclaim that such old and silver holdings are prohibited, and that allsuch coin, bullion or other possessions of gold and silver be tendered withinfourteen days to agents of the Government of the United States for compensation atthe official price, in the legal tender of the Government. All safe deposit boxesin the banks or financial institutions have been sealed, pending action in the duecourse of the law. All sales or purchases or movements of such gold and silverwithin the borders of the United States and its territories, and all foreignexchange transactions or movements of such metals across the border are herbyprohibited. Your possession of these proscribed metals and/or your maintenance ofa safe-deposit box to store them is known to the Government from bank andinsurance records. Therefore, be advised that your vault box must remain sealed,and may only be opened in the presence of an agent of The Internal RevenueService.By lawful Order given this day,The President of the United States."What an amazing decree, it totally and completely destroyed the ConstitutionalRights of the People concerning private property, as well as protection againstsearch and seizure. Of course, following that un-Constitutional and criminal act,the official currency was devalued by 40% and the official price of gold was thenrevalued upward. Thus the enslavement of the American People that was planned in1913, had effective been implemented by 1933. The People had no choice in thematter, no redress whatsoever, they were required, by "law" to exchange their realmoney for a devalued sum of paper money whether they like it or not.Now, it should not be surprising to anyone that if the government is powerful
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Dadoutlaw5503

i believe you are right on the money. i just wish there was a realistic way we could throw off the corrupt buggers... certainly not through the vote.

reply07 / 07 / 2009
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