http://www.youtube.com/user/jaralero In 1792, the Coinage Act also authorized the death penalty for any private citizen who counterfeited the currency. Too bad they weren't explicit that counterfeiting by government officials is just as detrimental to the economy and the value of the dollar.
In wartime many nations actually operated counterfeiting programs to undermine the dollar, but never to a disastrous level. The enemy knew how harmful excessive creation of new money could be to the dollar and our economy. But it seems we never learned the dangers of creating new money out of thin air. We don't need an Arab nation or the Chinese to undermine our system with a counterfeiting operation. We do it to ourselves with the all the disadvantages that would occur if others did it to us.
Today we hear threats from some Arab, Muslim and some Far Eastern countries about undermining the dollar system not by dishonest counterfeiting, but by initiating an alternative monetary system based on gold. Wouldn't that be ironic? Such an event theoretically could do great harm to us. This day may well come not so much as a direct political attack on the dollar system, but out of necessity to restore confidence in money once again.
Historically paper money never has lasted for long periods of time, while gold has survived thousands of years of attacks by political interests and big government. In time the world once again will restore trust in the monetary system by making some currency as good as gold.
Gold or any acceptable market commodity money is required to preserve liberty. Monopoly control by government of a system that creates fiat money out of thin air guarantees the loss of liberty. No matter how well intended our militarism is portrayed or how happily the promises of wonderful programs for the poor are promoted, inflating the money supply to pay these bills makes government bigger.
Empires always fail, and expenses always exceed projections. Harmful unintended consequences are the rule, not the exception. Welfare for the poor is inefficient and wasteful. The beneficiaries are rarely the poor themselves, but, instead, the politicians, the bureaucrats or the wealthy. The same is true of all foreign aid. It is nothing more than a program that steals from the poor in a rich country and gives to the rich leaders of a poorer country.
Whether it is war or welfare payments, it always means higher taxes, inflation and debt. Whether it is the extraction of wealth from the productive economy, the distortion of the market by interest rate manipulation or spending for war and welfare, it can't happen without infringing upon personal liberty.
At home the war on poverty, terrorism, drugs or foreign rulers provide an opportunity for authoritarians to rise to power, individuals who think nothing of violating the people's rights to privacy and freedom of speech. They believe their role is to protect the secrecy of government rather than protect the privacy of citizens.
Unfortunately, that is the atmosphere under which we live today with essentially no respect for the Bill of Rights. Though great economic harm comes from a government monopoly, fiat monetary system, the loss of liberty associated with it is equally troubling.
Just as empires are self-limiting in terms of money and manpower, so, too, is a monetary system based on illusion and fraud.
<< Back to article
