Real Solutions for the Economy

Real Solutions for the Economy - Sound Money

Written by Art Thompson

Tuesday, 28 October 2008 08:40

Part 2 in a multipart series examing solutions for our ailing economy, presented by Art Thompson, CEO of The John Birch Society.

coin Presently there is pressure building for a world currency as part of a solution to economic downturns. There are two basic problems with this solution.

A world currency already exists, and;
The current proposal would not solve the problem, but would make it more precarious in addition to further consolidating control over currency into the hands of a few, this time on a global scale.

For many decades now, the world currency has been the American dollar. The reason for this is that it has been the best currency available on a wide scale. Prior to this, it was the pound sterling. There are many reasons for both rising to the top in world wide acceptability which we will leave for another time. The point is that the dollar was accepted as a world currency by default in many cases due to its trusted value because it was backed by gold or silver. Once this backing was repudiated by our government, it then floated on trust. Due to the increasing problems with our economy and the high rate of actual inflation (the printing of too many dollars backed only by faith), several countries are starting to abandon the dollar for other currencies. The latest substitute seems to be the Euro, but it too, is backed by nothing.

Nothing really would change under a new world monetary plan. A new world currency being discussed by world leaders along with a world banking system would be backed by nothing but trust as well.

Our purpose herein is not to educate the reader on the principles of sound money; rather, it is to demonstrate several steps toward permanent, people-friendly solutions to our ongoing economic problems. Many fine organizations, along with JBS, have issued works in print, on the Internet, and DVD that describe the elements that comprise sound money. (An upcoming DVD on the subject, Dollars and Sense, by John F. McManus, will soon be available at www.ShopJBS.org.)

It is our purpose to demonstrate the ramifications of not implementing the correct solutions. For real money, intrinsic money, has an aspect about it which is often not discussed adequately: the value of maintaining the power of the individual over his own life.

There is an old saying called the Golden Rule: He who owns the gold, rules.

If money is gold, or silver, or backed by gold or silver, the people are independent of a fiat, controlled system. In a fiat system, some controller, say the Federal Reserve, manages the value of the currency. In other words, the value of the currency in your pocket is subject to the vagaries of whim and policy set by an elite few. That, certainly, is not conducive to freedom and independence for anyone other than the central bankers.

It is not simply that gold is the best commodity to use for money; it is that of all the aspects that make it money, its ability to make the individual free from the control of another individual or government is the most vital.

And, money backed by gold must be strictly limited in issue or the government will rob the people by means of inflation. The Greenback, the Civil War issue for instance, robbed the American citizens in the Union of 50 percent of their wealth in three years through inflation. The Confederacy robbed its citizens of 90 percent through inflation.

The reason that the South was so poor at the end of the war was due to the inflationary practices of the Confederate government, not because they lost the war. If they had won, they would still have been just as poor due to inflation. The South did not recover economically for nearly 100 years.

The purely economic advantages of sound money are obvious to anyone who understands what money really is. That being the case, then why are not all systems based on sound money? The answer is, and always has been, the Golden Rule.

Money in the hands of the individual is not simply a means of fair exchange for goods or services; it is a large part of being free. And this is why our Constitution was written in the manner that it was. In Article I, Section 8, the Constitution only grants the power to Congress to produce and protect the value of money. Since it states, “To coin money,” it implies gold or silver; not print money with an arbitrary value established by decree, or executive fiat. And the value of money was not just confined to U.S. coinage, but also to determine the value of foreign coin.

Our Founding Fathers had experience with printed money as well as a historical record, and they were adamant in arguments leading to the adoption of the Constitution that paper money was not to be issued by the government. They even established that States could only make gold or silver coin as a legal tender in the payment of debts in Section 10 of Article I.

The Founding Fathers were also adamant about the freedom of the people. After all, they had given much of their fortunes and families to the cause of freedom and were not about to give it up to a new form of tyranny.

Whoever controls fiat money systems not only controls the money power, they control the people, because the only entity that uses money is the people. Control of the money is a big step toward a system of government detrimental to freedom. And, it doesn’t matter what label you place on that government.

Control of money may be benign at first, but over time plays a role in the process of the accumulation of power in the hands of the few via fiat
money use. And, at the same time, makes the controllers unimaginably wealthy.

While the people still hold enough power to work to restore things back to a level of complete freedom; while the Constitution, though battered, remains as the Law as well as making the case for sound money; and because the use of real money would ensure financial independence of the individual supplying him with the ability to support other needed economic realities; then the restoration of gold and silver as money should be the first logical step toward the restoration of sound economics.

Sound money is absolutely necessary for economic recovery, for growth and sustaining the individual as well as improving national wealth and the freedom of the individual.

As long as our monetary system is susceptible to arbitrary inflationary pressures, our economy will be in danger from the creation of inflationary bubbles and our freedoms will be curtailed by economic "planners" walking the halls of central banks.