Did Abandonment of the Gold Standard Damage IQ?

THE ARRIVAL OF TECHNOLOGY

No doubt there was a time when cave man was little more than an animal. Somewhere along the line however, a growing brain combined with the discovery of fire brought him out of his cave and enabled him to protect and assert himself in a hostile environment. Whether by chance or observation, primitive metals formed in his cooking fires and thus the world of technology began in earnest. Repeated observation and experimentation since then have been the foundation of technological advances. As a result we have witnessed greater and faster production capacity, increasing miniaturization and a flood of new features on existing technologies.

THE ARRIVAL OF MONEY

Concurrently, as man stepped out of the shadows of his cave, he began to barter until the most incredible intellectual leap of all time (with the exception of metals and the wheel) was born with the advent of coinage. It was of course basic at first, but increasingly beautiful and versatile as time flowed on. It was the arrival of coinage that allowed uniformity through gold and silver to underpin savings, trade, wars, investment in infrastructure as well as private capital formation and private enterprise.

SORRY, NO CREDIT!

When ancient man used barter or precious metals to enable exchange he was exercising sound judgement. He knew that war and disease were the grim reapers of humanity and so promises to pay or repay were not worth a great deal. Those that took on loans had to provide security and those who failed to pay their debts often became slaves of the creditor.

There is very little doubt ancient man would have found the following behaviour insane, comic or both:

1.     Provisions of loans to the value of 100% for the purchase of a home.

2.     Issuance of credit cards with no security (and sometimes to children and pets)

3.     Issuance of paper currency.

4.     Borrowing heavily from an adversary (hint: USA borrowing from China)

5.     Handing over retirement savings to government 

AND THEN THERE WAS FIAT MONEY

Ancient man may not have had the material possessions we have today, but he was far more resourceful, far less wasteful and far more in tune with his environment than we are today. Obesity, cancers, diabetes and a range of other lifestyle diseases were far rarer.

So while man has become far more technologically enabled through accumulated scientific observations and discoveries, the reality is that he eventually adopted money systems which in turn led to lifestyle patterns that would be considered idiotic and harmful  by the standards that existed even 2,500 years ago.

Very little of the idiotic consumption, debt and investment patterns and decisions we have seen in the last 20 years (if not longer) would have been possible under a gold standard because the gold standard prioritizes funding and consumption in a far more intelligent order of merit. The advent of printed money at insanely low rates of interest however, made everything possible without regard to the sustainability, usefulness or benefit of that expenditure.

So those that call the gold standard a barbarous relic, a hangover from ancient times or a cross upon which to crucify humanity, are ignoring how undisciplined monetary systems have translated themselves into undisciplined and damaging lifestyles.

FATAL ATTRACTION

It is not so much the initial adoption of a fiat money system that could cause a drop in IQ. Humans have always conducted experiments on the path to progress. When they blew themselves up however they learnt from their mistakes and moved on. In the case of fiat money though, mankind has formed a fatal attraction like moths have to electric lights. The experiment is repeated ad nauseam with the same final result – destruction of the currency’s value.

The astute reader may then ask “why then did ancient man continue having wars if he was smarter back then?” The answer is two-fold. Firstly, the duration and destructiveness of wars was far more limited owing to the requirement of silver and gold for payment of soldiers. Today unfortunately, virtually all wars are funded on credit and therefore can continue well after the treasury is emptied. The second reason, in my view, is that war was still a residual instinct from mankind’s earlier days when he was competing with wild animals for his existence. In time and with further painful “experimentation” he may have developed another gold standard in relation to conflict resolution had it not been for the folly of fiat.

FIAT MONEY = FLAWED OUTCOMES

The longer we refuse to return to a gold standard, the longer we will lead fiat funded lifestyles that will poison our minds and then our bodies whilst we destroy our finances, the environment and our fellow human beings. In time disease and a poisoned environment will probably lead not only to unhealthier people but also to genetic damage. I am not a scientist, but if alcohol consumption can affect a foetus, then what IQ deficit would that foetus have when it matures first into a baby and then a grown adult? How many similar but perhaps less visible attacks on our genetic material are we experiencing in ignorance of the results through our excessive debt induced consumption?

BIRTH OF THE WELFARE STATE

Could it be also said that the advent of fiat money also gave us the welfare state and as a result not just the smartest and strongest survive? When the Romans started to adulterate their silver coinage with tin they were in fact introducing by stealth a metallic fiat system. This enabled them in turn to run bread and circuses programs which could be equated with the beginnings of the modern day welfare state.

DON’T WAIT FOR GOVERNMENT

Whatever the case may be, our global financial system is undeniably sick. As finance is an integral part of human existence and co-existence, it stands to reason that human health is also linked to its fortunes. Even if society were not to re-adopt the gold standard, it is clear that astute individuals that look beyond today’s meal will personally adopt the gold standard as a means of protecting themselves and the generations that are to follow. A proper examination of history will reveal which form of wealth has held up in all conditions and I can tell you it wasn’t fiat dollars.