Money

[JohnBirchSociety]

Friends,

We are in the midst of one of the largest financial problems in our nations history.

The major media outlets refuse to tell the story on what is the root cause of this problem.

The root cause of this problem is that we do not have actual, real, money in the United States. We have fiat. Fiat is manipulated on a nearly continuous basis by the Federal Reserve System. This manipulation causes the boom-bust-boom cycle we have seen in the last 9 years. The cycle will continue, and accelerate, until the final bust. No fiat system has ever survived for any substantial length of time. It simply cannot continue.

The solution to all of this is a return to real money, as prescribed by the United States Constitution.

Real money is defined as:

1) Having intrinsic value

2) Relatively scarce

3) Easily divisable

4) Relatively durable

Federal Reserve Notes are not money, by the the definition used for most of human history. They only fulfill provision #3, and wrongfully so.

Our Constitution mandates a currency, real money, based upon Gold or Silver. Only Congress has power to COIN money (notice the Constitution does NOT say print money, because you CANNOT print money). They, the Congress have no authority under the constitution to delegate their coinage responsibility / authority to any other entity. That Congress did so in 1913 is probably the most evil thing, outside of slavery, that our Government has ever done.

If we had real money (Gold or Silver) it would be tremendously difficult to manipulate to any extent.

It is this simple:

An ounce of gold or silver CANNOT be made into two ounces of gold or silver.

THINK!

Comments?

[Traveler]

Friends,

We are in the midst of one of the largest financial problems in our nations history.

The major media outlets refuse to tell the story on what is the root cause of this problem.

The root cause of this problem is that we do not have actual, real, money in the United States. We have fiat. Fiat is manipulated on a nearly continuous basis by the Federal Reserve System. This manipulation causes the boom-bust-boom cycle we have seen in the last 9 years. The cycle will continue, and accelerate, until the final bust. No fiat system has ever survived for any substantial length of time. It simply cannot continue.

The solution to all of this is a return to real money, as prescribed by the United States Constitution.

Real money is defined as:

1) Having intrinsic value

2) Relatively scarce

3) Easily divisable

4) Relatively durable

Federal Reserve Notes are not money, by the the definition used for most of human history. They only fulfill provision #3, and wrongfully so.

Our Constitution mandates a currency, real money, based upon Gold or Silver. Only Congress has power to COIN money (notice the Constitution does NOT say print money, because you CANNOT print money). They, the Congress have no authority under the constitution to delegate their coinage responsibility / authority to any other entity. That Congress did so in 1913 is probably the most evil thing, outside of slavery, that our Government has ever done.

If we had real money (Gold or Silver) it would be tremendously difficult to manipulate to any extent.

It is this simple:

An ounce of gold or silver CANNOT be made into two ounces of gold or silver.

THINK!

Comments?

There is a problem when there is more wealth than there is gold or silver that gold and silver become overinflated. A simple example is a society living on a small island. They have one pound of gold that is held by one person. A very hardworking person builds a beautiful house for which the person with the pound of gold offers to trade the gold for the house which is done. Then another man comes and builds a much better house. Now there is more wealth on the island than there is gold; therefore the value of both houses and the gold must change.

You are correct that for a stable economy there must be something of value that backs money. If we limit what can be value as a basis of money then the economy is likewise limited. In a stable economy there are several contributing factors beyond precious metals like skilled workers, education, usable natural resources and liberty.

The Traveler

[JohnBirchSociety]

There is a problem when there is more wealth than there is gold or silver that gold and silver become overinflated. A simple example is a society living on a small island. They have one pound of gold that is held by one person. A very hardworking person builds a beautiful house for which the person with the pound of gold offers to trade the gold for the house which is done. Then another man comes and builds a much better house. Now there is more wealth on the island than there is gold; therefore the value of both houses and the gold must change.

You are correct that for a stable economy there must be something of value that backs money. If we limit what can be value as a basis of money then the economy is likewise limited. In a stable economy there are several contributing factors beyond precious metals like skilled workers, education, usable natural resources and liberty.

The Traveler

Thank you for your response.

Fortunately, there actually is enough Gold / Silver, to go around as real money in the United States. No one person, or even group, could come close to holding all of the real money. We have from April, 1791, until December, 1913, as proof of that.

We cannot have skilled workers in a free market, without real money. With fiat, the worker base is manipulated according to the artificial allocation of the Fiat Currency (in our present situation, that was housing). With real money, it is theoretically possible for this to happen, yet it has never actually happened.

The intrinsic value of Gold or Silver has been extraordinarily stable through-out all of human history. It is only when it is artificially pegged to fiat currency that its' perceived value fluctuates so greatly. The real value, the intrinsic value of Gold as real money has been generally; one ounce of gold for one suit of good clothes. That has held true for thousands of years.

Skilled workers draw from good education. Again, when fiat currency is manipulated, we have an artificial draw to specific market segments that would not normally occur under a free market. The we see lapses in other segments that normally would have skilled workers with skilled educations.

America has essentially unlimited natural resources, so that will never be a problem in a truly free market.

Yes, we must have liberty. We cannot have liberty without real money.

An example:

With fiat currency (Federal Reserve Notes) everybody's wage value, over time, goes down. This has nothing to do with the quality / quantity of labor we perform (something we can control) or the wage an employer can offer (something they determine). It is fraudulant action outside of the employer / employee contract that causes the decrease in wage over time. This is not liberty, because you cannot create a contract with an employer and they with you, that overcomes this theft of wage.

In liberty, you would be payed by your employer with real money. Money that actually gains value over time (see 1791-1890). This is liberty. This is real.

[Traveler]

Thank you for your response.

Fortunately, there actually is enough Gold / Silver, to go around as real money in the United States. No one person, or even group, could come close to holding all of the real money. We have from April, 1791, until December, 1913, as proof of that.

.....

I would remind you that the gold backed wealth of the United States in 1913 would only allow 1 in 10 families to afford an automobile. Since the population has more than tripled since then – are you really ready to make that sacrifice in your home in order to have currency backed only by “scarce” gold and silver, which is also needed in our current electrical based society as a needed resource.

The Traveler

[JohnBirchSociety]

I would remind you that the gold backed wealth of the United States in 1913 would only allow 1 in 10 families to afford an automobile. Since the population has more than tripled since then – are you really ready to make that sacrifice in your home in order to have currency backed only by “scarce” gold and silver, which is also needed in our current electrical based society as a needed resource.

The Traveler

By 1913 we has so shifted from a free market that there was not a Gold Standard as had been adopted by the Nation's Framers.

The relative scarcity of Gold / Silver in today's society, would create an even greater intrinsic value to its' use as currency.

It is a straw man argument to accuse the Gold Standard of failing under a non-free market. Free-market apparatus don't work when interjected into Socialism (government intervention).

This would be like saying cars don't work under-water, and blaming the car...

[Traveler]

By 1913 we has so shifted from a free market that there was not a Gold Standard as had been adopted by the Nation's Framers.

The relative scarcity of Gold / Silver in today's society, would create an even greater intrinsic value to its' use as currency.

It is a straw man argument to accuse the Gold Standard of failing under a non-free market. Free-market apparatus don't work when interjected into Socialism (government intervention).

This would be like saying cars don't work under-water, and blaming the car...

I really do not understand your arguments here. Let us say that the gold available in 1913 would back 1 billion in dollars currency with a population of 50 million people - remember that gold cannot increase because it is a limited supply. How can that same gold support a 30 billion need for currency in a growing free economy with a 150 million population? The wealth of the free economy cannot grow beyond the gold that backs the currency. Ether something other than the gold or silver backs the currency (real and actual wealth) or the economy stalls and can no longer grow creating a ever increasing class of poverty which forces limited or no free trade.

The Traveler

[JohnBirchSociety]

I really do not understand your arguments here. Let us say that the gold available in 1913 would back 1 billion in dollars currency with a population of 50 million people - remember that gold cannot increase because it is a limited supply. How can that same gold support a 30 billion need for currency in a growing free economy with a 150 million population? The wealth of the free economy cannot grow beyond the gold that backs the currency. Ether something other than the gold or silver backs the currency (real and actual wealth) or the economy stalls and can no longer grow creating a ever increasing class of poverty which forces limited or no free trade.

The Traveler

First the Gold supply increases as the population increases (obviously, as with all things there is an absolute limit to this, but we are no where near it). It is not, at this time, limited to the extent that there would be a dirth of currency.

Also, let's presume the supply doesn't increase over time. Then the Gold / Silver money you hold increases in value over time. You gain "wealth" over-time. You, in effect, get a pay-raise, over-time. This held true from the 1790's to around 1890 / 1900.

You should read the Coinage Act of April 2, 1792, and you'll see that the "scarcity" argument against Gold / Silver money doesn't really hold any truth.

[a-train]

A growing economy on a rigid precious metals standard which does not have any growth in the money supply will have but a single change: lower prices, that is all.

-a-train

[mominzion]

I am with you on this one....we as a nation have really messed up. You sound like a freedom fighter...I love it. I am a seeker of truth, and this my friend is no lie....

We are going to be forced to change anyway....better to change now and even if we do have to suffer some, it will not compare to the suffering we will have to endure later when it collapses. I feel this is when the law of consecraction will come into play though. That will be the only way to set it all straight. Our forefathers would be flipping in their graves if they sat in a common federal meeting now-a-days. When greed came into the government...this is where we started slipping. I am very young in understanding all of the things of the "dark world", but stand firm on the ones I do know. I am just learning the money system....from what I have heard JFK was assasinated for signing an order to place restrictions on the money system. Ronald Regan had an assasination attempt placed on him as a warning (I feel) because he was looking into a way to get the government off people's backs. The bankers are serious. They control the money...not the government. The federal reserve is just a fancy misleading title for "private owned institute"! If you are interested in more...check out YouTube - Broadcast Yourself. and look up fiat money tyranny and presidents. It gives a pretty clear run through of what is going on. Another great website that is full of "real" stories is Alex Jones' Prison Planet: The truth will set you free! I check that one often. We are headed towards a new world order and it will drag us in because the American people will feel it has no other option because our money system is so shot. Then we will have one money system. It is coming...read revelations. I hope I don't sound like a radical....I guess it is hard not too when urgency comes into play.

[mominzion]

After reading my last post, let me clarify something......The Bankers are in control of our money system...our Government is NOT in control of it. we are at the bankers mercy.

[a-train]

A monopoly on the money supply in the hands of the elite is extremely dangerous to liberty. This is why the troubles of a commodity based monetary system outweigh the grave dangers of a centrally controlled debt based monetary system.

-a-train

Edited September 29, 2008 by a-train

[mominzion]

agreed!

[Traveler]

Here is my problem with gold or silver backed currency. If so much gold was backing the currency in 1913 and say for sake of the argument that was 1 billion dollars – that means that a given amount of gold was equal to 1 dollar. If the economy is able to grow to 30 billion dollars (GNP) then the amount of gold has to be 1/30th of the 1913 currency. This would make money worthless and the gold greatly inflated – by 30 times at least.

So the government has a problem – does it print more dollars (30 times more) so the dollar retains its value in wealth or leave the value the same to match the value of gold? or does the number of dollars remain constant with the amount of gold backing it? Since everything that is growing is in reality growing does that mean that if a teacher was paid 100 dollars in 1913 and that there are 3 times as many teachers now that they only get paid $33.33 for the exact same work?

When someone says gold standard works – would you please show me how???

I keep asking this question and no one answers – they just say it works. I would like to see how it works. If you cannot show me – I do not believe you understand the problem.

The Traveler

[mominzion]

I personally believe this is not a fixable problem, as we are way beyond a band-aid. We are obviously at a collapse. But it IS because of a failed system. I don't see how we can recover. How about this....if Bush distributes that money to the people...then we can pay off our homes by paying the banks back...they in turn can stay open and running, then we can delay the inevitable a little longer! I'm not going to pretend to know the answers...I just know our leaders have let us down for a very long time now. Especially this one. I'm not a kerry supporter either....so he did look like the better of the 2, but really what options do we have anymore?

[a-train]

Here is my problem with gold or silver backed currency. If so much gold was backing the currency in 1913 and say for sake of the argument that was 1 billion dollars – that means that a given amount of gold was equal to 1 dollar. If the economy is able to grow to 30 billion dollars (GNP) then the amount of gold has to be 1/30th of the 1913 currency.

Let us imagine that the gold supply remained totally constant. As more people consume more goods and the economy grows, a single ounce of gold becomes more valuable. Presumably, an ounce of gold could grow so valuable that it would be insanity to carry one around and no business would have enough change to take it. Therefore, smaller gold coins and/or notes of lower denomination back by gold would become necessary.

However, it should be noted that the actual historical scenario has demonstrated that a given amount of wheat is worth a given amount of gold and that ratio is relatively constant when compared with the volatility of our current economic system. It does not matter if there are more consumers, if the amount of available wheat and available gold are the same, the relation between the two is the same.

This would make money worthless and the gold greatly inflated – by 30 times at least.

Actually, this would be impossible with a gold standard, the money IS gold. If gold goes up in value, the money goes up with it. If gold goes down, the money goes with it. The only way to inflate gold is to obtain more from the earth, an operation that is not limited to any special group. Because of that, no person or group can monopolize the money supply.

So the government has a problem – does it print more dollars (30 times more) so the dollar retains its value in wealth or leave the value the same to match the value of gold? or does the number of dollars remain constant with the amount of gold backing it? Since everything that is growing is in reality growing does that mean that if a teacher was paid 100 dollars in 1913 and that there are 3 times as many teachers now that they only get paid $33.33 for the exact same work?

If I understand your question, the answer is yes. If the strength of the golden dollar had changed such that only $33.33 was necessary to buy the same amount of goods as $100 bought previously, then yes wages would and arguably should go down. However, the teacher isn't going to be all that worried about it if his buying power stays the same. Yes, he probably wishes he could continue to make $100 just as much as the grocer wishes he could get $1 for the turkey that now sells for only 33 cents. Buying power remains the same. However, it should be noted that in history, this has not really been the case. Wages and the cost of living have been far more constant than that under previous gold standards. The reasons why are a more complicated discussion dealing with natural resources and population.

When someone says gold standard works – would you please show me how???

I keep asking this question and no one answers – they just say it works. I would like to see how it works. If you cannot show me – I do not believe you understand the problem.

The Traveler

One of the main features possessed by the Gold Standard and not available with a fiat money system with a central bank is that the power to manipulate the money supply is not in the hands of an elite group of bankers who are able to inflate and deflate the money supply to their own personal benefit.

Go to Ludwig von Mises Institute - Homepage.

A great read is The Case For Gold. This was the minority report from the 1982 U.S. Gold Commission created by Congress.

-a-train

[Traveler]

Let us imagine that the gold supply remained totally constant. As more people consume more goods and the economy grows, a single ounce of gold becomes more valuable. Presumably, an ounce of gold could grow so valuable that it would be insanity to carry one around and no business would have enough change to take it. Therefore, smaller gold coins and/or notes of lower denomination back by gold would become necessary.

However, it should be noted that the actual historical scenario has demonstrated that a given amount of wheat is worth a given amount of gold and that ratio is relatively constant when compared with the volatility of our current economic system. It does not matter if there are more consumers, if the amount of available wheat and available gold are the same, the relation between the two is the same.

Actually, this would be impossible with a gold standard, the money IS gold. If gold goes up in value, the money goes up with it. If gold goes down, the money goes with it. The only way to inflate gold is to obtain more from the earth, an operation that is not limited to any special group. Because of that, no person or group can monopolize the money supply.

If I understand your question, the answer is yes. If the strength of the golden dollar had changed such that only $33.33 was necessary to buy the same amount of goods as $100 bought previously, then yes wages would and arguably should go down. However, the teacher isn't going to be all that worried about it if his buying power stays the same. Yes, he probably wishes he could continue to make $100 just as much as the grocer wishes he could get $1 for the turkey that now sells for only 33 cents. Buying power remains the same. However, it should be noted that in history, this has not really been the case. Wages and the cost of living have been far more constant than that under previous gold standards. The reasons why are a more complicated discussion dealing with natural resources and population.

One of the main features possessed by the Gold Standard and not available with a fiat money system with a central bank is that the power to manipulate the money supply is not in the hands of an elite group of bankers who are able to inflate and deflate the money supply to their own personal benefit.

Go to Ludwig von Mises Institute - Homepage.

A great read is The Case For Gold. This was the minority report from the 1982 U.S. Gold Commission created by Congress.

-a-train

My question concerns a growing economy where the amount of gold and silver that back the money remains the same or about the same. In a growing economy, wealth (for example real-estate) is increasing but what happens to the money. The example I used was were gold backed 1 billion in actual wealth of the economy with corresponding currency. What do we do when the wealth (non-gold and non-silver) increases by 30 times. Do we just let farmers and everybody else but bankers try to live on 1/30 of what they use to make or do we change the value of the dollar in relationship to gold and silver but not the increasing goods and services? One or the other has to change in a growing or srinking economy.

The Traveler

[a-train]

My question concerns a growing economy where the amount of gold and silver that back the money remains the same or about the same. In a growing economy, wealth (for example real-estate) is increasing but what happens to the money. The example I used was were gold backed 1 billion in actual wealth of the economy with corresponding currency. What do we do when the wealth (non-gold and non-silver) increases by 30 times. Do we just let farmers and everybody else but bankers try to live on 1/30 of what they use to make or do we change the value of the dollar in relationship to gold and silver but not the increasing goods and services? One or the other has to change in a growing or srinking economy.

The Traveler

Everyone would make 1/30th the face value of what they used to make in that scenario. But their purchasing power would be exactly the same.

Which scenario is better?:

A man making $10 an hour buys a burger meal for $10.

A man making 33 cents an hour buys a burger meal for 33 cents.

Imagine that wages dropped to 1/2 a cent an hour and a burger meal was 1/2 a cent. Perhaps half cent coins would be of necessity produced. In fact, the U.S. DID have 1/2 cent coins. And when it did, those 1/2 cents bought what 17 cents buys today, a change made by planned inflation.

Look here:

This half cent was 5.44 grams of copper (almost twice that of a 1981 penny). The melt value of that copper alone in today's money (meaning if you melted this coin and sold it for scrap copper) is about 4 cents. Its diameter was about 24% larger than a modern penny.

Now imagine for a moment the development of the United States from 1790 to 1890. Did the economy grow? You betcha. A lot. Think of the railroads, the land development, the ships, everything. How did wages and prices change during that time? They were virtually identical in 1890 to 1790.

From 1890 to 1990, because of the 1913 Federal Reserve Act and the subsequent fiat monetary system, wages and prices rose exponentially.

Is that bad? Yes. Why? Because this current system enables our government to spend money right out of our account without even asking. A seemingly successful retirement doesn't cut it because of the resulting rise in prices. Wages can't seem to keep up with inflation. Households now function on dual incomes to achieve the same buying power that Great-Grandad used to bring home to Great-Grandma.

The dollar has lost 98% of its value since 1913.

The gold standard is as ancient as gold, it has never lost confidence for any length of time and only in times of war and famine. Our paper system swings up and down in times of peace and is systematically devalued by a spend hungry government which we have no control over by virtue of the paper monetary system.

Did you go to mises.org?

-a-train

Edited September 30, 2008 by a-train

[Traveler]

Everyone would make 1/30th the face value of what they used to make in that scenario. But their purchasing power would be exactly the same.

Which scenario is better?:

A man making $10 an hour buys a burger meal for $10.

A man making 33 cents an hour buys a burger meal for 33 cents.

...........

The dollar has lost 98% of its value since 1913.

-a-train

Thank you for trying to understand and respond to my questions. However, your arguments do not hold up in history. I already made one example that in 1913 only 1 in ten families had enough purchasing power to by an automobile. Take a good look around you. Today not only do more families have increased purchasing power it has grown so much that there are now more automobiles in the USA than there are drivers.

You can argue that the dollar has lost 98% of its value since 1913 but your actual purchasing power has increased many fold from your great great grand parents trying to support a family in 1913. The Chinese developed the fiat money system that was used over several thousand years – during which there was much less economic upheaval than in the western world that maintained a strict precious metals base currency. It is interesting to me that those that argue a gold based system seldom reference Chinese history. Often they are ignorant of Asian history – thinking western civilization is the only example worth learning from.

There are many points concerning currency that I agree with. I believe it is the responsibility of the government, not private banks to oversee, insure and guarantee the monetary system. Our monetary system is broken – again. Not because of free markets, not because of a lack of government oversight and regulation. It has failed because of bad government oversight and regulations and because free market pressures have been overridden and ignored.

However, I do not see the arguments for exclusive gold standard holding water. I also am aware that one sided propaganda can make anything look good even the health care system of Canada appear superior to the health care system of the USA. But when I have made comparisons with my friends in Canada I realize that the propaganda does not hold water.

We all think the Social Security system is necessary for retirement of most USA citizens. Yet if any other private retirement system was run like Social Security we would have all those involved in that system convicted of criminal behavior. But we praise our government for it and politically assonate any politician that dare even criticize it.

The Traveler

[Hemidakota]

A monopoly on the money supply in the hands of the elite is extremely dangerous to liberty. This is why the troubles of a commodity based monetary system outweigh the grave dangers of a centrally controlled debt based monetary system.

-a-train

Concur....

[christmasvalleyfarms]

I had one of those aha moments in scripture reading the other day in the midst of this money crisis - when the BoM tells of the end of the Nephite civilization - how as they became wicked the Lord cursed the land because of their iniquity - ""behold, the time cometh that he curseth your riches, that they become slippery, that ye cannot hold them; and in the days of your poverty ye cannot retain them....Yea, we have hid up our treasures and they have slipped away from us....O that we had repented...for behold..all things are become slippery and we cannot hold them." (Helaman 13: 30-36) I'd always ascribed this to theft in the past. I guess it is still due to a larger and more organized form of theft, in light of the corruption and greed that has brought this on us, but what an apt description of our "slippery" economic times! Never really "got" that scripture before like I do now.

[a-train]

Thank you for trying to understand and respond to my questions. However, your arguments do not hold up in history. I already made one example that in 1913 only 1 in ten families had enough purchasing power to by an automobile. Take a good look around you. Today not only do more families have increased purchasing power it has grown so much that there are now more automobiles in the USA than there are drivers.

The cost of an automobile in 1913 was around 2 to 3 years wages for the average American and a person could buy 5 gallons of gas on an hour's wage. By 1920 it dropped to less than 1 year's wages. What happened? Did American wages triple? No. New production techniques slashed manufacturing costs. This occured while we were still on the gold standard.

You can argue that the dollar has lost 98% of its value since 1913 but your actual purchasing power has increased many fold from your great great grand parents trying to support a family in 1913. The Chinese developed the fiat money system that was used over several thousand years – during which there was much less economic upheaval than in the western world that maintained a strict precious metals base currency. It is interesting to me that those that argue a gold based system seldom reference Chinese history. Often they are ignorant of Asian history – thinking western civilization is the only example worth learning from.

I'd be delighted to see some sources that suggest that a chinese fiat system existed for several thousand years with little upheaval. Also, looking back at American history, the booms and busts occured as we left the gold standard. If leaving the gold standard should have solved our boom-bust troubles, what went wrong? Why do 99.9% of economists and Wall Street gurus all agree that the trouble facing our nation today all goes back to low interest rates and easy credit from the FED?

-a-train

[HiJolly]

My question concerns a growing economy where the amount of gold and silver that back the money remains the same or about the same. In a growing economy, wealth (for example real-estate) is increasing but what happens to the money. The example I used was were gold backed 1 billion in actual wealth of the economy with corresponding currency. What do we do when the wealth (non-gold and non-silver) increases by 30 times. Do we just let farmers and everybody else but bankers try to live on 1/30 of what they use to make or do we change the value of the dollar in relationship to gold and silver but not the increasing goods and services? One or the other has to change in a growing or srinking economy.

The Traveler

I agree with you, Traveler. Gold-backed money has no elasticity.

The elasticity of money is a requirement if we are to avoid continual cycles of prosperity>growth>no money supply to support expansion>recession -- repeat, and every 10 or 20 times around substitute "depression" for "recession". JohnBirchSociety is exactly 180 degrees off. Take a look at the financial history in the USA's first 100 years. Happened all the time.

HiJolly (the mystic Banker)

[a-train]

I agree with you, Traveler. Gold-backed money has no elasticity.

The elasticity of money is a requirement if we are to avoid continual cycles of prosperity>growth>no money supply to support expansion>recession -- repeat, and every 10 or 20 times around substitute "depression" for "recession". JohnBirchSociety is exactly 180 degrees off. Take a look at the financial history in the USA's first 100 years. Happened all the time.

HiJolly (the mystic Banker)

OK, so after the terrible age of the gold standard, we entered the wonderous age of fiat money wherein there has yet to be a single boom or bust. Right? Yeah right. The issue has nothing to do with boom and bust. Boom and bust has nothing to do with the currency backing and everything to do with debt. The Boom and Bust cycle is acutally the debt cycle.

People borrow and borrow, making a boom. Then when they can't borrow anymore, they must live beneath their means for a time to pay the debt down (bust). This is an issue independent of whether the currency in the system is commodity based or not.

The issue solved by commodity based currency is the taxation of inflation. We are going to have booms and busts as long as people are borrowing and getting into trouble with debt. But, with a commodity based currency, our retirement will look a lot better when prices don't systematically raise year after year.

Also, we avoid the possible tyranny of monetary manipulation.

-a-train

[deseretgov]

I agree that we need to change our currency system. And I would even go so far as to say that I think that giving power to the Federal Reserve over our monetary system was far worse than slavery. However I don't agree that our money should be based on gold. Yes gold has value, but it doesn't have value. If the world was in turmoil and there wasn't any money, people were fighting for their lives every day, gold would have little value. You can't eat it. It's not a very effective weapon. Things that would have real value would be food clothing, shelter, and weapons. Gold doesn't fulfill any of those requirments.

Rather I would prefer money to be based on labor and other resources, not just gold.

[Elphaba]

And I would even go so far as to say that I think that giving power to the Federal Reserve over our monetary system was far worse than slavery.

Tell me you didn't really mean to say "slavery." Or perhaps you were using it metaphorically, which doesn't make any sense, but I'm trying to give you the benefit of the doubt.

Nothing this country has ever done was more vile than slavery.

Elphaba