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President Andrew Jackson (1829-37) fought valiantly to dismantle the tyrannous Second Bank of the United States, yet later the Federal Reserve put Jackson’s image on the $20 bank note.
The abandonment of the gold standard during the history of the 20th century resulted in manipulated currencies leading to a century of economic and civil strife, within nations, and to terrible wars between the great powers.
To save the American economy from default, bankruptcy and hyperinflation, and to survive and overthrow the Marxist-socialist-Keynesian policies of the Obama regime, Congress should immediately pass a bill that America return to a currency based on the gold standard. This article continues my thesis I began last week on this subject.
Paraphrasing one of my many perceptive readers who also favors a gold standard: Since governments produce nothing of any real value, in order for government to grow, it must extort and exploit the money supply. By artificially inflating the money supply, it can fund its own leviathan growth by the promiscuous printing of valueless paper, causing stagflation, inflation, recession and economic chaos. History repeatedly records that eventually the entire economic system will collapse into hyperinflation and economic depression as it happened in America and Europe in the 1920s and ’30s and is happening in America under President Obama and throughout socialist Europe today.
In March 2011, Dr. Richard M. Ebeling, professor of economics at Northwood University, debated economics professor Robert Barsky from the University of Michigan on the question of whether America should return to the gold standard. Ebeling took the pro position and summarized his remarks in a revelatory essay, “The Gold Standard and Monetary Freedom,” questioning “whether or not we should continue to leave monetary and banking policy in the discretionary hands of central banks and the monetary central planners who manage them.”
In 1932, Friedrich Hayek wrote:
To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection – a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end.
A gold standard keeps egotistical, greedy, duplicitous politicians from raiding the national treasury to fund unconstitutional wars, demagogic class-warfare policies, unsustainable welfare spending, and confiscatory and discriminatory tax rates that funds laziness, endemic violence and escalate resentment by the poor and middle class because their “progress” is made unjustly on the backs of the rich and the industrious.
Professor Ebeling states, “Central banking is monetary central planning.” He continues that, “The United States and, indeed, virtually the entire world operate under a regime of monetary socialism. Historically, socialism has meant an economic system in which the government owned, managed and planned the use of the factors of production.” This reminds me of the Newsweek cover page of February 2009 – “We’re all Socialists Now” – heralding the Age of Obama.
Like author G. Edward Griffin, I think that the Federal Reserve is an unconstitutional government-created creature from Jekyll Island that recklessly prints money by the trillions, causing inflation and existential recession, manipulating interest rates and promoting market instability. America will never return to the gold standard as long as the Federal Reserve exists.
Ebeling writes, “If there is one lesson to be learned from the history of the last 100 years – during which the world and the United States moved off the gold standard and onto a government-managed fiat, or paper, money system – it is the fundamental disaster of placing control of the money supply in the hands of governments.” Ebeling then cited the famous 1919 quote/admission by Fabian socialist demigod John Maynard Keynes who prophetically observed:
By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.
Ever since 1931, when the Keynesian Revolution pushed Britain to abandon the gold standard entirely and to allow the private Bank of England to print money and set interest rates, many economists and policy makers in America and Europe have been likewise beguiled by the Zeitgeist of the Keynesian cult – that free markets are uncontrollable, unreliable and susceptible to wide and extended changes in employment and output that only can be stopped or decreased in severity by “activist” socialist monetary and fiscal policy. In the history of humanity, socialism has never worked in any nation. This is why the Obama administration and all the formerly great powers of Europe are dumbfounded on what to do next to stop their collective economies from collapsing under the weight of their bloated Marxist welfare states.
What is the endgame? Political progressivism and New World Order monetary and economic policy since 1900 has been aggressively propagated by a litany of progressive liberal presidents – TR, Wilson, FDR, LBJ, Nixon, Carter, Bush-41, Clinton, Bush-43, Obama – whose policies have lead inexorably to perpetual war, societal nihilism and economic decline in part due to Congress abdicating its constitutional role through the Treasury Department to print money and set interest rates for banks. Since 1913 the Federal Reserve has taken over Congress’ constitutional mandate by monetizing our debt by the promiscuous printing of money (e.g., QE1, QE2), which has caused existential economic chaos in America and financial mayhem worldwide.
In the meantime, gold has doubled over the past two years, and 2011 stocks are at 1990 prices.
Will America one day awaken from what Dr. Monica Crowley calls its 80-year “Keynesian coma”? Professor Ebeling urges America that, “a gold standard can be one of the positive institutional reforms in the attempt and on the way to a fully free-market monetary system.” If America returns to a gold standard, I guarantee you that it will mark the beginning of the end of progressivism, Trotsky’s perpetual war, the Federal Reserve, the welfare state … and the Democratic Party.