Fiat money / by kevin murray

We live in an era of fiat money.  That’s a formula for disaster because fiat money isn’t real money, it is the illusion of real money, and like any good illusion it may take you a while to figure out that you have been duped, but duped you will ultimately be.


What is fiat money?  It’s essentially a government decree, an order, that this will be the instrument and the sole instrument used in monetary transactions and that there isn’t any other legal tender allowed to compete against it.  In other words, dollars are our legal medium of exchange.   To make things even worst, fiat currency isn’t back by anything other than our belief that it is worth something.  Yet, that wasn't the way the United States monetary system was created.


Historically, our Government has had no problem with changing the rules on the fly.  President Franklin Roosevelt in 1933, made it illegal for private citizens to own gold, leaving citizens the choice of surrendering their gold to the Government at the price of $20.67/oz or of suffering the penalty of 10 years in prison and/or a $10,000 fine.  To make things even worst for those that were forced to sell to the Government at $20.67/oz, in 1934, Roosevelt declared that the price of gold was to be set at $35/oz, or a difference in price of a staggering 69% in one year!  That's a boondoggle for the Government and real raw deal for the private citizen.


Further, our 1792 Coinage Act states: "… that if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse …  person who shall commit any or either of the said offences, shall be deemed guilty of felony, and shall suffer death."  I suspect that very few people are aware of said act which was overturned during LBJ's administration in 1965 so that the Federal Government could more effectively debase our currency which would lead ultimately to the inability of citizens to exchange theirpaper dollars for silver. After 1968, even if you were in possession of a $1 bill that stated:"this certifies that there is on deposit in the Treasury of the United States of America one dollar in silver payable to the bearer on demand", you would not be able to receive any silver on that demand.


Thomas Jefferson stated that, "I believe that banking institutions are more dangerous to our liberties than standing armies" The reason that Jefferson felt so strongly about this is that the power to control our currency and what it is and what its value is, is the power to corrupt, confiscate, or destroy any and everything that private parties have and therefore to make those peoples subservient to the Government, which is essentially what occurs when the Government determines the rules and value of coin of the realm.  To make matters worse, we not only are stuck with the banking institutions but also with the standing armies!


Fiat money is a con game, a game that can continue for a long period of time as long as the participants believe in it.  However, like all con games it will end.  If we are fortunate it will end with the United States getting back onto a sound monetary-back commodity based currency, if not, our current system will fail us gradually, inexorably, and then suddenly with catastrophic consequences.