Money serves several purposes. The purpoase that we are most familiar with is money as a medium of exchange. I exchange my labor for the US dollar because the grocery store isn’t interested in my skills as a computer programmer. Paper money, sea shells, wampum, tobacco, cattle – all of these forms of ‘money’ fulfill the purpose of being a medium of exchange and all of these have been used as ‘money’ at some point in human history.
The main aspect of ‘money’ that paper dollars do not fulfill is to be a store of value. That means when I have extra ‘money’ I want to put it away for a rainy day and I want that ‘money’ to have the same purchasing power in the future as it does today.
In 1913 the Federal Reserve was founded and the US dollar has been declining in value since. Today, the US dollar is worth about 3 cents compared to its purchasing power in 1913. This monetary debasement is a hidden tax on the citizens of any country that uses fiat currency and allows that currency to be debased.
Politicians use monetary debasement to finance their welfare schemes (ie, buy votes) and to finance their foreign wars. If they tried to finance these activities via taxes (their only other way of raising money), the citizens would revolt and then the politicians’ games would be over. Since most people won’t learn how the monetary system works (and this info has been intentionally removed from the education systems of western society), monetary debasement is easy to pull off without the citizens taking offense. They even brainwash the population to think that 2 or 3% inflation is necessary and even good!
2 or 3% inflation for 93 years has reduced the value of the US dollar by 97%. It won’t be too much longer before the final 3 cents worth of value is gone.
It is only when monetary debasement becomes extreme that the price of gold begins to rise. And that is where we are today.
Yesterday, the 23rd of March, 2006 was the last time the Federal Reserve is going to publish the M-3 monetary aggregrate numbers or the repurchase agreement numbers. Why is the US Federal Reserve the only central bank in the world that is choosing to hide this critical aspect of its banking system?
Please educate yourself on the monetary system in the US. Start by reading “Creature from Jekyll Island.”
Silver and gold have been used as money for at least 5000 years. I am humble enough to believe that my ancestors probably figured out the best form of money during those 5000 years – ie, if sea shells or wampum or fiat paper was a better form of money than silver and gold we wouldn’t be having this discussion.
