Wisdom: Your Dollar’s Real Worth

Posted by Tina

Tyler Durden of Zero Hedge is doing a series about the value of money in modern America. See the entry, “The Reason the Rich Get Richer” at the link. I urge those interested in the economy, the disappearing middle class, the lack of opportunity and the disparity in wealth and income to read the full article.

When Nixon took us off the gold standard in 1971 he unleashed an era of funny money that has made the rich richer and our dollars shrink in value. Like the creation of the EPA, this action from Republican Richard Nixon, whether well-intentioned or not, has turned into a disaster of epic proportions. The problem is that humans are subject to temptation and bad choices. Our founders knew this which is why they structured a system of checks and balances.

Today’s wisdom:

Real money, like real time, cannot be jigged or jived. It can’t be stretched or compressed. It is what it is.

But that was then, pre-1971. This is now. Now, we have no more real money. Instead, the world has a gaggle of imposters – the dollar, the euro, the yen – all stage managed by benighted central bankers.

The miracle of real modern money – which has been around only for a few thousand years – is that it could function across time and space. It allowed people to trade with others far away who they didn’t know, often crossing language, cultural and religious barriers.

Money in hand, the deal was done. It made no difference what they thought or what happened to them later. Money made it possible to accumulate wealth (capital), too.

A crop of tomatoes or lettuce might be worthless in a few days. But with money, the farmer could hold the real value of his past work far into the future. Using money, he could also invest the fruits of his labor in new and more fruitful projects.

Rigged System – The new money substitute, which we’ve lived with for 45 years, is a fraud. A dollar in 1971 is worth about 17 cents today. In other words, it has lost roughly 80% of its buying power. Had you been counting on it to preserve the value of your work from the previous decade, it robbed you of everything from 1960 to 1968. (continues)

Even a youngster, Jared Story, seems to get that this, like many other things our leaders have enacted, is not constitutional:

“The people of the states empower the Congress to coin money
and regulate the value thereof and also of foreign coins.”
From Article I.8.5

This provision in the U.S. Constitution gave Congress the Right to produce a national coin, set the weight, fineness, and value. Also, Congress could specify the value of a foreign coin in terms of the national coin of the United States.

“No state shall …coin money; emit bills of credit; [or] make
anything but gold and silver coin a tender in payment of debts.”
From Article I.10.1

It is clear from this provision that the State’s could not create their own coin nor could they make anything but the gold and silver coins issued by Congress as legal tender for the payments of debt. This is a Constitutionally mandated Gold Standard.

It is important to note that there are two different kinds of paper currency which are not “money” but circulate as such: the first is debt money, which can be redeemed in silver or gold on demand, and the other is fiat (paper) money, which is designated as legal tender but cannot be redeemed for anything. Currently, our “Currency” is fiat money, something so abhorrent to our Founding Father’s that they didn’t even discuss it as an option.

More good reading on this subject from 2014 at Forbes

This entry was posted in Education. Bookmark the permalink.

One Response to Wisdom: Your Dollar’s Real Worth

  1. Tina says:

    First Things, “America’s Economy is Cartelized, Corrupt, and Anti-Competitive” is another good article on the state of our economy:

    * …startup businesses contributed virtually zero new jobs during the post-2009 employment recovery.

    * “The startup rate crossed a critical threshold in 2008, when the birth rate of new businesses dropped below the death rate for the first time since these metrics were first recorded.”

    * In line with the disappearance of business startups, productivity growth during the past five years has fallen to the lowest level since the Bureau of Labor Statistics began keeping the numbers.

    * close to half of the increase in corporate profits during the past decade can be attributed to regulatory rent-seeking by large corporations

    Donald Trump repeated that the system is rigged, and that resonated with the voters. Before the Great Recession, ordinary people could start businesses and get rich. Everyone knew someone who had gotten rich. With the disappearance of business startups, social mobility has declined. The voters conclude that the lottery is rigged, because they don’t see any winners.

Leave a Reply

Your email address will not be published.