Monday, March 08, 2010

Gold Money Equals Power to the People

If not gold then some other real commodity with intrinsic value. Former Arkansas resident Gary North explains why in this lengthy article, but I will excerpt the crux of his argument here......

That act of national theft (going off the gold standard) unshackled the bureaucrats. Before this, the bureaucracies had to be funded by governments. There were limits on this funding: tax revenues and the interest rates on borrowed funds. With the end of the various government-enforced gold standards, nation by nation, the governments reduced these restraints. Their central banks could always buy the governments' debt by creating fiat money.

The great winners have been the bureaucrats. They have escaped vetoes by governments, because governments have escaped the public's vetoes that were created by gold-redeemable currencies.

This is why all big-government politicians and their obedient, salaried intellectuals hate anything even remotely resembling the nineteenth-century gold standard. They resent the veto power of gold over the expansion of credit by the banking cartel. This is why they never challenge the central banks. They know who butters their bread: the central banks. They know what the butter is: borrowed fiat money used by governments to expand power.

The politicians and their many hired spokesmen – economics professors, newspaper columnists, think-tank intellectuals – dismiss the gold standard because they understand that this system placed a veto power in the hands of individual holders of IOU's from banks. This restrained the banks. This also limited the ability of governments to borrow money in order to defer tax increases.

The IOU-holding citizen had the power to say: "You're lying. I'm calling your bluff." He could walk into a bank and demand gold coins. That legal authority was the greatest single tool of decentralized power in the world – yes, even greater than the right to keep and bear arms. People rarely take up arms against their governments. They could impose a veto on their governments by walking into a bank and demanding their gold.

A gold-redeemable currency was to the economy what the jury system is to courts: a way to veto the lawmakers and law-enforcers. The lawmakers and law-enforcers deeply resent such decentralized authority.

1 Comments:

Anonymous Anonymous said...

Well... that's very interessting but frankly i have a hard time figuring it... wonder what others have to say..

2:53 PM, March 09, 2010  

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