Notes on Fiat Currency

27 May

What'll you have?  Gold or paper?  Liberty or fascism?

What’ll you have? Gold or paper? Liberty or fascism?

As everyone may know, we’ve used currencies other than gold or silver throughout history. Sometimes we used jugs of corn liquor as “money”; sometimes buckskins; and sometimes pieces of paper. Most of these currencies worked well-enough–except for paper.

The reason is that you can “spin” paper currencies out of thin air, but you can’t “spin” tangible products (like jugs of liquor, buckskins or gold and silver) out of thin air. All of the tangible currencies–including barter systems–have to be produced by actual work. Given that the world’s bankers have no intention or capacity for doing real work, they view all tangible currencies as anathema. They want a paper (or digital) currency that they can “spin out of thin air” with nothing more than their signature.

A tangible currency is ultimately produced by the work of the people and ultimately controlled by the people. Thus, the tangible currency tends to favor decentralized political power. A fiat currency is ultimately produced–and controlled–by central bankers and/or the general government and thus favors centralized power. The tangible currency does not guarantee, but is at least conducive to liberty. The fiat currency is almost always a guarantee of big government, fascism and loss of liberty.

The danger in any “artificial” monetary system–one made of fiat currencies–is that the people who spin the fiat currency “out of thin air” are inevitably tempted to “spin” a little on the side for themselves and/or for special (rich) interests. Once they start spinning fiat currency for themselves, the system begins to degrade and will ultimately collapse under the weight of banking fraud.

I doubt that the world has seen more than a handful of men in all of history who have sufficient spirituality, morality or ethics to resist the temptation of “spinning money” for his own use where there is no actual “money” and he didn’t earn a dime.  I suspect that the LORD’s Prayer might be a little more relevant if we changed one phrase from “and lead us not into temptation” to “and lead us not into fiat currency”.

In the end, the decision to have a tangible currency or a fiat currency will determine whether you will have a free country or a police state.

The danger in fiat currency is seen in the definition of “fiat”:



“1. An arbitrary order or decree. 2. Authorization or sanction: government fiat. [Medieval Latin, from Latin, let it be done, third person sing. present subjunctive of fier, to become, to be done; see bheu- in Indo-European roots.]”

If, by definition, a “fiat currency” is one made by “arbitrary order or decree,” some one person or entity will have to issue that “order or decree”. Whoever issues those “orders or decrees” will be able to buy the loyalty, obedience and property of everyone else. Ultimately, the man who issues fiat currency will rule; the men who do not issue fiat currency will be ruled.

We’re taught that the ultimate power of earthly sovereignty is the power to legislate (make laws). I doubt that’s true. I suspect the ultimate power of earthly sovereignty is to “make” money.  Baron Rothschild apparently recognized this truth when he said, “Give me control of a nation’s money and I care not who makes the laws.”  Rothschild knew that by controlling the supply of money, he would be above the law; he would be the true king.

When the people “make” a tangible money (such as jugs of liquor, buckskins, gold and silver), the people are the sovereign<strong>s</strong>. When only the government and/or central banks “make” the fiat currency, the government/central-banks are the sovereigns and the people are <strong>subjects</strong>.


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12 responses to “Notes on Fiat Currency

  1. Mike

    May 27, 2013 at 4:06 PM

    Reblogged this on This Got My Attention and commented:
    Short but sweet notes on the difference between paper money and tangible money.

  2. palani

    May 27, 2013 at 4:31 PM

  3. Carlton

    May 27, 2013 at 4:57 PM

    An article worth reading, as usual, but this does not compute:

    “A tangible currency is ultimately produced by the work of the people and ultimately controlled by the people.”

    Sure, a tangible currency is produced by tangible work, which the bankers won’t get caught dead doing. So far, so good.

    However, it does not follow that those who produce the currency and those who control the currency would be one and the same.

    When, in history, have the people who produced a commodity been the people who controlled it?

    Rarely, if ever. Especially in markets with global demand.

    • Adask

      May 27, 2013 at 7:05 PM

      What I mean by “control” by the general public is this: If you use gold as your money, you must either pay the gold miners a fair wage or you must use slave labor if you want to increase the money supply. I don’t regard overt slavery as an efficient economic system. Although the Powers That Be may try slavery, I think it usually results in a political revolution where those who believed in overt slavery lose their heads.

      So, I’m inclined to view the gold miners and blue-collar laborers in general to be “in control” when we have a tangible money system. If we don’t pay them enough, they won’t work. If they don’t work, we can’t expand the money supply. If the money supply stagnates or decreases,the economy tends toward recession or depression.

      I do not mean that the blue collar workers have “control” in the sense that Obama may have “control”. I mean that the workers who produce whatever tangible substance is used for money have so much influence that no other single entity had “full control”.

      It was probably a poor word choice, on my part, to use the word “control”. I should probably have said “strong influence” of some such. My fundamental point remains that with a fiat currency control can fall into the hands of one man or one institution or perhaps even a very limited aristocracy; with a tangible currency, the production is distributed among many producers and the “control” is increasingly decentralized. If you want liberty, you want decentralized control over everything–especially your currency.

      • cynthia

        July 20, 2013 at 11:51 AM

        One of a few reasons I am against any ‘metal’ being ‘lawful’ is that typically it involves some form of strip mining by ‘standard practice’, some countries clearly use slave or serf labor of some form, and to add insult to injury mercury and or other toxins\chemicals are used in the filtering process. Not only is this bad for the environment and Life as a whole, but also for the Soul. My preference is akin to ‘time dollar’ or ‘time bank’ for which additional witness\es are involved and the focus is barter\direct trade combined with ‘passing it forward’ the time\barter to others, etc. This is much more ‘lawful’ and typically includes form of ‘fair trade’ and ‘organic’ environmentally and ethical and moral practices as we are all seen as ‘living men’ not ‘dead zombie fictions’. The challenge is getting more ‘mom and pop’ stores to reclaim their place and more men to demand boycott of the ‘big box’ stores that literally ‘gouge’ ALL of us. For some additional insights, check out ‘Church of Stop Shopping” Reverend Billy (smile).

    • Anthony Clifton

      May 27, 2013 at 7:34 PM

      you wouldn’t mind doing the math & provide the mugshots . .

      of course to substantiate that monumental statement of genuine casuistry on behalf of globaloney…

      maybe its the orientation thingy….but seriously 300 million mass murdered with malice aforehtought is a little difficult to paper over when the facts set in…

      when the most valuable commodity – Truth – is mocked and scoffed at….now come on….

      “They are also the principle agents of war for profit, period. Period!!! The others, in association, are just their buttboys, production assistants and ‘slaves in harness’ chained by blackmail or coercion. Slice it how you like, it’s doesn’t change the composition of the pie.”

      cheers ol boy

  4. palani

    May 27, 2013 at 6:46 PM

    Fiat Money Inflation in France … Napoleon to around 1860 … says it all. And their experience wasn’t really fiat either because they backed their currency with the estates of noblemen who had more need of a head than of estates.

  5. xenatheprincesswarrior

    May 27, 2013 at 7:53 PM

    It’s all made up. It’s all what we agree to with our consent. Very simple, but extremely difficult to comprehend.Why aren’t we looking for solutions, instead of still trying to “figure it out”? It may be this or maybe that. It is what it is. Solutions are what we need. I’ve been trying. Where is the solution? We need to start using everything we know to present a solution.

    My grandfather, as I grew from a little girl, to a strong woman, used to say to me; Ok, Xena. You know the problem. Identify it, and solve it. That is your
    intelligence. The solution, not the problem.

    Then, if I didn’t get it, he would say; Okay, you know 2 + 2 equals 4. So, whatever problem you have, solve it.

    Why can’t, with everything we know, solve it? Why are we afraid to create. We have pretty much nothing but our ability to create.

    Maybe we aren’t capable. But maybe, JUST MAYBE, WE ARE!

  6. Felipe

    May 27, 2013 at 8:05 PM

    Sacred Economics
    About Sacred Economics

    Sacred Economics traces the history of money from ancient gift economies to modern capitalism, revealing how the money system has contributed to alienation, competition, and scarcity, destroyed community, and necessitated endless growth. Today, these trends have reached their extreme—but in the wake of their collapse, we may find great opportunity to transition to a more connected, ecological, and sustainable way of being.

    This book is about how the money system will have to change—and is already changing—to embody this transition. A broadly integrated synthesis of theory, policy, and practice, Sacred Economics explores avant-garde concepts of the New Economics, including negative-interest currencies, local currencies, resource-based economics, gift economies, and the restoration of the commons. Author Charles Eisenstein also considers the personal dimensions of this transition, speaking to those concerned with “right livelihood” and how to live according to their ideals in a world seemingly ruled by money. Tapping into a rich lineage of conventional and unconventional economic thought, Sacred Economics presents a vision that is original yet commonsense, radical yet gentle, and increasingly relevant as the crises of our civilization deepen.[/QUOTE]

    Read Online

    Welcome to the HTML version of Sacred Economics. The full version is here in English, along with full and partial translations into other languages. More translated material comes on-line all the time, so check back often.

    In keeping with one of the main themes of the book, the full text of the book is available online as a gift.

  7. Yartap

    May 28, 2013 at 8:16 PM

    A fiat currency can work, but as Alfred has said, those who create the currency will make notes/currency for themselves. This is a problem for all fiat currencies.

    In order for a fiat currency to work, restrictions must be placed upon the issuer of the currency. Usury must be prohibited at all levels. Usury would be inflationary, meaning it would create a demand for more money than is supplied. The Issuer must be a government (We the People) and not a private issuer. The Issuer must not be allowed to create the currency for their own use, but rather, receive taxes at a set percentage from the people and from their abundance. The Issuer must be prohibited from borrowing (this will create a truly smaller government). And the expansion of the fiat currency must be based upon the true growth of the population in the country and the input of new products that do not remove or replace old products into the economy (one means to increase the standard of living). There will not be any price fixing (except for monopolies and public utilities), but foreign trade pricing will be based in parity with domestic goods cost plus 5%, which will be used to offset/reduce domestic tax revenues needs (foreigners compete in quality of goods only, not pricing; true Protectionism for American businesses and factories). Foreign trade is stickily based upon barter. This will create truly equal trade balances with most countries (no need to convert currencies).

    • Carlton

      May 28, 2013 at 10:32 PM

      You’re making a lot of sense there, Yartap.

      If you adopt a commodity-based currency, but allow Goldman Sachs et al. to issue paper equivalents (e.g. paper gold, with which they heavily manipulate the global market at present, as Mr. Adask has described), you end up with problems much like those we have now. Also, failing to prohibit loans at interest allows the bankers to eventually vacuum up the entirety of a fixed money supply, with mathematical certainty. Funny how the on-message pundit handwringers never mention these things.

      There are three major problems with the Federal Reserve:

      1. The Fed is privately owned, while its function can and should be a public utility for the benefit of We the People.

      2. The Fed practices usury, to the great cost of We the People.

      3. The Fed issues fiat money. (This can work for or against We the People, depending on how it’s managed. In this case, it has clearly worked to the negative, mostly due to #1 and #2.)

      Funny how the on-message pundit handwringers consistently emphasize the third wrongful aspect of the Federal Reserve’s business model while downplaying, if not completely ignoring, the other two.

  8. Felipe

    June 6, 2013 at 8:18 PM

    Notes from the UNDERGROUND: FREEDOM begins with BREAKING the MENTAL CHAINS!

    At this point, if you spend much time researching power politics or the distribution of wealth, resources and basic necessities, it seems evident and undeniable, dare I say, “common sense,” that we, in fact, live in a neo-feudal society built on debt and mental slavery.

    That may sound like over-the-top rhetoric, and it obviously sounds extreme to propagandized and conditioned minds, and yes, it is extreme. However, it is the unfortunate reality of the present situation. The facts are there for the rational and unbiased mind to absorb and comprehend.

    If you take a few minutes of your time and read this through, it will easily be proven. We will look at how the system works, and then, hopefully, we will begin the process of evolving society together, as grandiose as that may sound.

    Let’s start by giving some context and perspective on present circumstances by breaking down some economic data. As Thomas Jefferson once said, “Enlighten the people generally, and tyranny and oppressions of body and mind will vanish like evil spirits at the dawn of day.”
    – See more at:


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