Thursday, September 15, 2005

Mo' Money

Has anyone ever heard of fiat money? It is what we use in the States, paper money backed by more paper money. The governent likes it becuase it can print/borrow as much as it likes, but then we get stuck with inflated, devalued money. So when our heavily indebted government spends money, it must borrow/create it, and our money inflates. This is like a hidden tax that the government doesn't have to ask us for. Kind of sucks, huh?

Throughout history, fiat money has invariably led to economic collapse. Thomas Jefferson knew this, as did most of the other framers of the Constitution. Yet it did not stop central bankers from buying politicians to enact the Federal Reserve System in 1913. The funny thing about the "Fed Bank" as it is usually called, is that it is not Federal, it holds nothing in reserve, and it isn't even really a bank.

So what can we do? Well, talking about it helps. Eddie, if you ever become President I would hope that you could solve the problem. Ideally, John Roberts and some other conservative judges come into the Supreme Court soon and get rid of the Fed, but that is unlikely. Even though, by the plain words of the Constitution, the government has the power to coin money, not to print it. This language was used because guys like Jefferson knew of the dangers of fiat money and they wanted to create an economy based on a gold/silver standard.

Hurricane Katrina has been a horrible disaster. I completely support the government spending whatever it needs to on relief. But I just wish that it would tax us for the bill by normal means instead of secretly "taxing" us by spending money it doesn't have.

Here's some more articles on money:

The Root of the U.S.'s problems

Fiat Currency - Library of Alexandria

Gold, Money and the U.S. Constitution

Economic Liberty and the Constitution

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