Dozens of towns have begun printing their own currency.
A dozen states are considering coining their own silver and gold backed currency. You can read more about that by clicking here (since that article, Utah has made significant steps in that direction).
Since the bubble burst in 2006, your taxes (through inflation) have gone up 11.37% while economic indicators point to another coming recession (details in a future post).
The only problem with these towns using this money is that it is backed by U.S. dollars. In other words, you give the bank $10 USD and you get $11 back in the new, local currency. This does not protect them from inflation or stimulate the economy, it only gives people an emotional feeling of community. That said, this is a step in the right direction. It removes the fear people have of believing that anything other than a greenback USD can be used as currency. Now, if the towns begin to issue this local currency backed on gold or silver that people deposit at the bank, we have something far better. And if employees are paid in gold or silver from their employers, we have something far better still – a complete decoupling from The Fed and its inflationary dollar destruction. Utah is moving quickly in that direction. People would still pay taxes on their incomes, but their incomes would not lose value, in fact they would gain value, no matter how much money The Fed printed.
I am glad the idea of local money printing is becoming more and more popular if for no other reason than to show Americans that the system we currently have is not only wrong, and not working, but that it is possible (and Constitutional) to return to the way our money used to work. The Fed is an abomination. It has devalued our currency over 95% since its inception, after a 12% gain before its creation.
Where once our currency was backed by gold, we have in short measures moved to backing it with nothing. It started with Roosevelt who would not allow domestic conversion, where you or I walk into a bank to exchange our dollars for gold, to the final nail in the coffin when our economy was doing poorly in the 70’s, and countries that had loaned us money tried to exchange their U.S. dollars for the gold it was backed by and Nixon said, “Hell no” and removed us from the gold standard. This was in truth, the U.S. defaulting on its debt. Rather than pay our creditors back, we simply told them they must either hold onto their U.S. dollars or take a long walk off a short pier.
What did Nixon say when people who knew what would happen protested this blank check for The Fed?
“I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold ….Now, what is this action–which is very technical–what does it mean for you? Let me lay to rest the bugaboo of what is called devaluation. If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.”
So Nixon, with the stroke of a pen, created an 80% devaluation of our dollar since that year and tried to placate the panicking minority who knew that would happen by recommending they just “Buy American” and not travel abroad or buy anything made by any other country. Idiot.
From Ralph Benko at CNBC, “The federal government spent $15 billion from 1789 – 1900. Not $15 billion a year. $15 billion cumulatively. Uncle Sam will spend $10 billion a day in 2011.”
Since then, The Fed has had the printing presses running day and night. In just four years, what cost $100 when the housing bubble burst would cost $113 now. If we go back a bit further, if I saved $520 in the bank when I was born in the early 70’s it would only be worth $100 now. The Fed is the IRS Part II. They tax us, just like the IRS, by devaluing our incomes. If they pump another billion dollars into the market to pay for social service programs, pork barrel projects, to drop bombs on people, to provide free medical care, those billions lower the value of the dollar in your wallet by a few pennies, a dime, then a quarter. So what is the difference between the IRS taking your money through taxes, or The Fed taking it through inflation? NONE. You are all having your “taxes” raised and you don’t even realize it.
We can return to a gold standard. We must return to a gold standard. It prevents the government from spending more money than it makes, it will eliminate deficit spending, it makes the government balance its checkbook just like the rest of us. If the government wants to go to war, or create a new social program, it will only be able to do that if it has enough revenue. It will not be able to simply print the money to pay for it so they can get the votes they want from whatever group is on the receiving end of that money printing.
It is time to return the U.S. to the period before The Fed. Imagine what our history would have been like if The Fed had never been created? We would not have had The Great Depression in the ’30’s. We would not have had the dot.com bubble of the 00’s, and there would have been no Housing Bubble in 2006.
And lastly, the next Great Recession locomotive that is picking up speed would never have existed, but because of The Fed, it’s on its way, running full steam, and coming straight at us.
Categories: Economy, Federal Reserve, National Debt
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