{"id":36169,"date":"2013-02-13T13:18:19","date_gmt":"2013-02-13T18:18:19","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=36169"},"modified":"2013-02-13T12:18:55","modified_gmt":"2013-02-13T17:18:55","slug":"the-end-of-honest-money","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/02\/13\/the-end-of-honest-money\/","title":{"rendered":"The End of Honest Money"},"content":{"rendered":"

You shall not crucify mankind upon a cross of gold.<\/em><\/p>\n

\u2013 William Jennings Bryan<\/p>\n

The season of fasting is upon us. No more high living. It’s time to
\ncinch up our belts… to put on a gaunt face and a smug look. Alone
\namong friends and associates, we will keep Lent.<\/p>\n

So neglected is Lent that even Google has forgotten about it. When we searched for it, it proposed “lentil soup.”<\/p>\n

Lent is meant to rehearse the 40 days and nights that Jesus spent
\nfasting in the desert before going public. We remember the lean days
\nwith prayer, meditation and self-denial. No alcohol will cross our lips
\nfrom Ash Wednesday till Easter Sunday. (Except on Sundays. And saints’
\ndays. And national holidays. And days that begin the letter “T” or have a
\ndate that is a prime number.)<\/p>\n

Yes, dear reader, we will be true to the church calendar, with a few emendations of our own.<\/p>\n

Why? Because we wish to remember that periods of gluttony and
\nwantonness must be followed by periods of fasting and correction. Yin
\nand yang must be kept in balance. Pain and pleasure… good and bad…
\nright and wrong — all must get what is coming to them. Otherwise, the
\nentire world gets out of whack.<\/p>\n

We fast to remind ourselves that there are hardships… there are
\nlean periods in life. Not just in our drinking lives… but in our
\neconomic lives… and in our emotional lives too. There is adversity.
\nThere is pain and penance. We fall in line, observing church rituals, so
\nthat we don’t fall apart when real adversity hits us in the face. We
\nendure Lent so we can enjoy Easter.<\/p>\n

Yes: Corrections<\/strong><\/a> are a part of life.<\/p>\n

You correct your mistakes… or you are corrected by them. No other outcome is possible.<\/p>\n

But along comes the doctrine and practice of modern central banking.
\nAll these MIT-educated central bankers have a different idea. They work
\ntirelessly to avoid correction… to prevent pain… and to bring back
\nthe good times of free-spending revelry. Now they have a program — “QE to Eternity”<\/strong><\/a> — which promises to keep the economy pain free forever.<\/p>\n

A “Wicked Project”<\/h3>\n

To fully understand how this came about, we step back to the founding
\nof the United States of America, in whose Constitution today’s central
\nbank money was specifically prohibited. The states (which had the power
\nthen to mint their own money) were not to “make any thing but gold and
\nsilver coin legal tender in payment of debts.”<\/p>\n

James Madison, in The Federalist Papers<\/em>, described allowing
\npaper money as “improper or wicked project.” And in his 1819 Dartmouth
\nCollege v. Woodward decision, Chief Justice John Marshall explained that
\npaper money had “weakened the confidence of man in man and embarrassed
\nall transactions between individuals by dispensing with a faithful
\nperformance of engagements.”<\/p>\n

Not that paper money was necessarily the work of the devil, but Satan had a hand in it. When you can counterfeit money — and get away with it<\/em> — it’s a hard habit to stop. You are soon hooked on it.<\/p>\n

Congress resorted to paper money — greenbacks — during the War
\nBetween the States. Five hundred million paper dollars were issued. This
\nled to higher prices, which pleased debtors. They borrowed in expensive
\nmoney; they repaid in cheap greenbacks. Prices in the North rose 75%
\nfrom 1860-1865.<\/p>\n

A Cross of Gold?<\/h3>\n

After the war, the greenbacks went away. But the desire for cheap money continued.<\/p>\n

Farming was the largest sector of the economy in the 19th century.
\nTypically, farmers borrowed to expand their farms during booms, when
\nprices were high. Then, in the correction, they cursed the bankers who
\nhad lent them money and railed against the gold standard.<\/p>\n

Late in the century, William Jennings Bryan took up their cause as
\nhis own. The rural proletariat had gone bust in the farm crash of the
\n1880s… and now found itself so deep in debt it was willing to take up
\nwith a fool like Bryan, if he promised relief.<\/p>\n

The roads choked up with dust when Bryan came to a cow town in the
\nMidwest. There, he ranted and raved against all that the farm folk
\ndetested — often sweating like a hot shower in the summer heat.<\/p>\n

“You shall not crucify mankind upon a cross of gold,” he roared to the approving hallelujahs of the yokels.<\/p>\n

The speech had a ring to it. It was a rhetorical flourish with great
\npower. Remembered and repeated, it is still today probably more readily
\nrecognized than Lent. But it was empty: nothing more than bombast and
\nfraud.<\/p>\n

There is some liturgical disagreement about it. But Lent generally
\nends on Good Friday, when Jesus was crucified on a cross of wood. Since
\nthen, millions have been crucified financially by paper money (a wood
\nproduct). No one has ever been nailed to a cross of gold.<\/p>\n

What Bryan had against gold was the same thing that all paper money pushers — including modern central bankers<\/strong><\/a>
\n— have against it. Gold is uncooperative and stiff-necked. You borrow
\nit and you have to pay it back. The lender expects to get his money back
\nin real money.<\/p>\n

And since the supply of gold rarely grows faster than the supply of
\ngoods and services for which it is exchanged, prices remain more or less
\nstable. Debtors are not let off the hook.<\/p>\n

Prices rose from 1800-1913, when America’s central bank was founded,
\nby 176%, says Paul Moreno. New discoveries of gold in Alaska, South
\nAfrica and Australia had increased the money supply significantly. But
\nthat was nothing. In the 100 years since, when paper money was the stuff
\nmost often issued by the U.S. Treasury, prices have gone up 448%.<\/p>\n

Bryan got his way after all. Nobody in America suffers from an honest
\ncurrency. Nobody pays back as much as he has borrowed. Even contracts
\nwith “CPI adjustment” clauses fail to make the lender whole; the feds
\nhave seen to that too.<\/p>\n

More to come, tomorrow.<\/p>\n

By Bill Bonner<\/strong><\/p>\n

http:\/\/www.billbonnersdiary.com\/<\/a><\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

You shall not crucify mankind upon a cross of gold. \u2013 William Jennings Bryan The season of fasting is upon us. No more high living. It’s time to cinch up our belts… to put on a gaunt face and a smug look. Alone among friends and associates, we will keep Lent. So neglected is Lent … <\/p>\n

Continue reading “The End of Honest Money”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-36169","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/36169","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=36169"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/36169\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=36169"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=36169"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=36169"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}