Steven Yates – Our Money SystemPage 3 of 14
But back to your grandfather’s dollar. What would he have seen on it? Among other things,the phrase
Will pay to bearer on demand just above One Dollar
. This indicated that the slipof paper wasn’t really the bearer of value; it was a receipt indicating that the bank had in itsrepository a dollar’s worth of gold that would be redeemed at his demand.This phrase disappeared from the dollar. Not right away, of course. If we look at, say, a 1928dollar, the phrase
Federal Reserve Note
will be found at the top and Will pay to bearer ondemand will still be found above
. The Federal Reserve had only begun to changethe nature of money. For at an appropriate place in between the two we find the statement,
Redeemable in gold on demand at the United States Treasury or in gold or lawful money atany Federal Reserve Bank.
But recently I ran across a representation of a 1929 dollar. This last phrase has changed. Wesee,
Redeemable in lawful money of the United States at United States Treasury or at theBank of Issue
. The reference to gold is gone! There is no mention of legal tender on any of these. Now consider a 1934 dollar. The 1934 dollar has become legal tender: It says,
This noteis legal tender for all debts public and private and is redeemable in lawful money at theUnited States Treasury or at any Federal Reserve bank.
Interestingly, this was right after the stock market had crashed and the country had spiraleddown into the Great Depression (the best account of which is still and will probably always beRothbard’s “
America’s Great Depression
”).Now compare that description with the dollar you took out of your wallet—again, if you hadone. Your dollar bill says nothing about
because it can’t be redeemed foranything. It is a note to pay nothing. The phrase
Will pay to bearer on demand
is gone.Having been a Watergate-era teenager, I am old enough to recall when this phrasedisappeared. It was 1971, the year President Richard M. Nixon took the money systemcompletely off the gold standard and said, "We are all Keynesians now." The reference is toJohn Maynard Keynes. Many economists consider Keynes to have been the greatesttheoretician of their trade who ever lived, which says more about them than it does aboutKeynes. Keynes’s own words, back in 1920, testify to ulterior motives:
"There is no subtler, nosurer means of overturning the existing basis of society than to debauch the currency. Theprocess engages all the hidden forces of economic law on the side of destruction, and does itin a manner which not one man in a million is able to diagnose."
Keynes, a member of the
(a socialist organization originating in GreatBritain in the early 1880s) and later a member of the
Council on Foreign Relations(CFR)
, despised the
system that had built this nation in its early history, theremnants of which gave rise to the relative prosperity of the American middle class.
economics is incompatible with centralization and control, so the international bankers set out to sabotage and destroy it. They did so by destroying, little by little, the valueof its currency. Mainstream twentieth century economics rationalized this destruction andsurrounded the rationalization with an edifice of impenetrable mathematical technique.Economists immersed themselves in what historian and philosopher of science Thomas S.Kuhn would later call a paradigm (in his
The Structure of Scientific Revolutions”
Almost no trained economists would recognize the truth. Non-economists would be so put off