Saturday, September 4, 2010

Understanding the gold standard

Libertarians have been calling for a gold standard to replace our fiat currency (meaning, currency backed by nothing -- or even worse, currency backed by debt). But there are two kinds of gold standards, as Michael Rozeff points out in DumpDC: a free-market gold standard, which ensures that there is a natural relationship between gold (or silver) and economic activity; and a gold standard based on government-created currency. With a natural relationship (which requires that there is no governmental intervention, event that of coining the money), inflation is rare and mild, and the value of money tends to rise over time, protecting the savings of the people.

The alternative, which, as Mr. Rozeff points out, is the one being pressed by the central bankers, is a gold-based world currency, which will in time become a fiat currency, just as the dollar did -- leading to periodic panics/depressions, and robbery of the people by the central bankers.

The take-home is, we must watch what officials are trying to push on us.

Only a return to a really free market, currency included, will act in the interest of all of us. Otherwise, we will continue the same old, same old, until we are robbed into slavery by the bankers and their friends in government.

Read the link to gain a greater understanding of the underlying ideas.

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