Most people may not know but the base behind the World’s current economic system was designed by a gentleman named John Maynard Keynes. Forgetting the fact I consider this man an enemy to the people let’s get to the facts. The base of Keynesian Economics is “monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle.” [via Wikipedia]. Let’s take a look at that for a minute, we see terms like “central bank” and “government to stabilize”, all terms that remove power from the citizens and place it ever so easily in the hands of the government. John Keynes believed that all money should be controlled by one central money house or bank, and that the central bank, with government regulation has a say as to what money means, and what money is worth. In one fail swoop he has removed vital market forces and prevented the free market from working. So why is this bad
<!–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.
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