This is Part 7 in the Mom and Dad Normal learn about Money Series
“That would solve it, wouldn’t it” Dad asked.
“Solve what?” Said Sue.
“The U S Debt crisis. We wouldn’t have to worry about inflation destroying our savings, if we all bought gold,” answered Dad.
Sue’s brother, Abe, heard this and added his own opinion. “I guess,” Abe observed. “When the electricity goes out, and the shelves in the stores are empty, your neighbor who owns chickens might agree to take a gold coin worth $1,800 for a fewchicken eggs. But if that is the situation, your neighbor might demand something more practical as barter, like a box of nails, instead.”
“It depends. We, the Normal Family, wouldn’t have to worry about inflation destroying our savings, if we, the Normal Family, had our savings in physical gold. But that’s physical gold, not a piece of paper that says we bought gold. And that assumes that only a small percentage of people do it, and that the economy is still operating so that we can exchange it for currency when we need it,” Sue explained.
“Huh?” Dad offered.
Sue didn’t know if she was up to this explanation. Maybe Henry Paulsen was right. Maybe the Middle People didn’t have the capacity to know the sinister trickery of the banking system. But, she’d committed to explaining this to Mom and Dad, so she kept going.
“First, Dad,” she said, “everybody can’t buy gold. That was the problem in the first place. Gold is a specific, limited physical object. There isn’t enough of it to operate the world economy. That’s why Nixon took America off the gold standard in the first place. Money outgrew the physical limitations of how much gold existed. It couldn’t keep going up and up in value, because there wouldn’t be a way to make gold coins small enough to use as trade currency.”
“Now I’m confused,” interrupted Mom Normal, entering the living room and wiping her hands on her apron. “First, you tell me the reason we have so much debt is because we went off the gold standard. Now you’re telling me we can’t go back on it.”
“Think about the Banker who has an empty hole, with no wampum in it,” Sue told her. “Going back on the gold standard isn’t going to put any wampum in it. It’s just going to make all the dollars worthless, because they aren’t based on gold. The only people with money would be the ones who owned physical gold. The United States Treasury would be completely empty then.”
“That’s ridiculous,” Mom stated. “The United States could use its dollars to buy gold.”
“No,” Sue said. “Dollars wouldn’t have any value. The only value in money is the perceived value. Until somebody agrees that money has value, it’s silly play money. Monopoly money.”
“Yeah?” Dad interrupted. “I don’t believe you. Somebody should try it. Put us back on the gold standard.”
“Actually,” Abe contributed, “in history, there were two U.S. Presidents who tried to change the system of paper money, distributed by an independent banking system called the Federal Reserve. Each of these two Presidents realized that the Federal Reserve system created a fake debt to the Spoon Cartel. They understood that the Federal Reserve is not an arm of the government. It’s an independent group of banks, who loan fake air-based money to the U.S. Treasury, printed out of thin air. Then they expect to be paid interest, which goes to the Spoon Cartel, rather than the American people. The Federal Reserve started out as Wampum Makers, loaning their money to the nation. But now, it’s evolved into a criminal enterprise. It operates outside the government, independent of oversight, and for the benefit of only the Spoons. It requires Cash to grease its wheels, and so it makes a Shell Game, for drug money and gun running to launder through. Each of these two Presidents proposed an idea for the U.S. Treasury to issue its own money, backed by gold, that would not involve the group of independent Bankers called the Federal Reserve system. If the U.S. issued its own money, instead of borrowing the money from the Banksters and the Spoon Cartel, it would not have to pay interest.”
“Okay. Who were these two brave and forward-thinking Presidents, who proposed to solve the problem of the U S Treasury owing money to the Federal Reserve Bank, which is not a government-controlled entity?” asked Mom.
“Lincoln and Kennedy,” Abe told her. “They were shot days before their plans were going to be presented to Congress. Their Vice Presidents never presented the plans.”
Next post: How high can the debt ceiling go?