Fractional Reserve Gold, Fractional Reserve Banking, Money Printing & Economic Decline Go Hand In Hand
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Bob Livingston * Personal Liberty
It is certain that Federal Reserve Chairman Helicopter Ben Bernanke was relieved last month when he testified before Congress and his longtime antagonist, Congressman Ron Paul, wasn’t present.
Bernanke’s statement that “… nobody really understands gold prices, and I don’t pretend to understand them either” went unchallenged. That would not have been the case had the now-retired Paul been present. It’s an astonishing admission from someone who claims to be steeped in economic history, wisdom and experience, as does Bernanke.
Gold prices have historically indicated the confidence in or the failure of fiat currencies. An ounce of gold can still be exchanged for the same items an ounce of gold could be exchanged for 100 years ago. That’s not the case of a dollar, which now is worth only pennies compared to what it was in 1913, or even 1971 when Richard Nixon completely disconnected the U.S. dollar from gold.
In 1936, you could buy a very nice suit for $34. At the time, gold was $34 per ounce. Today, you can buy an extremely nice suit for $1,350. An ounce of gold can be had for about $1,350.
Suppose someone had put $34 in a shoebox in 1936, set it on the top shelf of the closet and forgotten about it. If you found it today, it would still be $34, albeit $34 that will buy a lot less than $34 did in 1936. But suppose someone had put away for safekeeping an ounce of gold in 1936. If you pulled it out today, it would be worth $1,300 or more.
In 1933, the Consumer Price Index (CPI) — the price of a basket of common goods purchased by the average consumer — was 12.8. The current CPI is 233. In other words, that same basket of goods has increased from just less than $13 to $233.
The rise in gold’s price from $34 to $1,300 does not reflect an increase in the value of an ounce of gold. It reflects an increasing loss of confidence in the U.S. dollar and the devaluation of the dollar through money printing. Every dollar printed dilutes the value of those already in circulation. And Bernanke has been on a money printing binge for the past five years.
There is a great myth that the Federal government is in debt. Thanks to central banking and the Federal Reserve, all the government has to do to erase its so-called debt is to print more money. (This is not the case for local and State governments.)
Note from the Editor: As a reader you deserve to know the truth behind the economic disaster America faces. I’ve arranged for readers to get free copies of two books that reveal the sinister plot by the US Government to steal our wealth—a plot Merrill Jenkins, Sr. (the Original Monetary Realist) tried to expose at great risk. His books are hard to find, but these books include rare transcripts from his lectures. Click here for your free copies.
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Whistler Blowers, Insiders
We have to pay the Fed back. It’s a loan, not just “printing”.
You could have a system where the state creates the money and puts it into circulation by spending, the only tax being raised would be destroyed so to control inflation and deflation, a simple stable system, I am sure people like Bill Still would agree with me, but you don’t, there has been attempts at it but every leader that tried was murdered, so why do you have this unstable system and why is it so protected with the murder of anyone that tries to change it.
Well the answer is also very simple, by creating money as debt and then have interest that is not made charged on it means that more must be paid back than was created so therefore the only way it can be repaid is to bring things into existence that have value, IE. mine gold, so having the money system that we do forces all people involved in it to bring things into existence that has value, forces us to be productive, when we are not we starve.
So really it is a system that you would apply to a plantation to get maximum profit from, so you could say that the money masters are farming and mining this planet, like they are overseers or absent landlords, in which case they would have to murder anyone that wanted to change that system as the landlords would not be very happy if their plantation discovered self will and took over the land as their own, would need dumbing down if it looked as if that could happen.