Money is the life-blood of society and performs the same function as blood does in your body, carrying food and oxygen to every cell and carrying away the waste products to sustain life. The blood system is actually a transportation system. Money may also be compared to a transportation system, as did Henry Ford:
"The function of money is not to make money but to move goods. Money is only one part of our transportation system. It moves goods from man to man. A dollar bill is like a postage stamp: it is no good unless it will move commodities between persons. If a postage stamp will not carry a letter, or money will not move goods, it is just the same as an engine that will not run. Someone will have to get out and fix it."
Unfortunately (or perhaps fortunately for the rest of the world for you have a sound Constitution) your "engine" was deliberately designed with a fatal flaw which causes it to self-destruct and it can NOT be "fixed". It must be replaced with an engine of proven design but with a modern control system that will enable it to have cruise-control that will enable it to "automatically" adjust to changing power requirements (money volume) in order to maintain a constant speed (money value). If you pursue this analogy further the steps necessary to implement an honest and stable money system become obvious:
First, the unConstitutional and criminal Federal Reserve System must be abolished and its primary function, money creation, taken back by the Congress to whom it belongs, both logically and legally (Art. I, Sec. 8, U.S. Const.).
Second, the new engine, of proven design, must be a debt-free money system similar to the tally system of England, the scrip issued by the colonies and the U.S. Notes which enabled Lincoln to preserve the Union and which have saved American taxpayers over 100 BILLION dollars in usury which would have been stolen by the ABís [anti-god bankers].
Third, a STANDARD OF VALUE for money must be established as a reference so that any deviation from it may be quickly detected and corrected. THERE HAS NEVER BEEN A STANDARD OF VALUE ESTABLISHED FOR MONEY IN THE HISTORY OF MAN!
At this point many will object, thinking, "The Coinage Act of 1791 established a standard of value," or "The Gold Standard Act of 1900 established one". No. What these and the other monetary acts of Congress did was to establish a temporary standard of weight and purity of gold or silver coins called a "dollar".
Their "value" was determined in the market-place by vendors and buyers who bartered them for other commodities. In a relatively static, agricultural economy, they served quite well as money. That is, until the ABís cornered the market on gold, forced it upon the people as the "standard of money" and then, "removed gold from circulation, as far as possible".
The myth that gold or a gold-based money system is the only way to provide stable money should have forever been put to rest when your nation suffered the worst financial panics and depression you ever endured between 1900 and 1934 when you were on a "gold standard". However, suffice it to say that the IDEA behind the premise was good--but the actual manipulation destroyed the validity. Those who continue to promote this alternative today simply do so as either shrewd agents or ignorant (without knowledge) dupes of the ABís. For one thing, as I said before, the gold upon which you once could base a currency is, at any rate, GONE INTO FOREIGN DEPOSIT. YOU IN AMERICA DO NOT HAVE ENOUGH GOLD UPON WHICH TO BASE ANYTHING EXCEPT TO KEEP THE DECEPTION GOING A BIT LONGER--HENCE SOME OF YOU WHO LISTEN AND ACT CAN GET SOME MEASURE OF PROTECTION IF FOR NOTHING ELSE--COLLATERAL EXCHANGE.
One reason that a Standard of Value was never established is that it was considered impossible to do so. Well, we are possibility-thinkers and operators--WE LOVE THAT WHICH IS IMPOSSIBLE FOR, WITH GOOD, ALL IS POSSIBLE! After all, every man values everything differently from every other man and also differently at other times and places. Therefore, the first thing necessary to establish a "Standard of Value" is to determine what the general requirements for ALL "standards" are:
First, a standard must have similitude. That is, it must be similar to that which it measures. A standard of weight must have weight, a standard of length must have length, etc.
Second, a standard must have stability. That is, its value must remain constant under all conditions throughout the system which it serves. An inch is exactly the same length whenever and wherever it is used. But watch the bureaucrats--for a true story came out of New York where the legislature wanted to round off the value of "pi" because the fractions were an inconvenience.
Third, a standard must have commonality. That is, everyone in the system must understand and have, or have easy access to, the standard unit. Most everyone in America knows what an inch is and has, or can easily obtain a rule (standard) with which to exactly measure it.
GOLD FAILS AS STANDARD
If you compare any commodity, and most especially gold, against these criteria for a monetary standard with which to measure wealth, you find them to be woefully inadequate.
With respect to the first criterion, similitude, there is no relationship whatsoever. The value of gold is determined by its weight and purity. While the price of many commodities (coal, wheat, meat, fruit and---) is determined by weight, the price of manufactured goods bears little, if any, relationship to their weight, the major cost factor being that of "labor".
With respect to the second criterion, stability, you find that gold is only chemically stable, that is, durable. (Is it possible that this word might derive from the Plain of Dura, where the King of Babylon, Nebuchadnezzar, first established the Gold Standard?) As a commodity in a free market its price would vary in accordance with the law of "supply and demand". As a controlled commodity, its price has been less stable than that of the stock market, and for the very same reasons.
With respect to the third criterion, commonality, while many people have gold wedding rings and some have gold fillings, very few have any gold coins which could be used as money.
Further, the vast majority of the worldís gold is owned or controlled by the ABís. THINK ABOUT THAT CAREFULLY.
Thus, it is obvious that of these three criteria for ALL standards of measurement, gold and silver meet none of them as a monetary standard.
Incidentally, the "gold bugs" insist that money, in addition to serving as a medium of exchange and measure of value, must also be a store of value, which most of them erroneously refer to as "intrinsic" value. But these are contradictory requirements. Money, in order to serve its function as a medium of exchange, must be kept in circulation and the faster it circulates (called "V" for "velocity") the better it serves that function. If it is "saved" or hoarded, it cannot function as a medium of exchange. This is the reason for the need to continually mint large quantities of pennies, because many people fill jars or "piggy banks" with them as a form of saving, often using them as convenient door stops as the jar fills. A better store of value would be gold. But the best are, in order of priority; storage food, water, fuel, seeds, tools and silver coins.
TIME IS MONEY
Since no commodity has all of the criteria to serve as a monetary Standard of Value, what in the world does?
The price of all things can be, and frequently is, based upon the man-hours of labor required to make them and market them. The price of something is often quoted in terms of the average man-hours of labor required to purchase it, especially in comparisons between different nations or time periods. In fact, this is the conscious or unconscious means by which everyone determines the value of anything to himself; how much of his life "time" must be exchanged for it? Most everyone is already aware of the fact that "Time IS MONEY". Certainly would clear out the garbage and non-producers right away, also--the politicians who spend no time in production of positive goods, for instance, would be quote poor indeed. The ones who could work but refuse, would be soon quite hungry or go into production.
STANDARD OF VALUE
You could arbitrarily establish your monetary standard as one average man-hour of labor, which would be equivalent to setting the cruise-control at, say, 60 mph. This new standard of monetary value should also have a name, so let us call it a "Manny" and its 1% division a "Minn", for obvious reasons.
How well does a Manny meet the requirements for a standard? Let us compare them and see. First, similitude. Labor time is the primary factor in determining the price of everything and also the value of everything to each person, as already mentioned. Second, stability. There is nothing more stable than time, which remains fixed through all generations and nations. Third, commonality. Nothing is more common among men than time, which is distributed to all men equally; 24 hours a day and you canít take it with you when you leave.
Everyone understands time and virtually everyone has its standard of measurement on his wrist or kitchen wall. You measure and regulate your lives by "time". It is, in attachment to "space", the only separation of the species within the third dimension, so it seems logical to measure progress through that third dimension by your primary commodity--"perceived time". For many things in your dimension, there is no other means of measurement. This REVELATOR, for example. There is no dollar value which you can place on the work required herein to produce this document which is about ten times longer than the scribe had allowed for todayís writing, nor on the experience, discipline, communications, etc., required to study, research, analyse, understand, and solve the problem. The only cost that can be placed on the effort is the TIME involved to accomplish the finished product. Thus, you find that the Manny not only meets all of the requirements for standards in general, but uniquely serves as a monetary Standard of Value.
YOU ARE AWARE THAT THE GOLD STANDARD HAS BEEN THE RUIN OF THE STATES WHICH ADOPTED IT. FOR IT HAS NOT BEEN ABLE TO SATISFY THE DEMANDS FOR MONEY, THE MORE SO THAT WE HAVE REMOVED GOLD FROM CIRCULATION AS FAR AS POSSIBLE.
With us the standard that must be introduced is the cost of working-man power, whether it be reckoned in paper or in wood. We shall make the issue of money in accordance with the normal requirements of each subject, adding to the quantity with every birth and subtracting with every death.
The author makes the same mistake as many on the topic of money. Gold is gold it is not money. It , because it is in short supply and in demand it tends to retain its value and as a result is acceptable in exchange for goods and services.
It is true that gold and silver, in fact most metals retain their value, they will retain their value irrespective of who governs because value depends on demand. The value of fiat-money, like gold, depends on what can be purchased with it and confidence that it will maintain its value. Fiat money can and has been backed by metal (gold) in the past.
If a country expends the value of its production to purchase gold to back its fiat money where will the money come from to pay its people? This is a - not possible equation.
The problem with backing fiat (notes and coins) with equal value in gold or silver is that to do so requires all the money printed to be used to purchase the backing, if this is not the case then not all can be so backed or the backing must be for less than full value of the fiat money.
This leaves no money for people (to allow the proper exchange of goods and services) who do not have gold with which to buy or to sell. It also means that countries that do not have a gold mine do not have access to money (GOLD) and as a result must borrow. The reason most countries are in debt today goes back to the need to have gold or silver with which to trade. A FEW people domiciled in countries like Britain, Spain, France, Italy, Portugal and others, plundered the world's gold and as a result now run/rule the world.
God forbid we go back down this track. Australian Gold mines are today owned by foreigners as is the gold they produce, and I bet nobody knows the total amount mined or the total that ends up in foreign ownership. How would an ordinary Australian GET SUFFICIENT GOLD TO BY A FEED today?
If one is saving, gold and silver, or a few other metals are the safest bet. But how do ordinary people get gold, fiat or otherwise - by toiling for it - all spent in an effort to survive on a daily basis.
There is a limited amount of precious metals in the world, if the lot was to be shared around the worlds population how much would each of us have? Enough for a feed - or not? In any case most of the mined gold and silver is already "owned" - is it suggested we should confiscate it and share it around?
The author speaks about promissory money as if it was superior to fiat money when it is exactly the same, a promise that the cheque, piece of paper or coin will purchase equivalent value after it has been accepted as payment for goods or services supplied or if saved to spend later.
The real test of the value of money is the quantity/quality of goods and/or services it will purchase, no matter the form it takes. If there is no food to purchase it matters not how much gold you have, at this point a tomato would be worth all the gold in China.
A countries fiat money becomes valueless as a result of shortage of goods and services available for sale by the occupants of that country. NOT BECAUSE IT IS created FROM THIN AIR, but as a result of either no goods or far to much fiat money - bad management or foreign interference in a countries affairs are two causes - in exactly the same way as if there was far to much gold or silver or oil, - or tomatoes if the countries economy relied on tomatoes.
The author is wrong to discern that fiat/money is different to what he calls promissory/money they are both the same which is a promise to pay in a form that will retain its purchasing power.
All money relies on confidence including gold and silver.
World poverty subsided with the advent of fiat money simply because sufficient could be made from thin air to facilitate the trade required for more people to share - sell their goods and services.
It is imperative that confidence is maintained in the medium of exchange whether it is gold or paper money, or sea shells, and that its production in individual countries reflects demand and supply of those countries and the wider market place.
Precious metals such as gold will never be available in the quantities required for all the people of the world to share in world trade, nor will it ever be fairly distributed between the people of the world. Fiat money will do all the thins required of a medium of exchange if kept out of the hands of the criminals that now own most of the gold and other despots.
Confidence is the key - maintaining it is the challenge.
Gold and Economic Freedom
Greenspan responded, 'I've been recommending that for years, there's
nothing new about that. It would probably mean there is only one vote in the
Federal Open Market Committee for that, but it is mine.'"
Wheat is a luxury in underfed civilizations, but not in a prosperous society.
Cigarettes ordinarily would not serve as money, but they did in post-World War
II Europe where they were considered a luxury. The term "luxury good"
implies scarcity and high unit value. Having a high unit value, such a good is
easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.
Stripped of its academic jargon, the welfare state is nothing more than a
mechanism by which governments confiscate the wealth of the productive members
of a society to support a wide variety of welfare schemes. A substantial part of
the confiscation is effected by taxation. But the welfare statists were quick to
recognize that if they wished to retain political power, the amount of taxation
had to be limited and they had to resort to programs of massive deficit
spending, i.e., they had to borrow money, by issuing government bonds, to
finance welfare expenditures on a large scale.
The abandonment of the gold standard made it possible for the welfare
statists to use the banking system as a means to an unlimited expansion of
credit. They have created paper reserves in the form of government bonds which
-- through a complex series of steps -- the banks accept in place of tangible
assets and treat as if they were an actual deposit, i.e., as the equivalent of
what was formerly a deposit of gold. The holder of a government bond or of a
bank deposit created by paper reserves believes that he has a valid claim on a
real asset. But the fact is that there are now more claims outstanding than real
assets. The law of supply and demand is not to be conned. As the
supply of money (of claims) increases relative to the supply of tangible assets
in the economy, prices must eventually rise. Thus the earnings saved by the
productive members of the society lose value in terms of goods. When the
economy's books are finally balanced, one finds that this loss in value
represents the goods purchased by the government for welfare or other purposes
with the money proceeds of the government bonds financed by bank credit
Silver backed currency