Ok so you respond to my post by dismissing the Constitution, cite some half-baked economic “history,” then you declare that you don’t what I mean by the dollar losing 95% of its value since 1913 and then you beat breast declaring that you, “will follow a philosophical and epistemological argument, (I) will maintain a "tradition, tradition, tradition, ritual, myth, cultural, superstition argument.”
This doesn’t sound like a discussion worth pursuing but I’ll give it another shot…
I didn’t address the article because it mixes three distinct problems:
1. The Fed (which I am against and think is unconstitutional)
2. Fiat money vs. money backed by something that has had universal value over centuries
3. Government control of the money vs the free market
The article weaves back and forth between the three issues sometimes combining them sometimes treating them as separate and makes so many assumptions that it would take way too much time to deconstruct.
As to your post, I decided to cite a Constitutional basis for gold and silver but, like the Democrats, you don’t seem to honor the intent of the founding fathers. I don’t believe that the blueprint for the US of A is a “living document” that can be interpreted whatever way you want to with the passage of time. The Constitution was designed to keep the Federal Government small and non-intrusive, ignoring its true intent was what got us to where we are now.
This ranting about the Ibond is completely ludicrous and deserves no investment of my time.
Let’s hear from an economist about “the breakdown of the gold standard” (something that is treated with lies and half-truths by the article:
If the classical gold standard worked so well, why did it break down? It broke down because governments were entrusted with the task of keeping their monetary promises, of seeing to it that pounds, dollars, francs, etc., were always redeemable in gold as they and their controlled banking system had pledged. It was not gold that failed; it was the folly of trusting government to keep its promises. To wage the catastrophic war of World War I, each government had to inflate its own supply of paper and bank currency. So severe was this inflation that it was impossible for the warring governments to keep their pledges, and so they went "off the gold standard," i.e., declared their own bankruptcy, shortly after entering the war. All except the United States, which entered the war late, and did not inflate the supply of dollars enough to endanger redeemability. But, apart from the U.S., the world suffered what some economists now hail as the Nirvana of freely-fluctuating exchange rates (now called "dirty floats") competitive devaluations, warring currency blocks, exchange controls, tariffs and quotas, and the breakdown of international trade and investment. The inflated pounds, francs, marks, etc., depreciated in relation to gold and the dollar; monetary chaos abounded throughout the world.
---Murry Rothbard
More Rothbard:
It must be emphasized that gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium. Above all, the supply and provision of gold was subject only to market forces, and not to the arbitrary printing press of the government.
The international gold standard provided an automatic market mechanism for checking the inflationary potential of government. It also provides an automatic mechanism for keeping the balance of payments of each country in equilibrium. As the philosopher and economist David Hume pointed out in the mid-eighteenth century, if one nation, say France, inflates its supply of paper francs, its prices rise; the increasing incomes in paper francs stimulates imports from abroad, which are also spurred by the fact that prices of imports are now relatively cheaper than prices at home. At the same time, the higher prices at home discourage exports abroad; the result is a deficit in the balance of payments, which must be paid for by foreign countries cashing in francs for gold. The gold outflow means that France must eventually contract its inflated paper francs in order to prevent a loss of all of its gold. If the inflation has taken the form of bank deposits, then the French banks have to contract their loans and deposits in order to avoid bankruptcy as foreigners call upon the French banks to redeem their deposits in gold. The contraction lowers prices at home, and generates an export surplus, thereby reversing the gold outflow, until the price levels are equalized in France and in other countries as well.
It is true that the interventions of governments previous to the nineteenth century weakened the speed of this market mechanism, and allowed for a business cycle of inflation and recession within this gold standard framework. These interventions were particularly: the governments' monopolizing of the mint, legal tender laws, the creation of paper money, and the development of inflationary banking propelled by each of the governments. But while these interventions slowed the adjustments of the market, these adjustments were still in ultimate control of the situation. So while the classical gold standard of the nineteenth century was not perfect, and allowed for relatively minor booms and busts, it still provided us with by far the best monetary order the world has ever known, an order which worked, which kept business cycles from getting out of hand, and which enabled the development of free international trade, exchange, and investment.
In summation: How you can believe that government-backed fiat money is superior to something which has historical value is beyond me. The problem is government’s central planning compared to the free market. Your Ibonds are based on Big Brother’s guarantee that they will pay you a certain percentage to give your money to the government. All you get is a promise form the government backed by its power to tax. The fact that your quotes are from the Fed website shows your bias.
Also, please get someone to proofread your stuff before you post it as much of it makes no sense.
And by its power to print, and by its power to destroy.
Altogether, a very nice foundation for a free and prosperous society. NOT!!