The Right of Money Property is a Revolutionary Right
From News From The Old Republic
First, we should all recognize that the monetary use of gold is not without its flaws, no system can possibly be considered perfect due to the interactions of human beings and the unforeseen consequences of their actions. However, the primary flaw with all fiat monetary systems is that they always fall into mismanagement and abuse by those who manage the system due to the nature of the system itself. Every attempt at stabilizing fiat money is usually short-lived, because by its very nature the entire system must rely upon a consistent expansion of the money supply to continue economic growth. This major flaw, combined with mismanagement, will always end in the destruction of the monetary system, there are no exceptions.
Now equally, a gold specie system, administered by a central bank or under the heavy control of the government is not much more successful than a fiat system because of the simple reason that it can easily be abandoned by a stroke of the pen. The most successful monetary system would be one in which individual banks of issue not only had the fiduciary responsibility of good business practices, but also they would not have the ability to renege on the promises and demands of that responsibility to their depositors. Not only would this provide a much longer stability of prices, but also, as witnessed in history, a much more stable economy.
It has empirically been shown that the tendency of inflation usually persist under all fiat monetary systems, but not under what could be considered a classical gold monetary system where, through private banking, the promises of redemption are enforced by the sheer demand of the public. In order for the public to have confidence in such a system, it would, as always, have to have a credible commitment from the banks to maintain gold redemption of any bills of issue, and that any breach of this contract would not simply be dismissed as it appears under our current fiat monetary system. Now, this does not preclude the fact that banks are businesses, and mismanaged businesses do fail and should always be allowed to fail. That being said, such businesses should always provide for independent audits and publication of the findings of such audits to the public, especially to the depositors.
While I personally defend the use of gold as a monetary necessity, I do not defend it on purely ideological [i.e. Constitutional] grounds, but also on rational grounds as well. It is a very rational monetary system; it requires absolute responsibility on all parties, especially the government. Unlike fiat money, gold is not, nor can it ever be an inherent liability; by its very nature it is an asset.
Today, we are accustom to and therefore inclined to think of gold in terms of fiat evaluation. We look at the fiat price of gold and therefore assume that it is the actual value of gold when it fact it is merely the fait price that reflects the inflated, therefore debased purchase value of our fiat currency. Likewise, our entire economy is calculated in fiat terms, logically because at this time that is all we have, however, it is important to realize that the entire economy is based upon a debased evaluation. In other words, the evaluation of our economy should be recognized in highly inflated terms, therefore the real economy minus this inflation is substantially less than it appears in the numbers. I realize that is difficult for some to wrap their minds around, but if you view the economy in terms of a 1913 100 cent Dollar you will get the real economic evaluation. The reason for this is that since our money has lost the majority of its economic purchase power over the last 95 years, the economic evaluation is based upon far less purchasing power per dollar of value.
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