Time to Turn on Gold Standard What is money? Why it is devaluing day by day?

Why inflation compulsory part of the growth? What is the role of the central Bank towards devaluing the money and the inflation? These are the few serious questions on which we have to think. Today, we find there are very serious problem, such as poverty and unemployment. The solution of these question lie around these questions only. History bears witness that fiat currency devalued up to its real value, which is zero. Previously Dollar is backed by the gold. After 1971 Brettonwood agreement is suspended by the president Richard Nixon. Now, it becomes printing press for the federal reserve bank of America. They can print as much as they wish. As we know Dollar is reserve currency for the world. Countries are using dollar as medium of exchange, especially crude oil exporting countries. So, that basically means that they are getting real wealth out of paper. What is money? How dollar is created? Suppose US government want to deficit financing by $1 billion. So, they can print their own if they choose to, but they do not do so. They issue an “I owe you” to Federal Reserve bank, which is cartel of private. Now, Federal Reserve Bank type in the American government’s accounts $1 billion. Now, American tax payer via the government starts paying interest on $1 billion. Not only that this “I owe you” is legally counted asset for the Federal Reserve Bank as if they have $1 billion. Now, they can lend another $10 billion. Because of fractional reserve banking system, this has multiplier affect. This way they start to earn interest on $11 billion. That mean they lend $11 billion dollar which has never, does not and will never exist. Why Dollar can not survive? As we know money has basic three functions, first measure the value goods and services, second medium of exchange, third unit of saving. Rupees do this for India, Yuan do for china and yen do for Japan. Unfortunately, Dollar does these functions for US as well as for international trade. After ending the Brettonwood agreement Federal Reserve Bank has no limit to print as dollar. But, we know that if money supply increase in the market and other hand supply of the goods and service do not increase then there would be hyper inflation. What we saw recently in Zimbabwe. Although Federal Reserve Bank is printing money without limit but American economy does not affected. Because the printed dollar was not only lie in the American economy but also it went out side the country. That is why American economy does not affect. But, now situation is different. American economy has been collapse. Let’s see some highlight of the American economy. Prior to begging of “war on terror” American national debt was under 6 trillion dollars, now, it reaches up to 14.3 trillion dollars.

All this will destroy the American economy. Because.S. Japan. remaining they will invest in real wealth. but the U. The Pentagon currently gobbles up 56 percent of all discretionary spending by the federal government. military spending is greater than the military spending of China. U. Between 2007 and 2010. India. .S. U. still American budget will go in deficit. to finance these they to print money. Russia. This is the some highlight of American economy. military is in 130 different countries.S. world want to come out from the dollar. dollar can not survive as reserve currency of the world. Recently. As we know that Federal Reserve keeps on printing the money and the value of the money will decrease. world is hesitating to give the loan to American. And every time American budget used to go in deficit.S. because dishonest behavior of Federal Reserve.S. Now.Today U. government borrows an average of about 168 million more dollars every hour. and the rest of NATO combined. The United States government is now responsible for more than a third of all the government debt in the entire world. If all American tax their all income.26%. china and Russia did their bilateral agreement that Russia export their oil to china in their local currency instead of dollar. China has more than $3 trillion dollar foreign exchange reserve. China is increasing their gold reserve. it has a total of about 700 military bases around the globe. Reaction of the other countries: Now. And Federal Reserve has no option but to print money. national debt soared by 61% during that same time period. The only way to finance this deficit is to either increase the tax or print extra dollar or taking internal debt or external debt. So the confidence of American economy is decreasing. The U. Few month back china announced that $1 trillion foreign exchange reserve sufficient for us. GDP grew by only 4.

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