Thursday, September 25, 2014

The "Honest Money" Question

Our hard money advocates of the past (and goldbugs of the present) have often referred to "sound money" or "honest money" in the context of past gold standards ... meaning that money bound or fixed to a certain measure of gold or silver (past monies that have intrinsic wealth value) is the key to keeping the money honest.

They had a point, but the point ran away from them long ago. Even in times of a gold standard, money was politicized and used as a dishonest means to dishonest ends. We could say that "the money was honest" and that only its "use" was dishonest. But most of us realize that the "use" of money is so intrinsic to its nature, that the separation of the two makes little sense to distinguish.

Today's money is used as a geopolitical weapon (currency wars, sanctions), as a cultural denominator (exorbitant privilege) and as a class denominator (wealth inequality accelerator / carry unit).

It does retain one similarity to gold. It's utility in very large amounts is much more powerful than in small. Which is to say that the power of each dollar unit a common man earns in wages is far, FAR less powerful than each unit that a wealth Giant leverages to amass more real wealth (or that a central banker uses to manage a global depression).

Truly, today's money (especially in large amounts) has a more powerful use value than any previously discussed in years past. Today's "money" is used to manipulate markets (which in turn has a powerful impact on human behaviour) like NEVER before.

As all money today is both a denominator - and a derivative - of real, physical, intrinsic wealth, we must include all derivative contracts (derivatives of our fiat money) as being part of "the money".

And when we do, we are presented with the use of fiat currency/derivatives by central banks and their primary dealers as being the "miracle of salvation" which prevented a depressionary collapse into Armageddon in 2008. Of course however, it is this same derivative paper that created the depressionary collapse it saved us from in the first place.

We know that the paper is dishonest when used to loot the working class, rip off international speculators and manage the world at present through its Greatest Depression ... but these are all USES of the money, not the money itself. This same paper can do much good when used for good: for charity, for development, for progress, for cultural advancement - all good things that money can be used for.

It is in fact the MARKETS that are dishonest today, and it is the dishonest use of fiat money to grossly manipulate them, that has caused the greatest tragedy of all - the suicidal death rattle of fiat money as we know it today.

To have honest MARKETS again, there is only one solution. And that solution is coming. It's what all the writing of Another, Friend of Another, Friend of Friend of Another and myself, Roacheforque, is really all about.

It's not about honest money, its about honest VALUES, and when fiat denominates the physical world, our system of values loses its way. The people begin to believe that wealth can indeed be created from thin air by monetary alchemists. They begin to place their CONfidence in "something for nothing", and put much faith in the idea that "hard work is for peasants and fools".

When fiat manipulates our physical world markets, the people lose their sense of virtue. They watch the worst behaviors: fraud, dishonesty, greed, covetousness, swindling, speculation, (etc.) being egregiously rewarded, while things like: thrift, saving, industriousness, individualism (etc.) are being grievously punished.

So yes, the dishonest USE of fiat money to manipulate markets, and to manipulate behaviour, is indeed the real problem here. We can never govern the way evil people will misuse money, wealth, influence, or anything for that matter.

But, we CAN have a more equitable system, and a better world, with honest markets. And we CAN still govern the honesty of markets. The gold demand of the producer nations proves this beyond a shadow of all doubt, as if one needed it for such proof.

Clearly the hatred of it by the debtor nations was proof enough on its own. The time for fiat currencies to manipulate the price of gold is ending and the time when gold again denominates the fiat currencies approaches. In that time, markets will be honest again. As honest as any hard money advocate's "honest money" of the past.

There are many fine bottles of Chateua Laffite Rothschild to uncork when that turn finally manifests. Wealth Giants of good character are well prepared for it, and as hopeful as the little people should be, if only they understood the ways of their masters.

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