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Faith-Based Currency
- Text size
Ron Paul
July 22, 2008
The Latin term “fiat” roughly translates to “there shall be”. When we refer to fiat money, we are referring to money that exists because the government declares it into existence. It is not based on production or earnings, and not backed by any commodity. It is solely based on trusting the government. Fiat money is exchanged in the economy as long as there is faith in the government that issues it.
Some are blaming the recent shakeup in the markets to “whining” or financial fear-mongering, which misses the whole point. History has shown that fiat money, or “faith-based currency” always fails, because when governments claim this power, they always behave irresponsibly.
When government has the ability to create and spend all the money it wants, priorities shift, and the concept of budgeting, as most Americans know it, loses all meaning. Hand a teenager a credit card, and tell him there is no limit and no accountability for what he spends, and the effect would be the same. You see, this problem is not unique to our government. It is a predictable outcome based on human nature, and we’ve seen variations of what we are experiencing now happen over and over throughout history. I didn’t have a crystal ball or a fortune teller when I predicted this 3, 7, or even 30 years ago. Actions have logical consequences. The government becomes the reckless teenager with the credit card, and in the end, the taxpaying citizens get the bill. What happens after that is never pretty.
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This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less. Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.
Hard currencies, on the other hand, force governments to remain in check, strictly limited to the revenues they can raise from the country’s economic health. This is also an incentive for government to stay out of the way of productivity. The hyper-regulation in today’s economy demonstrates that this is no longer the case. What does it matter if the economy is crippled and the tax-base eroded, if government can create whatever dollars they need to keep the special interests happy?
We have been building economic castles on the sand, and the tide is coming in. The answer is not to bring in more sand, but to move to more solid foundation.
So yes, it is true that many are complaining about our economic trouble, but our economic trouble is not caused by their complaining. Many are being forced to wake up to the predictable troubles associated with faith-based currency. As more people notice the hardships, more will lose faith.
We are long overdue for a course correction and I can only hope that this awakening translates to a solid approach to currency reform.
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July 22nd, 2008 at 4:51 pm
so in theory, the government could issue every one 10 million dollars, and end poverty in minutes around the globe!,
but hey guess what ?
they will never ever do that, because they wish to keep us all slaves and subserviant to them,
its a simple as that,
there is enough food, water, fuel, money, everything, but you are stopped from having it as a means of control!!!
wake up, for f---s sake are people really that stupid that they do not understand this
we are all held in slavery and need to remove our task masters from the face of the earth, so that our children can be free for once in history.
July 22nd, 2008 at 4:52 pm
look!
so in theory, the government could issue every one 10 million dollars, and end poverty in minutes around the globe!,
but hey guess what ?
they will never ever do that, because they wish to keep us all slaves and subserviant to them,
its a simple as that,
there is enough food, water, fuel, money, everything, but you are stopped from having it as a means of control!!!
wake up, for f---s sake are people really that stupid that they do not understand this
we are all held in slavery and need to remove our task masters from the face of the earth, so that our children can be free for once in history.
July 22nd, 2008 at 4:54 pm
If the government issued millions to everyone then even a loaf of bread would cost 1,000s of dollars.
Everything is relative. The general cost of goods is balanced by the average persons ability and demand to buy the goods at a certain price. If people stopping driving and filling up their cars, then gas and oil prices will drop, as we are currently seeing.
July 22nd, 2008 at 4:54 pm
” People should not be afraid of their government. Government should be afraid of their people. “
July 22nd, 2008 at 4:59 pm
If this appears on the page then it will be the first time I was ever successful in commenting, despite the ease with which cretins can spew the most specious shait regularly in this forum.
See “THE MONEY MASTERS” on DVD or listen to Dr. Stuart Crane explain the (non)Federal (no)Reserve System: “WHEAT RECEIPTS” http://www.hearliberty.com/ near the bottom of the page.
It is informative and quite humorous! Download it and give it to friends, enemies and strangers.
July 22nd, 2008 at 5:21 pm
The Greater Depression here we come!
July 22nd, 2008 at 5:24 pm
http://www.survivalblog.com WELL SAID RON PAUL!!! I WISH I COULD STILL VOTE FOR YOU… GODSPEED TO YOU AND YOUR FAMILY….. AND TO ALL ((((REAL PATRIOTS)))) WHEN THE SHUMMER HITS THE FAN I HOPE TO SEE SOME OF YOU AND FIGHT ALONG SIDE YOU,,, FOR THE REPUBLIC!!!!
July 22nd, 2008 at 5:30 pm
Economists have long understood what causes increases in prices: it is the creation of money-from-nothing by privately owned central banks, such as the Federal Reserve.
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”
Source: John Maynard Keynes, British Economist
July 22nd, 2008 at 5:30 pm
Quantum Says:
July 22nd, 2008 at 4:54 pm
If the government issued millions to everyone then even a loaf of bread would cost 1,000s of dollars.
Everything is relative. The general cost of goods is balanced by the average persons ability and demand to buy the goods at a certain price
go and read all 3 volumes of capital, by karl marx, then try to tell me everything is relative to a persons ability to pay, if that were the case then why do millionaires still only pay the same as you for a loaf of bread ????, relative to a persons ability to pay, i think not lol, do some reading : )
July 22nd, 2008 at 5:32 pm
Quantum Says:
July 22nd, 2008 at 4:54 pm
If the government issued millions to everyone then even a loaf of bread would cost 1,000s of dollars.
Everything is relative. The general cost of goods is balanced by the average persons ability and demand to buy the goods at a certain price
go and read all 3 volumes of capital, by karl marx, then try to tell me everything is relative to a persons ability to pay, if that were the case then why do millionaires still only pay the same as you for a loaf of bread ????, relative to a persons ability to pay, i think not lol, do some reading : )
hmmm do i have to post evrything under different names and ip addresses to get it, a message on this board lol
July 22nd, 2008 at 5:39 pm
Ron Paul does an excellent job waking people up to the main problems facing this country. However, his Austrian economics are misguiding us to the wrong solution for fixing the problem. One of the root causes of the problem is the creation of money with debt instantly attached to it, since it is printed with interest from the private Federal Reserve central bank. In addition, more money is at the same time created by the member banks through fractional reserve banking, which further increases the amount of debt and money supply, further eroding the value of each unit of currency.
Note that we had a gold-backed currency during the Great Depression, so going back to a gold-based solution obviously doesn’t get to the heart of the matter.
The international bankers wouldn’t necessarily mind going back to a gold standard after this coming crash occurs, and it may even be their intention. They already have a near monopoly on the gold reserves. Remember Fort Knox? Well, Ronald Reagan’s gold commission (of which Ron Paul was a member) confirmed that whatever gold that did exist at Fort Knox (remember that it was intended to be America’s) was the property of the private Federal Reserve (talk about one of the largest thefts in history).
From Thomas Edison (more on addressing the root causes):
“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people.”
So, say if our Treasury Department printed the money without bond as opposed to the private Federal Reserve (which JFK issued an executive order to do just a few months before his death, but was soon put to a halt) , imagine the huge tax savings in your pocket from no longer having to service the debt!
July 22nd, 2008 at 5:44 pm
Government issued currency?!
Try Federal Reserve aka private bank issuing the currency!
July 22nd, 2008 at 5:57 pm
to all you people shorting gold i have another tidbit of wisdom for ya . its been recently discoverd that if you eat s--- you will reverse the aging process and live forever young the more you eat the younger you get aint dat sumpin. bon apetite.
July 22nd, 2008 at 8:39 pm
And if the government has it their way, soon we will have a “faith based government”, as if we don’t have one already! And if current fuel trends continue on their present downward course, soon American roads will look like something out of the Road Warrior movie.
July 22nd, 2008 at 8:49 pm
“Fait Currency?” no not my United States of America dollars, no way. My dollars are based on uramium-238, and the power and might of the American Empire. The dollars themselves are the commodity. And their seigniorage in this new age of digital dollars is America and our standing as the Empire. If the Government of the United States wanted to fix our economic woes, just do it. We control the digital dollars. Launch economic warfare across the globe. Give me a strong Dollar, smash the Euro. And all those smarts assed bankers, take their passports, and put them in the cooler for a few weeks. Then maybe they would stand up and good Americans again.
July 22nd, 2008 at 9:52 pm
Brian, I do not think that fiat currency can maintain its value. In fact, as the supply of fiat currency is controlled by the government, I do believe that it is definitely not what is needed. The founders expected that the Federal Government would establish the value of the monetary unit, but would not tamper with it. That’s why it is natural to use gold and silver. Fiat currency regimes cannot supply enough money to the economy. The value of a fiat currency always collapses, unless of course, its supply is restricted to the point of strangling the economy. Transferring this function to Congress or any other body will not solve the problem.
The fact that the gold standard was maintained before and during the depression, if you can truly consider that such was the case, does not reflect on whether it is a good standard or not. The gold standard cannot be thought of as a panacea for all economic ills. The causes of the Great Depression are still not well understood (by me). Furthermore, as the monetary unit was devalued, and people were banned from holding gold, one cannot say that we were really under a gold standard.
I find arguments against gold unconvincing. I find arguments for a fiat currency equally unconvincing.
Slim Reply:
February 9th, 2009 at 6:32 pm
Well,quite simply put sir, if 1 entity owns the vast reserve of mined gold and that entity is the same one that sets the value of the commodity, how will such a system be of more value and benefit than that which exists?
July 22nd, 2008 at 9:58 pm
This story makes no scense to me what-so-ever. None.
July 22nd, 2008 at 11:14 pm
roaddog, sounds more like a personal problem to me.
July 23rd, 2008 at 5:38 am
Ahh ye of little faith…
)
July 23rd, 2008 at 8:55 am
But its not the Government that issues the fiat money, If it was then the debt created would be owed to itself and therefore no real obligation to pay. It would be like me lending money to myself and charging interest and then worrying about how im going to pay myself back… And thats why its not the government but it has to be external to the government and that is the private Fed or any other national bank of the world because then they can at least pass it off as foreign debt..
July 23rd, 2008 at 9:30 am
#4, that quote is incorrect when the people are sick, unmoved, and pathetic.
July 23rd, 2008 at 11:34 am
Dr. Paul is correct. Why should we be taking all this ? We need REform I just hope like Dr. Paul that we can be awakend. I heard today that now with Fannie Mae and Freddie Mac are going to be bailed out. So what does that mean ? More printed up money thats becoming more and more worthless. And were going to be paying it back an estimated 25 billion dollars that would have to be paid by all Taxpayers. And Uncle Sam makes sure to get his taxes on EVERYTHING!!!!
July 23rd, 2008 at 3:37 pm
ROTHCHILD WORLD AGENDA EXPOSED. Read this I dare you.
http://www.biblebelievers.org.au/przion1.htm
July 23rd, 2008 at 8:29 pm
The elites are banking on the fact and letting the dollar go down, in order to make the other countries that are also pegged to the US Dollar to go down… just one step closer to one world currency. When the dollar will amount to nothing the government will come out say, “Don’t worry, we have a new currency called the Amero everyone, everything is under control.” The only thing they won’t tell us that is that our Constitution, the Bill of Rights, and the Declaration of Independence will be wiped off the slate, and a new Constitution will come into light. Then if that currency fails, then we will have one world currency, one world government, one world army, one religion… this is our future, if we don’t wake up and realize the bigger picture….
July 23rd, 2008 at 10:50 pm
if religion doesn’t work for you google nesara.
July 24th, 2008 at 3:11 am
http://www.youtube.com/watch?v=7CXPtmvdWDo
Operation Garden Plot – Activated?
As we fast approach total economic collapse what evidence is there that America will be taken into Martial Law? Operation Garden Plot is a declassified document detailing the plan to mobilize US Armed Forces and UN Troops against US Citizens. How much of it is a reality?
July 24th, 2008 at 8:53 am
this is for Khrodes…..
Ok so Now since you’re awake what the hell are you or anybody else that’s awake going to do about it.
all you people claiming this and claiming that need to stop talking so much and take some action….IF you really believe what you are saying.
July 24th, 2008 at 9:33 am
The answer to this has been in the design to not be easy to acheive…In order to acheive a solution, we must destroy this government through revolution…And that is the bottom line.
July 24th, 2008 at 12:13 pm
Yes revolution is comming. I have my sniper rifle ready for the president and congress members who approve amnesty for illegals. They are letting them to make them pay for it and force us to join them economically
July 24th, 2008 at 7:42 pm
As a witness to our collapsing economy and the forces of EVIL in this world, the Word of
God shows that a “love of money” has been the cause for all sorts of evil. It doesn’t
surprise many to see greed being the underlying motive for those that want to turn our
world into a one world government and use it for tyranny:
Part of 1 Timothy 6:10-”For the love of money is a root of all kinds of evil”.
Better yet, the prophecies in the Bible are being fufilled even as we speak. Creation
sings of the glories of God. God is more concerned about man destroying this earth with
sin more than anything else. Man has ruined a perfect creation. God gave us free will to
let us choose if we would follow God or follow ourselves. God never forces himself on
anyone.
We are a scarred creation, we deserve eternal condemnation for breaking God’s law. God
says all have sinned and fallen short of the glory of God. In essence, His glory is
perfection, and failing just one of his commandments means we fall short. He is a just
and Holy God, and because of his Holy nature, he must punish us for our shortcomings. The
punishment for mankind sinning is eternal separation from God when we die physically.
God loves us so much that he made a way for you and me to be reconciled to Him. John 3:16
“For God so loved the world that he gave his only Begotten Son that whosoever believes in
him shall not perish but have everlasting life”. God sent Jesus as a sacrifice on our
behalf to pay the penalty of our sins fully-past, present, future. God says that “Jesus
is the way the truth and the life, no one comes to the Father but through Him”. Jesus
took your penalty so you dont have to face eternal condemnation.
All you need to do is repent and believe in the Lord Jesus Christ and you will be saved. It is a gift from God to you, all need to do is recieve it!
God proves himself time and time again. Test God out! For all that truly and humbly seek
Him, He will reveal himself to you! If you are skeptical of God or the Bible, do some
investigation and read the Bible! See for yourself if the claims in there are true.
I despise the hypocrisy of today’s Christians, who claim they know God, but by their
actions deny him. Anyone can claim they are a Christian but that doesn’t necessarily mean
they are one. God teaches us in his word that we will discern TRUE followers of God by
their fruits. The inquisitions for example were not done to glorify God even though they
claim it did. God strickly forbids murder, and these “Christians” were engaging in it.
The condescending/judgemental attitudes of Christians today is sad. We are told by God to
love EVERYONE regardless if they are our enemies or friends.
Satan and his evil spirits are alive and well, deceiving many today in this world. Many
are blinded to the evils as our culture slowly conditions us to accept immorality.
The Word of God shows us that terrible times are coming, filled with persecution,
tyranny, and evil.
This Nation America is a slave to our establishment. But we are all a slave to sin. I
earnestly ask that you consider what I’ve said. God bless America.
July 25th, 2008 at 8:53 pm
http://www.thereignofchrist.org and http://www.veritas144k.com
The fulfillment of Christianity is at hand!!
“Until we all meet into the unity of faith and of the knowledge of the Son of
God, unto a perfect man, unto the measure of the age of the
fulness of Christ, doing the truth in charity, we may in all
things grow up in Him Who is the head, even Christ.”
This is accomplished in those who prepare themselves to receive
Christ in His Second Coming when “He shall appear without
sin to them that expect Him unto salvation.” This can only
accomplished in the valid reception of the Holy Eucharist.
If we carry this point a step further, we will see that the revolt
in Heaven by Lucifer has even deeper significance. Not only
did God ask the angels to assist man to come into the image
and likeness of God, but He revealed that in the final New
Creation, God would be ‘All and in all.’
That is, God would be in the angels and in man in the completion of the designs
of His heart from all eternity:
“Lie not one to another,
stripping yourselves of the old man with his deeds, and
putting on the new, him who is renewed unto knowledge,
according to the image of Him that created him, where there
is neither Gentile nor Jew, circumcision nor uncircumcision,
Barbarian nor Scythian, bond nor free. But Christ is All and
in all.”
There is neither, bond nor free, angel nor man, but
there is totally a new creature, for man and for angel are one,
that is the new creature, Eucharistic man.
The emergence of the new creature is the realization that there
is no difference of man and angel. The Resurrection of the
Christ, that is, the emergence of the victory of the Divine
Nature in the humanity of man, brings about the completion
of the fulfillment of the design of God from the beginning.
Just as Father, Son, and Holy Ghost are one, so too the new
creature is the image and likeness of the unity of the Trinity,
for the Holy Eucharist is Jesus, Father, Son, and Holy Ghost.
He said: “I and the Father are One.
July 27th, 2008 at 1:54 am
Kucinich and Paul together each where his approach is right–as noted by author of cryptogon–is the proper answer. The world has changed from the days of Jefferson. You cannot have an unregulated massive economic establishment any longer. As Buckminster Fuller saw, this is now spacesphip earch. You much regulate. But all means need to be employed in this new environment to keep the regulators from becomming totalitarian. Maximum freedom must be facilitated. This is the real discussion of the future–not nonsense about “austrian economics.”
July 28th, 2008 at 12:32 pm
As right as Ron Paul is on most other issues, he is simply wrong on the money issue. Not because the “Federal” Reserve is good. Far from it. But because the “hard money” solution he advocates is a deflationary “cure” that’s even worse the the inflationary disease he presumes to save us from.
In his masterwork, The Lost Science of Money (p. 426), monetary historian Stephen Zarlenga writes:
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Unfortunately neither [Martin] Van Buren nor his advisors had achieved a full concept of money. Daniel Raymond correctly urged Van Buren that any central bank must be government owned but incorrectly insisted that all currency must be 100% backed by gold and silver….
[Andrew] Jackson and Van Buren removed the monetary power from the private bankers but did not re-establish it in the hands of the nation. Instead, Van Buren organized the Independent Treasury System, establishing 15 sub branches of the Treasury to handle government moneys in 1840. From December 1836 the government moved toward making and receiving all payments in coinage, or truly convertible bank notes….Once the state bank notes were no longer accepted by the government, their circulation was cut back dramatically.
This was the closest our nation has ever come to implementing a real gold/silver standard. Operating under the commodity theory of money, Van Buren, who truly cared for the Republic, helped bring on the worst depression the Nation had ever seen, starting in 1837. It was reportedly even worse than that caused by the 2nd Bank of the U.S. in 1819. Bad as the state bank notes were, they had still been functioning as money!
Those who proclaim that no gold and silver money system has ever failed should consider that whether you are a laborer, farmer, or industrialist, the money system’s success or failure is not measured by the value of a piece of metal. When your job, your farm, or factory has disappeared in a monetarily created depression, the system has failed!
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Truth-seekers wishing to have a full understanding of both the nature and history of money, including how best to reform the current system, would be much better served reading both Zarlenga’s book and Ellen Brown’s “Web of Debt”:
http://www.webofdebt.com
July 28th, 2008 at 10:45 pm
Our economic worries are not based on flaws with our money. Our problem stems from the fact that the majority of American people have forgotten that, regardless of what they see in the commercials, life does NOT take Visa. You can get by very well if you are patient, save and spend wisely, and budget accordingly. Our grandparents and our parents didn’t get to own nice homes and drive nice cars until they were in their late forties and early fifties, and could finally afford them. But everyone under 35 is impatient, they want those things NOW! So they charged it to their credit cards. And now they’re hooked, because prices rose to reflect the “extra income” that those credit cards represented and it is almost impossible to get by without one.
Credit cards are simply the modern day equivalent of the old “Company Store”, such as you saw in 1800 mining communities.
Don’t buy anything until you can buy it three times. Use cash, it saves you money.
July 29th, 2008 at 12:06 pm
Big_Mike writes: “Our economic worries are not based on flaws with our money. Our problem stems from the fact that the majority of American people have forgotten that, regardless of what they see in the commercials, life does NOT take Visa.”
While the credit card mentality you speak of certainly makes things worse, you are simply wrong when you claim our economic problems are not based on flaws with our money.
What you seem not to realize is that, if everyone (including the government) got out debt, there would BE no “money” for any of us to spend or save in the first place.
And the reason for this is that our entire money supply is created OUT of debt, and is uncreated whenever the principal of a bank loan is repaid.
Please read the following web site and educate yourself about this:
http://www.wealthmoney.org
July 29th, 2008 at 1:32 pm
#39 Todd
I still find myself disagreeing with you on this point. Money is simply the token or other object that functions as a medium of exchange that is socially and legally accepted in payment for goods and services and in settlement of debts. Our money is not derived from debt, debt is the way that our society has allowed itself more finanical might than it should have (it removed the restrictions preventing the company from unregulated, unchecked economic growth, like the situation back when the dollar was backed by the gold standard). If we removed all of the money in the world, we’d go back to buying things with chickens and goats, but my advice would still be both sound and correct whether you are dealing with dollar bills or corn and carrots. Don’t spend on unnecessary items, save 10 – 15% of everything you make for your labor, don’t buy anything unless you can buy it three times.
Credit does not mean “get it” as Cedric the Entertainer so eloquently points out in his stand up routine.