Crazy Kook

The subject of gold as money and the possibility of returning to a gold standard has recently been addressed not only in the private sector but in the realm of government as well.  With the housing bubble and the Subprime Mortgage fiasco continuing to destroy people’s lives (Weyrich), the stock market falling in record numbers (Grynbaum), and people’s general distrust in the American Government (Pew Research Center) building for the last ten years, many believe that the American public is ready to move forward and return to the standard of money that our founding fathers had originally intended for our country.  Indeed, Thomas Jefferson wrote of paper money in a letter to Josephus B. Stuart in 1817, “That paper money has some advantages is admitted. But that its abuses also are inevitable and, by breaking up the measure of value, makes a lottery of all private property, cannot be denied.”  And again to John W. Eppes in 1813, “The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals… it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.”  Quote after quote and paper after paper prove that Thomas Jefferson as well as the majority of our founders were vehemently opposed not only to paper money but to the banking system as well, even stating in a letter to Albert Gallatin in 1802 that, “The monopoly of a single bank is certainly an evil. The multiplication of them was intended to cure it; but it multiplied an influence of the same character with the first, and completed the supplanting the precious metals by a paper circulation. Between such parties the less we meddle the better.”  It is for this reason, as well as for the intrinsic value and stability of silver and gold, that many well educated economists have proposed a return to coined money with real, intrinsic value.  This would be a dual process as it would certainly include abolishing the current fiat system as well as the central banks that control it.

A cursory glance over a timeline detailing the use of gold in society is very revealing.  Gold was first known to be used in parts of Central and Eastern Europe as far back as 4000 BC.  Jumping ahead in time to 1500 BC, gold became the recognized standard medium of exchange for international trade.  The Shekel, which weighed 11.3 grams, was used as a standard unit of measure throughout the entire Middle East and was approximately two-thirds gold and one-third silver.  Even then, the people recognized gold as being of value and were quick to use it as money.  Were one to attempt to exchange paper for gold during that time period they would have been quickly laughed at, yet we do exactly that today.  Indeed the government does, often printing and exchanging paper money for gold.  Gold has been a highly sought after medium since those early times and has led to vast human expansion, including, in 1511 King Ferdinand’s simple orders to explorers who were going to the Western Hemisphere, “get gold.”  This, of course, led to the European “discovery” of the Americas.  Finally, in 1787, the first US gold coin was struck by Ephraim Brasher, a goldsmith.  However, it wasn’t until 1900 that the United Stated adopted the gold standard for its currency.  This lasted until 1933 when then President Franklin D. Roosevelt used the Federal Reserve engineered Great Depression (Kupelian) as an excuse to commit the greatest and most daring robbery of the American People in the history of our country, when he issued an executive order that not only banned the export of gold and halted the conversion of dollar bills to gold, but also ordered United States citizens to turn in all the gold they had in their possession.  Roosevelt then went so far as to establish a set price of gold in 1934, fixing the price at $35 per ounce.  This effectively destroyed the world gold market and forced most countries of the world to sign the Bretton Woods agreement ten years later.  The International Monetary Fund and the World Bank were then created; these cartels set standard par values for currencies in terms of gold and obligated all member countries to convert foreign official holdings into gold at these values.  It was not until 1973 that the United States Dollar was removed from the gold standard and gold prices were allowed to be determined by the free market.  With Roosevelt’s illegal price fixing gone gold quickly reached more than $120 per ounce.  One year later, in 1974, after the price of gold had increased exponentially and corporations and governments had made millions of dollars, the United States Government finally ended its ban on individual ownership of gold.  (Newmont Mining Corporation)  It’s interesting to note that the United States Treasury currently does not own any gold.  The gold is actually held in trust for the Federal Reserve Banks, which are actually private institutions despite popular consensus (The Federal Reserve Board), at its depositories at Fort Knox and elsewhere (Rothbard). 

The theft of gold from the people and the strong-armed push to the fiat system and central banking, has successfully turned a once strong and stable, precious metal based free market system into the precipitous inflationary fiat empire that Jefferson warned us about when he made this famous warning,

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” Thomas Jefferson, Letter 1802 to Secretary of the Treasury, Albert Gallatin 

Nobel Prize winning economist Milton Friedman, in an interview with the Minneapolis Federal Reserve, was asked to theoretically put himself in an advisory role to the Federal Reserve and asked what he felt were some of the greatest unresolved issues that he would tackle first.  He stated simply,

“One unsolved economic problem of the day is how to get rid of the Federal Reserve. The most unresolved problem of the day is precisely the problem that concerned the founders of this nation: how to limit the scope and power of government. Tyranny, restrictions on human freedom, come primarily from governmental institutions that we ourselves set up.” (Levy)

In the same interview he went on to say that, “If I were to make up a balance sheet for the Federal Reserve, I could name many credit items on the research side, very few on the policy side.” 

These ideas do not stop with Milton Friedman.  It was John Maynard Keynes, regarded by many to be one of the most influential figures in the history of economics and the founder of Keynesian policy, who stated in his book The Economic Consequences of Peace that, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.  The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” (Keynes)  Keynes thought very much along the same lines as Karl Marx who believed that capitalism and the free market would eventually unravel without any controls.  In fact it was Keynes who called gold a “barbarous relic” going so far as to write in the introduction to the German edition of his book that the best system for implementing his policies required a total state on the scale that Germany was then creating (Llewellyn H. Rockwell).  Indeed it was Hitler who was first in line to practice his economic principles in order to better implement his vision of society and to place controls on the German people.  It seems insane that the victors of World War II would soon follow in a tyrant’s footsteps, but that’s exactly what happened when the leaders embraced the Keynesian economic principals.  One has to wonder if this was not done for some of the same reasons that the German government had for migrating to a fiat system, which was marked by hyperinflation, led to the Nazi Party’s rise to power, and consequently the reign of one of the most horrible dictators the world has ever known.

The solution is simple.  Bring back the barbarous relic and burn the Monopoly money.  Retired Federal Reserve Chairman Alan Greenspan wrote that, “the cause of the gold standard is bound up with the cause of freedom itself.”  For it is in commodity money such as gold and silver, that has true intrinsic value, that true liberty resides in.  Representative Ron Paul, in a speech to Congress introducing HR 2755: The Federal Reserve Board Abolition Act stated, “With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.”  And, “Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.” (Paul)  We must take the gold back that was taken from us so long ago by Roosevelt in 1933.  The government clings to our gold  like a security blanket, keeping most of it in a vault and denying the people any true money.  The dollar is just what it looks like, a piece of paper with fancy printing on it.  There is currently no established exchange rate between the dollar and gold, the supply of money is not limited, and civilization is truly at the mercy of a large banking cartel controlled by a few men.  True freedom and liberty will never be had as long as we allow controls to be placed on the free market and society in general.  Inflation will steal from us while we sleep, back room bail out deals will continue, golden parachutes will rain down from the sky, and one day we will wake up homeless on the continent our father’s conquered.

Filed under: Current Events, Freedom and Liberty