Quote of the day: “No gold-digging for me… I take diamonds! We may be off the gold standard someday.”
– Mae West
Subject: Fighting the Inflation Tax with Gold
Inflation is back — at the pump, at the grocery store, and in your utility bills. The higher prices you’re paying are caused, in large part, by Federal Reserve (FED) money creation. Like counterfeiters, the FED creates money almost out of thin air.
Frankly, we’d like to see the FED closed. But how? We’d need a plan.
Some impressive minds, like Ludwig von Mises, Ron Paul, and Edwin Viera think the best way to fight the FED, is to open the door for . . .
Private money, based on gold, NOT denominated in dollars, but by weight, that competes against Federal Reserve Notes (dollars).
Make dollars compete with gold and the FED’s ability to generate new dollars could be constricted. FED counterfeiting would be less and less relevant. It would be like yanking the teeth from a weakened beast, and only then calling for a fight.
But why gold?
- Gold can’t be counterfeited or easily manipulated by political forces.
- Gold retains its purchasing power. Gold even allows you to buy more as production technologies improve.
Investment writer Bill Bonner recently reported . . .
“To show you the scope of the phenomenon, we pull out a copy of The New York Times from October 19th, 1896. There, it is recorded in black and white that the average wheat price was about $1 a bushel – in gold – during the previous 20 years. An ounce of gold would buy you 20 bushels of wheat. Today, you can buy a bushel of wheat for about $12 which means, an ounce of gold will buy about 75 bushels of wheat. In terms of real money – gold – the price of wheat has gone down for more than 100 years. However fast farmers have added to the world’s wheat output, in other words, central banks have outdone them, planting far more acreage in paper money.”
Even the price of oil, which has been subject to massive government price distortion, has remained steady when denominated in gold. (Visit here to see charts demonstrating this point.)
Virtually everyone, most painfully families and those on fixed incomes, know that they’re paying more at the pump, at the grocery store and for utilities.
Here’s the point: Inflation is a tax – a hidden, sneaky levy.
YOU are being taxed.
Who benefits from the FED’s money machine? The bloated federal government gets most of the first fruits of the FED’s counterfeiting to spend on unnecessary wars and cow flatulence museums.
And by “first fruit,” we mean when the dollars are new, before they’ve washed through the economy. Your friendly federal government gets to spend those fresh dollars before they cause price inflation. It’s like having an inside source to tell you when the price of any given item is going to increase. You could walk into the store and buy a computer, a car, or a case of Coca-Cola today, for less than all of tomorrow’s suckers will pay — except in this case, the American people are the suckers.
But there’s no printing new gold. And there’s no first fruit privilege on gold either.
Gold is Honest Money.
Imagine a world where everyone wants to be paid in gold instead of those depreciating dollars!
So how do we reach the point where the dollar competes with Honest Money? Two big hurdles are:
- Federal Reserve Notes (dollars, greenbacks) enjoy a monopoly status called “legal tender” and,
- The Federal Mint holds a monopoly for coining money.
Let’s start by removing these hurdles, and gold may be able to compete.
- You already use the mechanisms that would make “gold money” practical, every time you whip out your debit card.
- Money would be defined more by the market, and less by government. At first, computers could calculate conversion rates in real time. Over time, people would simply think of price by weight of gold.
Would you like to close the FED? The first, “fabian” steps are breaking the legal tender and minting monopolies. Then, the FED becomes toothless and vulnerable.
Congressman Ron Paul has introduced two “honest money” bills that we’ve combined into one campaign at DownsizeDC.org – “End the Inflation Tax.”
Please, go there now and send a message. Tell your representatives in Congress that you want them to end legal tender and permit private coining of money. Tell them to co-sponsor the “Honest Money Act” (HR 2756), and the “Free Competition in Currency Act” (HR 4683).
Thank you for being part of the growing Downsize DC Army,
Jim Babka
President
DownsizeDC.org, Inc.