Back about A.D. 1995, President Bill Clinton’s reputation for lying inspired the “$6 Bill”—a joke “paper dollar” that included pictures of Bill Clinton on one side and Monica on the other, a few witticisms, and a big, bold number “6” in each of the four corners. The $6 Bills were so obviously a joke that they couldn’t be construed as counterfeits.
Even so, a friend of mine conducted an “experiment” in which he paid for hotdogs and cokes at several convenience stores with “$6 Bills”. The clerks (primarily immigrants) accepted the joke “dollars” and even gave change. The story seems kinda funny, except that when the clerks “cashed out” at the end of their shift and the boss found the $6 Bill in the money tray, the clerk’s were undoubtedly charged for the $6 loss. Thus, my friend’s innocent “experiment” actually robbed each clerk who ignorantly accepted the $6 Bills as if they were money.
The experiment illustrated a fundamental point: Most people don’t understand anything about money beyond the mathematics. That is, they know that $5 is better than $1, and $10 is better than $5, and $100 is better yet. When it comes to money, more is better.
This mindset is dangerous and potentially self-destructive in that “more is better” is not simply a statement of mathematics, but rather a statement of moral principle. Once a nation succumbs to the principle that “if some money is good, more money is better,” that nation’s system of values becomes based on the money and mathematics rather than moral or spiritual obligations and rights.
When a nation based on moral values devolves into an economy based on mere accounting, moral values of right and wrong are replaced by economic “values” of profitable and unprofitable. For example, the same pornography that would be shunned as immoral by a nation would be welcomed in an economy if the porn generated profits. The same argument could be applied to genetically-modified foods, outsourcing jobs, refusing to prevent an invasion by illegal aliens, and political prostitution by Congress. In an economy, anything that makes money is, by definition, “good” in the economy’s system of “values” (actually, system of accounts).
When “money” equates to “goodness,” the people come to “love” money while abandoning their spiritual foundation. Such people come quickly to accept the idea that “greed is good” and what was once a “nation” based on spiritual values degenerates into a mere, mathematical “economy”.
The inevitable result is national calamity.
Such calamity begins with an immoral monetary system. That system is built on a popular ignorance that can’t even imagine that money has moral implications.
To begin to understand the moral nature of money, you need to understand that for thousands of years, “money” has been recognized as a physical mass of some substance—usually gold or silver. Real “money” is not a mere, abstract number printed on the four corners of a piece of paper (like a “$6 Bill”). Real “money” is an objectively measurable, physical quantity of some tangible substance. Any paper currency that’s not at least backed by (redeemable in) a fixed, physical mass of “real” money (gold/silver) is not money—it’s evidence of money. It’s an illusion of money. It’s a LIE. Once that LIE is accepted by a people, their national destruction is all but assured.
Old Testament merchants used scales to measure out the physical mass of grains, perfumes, oils and even gold and silver (money). Many merchants kept two or more (“diverse) sets of weights to create the illusion (lie) that they were buying or selling more of a particular physical mass than was true. The result was the sophisticated robbery of unsuspecting consumers. The Bible warned repeatedly that God regarded such “diverse weights” as an “abomination”.
At Article 1, Section 8, Clause 5 in our federal Constitution, the Founding Fathers mandated that there must be a fixed system of “weights and measures”. This fixed system would guarantee that our gold and silver “money” retained the same physical mass from one generation and even century to another. I.e., a silver dollar would contain one ounce of silver from now until Washington D.C. froze over and thus the “value” our dollars would remain constant.
Article 1, Section 10, Clause 1, mandates that “The States shall . . . make no Thing but gold and silver Coin a Tender in Payment of Debts; . . . .” Thus, for Americans living within the States of the Union, a paper currency is expressly unconstitutional.
The vast majority of Americans do not understand that that these constitutional guarantees concerning money and fixed weights and measures are not simply about mathematics or even gold or silver, but they are fundamental tenets for a moral society. Once you accept any form of “money” that does not have a fixed, physical and objectively measurable mass, you are heading down the road to national destruction.
Paper money kills . . . nations.
Why? Because paper and digital dollars are LIES. They are illusions. They are the diverse weights and measures that Bible warned against and the Constitution prohibited.
Nevertheless, despite biblical warnings, and constitutional prohibitions, what kind of monetary system has been adopted in the USA? Fiat. Paper. Illusion. Lies. And out of the LIE that a piece of paper is “money,” you and I are being robbed every single day, just as the immigrant clerks were robbed when my friend paid for his hot dogs and cokes with “$6 Bills”.
Those who deny that they’re being robbed by a paper money system need only look at inflation. Since A.D. 1933, the purchasing power of a paper dollar has shrunk from 100 cents to about 3 cents. If your grandfather saved $100,000 in cash in 1933 to bequeath to his grandkids in 2010, today that $100,000 would only purchase about $3,000 in goods and services. Of course, if grandpa had saved 100,000 silver dollars (instead of 100,000 paper dollars), his wealth would’ve remained intact. He and his grandkids could not have been robbed of that wealth. But, because he trusted in paper currency, that grandfather and his grandkids have been robbed of 97% of their wealth.
How did this theft take place? By means of inflation.
Our Federal Reserve claims to be dedicated to stopping inflation, but in fact, the Fed is dedicated to causing inflation—within a fairly tolerable limits. So long as Whee duh Pee-pul are only robbed of 1% to 3% of our savings each year, we don’t seem to mind. We take it for granted that our monetary system must rob us and that a little robbery is OK. Why? Well, because “greed is good,” right?
We even celebrate inflation’s robbery when we borrow money because we know that, thanks to inflation, we’ll be paying off our debts with “cheaper dollars”. Did you ever take out a loan for a house, a car or a business investment? Did you justify the loan with the knowledge that with each passing year, you’d be repaying the loan with cheaper and cheaper dollars? Then you’re a thief and every bit as immoral as my friend who robbed those immigrant clerks with his “$6 Bills”.
You may object to being called a thief, but what else could you be if you know when you borrow currency to buy a house, car or business, that you don’t intend really repay the debt in full?
We excuse our personal acts of inflation-based theft by observing that “everybody’s doin’ it”. In other words, under normal circumstances, it might be wrong for me to rob Peter to pay Paul. But today, it’s OK for me to rob Peter because Peter is also robbing John to pay Sarah, and Paul is robbing Bill to pay Joan, and Joan is robbing me. So, here we are, a nation of happy thieves, each one merrily robbing the other—what’s wrong with that?
Here’s some of what’s wrong:
• First, one way or another, all of our debts will ultimately have to be paid. They might be paid in real money, they might be paid in lost property, they might be paid in the suffering that accompanies a national economic collapse—but they are going to be paid.
• Second, insofar as all debt denominated in paper currency subjected to inflation is a form of theft, the biggest borrowers (debtors) are also the biggest thieves. America’s (and the world’s) biggest debtor is the U.S. Government. The U.S. Government is thus America’s (and the world’s) biggest thief. That’s why the U.S Government and the Federal Reserve are fighting desperately to sustain inflation: they are absolutely determined and dedicated to robbing the creditors.
• Third, insofar as our government is dedicated to robbing creditors, our government is necessarily a corrupt entity. Our government isn’t a little corrupt around the edges, it is so centrally and fundamentally corrupt that it is irrational to regard it as any more than a criminal enterprise.
What are the chances that a truly honorable man can participate in a criminal enterprise? Isn’t it true by definition, that a truly honorable man cannot participate in a criminal enterprise? If so, how can a truly honorable man serve as President, Senator or Congressman in a corrupt institution?
You haven’t seen a truly honorable President or Senator in most of your lifetime. There may be a handful of reasonably honorable men or women in the House of Representatives (Ron Paul comes to mind), but as a practical matter, how can a truly honorable man participate in organized theft? So long as we are willing to accept a monetary system that’s prohibited by both God and the Constitution, we must also accept a government that is, at base, a criminal enterprise and laws that exploit the people rather than serve them.
• Fourth, a paper-dollar results in a “debt-based monetary” system where all of the currency is not earned based on past productive efforts but ultimately loaned into circulation based on predictions of future production. People who seem most likely to repay their debts will enjoy high credit ratings and can therefore borrow lots of currency to purchase lots and lots more “things”. In an economy (rather than a nation), “some is good, more is better”. The morality of possessing ever more and more “things” is implicit in paper dollars. Greed is good.
People with moderate credit ratings can be purchase some “things” but not everything. But people with low credit ratings can’t purchase anything. And that’s an enormous problem. For such poor people, “more is not better,” “more” is not moral, “more” is almost impossible. In a debt-based monetary system, how can a man without credit support himself?
A: Only two ways: overt crime and welfare (covert crime). Overt crime is where the poor predate on the rich by shooting and robbing them. Welfare (covert or hidden crime) is also a form of theft (taking that which is unearned) that’s paid by the middle class to bribe the poor into not robbing the rich.
The relationship between a debt-based monetary system and welfare is too long present fully at this time, but I contend that a fiat currency that’s loaned into a debt-based monetary system necessitates welfare for those communities that have no credit. Welfare (covert theft) is a necessary consequence of paper dollars.
• Fifth, a credit based monetary system is based on predictions of a man’s future earning and repayment potential. It’s easy to lend $100,000 to John D. Rockefeller, Bill Gates and Donald Trump. It’s not guaranteed, but it’s a reasonably predictable that these super-wealthy individuals should be able and willing to repay their debts at some future date.
Likewise, it’s reasonably predictable that those people in the upper 25% of our economic strata should be able to repay their debts in the future.
But what happens when we embrace a credit-based monetary system where virtually everyone must rely on credit to purchase homes, cars, clothes and even groceries? What happens when we must give credit (as in “sub-prime” home loans) to people who aren’t worthy of credit? What happens to a credit-based economy when that economy must give credit to the entire society?
Remember, a credit rating is a measure of the probability that a particular man will repay his loans sometime in the future. Credit ratings are predictions of the same sort people make when they bet on roulette in Las Vegas. If made by a sufficiently credible source (say, an “economist”), these predictions can take on the mantle of prophecy—but in the end, they’re only bets.
Credit ratings can work fine with wealthy consumers like John D. Rockefeller, but what happens when credit is extended to vast numbers of people who lack the talent, drive or moral commitment to repay their debts?
When the “masses” (read “sub-prime” mortgagees) default on their debt, the whole credit-based economic system is threatened with collapse. The requirement that a credit-based economy must extend credit to those who are unworthy of credit is probably our economy’s Achilles Heel.
As a credit “odds-maker,” I can safely predict that the one, super-rich, John D. Rockefeller will repay all of his debts. But what are the odds that one million John Doe’s will also repay their debts? And what happens if one million John Doe’s default at the same time? Economic collapse.
This collapse is the inevitable result of a paper-based monetary system that gives rise to a credit-based economy. The whole damn system is built on predictions and later mere hopes that people who aren’t credit-worthy will somehow repay their debts.
Remember “sub-prime mortgages”? Remember “liar’s loans”? Loan applicants claimed they made $100,000 a year. It was a lie. Nobody cared. The banks didn’t care because the government allowed bankers to profit from every home loan, even if the loan was stupid. The same economists who predicted that sub-prime mortgagees and known liars would still pay their debts in the future, also predicted that the price of homes would keep on rising. So, what difference did it make if the liars lied and the sub-prime borrowers borrowed and the banks made loans to idiots? The system was rigged. Our economic seers had given us prophecy! Nobody could lose. Greed was not merely good, it was great!
‘Cept for one thing. The future predictions of rising home prices and credit worthiness for sub-prime borrowers were false. We like to look back on those predictions as mistakes, but the people at the top knew they were lies all along.
Nevertheless, Americans, seduced by the fundamental immorality of a paper currency and credit-based monetary system bought and celebrated the lies because Greed is Good!
Result? A lot of people who didn’t deserve to live in apartments, bought expensive homes. Life seemed pretty good for a while. People were laughing because, thanks to the lie of credit, they were living far beyond their means (actual past earnings). They were living off the sweat of another man’s brow. The non-productive parasites were robbing the productive. But while they laughed about their theft, their debts accumulated until some of the subprime borrowers began to default (as was inevitable) and the system started to collapse.
There’s a lesson here: An economy might be able to function with some credit, but it can’t function without at least some real money. A purely credit-based society is an immoral society and must collapse for lack of moral foundation. Once the people know that somebody must give them credit, the people will learn to hustle, exploit and rob their creditors. That’s the nature of man. All collectivist (credit-based) societies fail because they must provide credit to those who have no intention of actually working to produce some product to repay their debt. The productive (creditors) are robbed and impoverished; the non-productive (borrowers) become bloated; the society collapses.
Credit—just like paper dollars—kills . . . nations.
• Sixth, while Americans have become a nation of merry thieves, we don’t really rob Peter to pay Paul. By means of deficit financing, our government robs the son of Peter to pay Paul. In other words, when government promises Universal Health Care to Paul, government knows that some significant portion of that “entitlement” will not be paid by current taxes imposed on Peter or the current beneficiaries of that program (Paul), but will instead be paid for by borrowing currency from some other creditor. That loan will be secured by a gov-co bond that will be paid by future generations of the children of Peter and Paul—who are not currently even old enough to vote.
In essence, the criminal enterprise we call “government” doesn’t have the balls to rob the American voters. Instead, it robs their children. Our government “buys”/bribes you and me with promises of “free” entitlements (like health care) now that will actually have to be paid for later by our kids.
And do we allegedly “moral” adults complain? Of course not. We’re gonna get free health care now, so screw the kids, right? We still claim to be a moral people, but that’s a lie. If we were a moral people we would pay our debts, not simply “discharge” our debts with paper currency. If we were a moral people, we would not allow our enormous (and now unpayable) debts to be passed on to our children.
All of our government’s entitlement programs, welfare and even regulatory agencies are ultimately based on the lie that you can actually pay your debts with a paper currency. The previous sentence probably sounds absurd to most Americans, but imagine that this country was truly bound (as mandated by Article 1.10.1 of the Constitution) to pay its debts only with gold or silver coin. If all debts could only be paid in gold and silver, when government had no more actual, physical gold and silver, it could not pay any more debts. There’d be no deficit financing. Government would operate “pay as you go”. If payments couldn’t be made in tangible gold or silver, government would be prevented from “spinning” paper or digital currency lies “out of thin air” to allegedly “pay” debts.
If government couldn’t “spin money out of thin air,” the size of government would be hugely reduced. Government entitlements and welfare would be almost nonexistent. Foreign wars could not be afforded. I doubt that government would be more than one-third of its current size if We the People simply enforced our constitutional mandate for using gold and silver coin as the only payment of debts.
More, if the U.S. abandoned paper currency and returned to gold and silver coin, the result would be a moral renaissance. If your debts had to be paid with real money—not paper currency, or plastic credit cards—the average American and our government would be forced to behave responsibly. If we could only buy in proportion to what we had actually and previously earned (rather than some lie-based prediction of our future productivity), I guarantee that Americans would be repulsed by the idea that “Greed is good”. If we actually had to pay (with gold and silver) for everything we bought at the time we bought it, how much junk food would we buy—and how healthy would we become (and how much “universal health care” would we need)? How much junk would we have stored in our garages, attics and closets that we don’t need or want but which we currently buy “on impulse” with our credit cards? Without credit and paper currency, we would be a more responsible, moral, independent, self-reliant and prosperous people. The United States of America would be strong.
With credit and paper currency, we’ve become the world’s biggest debtor nation and the world’s biggest pack of liars. Does that description sound extreme? Well, the American government and people are currently in debt for at least $75 trillion—about $250,000 for every man, woman and child. You show me anyone who claims that even half of that debt will ever be paid in full, and I’ll show you a damnable liar.
For the moment, the only thing keeping us afloat is the purported “kindness of strangers” (like China) who are loaning us more paper currency (more debt) to sustain the illusion (the lie) that we are still productive and prosperous. We are, in fact, a nation of bankrupts waiting for our nation to be “foreclosed” by a depression or world war.
The moral obligations imposed on the people by a gold- and silver-based monetary system would also be imposed on our government. How long do you suppose our troops would remain in Iraq or Afghanistan if the actual cost of the war had to paid in gold and silver right now—by this generation of adult voters—rather than by some future generation of unsuspecting children? If Americans had to actually pay now for the current war, they’d be screaming to end the war within a year after its onset. Without credit and paper currency, you couldn’t get a good war off the ground.
No president, senator or congressman would even dream of an entitlement program like “universal health care” if that program had to be paid in full, in gold and silver coin, every year as the bills came due. Without credit and paper currency, there’d be no welfare state, no communistic government, and far fewer criminal politicians.
There’s an old aphorism that “a nation gets the kind of government it deserves”. Our government is a criminal enterprise and that’s exactly what America deserves because Americans have become a nation of thieves robbing each other and even their children and grandchildren in order to maintain an illusion (lie) of prosperity. As a nation, we are as foolish as those who use their Master Card to pay off their Visa to pay off their American Express. The day of reckoning can be postponed, but not avoided.
The reason we’re in this mess is that at least 99% of the American people are as ignorant of the moral implications of our paper monetary system as were the convenience store clerks who took $6 Bills back in A.D. 1995. Those clerks were undoubtedly shocked and angry when they found out that they were personally liable for “making good” on the $6 Bills in their cash drawers. I guarantee the time is coming when Americans will be every bit as shocked and angry when they learn that—one way or another—they will be compelled to “make good” on all the paper dollar “credits” that we’ve used and promised to repay for at some future date.
America’s economic calamity began when we consented to abandon gold and then silver coin as our only “Tender in Payment of Debts”. Understanding the relationship between gold, silver and a moral society is difficult and even hard to believe, but we will not return to prosperity until that understanding is regained.
In the meantime, some of us will recognize that gold and silver coin are not just mathematical “units of account” but are tangible “units of value” that express moral principles and compel us to behave as a moral people. Those who achieve that recognition will anticipate the coming calamity and seek to defend themselves by accumulating as much gold and silver as possible. Those who don’t “get” that idea soon, will suffer dramatically in the inevitable day of reckoning.
I remain at arm’s length and within The United States of America,
blog at: http://adask.wordpress.com