Tuesday, June 07, 2011

The Gold Standard Paved the Way For Fiat Money
...And Easy War

This article on Alternet, "9 Signs That We May Be Living Through Another Depression" by Joshua Holland cites the Long Depression of the 19th Century as a similar period to ours. It is interesting to note that the "Long Depression" of the latter part of the nineteenth century from about 1873 to 1896 is very congruent with the period in which bimetallism (the original monetary system of the United States) was slowly supplanted by the strict gold standard, a process encouraged by the Bank of England all over the world during this time.

This stagnant period made it obvious that the strict gold standard was incompatible with a healthy growing economy, something the ancients of any sizable society had previously learned. Mankind had indeed been pinned to a "cross of gold."

However, the solution imposed on the world for this problem was the imposition of fiat money controlled by central banks. It can be argued that this "solution" led to the massive and then endemic wars and preparation for war of the twentieth and twenty-first century. War is not cheap, especially modern war that requires expensive sophisticated weapons and standing armies, and the requirement for gold to fund war had always been a challenge and a limiter for the most ambitious king. Fiat money is created in the gleam of a banker's eye. Solicting investment in war became so much less of a challenge for the governments of the twentieth century.

There are still those who believe that a return to the gold standard will solve all our problems.
Nothing could be further from the truth.
The gold standard created our problems.
When money is a scarce commodity there cannot be much money.
When there is little money there is little commerce. 

I will make man scarcer than pure gold, more rare than the gold of Ophir. ISAIAH 13:12

Note: Joshua Holland also cites Paul Krugman's calling up the similarities between today and the "Long Depression" in this June 27, 2010 column, "The Third Depression." 

The Didn't We Know This All Along? Department

Fukushima radiation was a lot worse than stated.

"The Japanese government has more than doubled the estimate for the amount of radiation released by the Fukushima nuclear plant crippled by the earthquake and tsunami.
The Nuclear and Industrial Safety Agency (NISA), a government nuclear watchdog, also said at a briefing in Tokyo today that it believed reactor cores at some of the units at the complex melted much more quickly than the plant operator had previously suggested."

Read more: http://www.dailymail.co.uk/news/article-1394902/Japan-nuclear-crisis-More-Fukushima-radiation-released-thought.html#ixzz1OagKDxtA

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