The speaker began a recent presentation before a large group of cattle producers (R-CALFUSA) by showing a paper dollar bill and a silver coin. The words "one dollar" is inscribed on both the coin and the paper, yet the paper dollar will only pay for about one quart of gasoline at today's prices, while the silver dollar will pay for well over five gallons. I explained to my audience that consumer prices are not high – the paper dollar has lost most of its value. It makes no difference how high the price of gasoline goes, a silver dollar will continue to buy gas for 20 cents a gallon, exactly the price gas was during the Great Depression. Based on 1940 prices, a paper dollar is worth about two pennies.
Today in America, we are being systematically robbed of our property because we have allowed the Federal Reserve to flood our banks with fiat, worthless paper money. There is actually a law against paper money but nobody seems to know about it.
The Supreme law of the land is the US Constitution, which stated in Article I Section 10: Individual states are "not allowed to make any things but gold and silver coin a tender in payment of debts." The Constitution also states that "Congress has the power to COIN money and regulate the value thereof."
Our Founding Fathers knew how a central bank printing paper money would collapse our economy. Had we followed the US Constitution to the full letter of the law, gasoline would still be 20 cents a gallon. As the dollar continues to lose value we say our currency has lost its purchasing power. It should be more properly referred to as embezzlement by the banking industry.
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Comments: 18
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(Depends what you mean by "collapse." One could argue that it has collapsed several times as in the Great Depression for one example.)
If we had a money composed only of gold and silver alloys ( for durability) in the form of coins, what would back up that money? Would there be products to buy? In the form of coins, gold and silver is almost worthless. It is only when converted to something else like jewelry, forks, or dental work that those metals are useful. So a metal coin, in itself, is of no more value than an engraved rectangle of paper, in itself.
But let's say that gold and silver coins were the only money and that they did have true value to people such that they would trade desirable goods and services for those coins. Given that assumption, would there still be poverty? Would there be any unemployment? Would there be fraud, robbery, and insurance scams? Would labor and management be in conflict over wages and benefits? Would organized crime still flourish? Would we still have wars? Would politicians still lie to us and would lobbiests still buy the legislation they wanted? Would most money still be in the form of computer accounts with no actual coins in the vaults to give to the depositors in case they all wanted to withdraw their money? Would there still be taxes?
Would inflation still exist or would banks no longer loan money? Would we be able to write checks? Would there still be counterfeiting?
In short, would the same problems that have plagued nations, governments, and peoplse for thousands of years whether they used coins or paper money still be with us? If so, why try something that has failed to get rid of these problems in every nation every time it has been used?
For an alternative which does eliminate these problems completely read Invisible Hand. It's here on Gather and it won't cost you a cent either paper, silver, or copper. :-)
In my lifetime money has lost 98% of its value. very interesting. We need money that is worth something again.