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We Have Capitalism So Watch Your Pocket

To give a little monetary history here we need to go back to the early 1800s where our paper money was backed by silver and gold

. Now in 1834 the silver was more or less dropped and gold was informally used to back the paper dollar. You might ask why use paper money in place of gold have you ever tried carrying around a pocket full of gold? It was 1900 that President McKinley signed into law the Gold Act that formalized this backing. What this did was to tell the government that it could only print dollars based on the amount of gold it held in reserves (Fort Knox). This lasted until 1914 and World War I when all of the countries involved in the war needed more money than they had gold backing for so they starting printing more money (we were probably told that it would only be temporary). You can probably guess it didnt stop and in 1936 a famed economist came up with a theory (Keynesian theory) which stated in so many words that the free market was to dumb to control itself and only the government could handle controlling it. Now you have to remember this was during the Great Depression of the 1930s and people were desperate. This meant that the government would control the interest rates and print money accordingly. This was done through the creation of The Federal Reserve Bank but this bank was a non-governmental system and that flies into the face of our Constitution which says that the government only is allowed to print and control money (Article 1, Section 8).

Now you can begin to see the dilemma here because you run the risk of getting some politicians controlling bankers who in turn are controlling the money supply for their own or political gains at your expense. This not only true for the United States but for many other countries as well. What we have now is a Fiat money system which means money not backed up by hard assets like gold, just a governments promise to pay. By printing more and more money without any backing will deflate its worth and encourages debt and interest. With this you can see how you might be caught up in this and the deeper in debt you become the harder it is to get out.

For more detail information on this please go to www.capitalismoffspring.info.

by: Jay Harris
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