The Trouble with Money
The trouble with money is that people believe in their hearts
that everything other than earning, saving, and spending money
is something "too difficult" for them to understand
and is better left to economists. Why do they think this?
Because it is horrendously complex and difficult - but it
doesn't need to be.
The reason money is such a difficult subject to think about
is that its foundation was literally screwed up from the very
beginning. Yes, I said "from the beginning." Even
in the days when gold was king, the money concept was still
screwed up. It is that very "screwed-up-edness"
that has enabled the money powers of today to subvert the
concept so completely that even noted economists like Al Greenspan
don't know what "money" is anymore. He admitted
as much sometime back in 2003.
The truth is, though, that money is very easy to understand
if you get rid of the most important misconception in its
history, and that misconception is this: That the value of
gold, history's primordial money, needs to be expressed in
terms of something other than gold.
That misconception is the root-cause of all confusion about
money and every scientific and policy-making process involving
it, especially economics. It is the reason people believe
this ruse that economics is so "difficult."
Unfortunately for all of us, the experts have turned out
to be most expert in one thing, and one thing only: in extracting
and arrogating to themselves the control over the value of
money. In doing so, they took it away from you and me where
this control originally belongs. In doing so, they were able
to switch real money - money with real, intrinsic value -
with little more than confetti, right under our noses.
It is not my point at all to say whether this misconception
is an intentional fabrication of a few well-heeled insiders
or an historical quirk in the ways people have learned to
think about money. That is irrelevant. The fact remains that
it is indeed a misconception, and that's bad news - but it
is also good news.
The bad news is that this misconception is the cornerstone
of most people's concept of the economic and financial universe.
Most people alive today have never lived in a time when gold
was official money.
The good news is that, just as any misconception, this one
can easily be cleared up by facts and solid reasoning. In
other words: by truth.
History has proven that gold is the best money - bar none.
Our current experiment with a world-wide, all-fiat, currency
system is only about 30 years old. But even during the classical
gold standard's heyday money wasn't "real" - because
gold wasn't really "money" in those days - at least
not in the complete and unified sense we are about to discuss.
In the gold-standard days, gold was only the stuff that backed
the "money" of the day - money that had already
begun to be thought of in terms of paper bank notes and gold
certificates. Yes, gold itself was also circulated as currency,
but far less so than its paper-proxy. It was mainly saved
or used to settle international trade accounts and very large
I will go so far as to say that gold wasn't really "complete
money" back when gold pieces themselves were still changing
hands, in the days before the invention of paper-bills and
How can I say this?
In those days, gold was surely the medium of exchange, and
it certainly was the store of value of the day - but what
was its value stated in? It was almost always stated in terms
of something else. Most of the time, gold was never counted
as "so-and-so-much gold." It was always counted
in terms of "ten Dukaten", "twenty Dollars",
"fifty Marks", "one hundred Gulden", etc.
That's where the problem lies.
People's popular concept of money was never really unified
in the substance that was used to represent it. Without getting
too esoteric about it, let's look for a moment at the commonly
accepted functions of money. There are three of them: money's
A unit of account
of exchange, and
You can immediately see that fiat completely fails to fulfill
the last function. Fiat has no intrinsic value, so it can't
store any. It's value must be supplied "from the outside"
if you will, by the government/central bank complex that issues
it. This is usually done by sheer force (legislation) and
empty promises. Both the force and the promises are only worth
anything as long as the government is able (and willing) to
back up that value. And that, as we all know, can change over
time, sometimes very suddenly, which leaves you hanging out
Even when actual physical gold changes hands as money, with
or without official sanction, these three functions are never
perfectly united in the actual substance of money,
i.e., the gold or silver bullion itself. That is, the physical
weight of the bullion itself was never used as the method
of counting the value of the money, i.e., as the "unit
of account." As long as the unit of account' function
is described in terms of an arbitrary measure that lies outside
the very piece of bullion you are dealing with, all kinds
of evil can be perpetrated on a currency.
"As long as the unit of account' function is described
in terms of an arbitrary measure that lies outside the very
piece of bullion you are dealing with, all kinds of evil can
be perpetrated on a currency."
It is this idea, the idea that money needs to be called something
other than what it is (namely, a certain quantity of gold
of a certain purity) that has allowed bankers and money-lenders
the world over to totally subvert and debauch our money to
the point where it has no value other than the one they tell
us it has. And it is also what now makes it so hard for them
to figure out what "money" actually is anymore (under
their own screwed-up definition of it).
They surely are experts, aren't they?
Right. But experts at what? They are like modern baking companies
that manufacture bread of the US "white bread" variety.
Modern bakers leech all real nutrients out of the flour they
use to bake the bread, and then they artificially "enrich"
it with stuff that wasn't in there before.
Modern-day money changers (bankers) do the same thing. They
take our money (precious, intrinsically valuable, and stable
gold) away from us and leave us with a disembodied, hologram-like
substitute that has no value at all. They then proceed to
"enrich" its value by what they call "monetary
policy", which is essentially another name for "inventing
ever more complicated lies to make you believe that what you
work so hard to earn, spend, and save every day has any real
All the while, that so-called "value" constantly
How can all this confusion, this deception, be prevented?
By firmly establishing in the public's mind
the concept of the "Money-Unit"
- that is, the perfect and organic union of all three functions
of money in the very thing that is traded and exchanged for
goods itself - the physical gold coin in your hand or pocket.
It makes no sense at all to call an ounce of
gold that was stamped into a little metal disc a "twenty-dollar
piece" or whatever. It makes far more sense to call it
a "one-ounce piece of gold." How much is that worth?
One ounce of gold. There can never be any confusion
about the value of money anymore if this is how monney is
constituted and counted.
To do this effectively, a gold (or silver) piece must be
of a certain minimum fineness of gold, must have certain universally
acknowledged dimensions, and must be stamped with nothing
other than its actual, physical weight.
Objections, Objections ...
People may ask: "How
can you be sure that what you earn or receive from another
is actually gold of that purity and weight? You'd have to
assay it every time you accept one." (Oh, if only
people were as suspicious of paper-money as they are of gold.
But that day will come!)
Have you ever gone to a grocery store to exchange your accumulated
small change for dollar bills in one of those coin-changing
The technology is very simple. The machine gauges the coin's
weight and dimensions very quickly. Only coins of the correct
weight and dimensions are accepted as "real" and
given credit for. (Only coins of the exact bullion content
required can meet the dual weight and dimension criteria.)
Given the atomic weight of gold, this dimension-to-weight
ratio is extremely difficult if not impossible to fake. The
very same thing can be done by installing smaller versions
of this kind of machine on any super-market (or other store)
"But ... gold is so heavy. You'd have
to carry sacks of it around with you every time you go shopping."
Maybe if you are shopping for cars or homes. For everyday
transactions, silver would be more suitable. For very small
change maybe even copper. If you are security conscious, you
can use a private digital gold-currency debit card that automatically
adds and subtracts balances of physical gold in your "holding"
as you buy and sell things. Although such cards would represent
a "proxy" for gold/silver and not the real thing
itself, they are still denominated in terms of actual bullion
weight - not "dollars", "francs", etc.
"But ... you won't find any stores
that accept gold instead of paper-cash or checks, credit cards,
etc., that are denominated in national paper currencies."
That's just a matter of convincing a few large retail chains
that they are better off earning bullion from their customers
than fiat - because bullion's value cannot be inflated away
or diluted by falling forex values. This is especially easy
to do in environments like our current one where the dollar
just keeps on falling and falling, and where the threat of
a total currency collapse cannot be ruled out. Once these
retail chains latch on to the idea, others will, too. Eventually,
people can demand to get paid in bullion by their employers.
"But ... the government won't go along
with that. They'll just confiscate gold all over again and
call it a national emergency' or whatever."
Sure, they could do that - but what if they did?
It would only serve to make clear to the entire world that
gold is the true value underpinning all fiat "currencies"
- despite all of their claims and treaties that attempt to
establish the contrary idea in people's minds. It would also
only serve to make crystal-clear that all past attempts at
marginalizing gold in the eyes of the public amounted to nothing
but fraud, theft, and collusion. And that means people, this
time,would know that such a renewed attempt to confiscate
is nothing but more of the same - and would hopefully respond
by showing some moral backbone. (I'm an optimist, I know!)
By the time the use of pure bullion currency
and its electronic variant (like GoldMoney, Pecunix, e-gold,
etc.) becomes widespread enough to make the government pay
attention, people will have understood this concept of the
they do, imagine a government trying to take gold away from
them and tell them: "Here, take this recently-proven-to-be-worthless
paper-currency in payment' for your valuable bullion
Preventing Further Deception
Back in the days of FDR when he confiscated all private gold
during 1933, the paper-bills floating around in which he "paid"
Americans for their bullion were called "dollars".
The gold coins they (at least in theory) represented was also
called "dollars" - so it was easy to confuse the
public by saying: "Hey, look here, we're giving you your
money's worth, dollar-for-dollar, so don't complain!"
Public awareness has progressed to the point where the government
is forced to take note, let them try to convince even an apathetic
public that paper-dollars are the monetary equivalent of actual
weights in gold or silver. Ha! I'd like to see that!
"Constant Marginal Utility"
As most people reading this know, gold has several huge advantages
over other "monies":
It's compact, easily transportable, infinitely divisible,
non-perishable - and it cannot be over-produced.
Production is slow, so any possible inflation of the volume
of bullion money is slow as well. Price-inflation, that
scourge of modern life, is therefore nipped in the bud
Gold has a "constant marginal utility."
Okay, so there is some economist-jargon. No
big deal. "Constant marginal utility" means simply
that each additional unit of gold owned or acquired by an
individual, business, or government, is worth the exact same
amount to that entity as the previous one.
With other commodities, this isn't so. Think about frozen
T-bone steaks. Once you have a year's supply (or whatever
amount) stored up, i.e., once you are "satisfied"
that you have "enough", each additional (marginal)
steak you procure is of less and less USE (utility) to you.
In economist's terms, that means steaks have a "declining
With gold it's different. It is so tradeable, so easily storable,
it keeps its value so well, is souniversally acceptable, and
is therefore so useful to people, that each additional unit
is of no less use than the previous one.
With fiat, it's more like the case of the T-Bone steaks,
although for different reasons. Fiat can be printed at will.
Its amount in circulation can be increased virtually over
night, so the temptation for the regulators of fiat (central
banks) to do exactly that to get themselves out of an occasional
"tight spot" is huge - and as we all know, they
regularly succumb to that temptation.
Fiat can be created at such a rapid pace, in such enormous
amounts, that its value shrinks dramatically over time. More
money competes for the same amount of goods, so prices rise
very fast. When this happens, the next dollar you earn is
worth less to you (it buys less) than the previous one, so
fiat's marginal utility declines just like that of the T-Bone
That means you are not in control of what your saved money
will be worth in ten, twenty, fifty years.
A bullion currency can be inflated, too - but only with great
effort and expense - and not by very much. A country can trade
for gold and accumulate a surplus, or can dig it out of the
ground. As the amount of gold coins in circulation increases,
prices rise - but only very, very slowly. When citizens of
a country own lots of gold and circulate it (i.e., the domestic
money supply increases) and they see domestic prices rise
as a result, they tend to buy cheaper foreign goods. As a
result, gold flows out of the country to pay for the imports
until prices fall again - naturally.
The result: an AUTOMATIC price-adjustment."
This happens automatically., i..e., THE MARKET (all people
interacting and exchanging goods and services voluntarily)
determines the level of prices and the flows of bullion from
one country to another. No central banks, no governments are
needed for this process in any way! And the value of the bullion
is very stable over time. In such an economic environment,
governments are reduced to their proper function: to make
sure that people don't steal from each other or kill each
other, to provide for the common defense, and to provide a
forum for legal disputes over contracts, etc.
That's why bankers and governments are so scared
of gold, and that's why they will fight to the death before
they re-institute a gold standard on their own. That is why
such a bullion-standard needs to be initiated as ...
A Private-Issue Currency
This bullion-weight currency must be issued and distributed
privately, by the people only, without any government input,
until governments are confronted with a fait-accomplis.
Another benefit is that, in the case of a bullion currency,
the market similarly operates to keep interest rates very
low and consistent. Interest is what one charges for loaning
out bullion. When bullion is lent, the lender actually parts
with the value of the bullion lent out. When fiat is lent
on the other hand, the bank parts with precisely nothing!
The bank creates a bookkeeping entry on your account (a "credit")
and a piece of paper (your loan contract) says that you must
"repay" that "loan". You have to now work
or make a profit to repay that money with interest. The bank
gets the benefit of your labor and effort. You get - in essence
In the process, money is created. The banks loan it into
existence. People buy and sell with it, and prices rise. Inflation
heats up. So banks raise their interest rates to stop this
process and cool it off a bit.
At the same time, governments love the fiat arrangement because
it lets them borrow unlimited amounts of money and run huge
deficits whenever needed. This debt-created money is what
allows governments to fight endless wars.
So, don't count on your government - whichever government
you happen to live under - to "do the right thing"
and "go back on a gold standard." If you want one,
do it yourself.
The Thing to Remember:
Valuing bullion in terms of a fictional, arbitrary unit of
account other than the bullion's exact weight leaves the door
open for bankers and politicians to tinker with the currency.
What happens when they get to do that we all can witness first
hand right now. Only a purely weight-denominated, 100% bullion
content currency can prevent that, and such a currency must
be privately issued and distributed, using nothing but free-market
forces and channels.
That's the way out of the stealth-tax called 'inflation.'
That's the way out of having only worthless pseudo-money to
earn, save, and buy things with. That's the way to protect
yourself and the world from government tinkering with your
life's savings by "adjusting" your money's value
according to their own needs - and that "need" is
always to cover up their accumulated policy blunders.
The Founders' Biggest Blunder
At the same time, once use of this private bullion currency
is sufficiently widespread, a drive to amend the Constitution
must be initiated to make it the law of the land that any
attempt to subvert the Money Unit - legislatively or otherwise
- is punishable by death.
When the Constitution of 1787 was written, the
founding fathers failed to write that provision into their
document. They also failed to properly define the Money
Unit and to expressly bind the federal government itself
to the use of only gold and silver as money - not just the
That needs to be corrected.
A tall order, I know, but so what? The founders and the people
who lived in their days (a small minority when compared to
the total, often pro-British, US population at the time) fought
off the British Empire, the most powerful political, economic,
and military force of the then-known world, willingly pledging
- and in many cases sacrificing - their Lives, their Fortunes,
and their Sacred Honor.
So, can we take upon us whatever little risk
and effort lies in establishing and educating the public about
The Money Unit?
I think we can...
... I think we must!
vs DOLLAR CURRENCY WAR MONITOR
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