Our entire financial, economic and political systems since 1971 have been built on nothing but fantasy – paper fantasy. It was after President Nixon closed the gold window and took our nation off the gold standard that we saw US debt explode, media conglomerates merge and expand their control of propaganda, and elite banking institutions take hold of the financial future of the people.
The inflationary fiat paper monetary policies of the United States made it possible for private institutions to enrich themselves at the expense of working Americans, and for government to take a once productive individual and make them wards of the state.
In Three terrible lies you need to know about gold, Porter Stansberry of Stansberry and Associates provides a must-read essay that explains how and why the media, government and economic experts lie to us about gold, the failures of paper fiat currency systems, and how a gold standard would change our lives – for the better:
Paper money works great for the rich, who can hedge their exposure to the currency and whose access to fixed-rate credit allows huge asset purchases. But it is horrible for the middle class, whose wages do not keep pace with declines in purchasing power caused by inflation. If you want to know why there’s so much discrepancy in incomes and per-capita wealth in the U.S., look no further than paper money.
…prices steadily fell from the end of the Civil War until the early 1890s, when they finally stabilized. You’d be hard-pressed to find a working economist today on Wall Street who could explain why the greatest decades of economic growth in American history could have been achieved during a period of deflation.
Mainstream economists all believe prices ought to only fall during economic depressions because they’ve become so blinded by paper money. But I can explain what happened in the 1880s easily: With real money in place, investors were willing to make long-term investments.
The result was an economy led by capital investments – not consumption. It was an economy fueled by real savings – not foreign loans. There was no need for a central bank to set interest rate policies or to “safeguard” us from inflation because the gold standard insured parity and fairness between borrowers and lenders. This all led to big increases in productivity and production – and wealth for the entire economy, not just the rich.
And therein lies the secret to our story…
Any reasonable study of paper-money systems versus gold-backed monetary systems demonstrates the superiority of gold immediately. So… why does almost every modern government choose paper? The answer is because paper money allows the wealthy and powerful vested interests in our economy to manipulate interest rates, prices, the money supply, and credit to their exclusive advantage.
Clearly, the government and the elite who benefit from the paper money system will do everything to avoid a gold standard. And, chances are that those among us who are uninformed will join them, because a transition would certainly not be easy. In fact, a switch to a gold standard would completely change the world as we have come to know it in modern times, perhaps destroying our existing economic and financial system during such a transition. But, the alternative may be much worse.
The end result of such a transition to a sound money gold backed currency, one advocated by many contrarian thinkers like Porter Stansberry and Ron Paul, will be a more prosperous America and a more successful individual American – and perhaps most important of all, a government that would be required to live within its means.
Recommended Reading: Three terrible lies you need to know about gold