<!–more–>Under a Keynesian Economy government has the power to decide value and print money. The natural forces of the free market cannot operate because they are being blocked, chained up if you will. The government and it’s central bank decide what a dollar is, what a penny is, and how much they are “worth”. Ignoring market forces like supply and demand and commodity based currency they now have a monopoly over money. We are trained from day one to believe that $0.25 is a shiny circle object called a “quarter” and that entitles you to 25 individual reddish brown circles called “pennies”. We are trained to believe the value of a quarter is twenty five cents. This could not be further from the truth. Think for a moment, what are you holding in your hand? You are holding a metal, and metal is a commodity. A commodity is valued for whatever reason and therefore has a price. The price of a specific metal depends on the demand and availability. So while most of us might be trained to look at a quarter and say “oh look, twenty five cents!” I look at a quarter and say “oh look, I wonder if its a 1932-1964 quarter?” Again, so what?

The final “so what” and the crux of my argument is this. From 1932-1964 the central bank and the US Mint made quarters out of silver (as they should!). They pressed the coins and stamped $0.25 on them. So the invented and government controlled Keynesian value will lead you to believe that this quarter no matter what the market says, is worth $0.25 cents. However the truth of the matter is silver is worth something. It is a commodity! The true value of a quarter from 1932-64 is in fact $2.93! Why? Because you have $2.93 worth of silver in your hands if you melt it down. So because of central planning and government controlling money through the central bank you can’t even get a stick of gum for a quarter in a Keynesian system! However the truth to the matter is you can actually afford gum and a soda! Are we beginning to see the problem with our global economic system? To prevent people from obtaining real worth the government has phased out silver and gold from our currency and in its place we have zinc, copper, and nickel. Very abundant metals that have little value. Taking this into consideration, the average quarter you have in your pants pocket is actually worth about $0.04 cents! That’s right, you have something marked “25 cents” and its true value is a little over .4 cents. How can this be legal? Isn’t that fraud? These are the evils of inflation and non commodity based currency. Beyond that aren’t we now destroying the value of something we are paying for? I think so!

And lest we forget paper? What is a dollar really worth? After all its really just a rectangular piece of paper made up of cotton and linen. So what is that much cotton and linen worth? The average citizen believes it to be 100 pennies for $1 dollar. I’ll tell you the truth though.. it’s 6 cents. That’s right 6 cents, that much paper is valued at just 6 cents! Makes you think right? And these same papers have values like $20, $50, and $100 on them. The SAME piece of paper valued at just $0.06! Yet because of Keynesianism we don’t deal in real values dictated by the market, we deal in fantasy. Artificial interest rates and the uncontrolled printing of money plagues us everyday. This is beginning to sound like a form of counterfeiting. As a matter of fact that is exactly what it is.

Until we bring back a commodity based currency and eliminate things like hyper-inflation, made up values, and prices we are doomed to watch our country and economy destroy itself. We will continue this boom and bust business cycle and only watch as prices skyrocket. The more you have of something the less valuable it is by nature. Ask eastern European countries of the 1920′s and 30′s. Ask Zimbabwe! All of these countries printed money out of control with no backing or value and soon all it was good for was kindling to sustain fires to keep warm. You must have a check on the value of money and that check must be a commodity valued by the people. Gold, silver, copper, iron, whatever the case it must equal the amount of cash in circulation. It is because of the instability and uncertainty that we see gold and silver prices shooting to the moon and it is my prediction that they will rise even higher. These metals have value, fiat money printed at an uncontrolled rate and given value by central planners cannot hold these same values by nature.

And this is just ANOTHER reason to end the Federal Reserve.

I’m nearly finished with “What Has Government Done to Our Money” by Murray Rothbard. I find it comical when people say that there aren’t any modern day philosophers. A simple read of this text proves that such statements are severely inaccurate. Murray Rothbard and others like Hayek and Von Mises are a prime example of men who see beyond their time. Predicting things years into the future and providing instructions on how to avoid and fix these issues that plague society is nothing short of amazing. But what do money and economics have to do with prophecy?

To break it down to basics the monetary system of any civilization is both its strength and Achilles heel from which it can be destroyed. Running on a broken Keynesian economy spells only trouble and ultimately destruction for the American Economy. These men knew the errors of 1913 though, and anyone who studies the text can see the judgment day approaching. A judgment day reserved for any given Monday when an economic superpower like Germany or China decides to reset the system and treat fiat money as nothing more than paper. A gold or commodity based standard will instantly fight to level the market almost like a lion fighting to spring from a cage to save it’s young. The effects would be felt immediately. However that’s another post or conversation for another day.

My point to all of this is that visionaries and prophets still walk the Earth. Sure Murray Rothbard passed on in 1995 but for his entire life he walked among us and spoke of economic prophecy. Naturally he didn’t speak about the sky splitting and the fires of hell raining down but is that really the role of a prophet? Did he need some sort of ethereal being whispering in his ear? Or did these men like many others just need to understand a system for what it is? Robbery of power from the people! Do we need to view premonition as second sight? Or, can we view it in a modern sense and accept that these men of genius accurately predicted the downfall of the world economic system. Their followers and scholars on the subject preached for years and years to no avail! Why?

These ideas which I and many others subscribe to all prove one thing: a commodity based currency in the hands of the people, and not the central bank spells an end for “big” government. With a proper market based currency in place there could be no endless spending by a government. Any government lacking a monopoly of money is limited in growth, it simply can’t afford to grow because it can’t physically print money. Limited powers equates to maximization of freedom for society. Money regulates the monopoly of force. As stated though, because these facts exist they are ignored by anyone seeking to steal power and money through taxation and policy. Thus we have the problem of out of control government. Under a guise of Democracy we are led to believe the system works. It does not. Any Keynesian care to prove me wrong?