Gold's Future as Money - Q&A
by Nelson Hultberg
February 28, 2005
The response to my recent article analyzing Antal Fekete's plan
for a parallel Gold-Coin Standard was quite substantial. Many questions
and commentaries poured in from readers -- both positive and negative,
which is to be expected, of course, since the subject is such a controversial
one. Keynesian establishment types are always horrified at the thought
of restoring gold and silver to the monetary system. But even among
the hard money community, there are numerous hotly disputed points
about how exactly to implement a gold monetary system for America.
Following are some of the more important questions and objections
from readers about the Fekete plan and its advocacy of "bills of
exchange" to enhance the elasticity of gold and silver coinage throughout
the economy.
* * * *
Question #1 -- Why does government have to be involved in our
restoration of a gold/silver money system? There are plenty of
free-market outfits that provide people with commodity money --
such as GoldMoney.com, libertydollar.org, e-gold.com, and several
others. All we need to do is let the market work, and a new money
system will spring up.
Answer. I fully realize that an alternative monetary system
exists with companies such as GoldMoney, libertydollar, and e-gold,
etc. I support these companies wholeheartedly. They are the wave
of the future. But I'm afraid that just implementation via this kind
of marketplace methodology will not be sufficient to win the battle
for sound money. We need to promote the idea of an alternate money
through legislative reform as well as market entrepreneurship.
This is very much a two-pronged fight if we are to succeed.
The act of politicizing the issue will bring dramatic and nationwide
attention to the need for an alternate money, which will bring about
legislation to foment policy changes that will take such a new money
into the mainstream rather than just the margins of
society.
Money is not like other products in the marketplace. Hats, houses,
automobiles, energy sources, etc. need nothing more than proper entrepreneurial
vision and promotion to fulfill demand and become mainstream. But
money is a different breed of cat; it needs to be sanctioned legally
and constitutionally if people are going to gain enough confidence
to embrace it pervasively. At least if they are going to embrace
it in a matter of decades. Now if one is willing to wait two or three
centuries, then acceptance of a new money could be done without political
proselytization. As I read history, people's use of money is a deeply
ingrained habit acquired over vast stretches of time; it is not something
that shifts casually or speedily. It progresses like a glacier moving
across a continent.
Thus, an alternate money system will not be able to grab people's
attention to the point of widespread usage through marketplace
efforts alone. An alternate money system needs legal reform to
accompany its entrepreneurial promotion.
Moreover, the Constitution mandates that we use gold and silver
coins as money, which makes it very much a government issue. This
is one of the reasons why the constitutional scholar, Edwin Vieira,
has given his life to such magisterial works as Pieces
of Eight. He realizes that we can never have a free, nor
an economically sound, country without adhering to the constitutional
mandates on this issue, and that widespread political action is necessary
to bring about constitutional adherence. In other words, without
political action, no monetary reform will be able to overcome the
powerful Washington-Wall Street cartel that has corrupted the system.
For more on this point, see Vieira's monograph, The
Federal Reserve System: A Fatal Parasite on the American Body Politic.
In conclusion, we need both marketplace and legislative promotion
of an alternate gold/silver monetary system. Private money entrepreneurs
and political monetary reformers are climbing the same mountain here
-- which is the ABOLITION OF POLITICAL BANKING and a restoration
of free-market banking. It's just that we are taking different paths
to the top of the mountain.
Important Note: In order to coincide totally with the goal
of abolition of political banking, the Fekete plan for a parallel
gold-coin standard is being revised slightly. The "state chartering" of
credit unions is being dropped; instead, they will remain as private
institutions. In this way, there will be a total separation of
banking and government. The goal must be to bring about free-market
banking that is strictly constitutional.
* * * *
Question #2 -- What section in the Constitution says the Federal
Government must use only gold and silver?
Answer. The best way to handle this question is to refer
to Edwin Vieira, seeing that he is the nation's foremost scholar
in regards to monetary issues and the Constitution. In a paper titled, How to Restore Constitutional
Money, that he presented to the Conservative Caucus Foundation
in Washington, D.C. on January 13, 1997, he states:
"In Article I, Section 8, Clause 2 and Article I, Section 10, Clause
1, the Constitution prohibits explicitly or implicitly the emission
of any form of what was called in those days 'bills of credit'. Today
we would call that paper money.
"Article I, Section 10, Clause 1 also disables the states from imposing
on unwilling creditors anything but gold and silver coin as a tender
in payment of debts -- which, of course, reflects the inherent disability
of Congress to declare anything other than gold and silver coin a
legal tender."
Vieira goes on in his paper to say that, "Article I, Section 8,
Clause 3; Article IV, Section 2, and the Fifth, Ninth, Tenth, and
Fourteenth Amendments... guarantee individuals free entry into private
banking." They also guarantee that private banks can, if they choose, "issue
their own non-fraudulent notes and securities, and deal in deposits
of silver, gold, foreign currencies, or any other monetary medium." In
other words, these sections of the Constitution "grant a complete
free market to money."
Thus the federal and state governments CANNOT issue paper notes,
but private banks CAN as long as such paper instruments do not breach
the laws of fraud, i.e., as long as the issuing banks provide in
Vieira's words, "complete disclosure of their operations and are
fully responsible civilly (and a fortiori criminally) for
the same." [Email to this writer, February 3, 2005.]
"The Constitution," states Vieira, adopted "the very unit of money
that the American market at that time was using -- the silver dollar
-- and it left the ultimate supply of money to the market too, by
implicitly incorporating the system of free coinage that had been
used throughout Anglo-American law -- and, in fact, it first occurs
in the first Coinage Act of 1792." [Op.cit., How to Restore Constitutional
Money.]
"So, it is fairly clear from that history that the Constitution
integrated market and state with respect to official money -- silver
and gold coinage -- and it separated bank and state with respect
to everything else. The government is not to be a player with respect
to the private market in terms of privileging banks or other financial
institutions." [Ibid.]
Therefore, if the government is "not to be a player" in the private
marketplace of banking and not to become involved in "privileging
banks," then the Federal Reserve is unconstitutional because it is
not only heavily involved in these two policies, but it has replaced
gold and silver with irredeemable paper notes. All this is strictly
forbidden under the Constitution.
Dr. Vieira's book, Pieces
of Eight, goes into much greater detail about these points
and many others in analyzing the constitutional system of money
and banking espoused by the Founders and what their "original
intent" was. It goes into how the system was corrupted and how
it can be reformed. He irrefutably demonstrates that our official money
(i.e., the money that all levels of government must deal in)
is to be only gold and silver.
Unfortunately, however, the courts have, over the past century,
allowed the Feds to get away with all kinds of monetary chicanery.
They have ignored the Constitution and the Founders' intent while
winking at the egregious fraud and debasement of the government's
banking cartel as it destroys the currency and robs us of our life
savings.
The only solution is that we as a people must work to restore a
government that will abide by what the intent of the Founders was
in the Constitution. This will necessitate the enactment of legislation
that gets the government out of "creating" money altogether and restores
free-market banking with constitutional money, i.e., gold and silver.
The government's role is not to "create" money, but as the Constitution
says, only to "coin and regulate" it. This means Congress is not
to determine what money is; it is simply to provide for the manufacturing
of it in a standardized form according to what the Constitution
has declared it to be, which is gold and silver.
In essence, the role of creating money belongs to the people. This
is as it should be. The people's representatives wrote the Constitution,
which the people ratified; and they chose to make gold and silver
their money. Government's role is to abide by their wishes, which
it was empowered in the Coinage Act of 1792 to do. This Act established
the U.S. Mint to form the people's gold and silver into money. Thus
government's role is merely to assure the uniformity of coins in
accord with standard weights and measures, and to adjudicate in the
courts those cases where fraudulent banking practices take place.
As long as our government provides the means to these two policies
-- proper adjudication of fraud and the free circulation of gold
and silver coins -- then we will have a stable monetary system. As
I pointed out in my previous article (and as Vieira verifies above),
in such a system it is perfectly permissible for PRIVATE banks and
credit unions to engage in the issuance of credit and paper notes
-- as long as they engage in such endeavors legally, i.e., non-fraudulently.
This means that there must be full disclosure on the part of banks
and no government conveyance of privileges to the banks. This would
limit their credit issuance to benign, non-inflationary forms
(e.g., time deposit loans, real bills, etc.). This would be a legitimate
monetary system under our Constitution, and it would function very
nicely.
If, over the course of time, we find we need to change the system,
then it must be done by the amendment process to the Constitution.
Our 58-year transfer to fiat money (via the Federal Reserve from
1913 to 1971) was clearly not authorized by the Constitution. The
Founders intended that official money for all forms of government
was to be gold and silver, and that the people in the marketplace
should have access to the U.S. Mint to coin whatever they choose
to be their money (which will naturally be gold and silver also).
This cannot be altered by legislative whim, only by amending the
Constitution.
This is the crux of the monetary issue. Without such a strict constitutional
approach, money becomes whatever the politicians and bankers would
like it to be. And history tells us quite clearly what happens when
people allow their government rulers to determine whatever they as
rulers wish money to be. If not "tied down by the chains of the Constitution," politicians
and their bank cronies will always conspire to monopolize fraudulent
forms of paper as money in order to increase their own power and
wealth at the people's expense.
* * * *
Question #3 -- Since the U.S. has no gold or silver in its vaults,
and since real bills would all have different denominations, how
would this work?
Answer. Real Bills will be handled through discount houses
as they were done in London prior to 1914. They can be carried to
maturity by a bank or a credit union in their portfolios, or they
can be discounted for immediate payment, whichever the respective
institution prefers. Granted the concept is a little strange to us
today, but they would be endorsed over to any prospective payee (with
appropriate change being made in gold coins or currency backed by
gold). The receiver can then endorse them over to his supplier, and
on down the line. The different denominations would be irrelevant
because change is extracted in the process. The marketplace will
handle the logistics and the implementation, which is what it's very
good at doing.
Real Bills sprang up spontaneously in the 14th century, and they
were used for over 500 years. They will spring up again spontaneously
once the Federal Reserve's monopoly power is curtailed. It was the
Fed and the Treasury Department that sabotaged the usage of Real
Bills in the decade after the Fed's formation.
According to Dr. Fekete, the Federal Reserve Act of 1913 originally
stipulated a banking system with assets confined strictly to commercial
paper, i.e., "real bills." U.S. government debt was prohibited. But
very quickly the Washington-Wall Street elites circumvented the law
because they wanted to push long term paper, they wanted to have
an open road to massive monetization of government debt so as to
fight wars and buy votes, and they wanted to establish a lender of
last resort that would let all banks inflate at will. Real Bills
are short-term and self-liquidating. This was not an exciting form
of debt to the mega-bankers and Treasury honchos. They had much more
grandiose plans, which called for the capacity to massively inflate
the money supply permanently. Real Bills would not allow this. Thus,
they had to be sabotaged.
How all this sabotaging took place is a convoluted scam of sophistry,
deception, and power lust of many hues on the part of government
and the mega-banks. Perhaps Dr. Fekete will write on it in detail
some day.
As for the so called "dearth" of gold the reader speaks of, it is
also irrelevant. The gold exists in many places, and it is held by
many hands, both private and public. The point is that Fekete's plan
calls for opening up the U.S. Mint for coinage of both gold and silver
coins as the Founders intended. Once this is done, then gold and
silver will pour out of hiding and into circulation. It will pour
into the U.S. from all around the world. The government owns no silver
anymore, but whatever gold the government and its various agencies
still hold will be phased into circulation through the Rehabilitation
Fund part of the plan. This is explained in more detail in the complete
version of the plan that is in my book, Breaking
the Demopublican Monopoly. For those interested in furthering
their grasp of the concept of Real Bills and their use, they should
read the lectures in Professor Fekete's Monetary
Economics 101 course.
If we as Americans want to get serious about restoring gold to our
monetary system, then Real Bills must be part of any restoration
plan. This is the only way to provide for the necessary elasticity
of credit in a non-inflationary manner. This is what has been overlooked
by so many monetary reformers -- both layman and scholar. But Fekete
saw this theoretical gap that stemmed from modern economists' misunderstanding
of Adam Smith's Real Bills Doctrine. Sadly to this day, almost all
economists (even many of the Austrians) still remain close minded
on the issue. But despite this stubbornness, eventually all scholars
will be compelled to reevaluate their interpretation of the Real
Bills Doctrine. Truth is a mighty powerful force; it usually wins
in the long run even though it has to fight long excruciating battles
to do so.
* * * *
Question #4. Can we really bring back the use of Real Bills?
They were credit instruments that were popular in centuries past;
but times and finance have changed. How could they possibly be
revived in our modern world?
Answer. This is a misguided concern. Real Bills are something
that would just spring up spontaneously among people in the market
if the government and the Fed do not get in their way. The major
reason why they disappeared from the scene after 1913 was because
the elite bankers and bureaucrats that made up the Federal Reserve
cartel sabotaged their use with their monetary machinations in the
aftermath of the Fed's establishment. The elites' justification was
the fallacious interpretation of Smith's Real Bills Doctrine among
academics, while their motive was, of course, the desire to expand
the power and wealth of their cartel. Once gold coins were sufficiently
replaced in the American economy by Federal Reserve notes, then any
use of Real Bills was dead. They will only flourish as long as gold
and silver coins circulate.
But restore a constitutional banking system, and Real Bills would
very quickly spring up again. They are a natural marketplace phenomenon
that human action would turn to if left free. And this is the whole
idea of an alternate money system; it will be FREE from the Fed and
the Machiavellians in Washington.
So we must not think of this as a problem of "what's in fashion." Real
bills are instruments that transcend time. All they need in order
to flourish is for government to stop conveying special privileges
to banks, start objectively enforcing the laws on fraud, and open
the U.S. Mint to coin gold and silver to circulate as the Constitution
requires. Once this is done, the marketplace will provide Real Bills
again because they serve a very needed purpose -- the act of clearing the
goods being produced and distributed to consumers.
* * * *
Question #5. The crux of your protest to us Rothbardians is flawed.
What Rothbard saliently argues is that it is wrong, legally or
illegally, to counterfeit money. This is why all forms of paper
money must be abolished. They are legalized forms of counterfeiting,
and thus morally wrong.
Answer. The key here is to arrive at a clear conception of
fraud and how it applies to our banking system and credit issuance.
As long as banks do not operate via misrepresentation (such as when
they loan out demand deposits rather than warehouse them), or operate
by means of special legal privileges conveyed by government (such
as when banks are allowed to suspend redemption of notes in specie),
then their issuance of credit is not fraudulent and thus not a crime.
Issuance of bank credit is certainly a legitimate venture as long
as the bank's power to loan is not gained by false pretenses (which
it is when it uses "demand" deposits, i.e., when it borrows short
to loan long). But if the bank loans out only "time" deposits of
proportionate length, then it is not misleading the public, and thus
it is not engaging in fraudulent credit practices. This type of lending
would be kosher in the Rothbardian scheme of things. It is, as I
said in my previous article, a benign form of credit as opposed
to the fraudulent forms so in use today.
The key to making it kosher is that there be full and open disclosure between
the participants. What makes present banking practices fraudulent
is that there is not this full disclosure on the part of the banks
to their depositors. Depositors are led to believe that their money
is going to be there upon "demand," when, of course, it has been
lent out. Other instances of fraud occur when the government allows
banks to overstate their assets and understate their liabilities
with impunity, and when government allows banks to suspend note redemption
in specie and still stay in business. These and other fraudulent
policies are practiced by banks while our court system tolerates
the entire charade.
If the reader will keep this in mind, I think he will then be able
to see why Rothbardians are wrong on the issue of real bills. Real
bills are examples of benign credit. They are not instances
of borrowing short to loan long. They mislead no one. They practice
full and open disclosure and are freely entered into agreements.
They state in the bill the amount of credit being issued and the
time frame that is involved (91 days, 60 days, 30 days, etc.). If
loaning of time deposits by a banker is legitimate under the Rothbardian
scheme (and I presume it is), then why are not 91-day bills of exchange
legitimate?
A Rothbardian 100% gold standard is not against benign credit;
it's just against the widely used inflationary and fraudulent credit
of our contemporary banking system. Whatever credit arises from human
action that does not breach the laws of fraud and does not depend
upon special privileges conveyed by government is benign and
thus legitimate. Rothbard's mistake, however, is that he considered
Real Bills to be inflationary, when they clearly are not.
If, as Rothbard maintained, Real Bills are inflationary, why did
both consumer and wholesale prices lower considerably during the
19th century -- a period when Real Bills were widely used? From 1800
to 1913, there was a 40% decrease in an index of consumer prices
from 51 to 30, and a 23% decrease in a composite of wholesale prices
from 133 to 102. [Historical Statistics of the United States,
Colonial Times to 1970, U.S. Department of Commerce, 1975, p.
211. Also Warren and Pearson, Gold and Prices, Wiley & Sons,
1935, pp. 19-20.]
Real Bills are "self-liquidating" as Fekete shows. They are backed
by "real goods." They are not long term Treasury debt to be monetized
via the printing press and constantly rolled over, nor are they loans
created out of thin air and multiplied ten times upon paper notes
in a banker's reserve deposit in his Fed regional bank. They do not
hang around permanently adding to the aggregate supply of purchasing
media. They expire and go out of existence in 91 days or less when
the goods clear the market from producer to consumer. They spring
up momentarily to grease the production-distribution channels between
manufacturers and consumers.
Thus, credit issuance per se is not an evil; it must be categorized
into good and bad forms. Credit can be fraudulent and inflationary
at times. And when it is so, it must be outlawed, which I call for
vehemently in my article. But there is a benign form of credit
that is very necessary to a growing healthy economy. Rothbard and
Mises both realized this, of course. It's just that they were mistaken
in their belief that Real Bills were inflationary. Perhaps Rothbard
also thought of them as fraudulent; I don't know. But the point is
that they are neither fraudulent, nor inflationary as Fekete shows.
Thus they come under the category of benign credit and are
permissible.
* * * *
Question #6. Throughout your article you say that "Austrian economists" subscribe
to a 100% gold dollar. This should be stated as "some Austrian
economists." There are many of us who do not agree with Rothbard
on this issue.
Answer. My thanks for pointing out the error. I hope this
reader is right and the Austrians are not as monolithic as I perceive
them. I have been a life-long fan of Mises and Rothbard. Both were
intellectual giants. But these two great thinkers were not gods;
they were humans. They made some mistakes that need to be corrected
and clarified where necessary if we are to truly advance the cause
of freedom. We must read them for their wisdom and dismiss their
folly. This is the way we must treat all great thinkers of history.
They all make mistakes.
Those Austrians who do subscribe, however, to the Rothbardian 100%
gold dollar (and thus its animus toward Real Bills) would be taking
a step out of darkness into sunlight if they were to read Professor
Fekete's Monetary
Economics 101 lectures. They are scintillating eye-openers
that rigorously dispel the derisive interpretations of Smith's Real
Bills Doctrine propagated by modern economists.
The usual denunciation one hears bandied about is that Real Bills
are inflationary because they are "autocatalytic," i.e., they feed
upon themselves. But if Real Bills disappear when the goods are cleared,
they hardly can "feed upon themsleves." Thus, they cannot be inflationary.
The other slur that one hears is sort of a perfunctory claim that
Real Bills were "discredited long ago." What is autocatalytic is
this kind of thinking. It feeds upon itself because unfortunately
economists are all too human and often find it easier to just go
along with the accepted wisdom of their peers, rather than investigate
the history of an issue such as Real Bills, which would reveal the
deceptions and misunderstandings that led to their demise.
* * * *
Question #7. What about international trade? Wouldn't Federal
Reserve notes go to zero almost instantly once the real money started?
And what about people who already own bullion coins? Wouldn't they
possess an unfair advantage?
Answer. International trade will be performed very nicely
by means of "bills of exchange." As Professor Fekete points out:
"Prior to the outbreak of World War I in 1914 world trade was financed
through real bill circulation with London acting as the discount
house on a remarkably small gold base. The system worked smoothly
and efficiently, showing that there is no limit on the amount of
credit that could be built on a given gold basis. World trade was
completely self-financing, and producers as well as consumers prospered.
The volume of world trade before 1914 was so great that it took more
than 75 years before it was surpassed in the 1990's, in spite of
a much faster population-growth. We may conjecture that if the international
gold standard and the trading system of the world financed by real
bills had not been destroyed by World War I, then the volume of world
trade would have increased to a level several times higher than what
it is today, and the resulting prosperity would have by and large
eliminated poverty from the face of the earth." [Monetary Economics
101, Lecture 2]
As for what value Federal Reserve notes would acquire in the market
once real money started, this is an unknown. History has shown that
people do not give up their customary habits very easily, and the
conduct of business in paper dollars is a very entrenched habit of
modern day Americans. My guess is that the evolution of choice as
to what money to use will proceed slowly as people adjust their preferences
over time. Eventually Federal Reserve notes will sink in the people's
estimation, and all citizens will trade in real money again. But
it is doubtful that this will happen overnight.
As for people who already own gold coins having an advantage, what
are we supposed to do, punish them for their foresight, their wisdom,
their lack of gullibility in buying into the Federal Reserve scam
that was perpetrated upon us throughout the 20th century? What kind
of social system do we have that would penalize Americans for their
foresight and contrarian courage? This is the kind of excuse that
collectivist mentalities throughout history have always used to level
down their fellowmen who are more industrious. This is what stultifies
growth and decimates freedom. It is what has entrapped us in today's
hideous welfare-state hell. If we are to rebuild a free and just
country, then it must be structured upon objectively protecting
men's rights to their property. This would certainly deny any redistribution
scheme dreamed up by the "coercive humanitarians" of the collectivist
establishment to account for the fact that gold coins are not evenly
distributed among all Americans.
* * * *
Question #8. What you are saying is that our history has been
stolen from us by elite bankers who have hijacked the process of
commerce since 1913, thus enabling themselves to live parasitically
off the process ever since. You will have to substantiate such
a claim with documentation about trade being "smooth as a whistle" before
1913. The average business guy is going to reject all this as unbelievable.
Answer. Indeed our history has been stolen from us. But it's
not the elite bankers and politicians that are the source of this;
they are the concomitants, the instruments. It all begins in the
school system as early as grade school, but reaches quite venomous
degrees in the universities. Read my article, Invasion
of the Mind Snatchers. It will show you how the process is
orchestrated down from the super minds of history, to the super academics
of our universities, to the best and the brightest of the students
by conveying to them that freedom is unworkable, that capitalism
leads to exploitation, poverty, racism and war, and must be abandoned
in favor of a centralized one-world government. These best and brightest
then go out and rise up in the various power positions of society
(political, financial, media, religious, publishing, artistic, etc.)
to try and smuggle our country into a centralized one-world government.
So the root cause of all these "conspiracies" is in the ideological
arena, not the financial world. Elite bankers and politicians have
been taught a warped ideal of how the world should be constructed.
This is the nature of men; they will always work to move their society
toward what they conceive as the ideal. Sadly the worldview that
has been instilled into them is precisely the opposite of the truth;
and any objective investigation into the history of the 19th century
will document such. To those who doubt, see Ayn Rand's Capitalism:
The Unknown Ideal, Ludwig von Mises' Human Action, and
George Reisman's Capitalism: A Treatise on Economics. As for
how the banker and political elites have conspired to bring this
about, see G. Edward Griffin's The Creature from Jekyl Island.
Dr. Fekete and I are not saying that business used to "run smooth
as a whistle." Business in the days prior to 1913 was tough, just
as it is today and will be tomorrow. There has never been a "golden
age" where things were idyllic. There was, however, an age where
our lives were much freer -- where there was a better system of justice
and rights, where government was limited and objective, not gargantuan
and arbitrary. That is what we at AFR wish to restore. Life will
never be a picnic, but it can be FREE and JUST if we will regain
our reason.
* * * *
Question #9. Any system that uses paper promises (such as real
bills) to be turned into gold eventually is asking for trouble
down the road. The Byzantine society functioned very successfully
economically for a thousand years using the pure bezant gold coin.
Answer. This reader is missing the point about "elasticity." Without
the added elasticity that stems from Real Bills, there would be economic
activity, but it wouldn't be the dynamic, sophisticated activity
we have known since the Renaissance and its ushering in of the Industrial
Revolution. Byzantine society is hardly an "ideal" to hitch our wagons
to. Yes, the Byzantine Empire survived in the East after the fall
of Rome for a thousand years (from the 5th century to the 15th),
after which it was overrun by the Ottoman Turks when Constantinople
fell in 1453. But it did not survive for those thousand years as
any kind of dynamically growing economy. It was primitive by 19th
and 20th century standards.
It's a fair conclusion to say that our choice is between a 100%
gold dollar with its rigidity of medieval style commerce, and a gold
dollar accompanied by Real Bills that led to the expansive commerce
of the modern era. A 100% gold dollar, would send us back to a much
more primitive form of trade -- that which the Middle Ages endured.
I would hope that Americans opt for the Renaissance and the Industrial
Revolution as our "ideal."
Real Bills do not deserve the "discredited" status extended to them
by today's laissez-faire economists. They are credit instruments
of the very free-market that Rothbardians, Misesians and Friedmanites
claim to champion. They do not spring from fraudulent motives and
government manipulations. They comply with full disclosure between
market participants. They are the result of entrepreneurs being left
alone to freely supply the demand for something that is needed.
To deny them is to deny freedom to produce and distribute according
to an openly disclosed contract. Such a denial is hardly in the spirit
of free enterprise that followers of Rothbard, Mises and Friedman
claim to espouse.
* * * *
Question #10. One small problem with your proposed plan to establish
a gold/silver oriented monetary system. It will result in the end
of the massive profits of fractional reserve banking to those who
currently own the system. The power elites will never allow anyone
to end their monopoly. You are wasting your time.
Answer. This is the type of thinking that ushers in all the
dictatorships of history and allows them to prevail. It is what Ayn
Rand meant when she wrote about the "sanction of the victim" in Atlas
Shrugged. It is the mindset that all dictatorial elites try to
inculcate. Once they have convinced the populace that reform is impossible,
then they have won the day for their tyrannical rule. The Pharaohs,
the Caesars, the Monarchies, the 20th century fascist and communist
dictators all worked to cultivate a servile populace that would give
up and sanction their own enslavement. Regrettably there are a number
of Americans today who are willing to do so. They have let the Mind
Snatchers brainwash them into believing that to rebel and reform
is pointless.
As I point out in Breaking
the Demopublican Monopoly, "I fully realize the strength
of the ruling establishment and the odds that a challenge like
this is up against. But I see overwhelming challenge as rampant
throughout history. I see that all progress in forming better,
freer societies only comes about because there are certain people
in this world (the Thomas Jeffersons and Aleksandr Solzhenitsyns)
who just don't allow immense power structures to bother them
or dissuade them."
When Jefferson and Paine rallied the American colonists to rise
up and resist King George's tyrannical rule, they were appealing
to those humans whose nature is to fight for truth and freedom even
though one's opposition seems insurmountable. They were calling out
to those stalwart souls who believe life to be a crucible, rather
than a banquet, who believe that men were not meant to meekly comply
with would be usurpers, that men must stand and be counted on the
side of "right principle," or their lives are naught but a meander
in meaninglessness.
When Solzhenitsyn and Walesa rallied their fellow countrymen against
the Soviet Gargantua, they were calling out for the same breed of
men that Jefferson and Paine appealed to. It is this breed that has
always been willing to challenge the dictatorial authorities of history
no matter how intimidating they appear.
Because of the coming economic maelstrom, the people will soon be
clamoring for some radical voices to lead them. You the reader can
ignore this crisis and choose to accept the establishment dogma about
the "impossibility of ever changing the system." Or you can choose
the contrarian fight that the Jeffersons and Solzhenitsyns of history
have so gallantly exemplified.
If a free America is to survive, she needs radical monetary reform,
not timorous complicity to the Darth Vaders of Washington and Wall
Street. This will require a large measure of courage and determination
on the part of all of us; but our only alternative is to give up
and allow the forces of evil to win by default. How can we Americans,
scions of Jefferson and Paine that we are, ever rest easy if we allow
such a capitulation to take place?
© 2005 Email Nelson
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