- There was a time in this country when those w! ho advocated
a Fiat Monetary Standard were considered certifiable crackpots, monetary
quacks and dangerous interventionists set on domination of both the political
and economic processes in this country, the roles have been reversed and
those who advocate sound money are assigned such epitaphs of derision.
Fortunately, that will change and at this point in time, change rather
rapidly as the true nature and inherent problems of fiat money become evident
to the people themselves.
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- At one time, Classical Liberalism promoted the ideals
found within the principles of a sound monetary unit that not only provided
stability economically, but also provided for the spread of real prosperity
and liberty. The cornerstone of Classical Liberalism was private property
rights and the cornerstone of all private property rights was, and is sound
money, money that is actual real property, solely owned by the individual
who labored either by the sweat of his brow or the sharpness of his ! creative
mind. Such money was not owned or controlled in any s! ignifica nt way
by government except in trust through the regulation and verification of
the fineness of coinage in purity, weight and measure. Otherwise, money
was the property of the individual, or legal corporation, just as any other
property of which legal title may be held.
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- Along with the ideal of private property rights, Classical
Liberalism, which could just as easily be called Jeffersonian Liberalism,
promoted a confidence in the market economy, as free as possible from all
interventions, especially from the government. They held, and still hold
that private property rights, in all aspects, provides for the best means
of production and distribution of prosperity within society with a system
of economic organization organic in both concept and operation. It was,
and is, the best system to secure the broadest means of prosperity and
individual protection within a society for it assigns the individual consumer
the power to choose which producers provide the best quality a! t the lowest
possible price for the consumer's needs and desires. The principles of
sound money and free, unencumbered markets were just some of the foundation
stones that help create this wonderful and I might add, successful experiment
in the broadest spectrum of individual freedom and liberty the world had
experienced: These united States of America under an mutually agreed Constitutional
Compact between the people and their government.
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- The Founders of our country realized that the main challenge
facing such a liberal system of government and society was how to control
the only real danger that would ever face the country, the government itself.
The goal of the Founders was to institute a government so cumbersome, so
divided in function and authority that all power would be distributed between
the general government and the independent State Republics; the best description
could be called a Republic of Republics, functioning in a cooperative compact.
Then, of cour! se, they implemented further divisions within the general
gove! rnment i tself, once again dividing function and authority to ensure
that power could not easily be concentrated or consolidated.
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- In essence, the general federal government was simply
a reflection of the will of the people through the agency of their respective
State Republics. So, the main problem, in the minds of the Founders, was
how to prevent those who are entrusted to govern by consent from becoming
despots, endangering and enslaving the citizenry in their stewardship.
The layers of defense for individual liberty was obviously the primary
goal in the institution of our system of governments and the focus of each
layer of defense was the broadest application of individual freedom and
liberty possible within such a system. What an absolute shame that we have
allowed ourselves and our country to devolve far from such a very workable,
very efficient ideal.
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- Today, there are few who seem to realize or understand
that within all the defenses for individual freedom and li! berty laid
out by the Founders, was the principle of sound money. It is absolutely
impossible to understand the full meaning and import of sound money without
understanding that one of the primary purposes of sound money is the protection
of individual freedoms and liberty, private property rights, as well as
a protection against government intrusion. Sound money is politically and
ideologically in the same strata as our Constitution and our Bill of Rights,
and it is just as important to our freedom and liberty. It was, and should
be considered, the most essential restraint upon arbitrary government expansion
and the potential for unbridled consolidation of power.
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- The principle of Sound money has a dual purpose, one
positive, one negative; in the positive aspect it provided for the greatest
degree of individual freedom and liberty while providing for the broadest
spectrum of free market choices. On the negative side, its aspect was one
of governmental restraint, an a! butment of reckless expansion, potentially
dangerous debt aggr! egation and of course eventual despotism. In such
a system, only actual coinage was to be considered loose legal-tender,
all tokens, scripts and types of "paper-money" were to only represent
the real money and only served as fiduciary mediums, which upon demand
of the holder, were completely redeemable in lawful real money. "Real
money", it definitely has a wonderful ring to it, doesn't it?
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- I wonder how many in our government, or in the Federal
Reserve for that matter, finds the term "Fiat Money" as oxymoronic
as I do? Money, by definition, is a store of value; fiat, by definition
is simply a decree without intrinsic value. Fiat money is an impostor,
giving the impression of value without retaining a store of value as a
medium of exchange. With the dedicated assistance of the Federal Reserve,
this country is in now in a state of irreversible collapse, technically
bankrupt for several years, it will absolutely be unable to climb out of
the horrible pit these criminals, both in! the Federal Reserve and the
government, have share in taking this country to the precipice of disaster
and they are still pushing.
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- "... the U.S. government has a technology, called
a printing press (or, today, its electronic equivalent), that allows it
to produce as many U.S. dollars as it wishes at essentially no cost. By
increasing the number of U.S. dollars in circulation, or even by credibly
threatening to do so, the U.S. government can also reduce the value of
a dollar in terms of goods and services, which is equivalent to raising
the prices in dollars of those goods and services. We conclude that, under
a paper-money system, a determined government can always generate higher
spending and hence positive inflation." Ben Bernanke 2002
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- Today, we are so far-removed from the concepts of sound
money that it is totally foreign to our understanding; we have been convinced
that the only monetary system that is acceptable or applicable is the one
we current have ! imposed upon us and that is the fiat monetary system.
Sound mo! ney is a n alien concept, so much so that we don't realize just
what we are missing, it doesn't enter our minds, for the most part we are
totally unaware of the benefits of a sound monetary system. Of course,
a fiat monetary system requires ignorance, equalized with confidence, in
the general population to function properly, without widespread ignorance
or confidence, the system fails, as we will see.
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- The fiat system not only relies upon widespread ignorance
and misplaced confidence, but it also relies heavily upon government intervention
and regulation. A sound money system, on the other hand, doesn't rely upon
such numerous variables in order to function; actually it is extremely
simply and straightforward in both functionality and application. A sound
money system can easily operate independently of all government policies
and the pressures of political intrigues, including very divisive party
politics. Such a system also helps to prevent government officials, and
represent! ative assemblies, from using various tricks to elude their budgetary
and fiscal responsibilities to the people and the country.
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- Since the rather subversive introduction of the fiat
monetary system in this country, there has been little room for the consideration
of a sound monetary system. The proponents of the fiat system have for
the most part, effectively exiled it from economics and serious monetary
studies for good reason, for it poses the greatest danger to the fiat system
and those who enormously benefit from that system. The various proponents
and schools of economic thought have yet to consider the precarious position
they are in because they have failed, utterly failed to contemplate that
all their theories are based upon a monetary system inherently doomed to
failure. Such a foundational flaw will always ultimately distort all conclusions
associated with it, especially when the flaw is not considered to exist.
Today, our country is fraught with what could ! only be considered "Crypto-Despots",
eager to maintain their p! osition as well as their power, the prime impetus
of which has been the introduction of a system of fiat money for it provides
them with medium of control over society that they crave.
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- So, there are few questions asked and the questions that
arise are based upon incomplete assumptions because the foundational structure
of the economy is completely based upon a system that contains two divergent
fault lines, which will, in time converge in disaster. The first fault
line consist of the inherent terminal life span of all fiat monetary systems
due to the systemic accumulation and exponential multiplication of debt,
the second fault line consist of requirement of absolute widespread public
confidence in fiat money itself.
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- Eventually, these two fault lines converge and the system
collapses. Such collapses are not preventable any more than the system
itself is sustainable without massive government and central banking interventions.
The system lends itself to those who requir! e the benefits of inflationism,
this trait, of course, is welcomed and enhanced by both government and
central bankers who are all too eager to utilize such a trait to their
best advantage. What need is there to operate within budgets, to maintain
expenditures by within tax revenues since, according the a former Chairman
of the Federal Reserve of New York: "taxes for revenue are obsolete",
and indeed they are obsolete within a fiat monetary system. I have found
that the full import of that statement has yet to be realized, especially
within the minds of the majority of economists and their feeble schools
of economic theory fashioned around the fiat monetary system, a system
that is inherently flawed.
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- Eventually, of course, the people, the economists and
the politicians will become painfully aware of just how flawed the fiat
monetary system really is as the very harsh reality rises into view, affecting
everything and everyone within this country. Like all fiat monetar! y systems,
ours is destined to go through the same stages of f! ailure a s all others
before it, and our economy will, at that moment, collapse under the weight
of massive insolvent debt, upon which the system is created.
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- Inflation is an easy tool in the hands of the government
as long as they can maintain it at gradual incremental increases over long
periods of time, but the moment a rapid increase occurs, the ruse becomes
far more difficult to maintain. In the first stage, the people will begin
to witness the rapid increase in prices for both goods and services. While
at that point they simply believe the government when it states that commodity
prices are rising for various reasons; the government of course, always
has a plethora of reasons on hand to justify such price increases, all
in the hope of maintaining the charade.
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- At this stage, there will be a few people who actually
realize just what is going on in the economy, but unfortunately the majority
will remain true to their conditioning and while they may gripe, will not
que! stion the true cause of their financial pain or the culprit behind
it. The majority will continue living their daily routines as though the
inconveniences of higher prices will be a passing phenomena, continuing
to misplace their trust in a government that was in on the damnable ruse
from the beginning as it shifts all blame to something or someone other
than itself.
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- While, at this stage, people may wish to make certain
purchases, they think that prices will eventually retreat so they put off
the purchases in the short-term until a later date. This common attitude
is relatively short lived because as prices continue to rise, at unprecedented
levels over longer, consistent periods of time, people will begin to think
that because prices are so high that they will then put off a purchase
for a year or two, perhaps then prices will once again subside to more
normal and manageable levels for their income. The last stage abruptly
hits and the entire system then faces catas! trophic collapse when the
people begin to think that they had ! better m ake a purchase, any purchase
immediately because they realize that the purchasing power of their fiat
money is rapidly loosing its value of exchange.
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- So, the people, in a panic, will withdraw, if they are
allowed, their bank deposits, cash in their stocks, redeem any bonds for
cash to exchange for commodities or merchandise they feel will retain value
even if they have no real needs for the commodities or merchandise they
are buying. As the panic spreads, shortages being to take shape, manufacturing
slows to a halt, unemployment skyrockets, and public services breakdown
and in the last stages chaos ensues. The government seeks to assert itself,
but to no avail for even the government under these circumstances, in this
present age will prove to be as impotent as the fiat money they so ardently
promoted, to solve the problems faced by the country and the people.
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- While it is easy to see the conclusion of such a system
as a failure, the truth of the matter is that ! entire system, and the
polices created to sustain it, were failures from the beginning. The purpose
of the system is not, nor has it ever been throughout history, for the
benefit of the people; its sole purpose is to provide the government with
unlimited, unrestrained finance and the central bankers with an incredible
profit machine without much oversight or regulation to impede their government
authorized monopoly.
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- So, the system of government and central banking fiat
money, dependent upon intentional deception of the population to remain
viable comes to an abrupt end, it is no longer a manageable system of exchange,
nor will it provide the government with a free financial reign. There are
no solutions to the problems inherent within our government's fiat monetary
regime even though the government economists continue to heap unabashed
praise on both the system and the polices required to maintain it, that
will become more and more difficult as the system reaches its! terminal
point.
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- Historically, fiat inflation was reali! stically deemed
extremely dangerous to the economic, social and political safety of a country,
but as usual, the temptation for the unleashed power and the ability to
use the fiat system to convert the labor of a population to unlimited wealth
for those in charge of the money has always proven far too great to resist.
Of course, the campaign to demonize sound money has been unrelenting, primarily
from those who benefit the most from the fiat monetary system, and those
who have been duped into believing it was the source of all economic troubles
prior to the advent of the Federal Reserve System, of course, it wasn't.
Those pro-inflationist, those fiat-philanderers have vowed to forever prevent
sound money from raising its head in this and other countries again, but
their faith will be shaken soon enough.
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- In Liberty and Eternal Vigilance,
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- Republicae-Seditionist
- Posted By: JoAn
- *AfricanCrisis Volunteer*
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- Source Url: <http://www.africancrisis.co.za/A! rticle.php?ID=32858&>http://www.africancrisis.co.za/Article.php?ID=32858&
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